Press Releases

Quarterly Dividends, Special Dividend Declared
(For Release 4 p.m. EDT July 21, 1998)

Toronto, July 21, 1998: Premium Income Corporation (the "Company") has declared quarterly dividends of $0.221305 on each of its Preferred Shares and $0.30 on each of its Class A shares payable on July 31, 1998 to shareholders of record on that date which includes 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 it's 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:

For more information, please contact:
John Mulvihill, Chairman & CEO, 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
premium@mulvihill.com
www.mulvihill.com