HPS John Hancock Preferred Income Fund III

John Hancock Preferred Income Fund III Declares NEW Monthly Dividend BOSTON, June 1 /PRNewswire-FirstCall/ -- John Hancock Preferred Income Fund III (NYSE:HPS) declared a new monthly dividend as follows: Declaration Date: June 1, 2005 Ex Date: June 9, 2005 Record Date: June 13, 2005 Payable Date: June 30, 2005 Dividend Amount: $0.148 This dividend equates to an annualized yield of 7.99 percent, based on the fund's closing market price as of May 31, 2005. The yield represented by the new dividend level remains attractive relative to other investment grade income oriented securities. In keeping with management's approach of only paying income earned, the Fund's dividend has been reduced. A number of higher-yielding preferred securities in the Fund's portfolio have been refinanced or called, forcing the Fund to reinvest at lower yields. Although the Fund actively employs hedging techniques, rising short-term interest rates since the Fund's launch in June 2003 have increased borrowing costs, putting added pressure on the Fund's dividend. Management believes an amendment is necessary in order to set the dividend at a level that will increase it's sustainability over the long-term. John Hancock Preferred Income Fund III is a diversified, closed-end fund. The Fund's primary investment objective is to provide a high level of current income, consistent with preservation of capital. The Fund's secondary objective is to provide growth of capital to the extent consistent with its primary investment objective. The Fund invests at least 80% of its total assets in preferred securities and other fixed income securities which are rated investment grade. John Hancock Funds, a premier investment management company, managed more than $30.6 billion in open-end funds, closed-end funds, private accounts, retirement plans and related party assets for individual and institutional investors as of March 31, 2005. Additional information about the company can be found on the website: http://www.jhfunds.com/. John Hancock Funds is a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary of Manulife Financial Corporation. Founded in 1862, John Hancock Financial Services and its subsidiaries today offer a broad range of financial products and services, including whole, term, variable, and universal life insurance, as well as college savings products, mutual funds, fixed and variable annuities, long-term care insurance and various forms of business insurance. John Hancock is a unit of Manulife Financial Corporation, a leading Canadian-based financial services group serving millions of customers in 19 countries and territories worldwide. Operating as Manulife Financial in Canada and most of Asia, and primarily through John Hancock in the United States, the Company offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Funds under management by Manulife Financial and its subsidiaries were Cdn$350 billion (US$290 billion) as of March 31, 2005. Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '0945' on the SEHK. Manulife Financial can be found on the Internet at http://www.manulife.com/. The John Hancock unit, through its insurance companies, comprises one of the largest life insurers in the United States. John Hancock offers a broad range of financial products and services, including whole life, term life, variable life, and universal life insurance, as well as college savings products, fixed and variable annuities, long-term care insurance, mutual funds and various forms of business insurance. DATASOURCE: John Hancock Preferred Income Fund III CONTACT: Kimberley Dietrich +1-617-375-0311 or Investors: +1-800-843-0090 both of John Hancock Web site: http://www.jhfunds.com/ http://www.manulife.com/

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