STUDENT TRANSPORTATION INC 5.25 PCT DEBS T.STB.DB.A

RE:STB management

[goldsternp]

Why do you think that retiring debt with equity is bad? Although I have to say that if the company were able to issue some more CDs and end up paying only 2.7% interest as they did on the 6.75% CDs, that would be a better deal.

What do you think about REITs which distribute cash flow? They are addicted to issuing stock for growth just as STB.

How much goodwill do you think STB has from depreciating buses over 7 years and using them for 15 ?

What kinds of missteps are you anticipating for contracts that run 5 years plus?

What do you mean that "you don't think they have the cash" to redeem the CDs. The cash they have is on the balance sheet  as $2 million and the current assetts exceeded current liabilities by $30 million so you don't have to "think"?

For the last 18 months, acquisitions and equipment purchases were $124 million and financing activities including dividends were $101 million, which says to me that the company paid $23 million of growth plus $34 million of dividends out of operating cash flow. So there is little reason to worry about the safety of the dividends. Especially so  with the weak CAD which is saving around USD$8 million/year of dividend expense.

I might be wrong but your comments sound a lot like the bolierplate one reads all the time on these sites.