Prime Rate Plus Corp.
TSX : PPL.PR.A
TSX : PPL

Prime Rate Plus Corp.

August 18, 2005 09:00 ET

Prime Rate Plus Corp.: Initial Regular Monthly Dividend Declaration

TORONTO, ONTARIO--(CCNMatthews - Aug. 18, 2005) - Prime Rate Plus Corp.(TSX:PPL.A)(TSX:PPL.PR.A) ("Prime Plus") declares its initial regular monthly distribution of $0.07813 (6.25% annualized) for each Class A share which reflects the distribution policy of prime rate in Canada, currently at 4.25%, plus 2% annually. Prime Plus also declares its initial regular monthly distribution of $0.06575 (5.0% annualized) for each Preferred share which reflects the distribution policy of prime rate plus 0.75% annually (for the period July 15/05 to Aug 31/05). Distributions are payable September 9, 2005 to shareholders on record as of August 31, 2005.

The fund's investment objectives are:

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.

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.

Prime Plus invests in a portfolio of six publicly traded Canadian Banks as follows: Bank of Montreal, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada, Bank of Nova Scotia, Toronto-Dominion Bank. Shares held within the portfolio are expected to range between 5-20% in weight but may vary at any time. To generate additional returns above the dividend income earned on the portfolio, Prime Plus will engage in a selective covered call writing program.



Distribution Details:

Class A Share (PPL): $0.07813

Preferred Share (PPL.PR.A) $0.06575

Ex-Dividend Date: August 29, 2005

Record Date: August 31, 2005

Payable Date: September 9, 2005


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