Press Release

Declares Special & Year End Income Distributions
(For Release 9 a.m. EDT, December 15, 2000)

Toronto, December 15, 2000: First Premium Income Trust [FPI.UN] has declared a regular quarterly income distribution of C$0.50 per Unit plus a special distribution of $0.50 payable December 29, 2000 to holders of record on such date. The special distribution will ensure that the Trust distributes sufficient of its net income and net realized capital gains for 2000 so that it will not be liable for tax. The amount of the distribution may therefore be subject to minor adjustment.

The total distribution for Unitholders for the year ending December 31, 2000 should therefore be $4.00 per unit (including special distributions during the year of $2.00) equivalent to a 16% annual distribution yield on the original issue price of $25.00.

Unitholders of First Premium Income Trust may elect to have their distributions re-invested into additional units by enrolling in the TrustŐs Distribution Reinvestment Plan. In order to take advantage of distribution reinvestment, Unitholders should contact their broker or the Plan Agent (Montreal Trust Company of Canada) as soon as possible to enroll in the plan.

The TrustŐs investment objectives are to provide unitholders with a stable stream of quarterly distributions of at least $0.50 per Unit. The Trust intends to achieve its investment objectives by investing in a diversified portfolio consisting primarily of common shares issued by major Canadian issuers. In order to generate returns above the dividend income generated by the portfolio, the Trust will write covered call options in respect of all or part of the securities in the portfolio. In addition, the Trust may write cash covered put options in respect of securities in which the Trust is permitted to invest.

The TrustŐs investment portfolio is managed by its investment manager, Mulvihill Capital Management Inc. Trust Units are listed on The Toronto Stock Exchange and The Montreal Exchange under the symbol FPI.un

Special Distribution Details:

Regular Distribution per Unit: $0.50
Special Distribution per Unit: $0.50
Payable Date: December 29, 2000
Record Date: December 29, 2000
Ex-Distribution Date: December 27, 2000

For more information, please contact:
John Mulvihill, Chairman & CEO, Mulvihill Capital Management
Don Biggs, Vice President, Mulvihill Capital Management

First Premium Income
121 King Street West, Suite 2600
Toronto, Ontario M5H 3T9
(416) 681-3966   (800) 725-7172