BOSTON, March 31 /PRNewswire-FirstCall/ -- The Board of Trustees of the John Hancock Patriot Premium Dividend Fund II , as part of its careful review of the options available to help enhance shareholder value within the context of the Fund's goal of providing shareholders with tax- advantaged income, has authorized a semi-annual series tender offer program. Under the program, the Fund will offer to purchase up to 5% of the Fund's outstanding common shares at 98% of net asset value (NAV) on the date the tender offer expires, provided that the common shares of the Fund have traded at an average daily discount to NAV of greater than 10% during a 12-week measurement period. The tender offers will occur twice a year if the thresholds are met, with the Board to review the program annually.
The first measurement period will commence in April 2008 and if the Fund's average daily trading discount at the end of the measurement period is greater than 10%, it is anticipated that the first series tender offer will be conducted in the third quarter of 2008.
The Board adopted the semi-annual series tender offer program for reasons including:
-- To help address the fund's current discount to NAV by allowing shareholders the ability to tender shares at 98% of NAV if the measurement thresholds are met. -- The potential to provide increased liquidity for Fund shareholders. -- The retirement of any tendered shares would be marginally accretive to the NAV per share of the Fund, thereby positively impacting the Fund's NAV.
The investment objective of PDT is to provide a high current income consistent with modest growth of capital for holders of its common shares of beneficial interest. 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), although 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 received from their taxable income, while individual investors also benefit as the maximum federal tax rate for qualified dividend income (QDI) is only 15%.
This series tender program is in addition to previously announced actions taken by the Board:
-- A share repurchase program, approved in December 2007 and conducted until now. -- Review and implementation of a series of Patriot fund mergers into PDT to gain fund efficiencies, which were completed in October of 2007. Lower shareholder expenses are expected for the majority of the shareholders as a result of the mergers.
It also should be noted that on December 5, 2006 the Board approved the filing of an exemptive application with the SEC seeking authority for a managed distribution plan, which would allow a fund to distribute long-term gains on a more frequent basis. A fund must obtain an exemptive order from the SEC in order to adopt such a plan. The SEC announced that it would begin accepting applications again for such orders on December 1, 2006. However, despite the Board's proactivity, more than fourteen months have passed and the SEC still has not granted any such orders. If relief is granted, the Board will review the possibility of distributing the Fund's long-term gains on a more frequent basis with the possibility of increasing the Fund's distribution rate.
Although the Fund is currently trading at a discount to NAV it continues to deliver strong performance. As of February 29, 2008, for the 1-, 3- and 5- year periods the Fund's total return percentile rank was 38th, 25th and 32nd, respectively, outperforming its Lipper peer group average.
About John Hancock Funds
The Boston-based mutual fund business unit of John Hancock Financial Services, John Hancock Funds manages more than $56.8 billion in open-end funds, closed-end funds, private accounts, retirement plans and related party assets for individual and institutional investors at December 31, 2007. John Hancock Funds are distributed by John Hancock Funds, LLC, member FINRA. For more information, please visit http://www.jhfunds.com/.
John Hancock Financial Services 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 Asia, and primarily through John Hancock in the United States, the company 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$396 billion (US$401 billion) at December 31, 2007. Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '0945' on the SEHK. Manulife Financial may be found on the Internet at http://www.manulife.com/.
The performance data contained within this press release represents past performance, which does not guarantee future results. Performance, especially for short time periods, should not be the sole factor in making your investment decision. Statements in this press release that are not historical facts are forward-looking statements as defined by United States securities laws. You should exercise caution in interpreting and relying on forward- looking statements because they are subject to uncertainties and other factors which are, in some cases, beyond the fund's control and could cause actual results to differ materially from those set forth in the forward-looking statements.
