Press Releases

Quarterly Dividends, Special Dividend Declared
(For Release 4:00 p.m. EDT July 21, 1999)

Toronto, July 21, 1999: Premium Income Corporation (the "Company") has declared quarterly dividends of $0.221988 on each of its Preferred Shares and $0.20 on each of its Class A shares payable on July 30, 1999 to shareholders of record on that date. In addition, the Company has declared a special dividend on each of its Class A shares of $0.10 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 of all or part of the common shares in the portfolio.

The Company's investment portfolio is managed by its 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.

Distribution Details:

Dividend per Preferred Share: $ 0.221988
Regular Dividend per Class A Share: $ 0.200000
Special Dividend per Class A Share: $ 0.100000
Payable Date: July 30, 1999
Record Date: July 30, 1999
Ex-Dividend Date: July 28, 1999

For more information, please contact:
John Mulvihill, President, Mulvihill Capital Management
Don 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