Press Releases

Special Dividend, Quarterly Dividends Declared
(For Release 9 a.m. EDT, July 13, 2000)

Toronto, July 13, 2000: Premium Income Corporation (the "Company") has declared quarterly dividends of $0.22250 on each of its Preferred Shares and $0.20 on each of its Class A shares payable on July 31, 2000 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 for a total dividend of $0.30 to Class A shareholders. The amount of the dividend on the Preferred shares may be subject to minor adjustment.

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

Distribution Details:

Dividend per Preferred Share: $ 0.22250
Regular Dividend per Class A Share:: $ 0.2000
Special Dividend per Class A Share:: $ 0.1000
Payable Date: July 31, 2000
Record Date: July 31, 2000
Ex-Dividend Date: July 27, 2000

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