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The Reaves Utility Income Fund Announces Intent To Redeem Auction Market Preferred Shares

Today, The Reaves Utility Income Fund (NYSE Amex: UTG) (the “Fund”) is pleased to announce that it intends to redeem all outstanding shares of Auction Market Preferred Shares (the “AMPS”) at par, as set forth below, in their entirety pursuant to their terms. The Fund has entered into a Committed Facility Agreement from a financial institution to provide new funding to redeem the AMPS and provide up to 33% leverage to the Fund going forward. The Board of Trustees has approved the refinancing which is expected to lower the costs of leverage for the Fund.

Series (CUSIP Number)
   

Total Liquidation Preference
     

Redemption Date

UTG Series W – 28 ( Cusip: 756158309)

$80,000,000

December 8, 2010
UTG Series F – 7 ( Cusip: 756158408) $80,000,000 December 10, 2010
UTG Series M – 7 ( Cusip: 756158200) $80,000,000 December 13, 2010

Notice was sent today to the Fund’s paying agent of the AMPS to commence the process. The Fund’s obligation to redeem the AMPS shares is subject to having sufficient funds available to it from its borrowing arrangement to fund the redemption.

The Reaves Utility Income Fund

The investment objective of the Fund is to provide a high level of income and total return consisting primarily of tax-advantaged dividend income and capital appreciation. There were approximately $741 million of total assets under management and 22.9 million common shares outstanding as of November 17, 2010.

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