$.068 Dividend Reflects Continued Strong Credit and Performance.

PHOENIX--(BUSINESS WIRE)--Oct. 7, 1998--Pilgrim America Prime Rate Trust (NYSE: PPR), a diversified closed-end management investment company listed on the New York Stock Exchange, declared a 6.80 cents per share monthly dividend on September 28, 1998, based on the 30 days of September, payable on October 22, 1998 to shareholders of record on October 13, 1998. This represents the 124th consecutive monthly dividend since the Trust's inception in May 1988.

Although the stock market has been highly volatile, Portfolio Manager, Howard Tiffen said today "The Trust's credit quality and performance have remained sound."

The following are annualized distribution rate calculations for the 30 day period ending September 30, 1998:

-- 8.96 % based on the dividend-adjusted month-end NAV of $9.23

-- 8.32 % based on the month-end closing NYSE composite market

price of $9.94

-- 8.88 % based on the market closing NYSE composite market

price of $9.31 as of October 7, 1998

-- 8.90 % based on the month-end NAV of $9.29

As of September 30, 1998, the Trust's weighted average rate reset period was approximately 46 days. The reset period is a measure of how quickly the Trust's overall yield should adjust to the general level of short-term interest rates.

The Trust had $484 million outstanding on its revolving credit facility as of September 30, 1998. Non-performing assets in the portfolio represented 0.88% of net assets and 0.62% of total assets at September 30, 1998.

Pilgrim America Prime Rate Trust was the first mutual fund to invest in a portfolio of participation interests in senior, collateralized corporate bank loans whose rates float with the prime lending rate as posted by major banks or LIBOR (London Inter-Bank Offered Rate). The Trust seeks to provide high current income, consistent with preservation of capital.

The Trust is managed by Pilgrim America Investments, Inc., and distributed by Pilgrim America Securities, Inc., subsidiaries of Pilgrim America Group, Inc., which is a wholly-owned subsidiary of Pilgrim America Capital Corporation, a publicly-traded (NASDAQ: PACC) financial services company with operations in Phoenix, Arizona.

Average Annual Total Returns assuming Rights were Exercised (Full Participation) through September 30, 1998 (1). (Without sales charge and commissions). -0-

                                  NAV (2)(c)            MARKET (3)
  Year-to-Date                          5.65%             1.42%
  1 - Year                          7.96%             6.56%
  3 - Year                          8.04%            11.40%
  5 - Year                          8.35%            10.34%
 10-Year                          8.46%               N/A

Since Trust Inception(a)          8.44%               N/A
Since Initial Trading on NYSE(b)   N/A                   10.81%

Past performance is no assurance of future results. Investment return and principal value of an investment in the Trust will fluctuate. Shares, when sold, may be worth more or less than their original cost. Calculation of total return assumes a hypothetical initial investment at the net asset value (in the case of NAV) or the NYSE composite (in the case of Market) on the last business day before the first day of the stated period, with all dividends and distributions reinvested at the actual reinvestment prices.

(1) On November 12, 1996, the Trust completed a Rights Offering in which rights holders acquired approximately 18.12 million shares of beneficial interest in the Trust. Rights holders were entitled to purchase one share of beneficial interest in the Trust for every five rights held. On January 27, 1995, the Trust completed a Rights Offering in which rights holders acquired approximately 17.96 million shares of beneficial interest in the Trust. Rights holders were entitled to purchase one share of beneficial interest in the Trust for every four rights held.

(2) Calculation of total return assumes a hypothetical initial investment at the net asset value (in the case of NAV) or the NYSE Composite closing price (in the case of Market) on the last business day before the first day of the stated period, with all dividends and distributions reinvested at the actual reinvestment price. The Trust's average annual returns on an NAV basis and assuming rights were exercised through September 30, 1998 were 7.96% and 8.35% for the one and five-year periods, respectively. The Trust's average annual total return on an NAV basis with a 3% sales charge and assuming rights were exercised through September 30, 1998, was 8.14% for the ten-year period. The average annual total returns based on market price assuming rights were exercised with a brokerage commission are not presented.

(3) Due to variances in investors' broker commission rates, market returns are presented without deduction of such commissions. Applying the respective commissions will result in lower total returns at market.

(a) Inception Date - May 12, 1988

(b) Initial Trading on NYSE - March 9, 1992

(c) Reflects Partial Waiver of Fees

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30-Day Standardized Yields          NAV              MARKET
September 30, 1998                  8.67%       8.10%
August 31, 1998                   8.46%       7.88%
July 31, 1998                          8.51%       7.93%
June 30, 1998                          8.39%       7.83%
May 31, 1998                          9.67%       8.82%
April 30, 1998                          8.78%       8.04%
March 31, 1998                          8.97%       8.37%
February 28, 1998                  8.60%       7.77%
January 31, 1998                  9.10%       8.31%
December 31, 1997                  9.04%       8.10%
November 30, 1997                  9.93%       9.08%
October 31, 1997                  9.10%       8.33%

Yield is calculated by dividing the Trust's net investment income per share for thirty days by the respective month's ending net asset value (in the case of NAV) or closing price on the NYSE composite (in the case of Market). Yield calculations do not include any commissions or sales charges, and are compounded for six months and annualized for a twelve month period to derive the Trust's yield consistent with the SEC standardized yield formula for open-end investment companies. -0-

Annualized Period-end
 Distribution Rates                  NAV             MARKET
September 30, 1998                  8.90%      8.32%
August 31, 1998                   8.72%      8.12%
July 31, 1998                          8.83%      8.24%
June 30, 1998                          8.85%      8.27%
May 31, 1998                          8.93%      8.16%
April 30, 1998                          8.86%      8.12%
March 31, 1998                          8.88%      8.24%
February 28, 1998                  8.65%      7.84%
January 31, 1998                  8.72%      7.98%
December 31, 1997                  8.85%      7.94%
November 30, 1997                  8.88%      8.13%
October 31, 1997                  8.71%      7.98%

The distribution rate is calculated by annualizing dividends declared during the period (i.e., divide by days in the related month times days in the fiscal year) and then dividing the resulting annualized dividend by the month-ending net asset value (in the case of NAV) or the month-ending closing price on the NYSE composite (in the case of Market). The distribution rate is based solely on the actual dividends and distributions, which are made at the discretion of management. The distribution rate may or may not include all investment income, and ordinarily will not include capital gains or losses, if any.

For more complete information about the offerings, contact Pilgrim America Prime Rate Trust at the address above to request a prospectus which contains more complete information on all charges, fees and expenses. Please read the prospectus carefully before investing or sending money.