Toronto, January 21, 1997: Premium Income Corporation (the "Company") has declared an initial quarterly dividend of $0.2204 on each of its Preferred Shares and $0.20 on each of its Class A shares payable on January 31, 1997 to shareholders of record on that date.
In declaring the dividend payable on the Class A Shares, the Board of Directors wished to establish an amount that would be sustainable over the ensuing year under most circumstances. While increased market volatility in the first quarter resulted in higher income for the Corporation than had been anticipated, it is the intention of the Board to establish a policy that will be sustainable over the long term. Any net realized capital gains, dividend income and option premium earned by the Corporation in excess of the dividends payable to preferred shareholders and the dividends already paid to Class A shareholders will be paid to Class A shareholders of record at year end.
Premium Income Corporation is a mutual fund corporation which invests in the common shares of Bank of Montreal, The Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada, and The Toronto-Dominion Bank. To generate additional returns above the dividend income earned on the Portfolio, the Company will from time to time write covered call options in respect to all or part of the common shares in the portfolio.
The Corporation's investment portfolio is managed by it's investment manager, Mulvihill Capital Management Inc. The company's Preferred and Class A shares are listed on The Toronto Stock Exchange and the Montreal Exchange under the symbols PIC.PR.A and PIC.A.