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Preferred Shares Update: DNP Select Income Fund Inc. Duff & Phelps Utility And Corporate Bond Trust Inc.

CHICAGO, May 14, 2012 /PRNewswire/ -- DNP Select Income Fund Inc. (NYSE: DNP) and Duff & Phelps Utility and Corporate Bond Trust Inc. (NYSE: DUC), two closed-end registered investment companies (the "funds") advised by Duff & Phelps Investment Management Co. (the "Adviser"), have provided an update on their efforts to provide additional liquidity to holders of preferred shares in light of the persistent failures in the auction markets.

To date each fund has retired a portion of its preferred shares with monies borrowed under a credit facility.  However, there are a number of factors that have constrained the funds from refinancing additional preferred shares with debt.  One of those factors is that the Investment Company Act of 1940 requires a fund to have 300% asset coverage for its senior indebtedness at the time of any new borrowings.  Another factor is that the funds cannot incur indebtedness or enter into reverse repurchase agreements without departing from the guidelines established by the two rating agencies that rate the preferred shares. 

In the proxy statement relating to the May 10, 2012 annual meeting of the funds, the funds' board of directors recommended that the shareholders of each fund approve charter amendments that would permit the fund to negotiate an arrangement with the rating agencies whereby the fund could accept a lower rating on the preferred shares in exchange for being allowed to utilize additional debt leverage for the purposes of retiring preferred shares. The board recommended approval of the charter amendments in order to give the funds greater flexibility to provide additional liquidity to preferred shareholders. The amendments to each fund's charter required for their approval a favorable aggregate vote of the fund's common and preferred shareholders, as well as a separate class vote of the fund's preferred shareholders.

At the joint annual meeting of the funds' shareholders on May 10, 2012, the proposed amendments to DUC's charter received the requisite aggregate and class votes for approval and, accordingly, those amendments are now in effect.  The proposed amendments to DNP's charter received a favorable aggregate vote of DNP's common and preferred shareholders, but were defeated in the separate class vote of DNP's preferred shareholders.  Accordingly, those amendments were not approved, and DNP remains bound by the charter provisions that prohibit it from departing from the rating agencies' restrictions on borrowings and the use of reverse repurchase agreements, unless the rating agencies confirm that a proposed departure would not adversely affect the then current rating of DNP's preferred shares.

The results of the votes do not affect the Tender Offers currently being undertaken by the funds.

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