DBRS is downgrading the ratings of the Preferred Shares issued by Global Telecom Split Share (the "Company") to Pfd-5 (low). Global Telecom Split Share is a mutual fund corporation that invests in selected companies in the following industries: telecommunications services, emerging markets telcos, cable and wireless, emerging markets cable and wireless, and communications technology. Mulvihill Capital Management, the investment manager of the Company, uses covered call options in respect of the underlying shares as a source of income and growth. The rating is being lowered because the Company's holdings have fallen sharply in value. Current levels of asset coverage are longer consistent with the previous rating of Pfd-3 (low), despite the portfolio's positive performance relative to benchmarks for these industries. As of June 30, 2002, holders of the Preferred Shares would have experienced a loss of approximately 20% if the portfolio were to be liquidated and distributed. As the NAV of the portfolio has fallen to below the principal amount of the Preferred Shares, the annual minimum return required from the portfolio to pay dividends and final principal in respect of the Preferred Shares has increased to approximately 9.1% (assuming capital share distributions are not made) after management expenses. As a result, even though distributions to holders of the Capital Shares have stopped, there is a significant chance that holders of the Preferred Shares will eventually experience losses. Currently, the rating on the Preferred Shares will not be lowered from this rating level unless it becomes evident that losses will be inevitable, or if return requirements appear to be completely unrealistic. Should the portfolio appreciate in value considerably, a rating upgrade will be considered; however, DBRS intends to constrain any consideration for upside due to the risk that distributions to holders of the Capital Shares (to the extent they re-commence) reduce protection to holders of the Preferred Shares.

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