Prime Dividend Corp.
TSX : PDV
TSX : PDV.PR.A

Prime Dividend Corp.

May 24, 2006 15:11 ET

Prime Dividend Corp.: Dividends Set to Increase

TORONTO, ONTARIO--(CCNMatthews - May 24, 2006) - As a result of the Bank of Canada's decision today to increase the bank rate in Canada by 0.25%, the Prime Rate has also increased by 0.25% to 6.00%. As a result, the June dividends payable to both Preferred Shares and Class A shares of Prime Dividend are each set to increase by 0.25%. This would result in the June Preferred share dividend being paid at an annualized rate of 6.75% (Prime Rate plus 0.75%) and the Class A share dividend being paid at an annualized rate of 8.00% (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 BCE Inc.
Lifeco Inc.

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

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

National Bank of Power
Canada Financial
Corp.

Royal Bank of TSX Group Inc.
Canada

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.

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