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

RE:RE:RE:RE:RE:Dividend Cut Imminent

[jammo71]

Bigdaddy007 wrote: There are many serious problems facing stb going forward, especially related to dividend sustainability. One issue that's not being discussed is the effect of higher interest rates. Stb is highly indebted and higher rates are going to squeeze the already thin margins, forcing management's hand on the dividend. Higher rates will likely be the cause of the second dividend reduction.

By what metric are you referring to STB as "highly indebted"? Feel free to also not answer that under the presumption of me being inexperienced.

As well, I'd love to hear more on your theory about higher interest rates causing the second dividend reduction (when was the first one again?) Unless I'm mis-remembering, STB has operated in higher interest rate environments and still managed to pay a dividend. As per the most recent company release, the dividend they are payign this month will be the 132 consecutive monthly dividend - that's 11 years. I'm farily certain that at some point during the past 11 years interest rates were higher than they are now.