Prime Dividend Corp.: Dividend Rate Change: Financial News

TORONTO, ONTARIO--(MARKET WIRE)--Nov 3, 2008 -- As a result of the Bank of Canada's decision on October 21, 2008 to decrease the bank rate in Canada by 0.25%, the Prime Rate has been decreased to 4.00%. As a result, the November 28, 2008 dividends payable to both Preferred Shares and Class A shares of Prime Dividend are each set to decrease by 0.25%. This would result in the November Preferred share dividend once declared being set at an annualized rate of 5.00%. The Prime Rate Preferred share has reached its minimum annual rate of 5% and will not decline below this level as per the prospectus. The November Class A share dividend once declared will be set at an annualized rate of 6.00% (Prime Rate plus 2.0%).

Prime Dividend invests in a portfolio of high yielding Canadian Companies as follows:

 

Banks                     Investment                    Life      Utilities
                          Management               Insurance        & Other

Bank of Montreal  AGF Management Ltd.  Great-West Lifeco Inc.       BCE Inc.

The Bank of Nova                                    Manulife      TransAlta
 Scotia                 CI Financial          Financial Corp.          Corp

                                                    Sun Life    TransCanada
CIBC               IGM Financial Inc.          Financial Inc.          Corp

National Bank                                                         Power
 of Canada                                                   Financial Corp.

Royal Bank
 of Canada                                                    TSX Group Inc.

Toronto-Dominion
 Bank

Shares held within the Portfolio will generally represent no less than 4%
and no more than 8% of the net asset value.

The fund's investment objectives are:

Floating Rate Preferred Shares:

(i) to provide holders of the Preferred Shares with cumulative preferential floating rate monthly cash dividends at a rate per annum equal to the Prime Rate in Canada plus 0.75% (minimum 5%, maximum 7%) based on original issue price of $10.00 per share

(ii) on or about December 1, 2012 (termination date), to pay the holders of the Preferred Shares the original issue price of those shares.

Floating Rate Class A Shares:

(i) to provide holders of the Class A Shares with regular floating rate monthly cash distributions targeted to be at a rate per annum equal to the Prime Rate in Canada plus 2.0% (minimum 5%, maximum 10%) based on original issue price of $15.00 per share

(ii) on or about December 1, 2012 (termination date), to pay the holders of Class A Shares at least the original issue price of those shares.