Mr. John Germain reports

PREMIUM INCOME CORPORATION ANNOUNCES CLOSING OF OVERNIGHT OFFERING OF PREFERRED SHARES

Premium Income Corp. has completed the previously announced treasury offering of 2,633,000 preferred shares for gross proceeds of $42,654,600. The preferred shares will trade on the Toronto Stock Exchange under the existing symbol PIC.PR.A. The preferred shares were offered at a price of $16.20 per preferred share.

The fund invests in a portfolio consisting principally of common shares of Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada and Toronto-Dominion Bank. To generate additional returns above the dividend income earned on the fund's portfolio, the fund will selectively write covered call and put options in respect of some or all of the common shares in the fund's portfolio. The manager and investment manager of the fund is Mulvihill Capital Management Inc.

The preferred shares pay fixed cumulative preferential monthly cash distributions in the amount of 10.625 cents ($1.275 per annum) per preferred share, representing a yield of 8.50 per cent on the original issue price of $15. The syndicate of agents for the offering was led by National Bank Financial Inc.