DBRS Rates Split REIT Opportunity Trust at Pfd-2 (low)

Dominion Bond Rating Service (DBRS) has today assigned a new rating of Pfd-2 (low) to the Preferred Securities issued by Split REIT Opportunity Trust (the Trust), a split share company that holds a portfolio (the Portfolio) of securities issued by real estate investment trusts (REITs). The trend is Stable. The Portfolio is funded through an initial offering of $38 million where the Trust issued an equal number of Preferred Securities at $10 each and Trust Units at $15 per unit to provide an initial downside protection of 53% to the Preferred Securities holders, after giving effect to leverage and issuance costs.

The holders of the Preferred Securities are entitled to receive a fixed preferred quarterly interest payment to yield 5.75% annually. The distribution to the Capital Unit holders is subject to change at the discretion of the Manager based on prevailing market conditions. There is an asset coverage test that does not permit any cash distributions to the Trust Unit holders if the net asset value (NAV) of the portfolio is less than 1.5 times the outstanding principal amount for the Preferred Securities. There is also a provision for the Trust to borrow up to a maximum of 10% of the total assets to make additional investments. Distributions to the holders of the Preferred Securities will be subordinated to the leveraged interest expense on this borrowed loan facility.

The rating of the Preferred Securities is based on the available downside protection of the underlying securities in the Portfolio. At maturity, the Trust will pay the outstanding principal amount of the Preferred Securities by liquidating the Portfolio in the open market.

Note: All funds are in Canadian dollars unless otherwise noted.