DBRS Confirms Rating of Dividend Growth Split Corp. Preferred Shares at Pfd-3 Following Completion of Merger

DBRS has today confirmed the rating of the Preferred Shares of Dividend Growth Split Corp. (DGS or the Company) at Pfd-3 following the completion of a merger of the Company with Brompton Equity Split Corp. (BE). There are no longer any preferred shares or class A shares of BE outstanding. As a result, DBRS has discontinued the preferred share rating of BE.

On May 18, 2011, Brompton Funds announced the completion of the merger of BE and DGS. In order to maintain an equal number of Preferred Shares and Class A Shares of DGS outstanding following the merger, DGS completed a private placement of 468,480 Preferred Shares at $10.30 each. There are now 6,374,149 Preferred Shares and 6,374,149 Class A Shares of DGS outstanding.

On April 8, 2011, DBRS published a press release commenting on the approval of the proposed merger of the two split share funds. DBRS stated that if the 1:1 ratio of Preferred Shares to Class A Shares were maintained, the merger would not result in a decrease in downside protection for existing preferred shareholders of DGS and the rating would likely be confirmed.
As of May 19, 2011, there is approximately 49% of downside protection available to the Preferred Shares of DGS, and the protection level did not decrease following the merger. As a result, DBRS has confirmed the rating of the Preferred Shares at Pfd-3.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodology is Rating Canadian Split Share Companies and Trusts, which can be found on our website under Methodologies.