Press Releases

Special Dividend, Quarterly Dividends Declared
(For Release 4 p.m. EDT January 15, 2001)

Toronto, January 15, 2001: Premium Income Corporation (the "Company") has declared quarterly dividends of $0.220813 on each of its Preferred Shares and $0.20 on each of its Class A shares payable on January 31, 2001 to shareholders of record on that date. In addition, the Company has declared a special dividend on each of its Class A shares of $0.20 payable on the same date.

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. In addition, the Company may write cash covered put options in respect of securities in which the Company is permitted to invest.

The CompanyÕs investment portfolio is managed by its investment manager, Mulvihill Capital Management Inc. The companyÕs Preferred and Class A shares are listed on The Toronto Stock Exchange under the symbols PIC.PR.A and PIC.A.

Distribution Details:

For further information, contact:
John Mulvihill, President, Mulvihill Capital Management
Donald Biggs, Vice President, Mulvihill Capital Management

Premium Income Corporation
121 King Street West, Suite 2600
Toronto, Ontario M5H 3T9
(416) 681-3966   (800) 725-7172
premium@mulvihill.com
www.mulvihill.com