First Premium Income Trust and Premier Canadian Income Fund announce special
meetings

TORONTO, April 30 /CNW/ - First Premium Income Trust (TSX: FPI.UN), which operates as Mulvihill Premium Canadian Fund ("FPI") and Premier Canadian Income Fund (TSX: GIP.UN) ("PCI") announced today that the board of directors of Mulvihill Fund Services Inc., the manager of the funds, has approved a proposal that would result in the merger of FPI and PCI (the "Merger Proposal").

If the Merger Proposal is implemented, PCI will be the continuing fund and holders of units of FPI ("FPI Units") will become holders of units of PCI ("PCI Units"). PCI has been designed to generate attractive returns for investors by investing in a high quality portfolio of common shares of large-capitalization Canadian issuers selected from the S&P/TSX 60 Index and invests primarily in common shares of issuers in the energy, materials and financials sectors.

The merger is expected to be beneficial to unitholders for the following reasons:

    
    -  Unitholders will be provided with an opportunity to invest in a
       continuing fund with improved operational efficiencies and enhanced
       economic viability. The merger is expected to eliminate the
       duplicative administrative and regulatory costs of operating FPI and
       PCI as separate investment funds.

    -  The continuing fund will have a larger market capitalization, a
       greater number of outstanding units and a larger number of unitholders
       than either of the funds. Consequently, the liquidity of the units of
       the continuing fund should be enhanced.

    -  Unitholders of FPI will receive distributions more frequently, as
       distributions of PCI are payable monthly whereas distributions of FPI
       are payable quarterly.

    -  Given the similarities in both the composition of the portfolios of
       the funds, as well as their investment strategies, unitholders of FPI
       will continue to receive exposure to a blue-chip portfolio of common
       shares of major Canadian issuers.
    

If the merger is effected and PCI Units are issued to the holders of FPI Units on the redemption of such FPI Units under the merger, a service fee equal to 0.30% annually of the net asset value of the PCI Units held by clients of a dealer will become payable to each such dealer. Nonetheless, after the merger, the fees indirectly borne by unitholders of FPI will decrease as a result of the lower aggregate fees payable by PCI as the continuing fund.

If the Merger Proposal is implemented, unitholders of FPI will have the opportunity to redeem their FPI Units for a redemption price equal to the net asset value per FPI Unit if they choose not to participate going forward.

Special meetings of unitholders of the funds have been called and will be held on June 4, 2010 to consider and vote upon the Merger Proposal. In order for the Merger Proposal to become effective, it must be approved by a two-thirds majority of unitholders of FPI and a majority of unitholders of PCI present in person or represented by proxy at the applicable special meeting. The implementation of the Merger Proposal is also subject to the receipt of all necessary regulatory and stock exchange approvals. If the Merger Proposal is implemented, the continuing fund proposes to issue to its unitholders warrants to subscribe for additional units of the merged fund by way of a prospectus.

Details of the Merger Proposal will be outlined in a joint management information circular to be sent to unitholders of each of the funds in connection with the special meetings. Copies of the circular will also be available on www.sedar.com and www.mulvihill.com.

    
    John Mulvihill, President and CEO
    John Germain, Senior Vice-President
    Sheila Szela, Vice-President, Finance and CFO

    A member of the Mulvihill Capital Management Inc. Group of Funds

    Mulvihill Structured Products
    121 King Street West
    Suite 2600 Toronto, Ontario, M5H 3T9
    (416) 681-3966; (800) 725-7172
    www.mulvihill.com
    hybrid@mulvihill.com
    

SOURCE FIRST PREMIUM INCOME TRUST

For further information: For further information: Investor Relations at (416) 681-3966, toll free at 1-800-725-7172 or visit www.mulvihill.com

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FIRST PREMIUM INCOME TRUST

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