BOSTON, Aug. 3 /PRNewswire-FirstCall/ --
John Hancock Patriot Premium Dividend Fund II (NYSE:PDT) (the "Fund") announced today it will increase its monthly distribution by 16.5% to $0.0705 per share, up from $0.0605 per share effective with the Fund's next distribution payment on August 31, 2009. The increased distribution is payable to holders of record on August 13, 2009 with an ex-dividend date of August 11, 2009.
On an annualized basis, the new distribution level equates to a net asset value ("NAV") distribution rate of 8.97% and a market value distribution rate of 9.84% based on the Fund's NAV of $9.43 and closing share price of $8.60 on July 31, 2009. This is the Fund's third distribution increase in the past nine months.
Over the past two years there have been several positive developments that management believes have led to the Fund's ability to increase its distribution, including:
-- an increase in the dividend yield of the Fund's portfolio - the new
distribution rate more closely reflects the Fund's current earnings;
-- the Fund is realizing certain benefits and efficiencies gained from a
series of mergers into the Fund which were completed in October 2007;
-- lower cost of leverage, due to the refinancing of the Fund's Auction
Rate Preferred Shares (ARPS) with a bank line of credit, has
contributed to the Fund's ability to generate additional investment
income;
-- an increase in ownership of preferred stocks, which tend to have
higher yields than common stock; and
-- approval of modifications to the Fund's investment policies has given
portfolio management additional flexibility which may allow them to
move into securities with higher dividend yields.
The Fund is a diversified closed-end management investment company. The Fund's investment objective is to provide common shareholders high current income consistent with modest growth of capital. The Fund pursues its objective by investing in a diversified portfolio of dividend paying preferred and common stocks. The Fund operates so that dividends paid will qualify in their entirety for the Dividends Received Deduction ("DRD"), however there can be no assurance that this result will be achieved. Income eligible for DRD entitles certain corporate investors to deduct 70% of the dividends they receive from their taxable income, while individual investors also benefit as the maximum federal tax rate for qualified dividend income (QDI) is only 15%.
A portion of the Fund's current distribution may include sources other than net investment income, including a return of capital. Investors should understand that a return of capital is not a distribution from income or gains of the Fund. As required under the Investment Company Act of 1940, a notice with the estimated components of the distribution will be mailed to shareholders at the time of payment if it does not consist solely of net investment income. Such notice will also be posted to the Fund's website at http://www.jhfunds.com/. The notice should not to be used to prepare tax returns as the estimates indicated in the notice may differ from the ultimate federal income tax characterization of distributions. After the end of each calendar year, investors will be sent a Form 1099-DIV informing them how to report distributions received during that year for federal income tax purposes.
About John Hancock Funds
The Boston-based mutual fund business unit of John Hancock Financial, John Hancock Funds manages more than $35.8 billion in open-end funds, closed-end funds, private accounts, retirement plans and related party assets for individual and institutional investors at March 31, 2009.
About John Hancock Financial and Manulife Financial Corporation
John Hancock Financial is a unit of Manulife Financial Corporation, a leading Canadian-based financial services group serving millions of customers in 19 countries and territories worldwide. Operating as Manulife Financial in Canada and in most of Asia, and primarily as John Hancock in the United States, Manulife Financial Corporation offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Funds under management by Manulife Financial and its subsidiaries were Cdn$405 billion (US$322 billion) at March 31, 2009.
Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '0945' on the SEHK. Manulife Financial can be found on the Internet at http://www.manulife.com/.
The John Hancock unit, through its insurance companies, comprises one of the largest life insurers in the United States. John Hancock offers a broad range of financial products and services, including life insurance, fixed and variable annuities, fixed products, mutual funds, 401(k) plans, long-term care insurance, college savings, and other forms of business insurance. Additional information about John Hancock may be found at http://www.johnhancock.com/.
DATASOURCE: John Hancock Funds
CONTACT: Media, Jay Aronowitz, +1-617-663-2702, or Investors,
+1-800-843-0090, both for John Hancock Funds
Web Site: http://www.jhfunds.com/