VANCOUVER, BRITISH COLUMBIA, Nov 3, 2009 (Marketwire via COMTEX News Network) --

Deans Knight Income Corporation (the "Company") (TSX:DNC) is pleased to provide an operational update of the Company for the nine months ended September 30, 2009.

Highlights:

- Net earnings(1) for the nine months ended September 30, 2009 were $2.7 million, or $0.2584 per Share.

- The Company paid dividends of $0.2332 per share on all of its outstanding voting and non-voting common shares (collectively, the "Shares") for the nine months ended September 30, 2009, which equated to 90% of net earnings.

- At September 30, 2009 the Company was fully invested and the net asset value ("NAV") was $11.88 per Share.

(1) The Company calculate net earnings as interest income less the on-going operating costs of the Company, and excluding any realized capital gains and losses and any income or loss not derived from debt securities.

Corporate:

Following its initial public offering ("IPO") in March 2009, where the Company raised approximately $100.4 million of capital ($94.1 million net of offering costs), management has worked diligently to invest the capital in corporate debt securities, predominantly rated below investment grade. As of September 30, 2009, the Company was fully invested.

During the nine months ended September 30, 2009, the Company generated net earnings of $2.7 million. In addition to net earnings, the Company also generated $1.0 million of realized capital gains to September 30, 2009 from the sale of certain holdings. The Company paid out $2.5 million in dividends ($0.2332 per Share) which represents approximately 90% of net earnings.

Based on the Company's investments at September 30, 2009, the Company anticipates that it will be able to generate enough income from its bond investments to pay the monthly dividends of $0.0583 per Share for the remainder of 2009.

Investments:

The financial system is showing signs of life, as certain investors are buying corporate bonds and equities again. In the past 6 months, the global high yield bond market has issued more than $100 billion of bonds, almost double what was issued in 2008. This renewed interest in higher yielding debt has continued to push bond prices higher. This has resulted in the Company enjoying a significant rise in its net asset value, which as at September 30, 2009 is $11.88 per Share, a 19% increase from the IPO price of $10 per share.

Despite the recent rise in bond prices, with 5-year Canadian government bonds at 2.5% and Canadian investment grade bonds averaging a 4.0% yield, we feel our strategy, currently offering a dividend yield of 6.5%(2), is the best option for investors to earn a high level of income. The graph below shows credit spreads between high yield bonds and government bonds which have narrowed significantly from the record levels of late last year; however, high yield bonds are still 33% higher than the 25 year average.

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