Premium Income Corporation II Extends Expiration Date of Exchange Option



    TORONTO, June 27 /CNW/ - Premium Income Corporation II (the "Company"), a
split share corporation offering an investment in the common shares of the six
largest Canadian banks through its Class A Shares and Preferred Shares, has
announced an extension of the Company's exchange option (the "Exchange
Option") with respect to its initial public offering. The cut-off date to
exchange common shares of Bank of Montreal, The Bank of Nova Scotia, Canadian
Imperial Bank of Commerce, National Bank of Canada, Royal Bank of Canada and
The Toronto-Dominion Bank ("Bank Shares") for Class A Shares and Preferred
Shares together in Units (each consisting of one Class A Share and one
Preferred Share) or for Class A Shares has been extended to July 17, 2007.
    A prospective purchaser wishing to utilize the Exchange Option will have
until 5:00 p.m. (Toronto time) on July 17, 2007 to deposit (in the form of a
book-entry deposit) Bank Shares through CDS Clearing and Depository Services
Inc. CDS participants may, however, have an earlier deadline for receiving
instructions from their clients to make deposits pursuant to the Exchange
Option.
    Under the Exchange Option for Units, the number of Class A Shares and
Preferred Shares issuable in exchange for Bank Shares deposited by prospective
purchasers will be determined by dividing the volume-weighted average trading
price of Bank Shares on the Toronto Stock Exchange (the "TSX") during the
three consecutive trading days ending on July 18, 2007, adjusted to reflect
dividends declared on such Bank Shares that will not be received by the
Company (the "Exchange Price") by $25.00 (being the sum of the issue price of
one Class A Share and one Preferred Share).
    Under the Exchange Option for Class A Shares, prospective purchasers will
receive Class A Shares in exchange for Bank Shares and $0.01 in cash per
Class A Share. The number of Class A Shares issuable in exchange for Bank
Shares deposited will be determined by dividing the Exchange Price by $15.00
(being the issue price of a Class A Share). This exchange ratio will be
adjusted to reflect the $0.01 per Class A Share to be received by prospective
purchasers.
    The exchange ratios will be announced in a press release to be issued by
the Company on or about July 18, 2007. The Exchange Option is subject to the
terms and conditions of the Company's preliminary prospectus dated May 25,
2007. All other terms and conditions of the Exchange Option remain in full
force and effect.
    Premium Income Corporation II will invest in a portfolio consisting of
Bank Shares. Investors in the Company's Class A Shares will receive leveraged
exposure to the performance of the Bank Shares, including increases or
decreases in the value of Bank Shares and increases or decreases in the
dividends paid on Bank Shares. Investors in the Company's Preferred Shares
will receive monthly distributions on a fixed, cumulative and preferential
basis. The Preferred Shares have been provisionally rated Pfd-2 by Dominion
Bond Rating Service Limited.





For further information:

For further information: John Mulvihill, President and CEO, Don Biggs,
Senior Vice-President, Sheila Szela, Vice-President, Finance and CFO,
Mulvihill Structured Products, A member of the Mulvihill Capital Management
Inc., Group of Funds, 121 King Street West, Suite 2600, Toronto, Ontario, M5H
3T9, (416) 681-3966, (800) 725-7172, www.mulvihill.com, hybrid@mulvihill.com

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PREMIUM INCOME CORPORATION II

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