BOSTON, May 1 /PRNewswire-FirstCall/ -- John Hancock Patriot Premium Dividend Fund II (the "Fund") announced today it will increase its monthly distribution by 10% to $0.0605 per share, up from $0.055 per share effective with the Fund's next distribution payment on May 29, 2009. The increased distribution is payable to holders of record on May 11, 2009 with an ex-dividend date of May 7, 2009.
On an annualized basis, the new distribution level equates to a net asset value (NAV) distribution rate of 9.40% and a market value distribution rate of 11.00% based on the Fund's NAV of $7.72 and closing share price of $6.60 on April 30, 2009. This is the second distribution increase in the past six months, with the first representing a 14.6% increase in December 2008.
Over the past year 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 -- 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), 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 receive from their taxable income, while individual investors also benefit as the maximum federal tax rate for qualified dividend income (QDI) is only 15%.
The distribution will be made from current income, and while not expected to be the case, supplemented by realized long-term capital gains, to the extent permitted by law, realized short-term capital gains, and return of capital. The ultimate composition of the distribution may vary because it may be materially impacted by future realized capital gains or losses, and income from holdings. As required under the Investment Company Act of 1940, the Fund will provide a notice to shareholders at the time of payment of a distribution that may not consist solely of net income. Such notification will also be posted to the Fund's website at http://www.jhfunds.com/ where it will be viewable under the "Funds & Performance" tab, by clicking on "Closed-End Funds" and then "19(a) Distribution Notices". The notice is for informational purposes only and should not be used to prepare tax returns as the estimates indicated in the notice may differ from the ultimate federal income tax characterization of distributions reported to shareholders on Form 1099 DIV at the end of the calendar year. As noted, distributions may include return of capital. Investors should understand that return of capital is not a distribution from income or gains from the Fund.
About John Hancock Funds
The Boston-based mutual fund business unit of John Hancock Financial, John Hancock Funds manages more than $38.8 billion in open-end funds, closed-end funds, private accounts, retirement plans and related party assets for individual and institutional investors at December 31, 2008.
About John Hancock Financial and Manulife Financial Corporation
John Hancock Financial is a unit of Manulife Financial Corporation (the Company), 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, 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$405 billion (US$330 billion) at December 31, 2008.
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/.
John Hancock Funds
CONTACT: Media, Jay Aronowitz, +1-617-663-2702, or Investors,
+1-800-843-0090, both of John Hancock Funds
Web Site: http://www.jhfunds.com/
