Press Releases

Amended Preliminary Prospectus Filed for Follow-on Treasury Offering

(For Release 4 p.m. EDT, August 18, 2003)

Toronto, August 18, 2003: Premium Income Corporation (the "Company") announces that it has filed an amended preliminary prospectus with the securities regulators in each of the provinces of Canada in anticipation of a follow-on treasury offering of both its Preferred Shares and Class A Shares. The Shares will be offered by a syndicate of investment dealers led by RBC Dominion Securities Inc. The offering price for each class of shares will be determined prior to the completion of the offering. The offerings will be priced to be non-dilutive to the Company's net asset value. Marketing of the offerings is expected to commence in late August.

The Company, which was formed in 1996, invests in a portfolio consisting principally of common shares of Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, Royal Bank of Canada and The Toronto-Dominion Bank. The Company's investment portfolio is managed by its investment manager, Mulvihill Capital Management Inc. The Company's Class A Shares and Preferred Shares are listed on the Toronto Stock Exchange under the symbols PIC.A and PIC.PR.A.


For further information, please contact:
John Mulvihill, President & CEO
David Middleton, CFO
Mulvihill Structured Products

Mulvihill Premium Canadian Bank Fund
121 King Street West, Suite 2600
Toronto, Ontario M5H 3T9
(416) 681-3966   (800) 725-7172