Toronto, June 16, 1999 - The Board of Directors of Premium Income Corporation today announced that it has approved a proposal which would permit the Company to add the writing of cash covered put options as an investment strategy complementing its covered call option writing strategy. The addition of cash covered put options will not in any way change the fundamental objectives of the Company. This additional feature will constitute an enhancement to the investment management tools currently available to the Company and should permit the Company to generate a higher rate of return on cash balances held.
A special meeting of shareholders has been called and will be held on July 29, 1999 to consider and approve the Proposal. The Proposal will be outlined in an information circular to be prepared and delivered to shareholders in connection with the special meeting and will require the approval of the holders of both the Class A Shares and Preferred Shares voting separately as a class and is subject to regulatory approvals. The Board of Directors has determined that the proposal is in the best interests of the Company and its shareholders and recommends that all shareholders vote in favour of the proposal.
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.