John Hancock Advisers, LLC Provides Statement on Auction Rate Preferred Lawsuit and Related Matters

John Hancock Advisers, LLC announced that on August 24, 2010, a shareholder derivative complaint was filed in the Superior Court of The Commonwealth of Massachusetts, Suffolk County, with respect to John Hancock Preferred Income Fund III (NYSE:HPS), a leveraged John Hancock closed-end fund ("Preferred III"), which had previously received a demand letter from the same law firm on behalf of a putative common shareholder. The complaint was filed against John Hancock Advisers, LLC, Preferred III's adviser ("JHA"), JHA's parent company Manulife Financial Corporation, and certain of the Trustees, executive officers and portfolio managers of Preferred III in connection with the redemption of auction preferred shares of Preferred III ("APS"). The complaint alleges, among other things, that the named defendants breached their fiduciary duties to Preferred III and its common shareholders by redeeming APS at their liquidation preference and alleges that such redemptions caused losses to Preferred III and its common shareholders. The plaintiffs are seeking monetary damages for the alleged losses and certain other relief.

As previously announced, John Hancock Patriot Premium Dividend Fund II (NYSE:PDT), another leveraged John Hancock closed-end fund ("Patriot"), received a substantially similar demand letter from the same law firm on behalf of a putative common shareholder of Patriot. That demand letter similarly alleged that JHA and certain of the Trustees, executive officers and portfolio managers of Patriot breached their fiduciary duties to Patriot by redeeming Dutch Auction Rate Transferable Securities Preferred Stock at their liquidation preference and demands that the Board of Trustees take action to remedy those alleged breaches. No shareholder derivative complaint has been filed with respect to Patriot at this time.