PIONEER INTEREST SHARES, DEF 14A, 1998-05-15

PIONEER INTEREST SHARES
DEF 14A, 1998-05-15

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File No. 2-42352
File No. 811-2239

SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A)
OF THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the registrant
[X]

Check the appropriate box:

[ ] Preliminary proxy statement

[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))

[X] Definitive proxy statement

[ ] Definitive additional materials

[ ] Soliciting material pursuant to
Rule 14a-11(c) or Rule 14a-12

Pioneer Interest Shares
(Name of Registrant as Specified in Its Charter

Pioneer Interest Shares
(Name of Person(s) Filing Proxy Statement)

<PAGE>

PIONEER INTEREST SHARES
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
1-800-622-3265

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD TUESDAY, JUNE 23, 1998

The Annual Meeting of Shareholders (the "Meeting") of Pioneer Interest
Shares, a Delaware Business Trust (the "Fund"), will be held at the offices of
Hale and Dorr LLP, counsel to the Fund, at 60 State Street, 26th floor, Boston,
Massachusetts 02109 on Tuesday, June 23, 1998 at 2:00 p.m. (Boston time) to
consider and act upon the following proposals:

1. To elect the nine (9) Trustees named in the attached Proxy Statement to
serve on the Fund's Board of Trustees until their successors have been
duly elected and qualified;

2. To ratify the selection of Arthur Andersen LLP as the Fund's independent
public accountants for the fiscal year ending December 31, 1998; and

3. To transact such other business as may properly come before the Meeting
or any adjournment thereof.

Shareholders of record as of the close of business on April 30, 1998 are
entitled to vote at the Meeting or any adjournment thereof.

By Order of the Board of Trustees,

Joseph P. Barri, Secretary

Boston, Massachusetts

May 11, 1998

------------------------

WHETHER OR NOT YOU EXPECT TO BE PRESENT AT THE MEETING, PLEASE COMPLETE AND
RETURN THE ENCLOSED PROXY CARD. YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE
MEETING.

0598-5192

<PAGE>

PIONEER INTEREST SHARES INC.
60 STATE STREET
BOSTON, MASSACHUSETTS 02109
1-800-622-3265

PROXY STATEMENT

FOR ANNUAL MEETING OF SHAREHOLDERS

JUNE 23, 1998

INTRODUCTION

This Proxy Statement is furnished to shareholders of Pioneer Interest
Shares, a Delaware business trust (the "Fund"), in connection with the
solicitation of proxies by the Fund's Board of Trustees for use at the Annual
Meeting of Shareholders (the "Meeting") to be held at the offices of Hale and
Dorr LLP, counsel to the Fund, at 60 State Street, 26th floor, Boston,
Massachusetts 02109 on Tuesday, June 23, 1998 at 2:00 p.m. (Boston time) and at
any adjournment thereof, for the purposes set forth in the accompanying Notice
of Annual Meeting of Shareholders.

The attached Notice, this Proxy Statement (the "Proxy Statement") and the
enclosed proxy card are being mailed to shareholders on or after May 8, 1998.
THE FUND'S ANNUAL REPORT FOR ITS FISCAL PERIOD ENDED DECEMBER 31, 1997 WAS
MAILED TO SHAREHOLDERS ON OR ABOUT FEBRUARY 28, 1998. ADDITIONAL COPIES MAY BE
OBTAINED FREE OF CHARGE BY WRITING TO THE FUND AT ITS EXECUTIVE OFFICES, 60
STATE STREET, BOSTON, MASSACHUSETTS 02109 OR BY CALLING 1-800-225-6292.

Shareholders of record as of the close of business on April 30, 1998 (the
"Record Date") are entitled to vote on all business of the Meeting or any
adjournments thereof. As of the Record Date, 7,381,962 shares of beneficial
interest of the Fund were outstanding. To the knowledge of the management of the
Fund, no person beneficially owned more than 5% of the outstanding shares of the
Fund as of April 30, 1998, except that Cede and Co., Box 20, Bowling Green
Station, New York, NY 10004-0001, held 4,830,187 shares as nominee.

<PAGE>

PROPOSAL 1.

ELECTION OF BOARD OF TRUSTEES

The persons named on the accompanying proxy card intend to vote at the
Meeting (unless otherwise directed) FOR the election of the nine (9) nominees
named below as Trustees of the Fund. All of the nominees currently serve as
Trustees.

Each Trustee will be elected to hold office until the next meeting of
shareholders or until his or her successor is elected and qualified. Each
nominee has consented to being named herein and indicated his or her willingness
to serve if elected. If any such nominee should be unable to serve, an event not
now anticipated, the persons named as proxies may vote for such other person as
shall be designated by the Board of Trustees.

The following table sets forth each nominee's position(s) with the Fund,
age, address, principal occupation or employment during the past five years;
trusteeships and directorships; and indicates the date on which he or she first
became a Trustee of the Fund. The table also shows the number of shares of
beneficial interest of the Fund beneficially owned by each nominee, directly or
indirectly, on May 5, 1998.

<PAGE>

<TABLE>
<CAPTION>
SHARES OF BENEFICIAL
INTEREST OF THE FUND
BENEFICIALLY OWNED AND
NAME, AGE, PRINCIPAL OCCUPATION FIRST PERCENTAGE OF TOTAL
POSITION(s) WITH THE OR EMPLOYMENT BECAME A SHARES OUTSTANDING ON
FUND AND ADDRESS AND DIRECTORSHIPS/TRUSTEESHIPS(1) TRUSTEE MAY 5, 1998(2)
- ------------------------------ --------------------------------- -------- ----------------------
<S> <C> <C> <C>
Pioneer First Polish Investment
Fund Joint Stock Company, S.A.
("PFPT") and Pioneer Czech
Investment Company, A.S.
("Pioneer Czech"); Director of
Pioneer Global Equity Fund Plc,
Pioneer Global Bond Fund Plc,
Pioneer DM Cashfonds Plc,
Pioneer European Equity Fund
Plc, Pioneer Central & Eastern
Europe Fund Plc and Pioneer US
Real Estate Fund Plc; and
Partner, Hale and Dorr LLP
(counsel to PGI and the Fund)
MARY K. BUSH, 50.............. President, Bush & Co., an 1997 -0-
Trustee international financial advisory
4201 Cathedral Ave. NW firm, since 1991;
Apt. 1016E Director/Trustee of Mortgage
Washington, DC 20016 Guaranty Insurance Corporation,
Novacon Management Company,
Hoover Institution, Folger
Shakespeare Library, March of
Dimes, Project 2000, Inc.
(not-for-profit organization),
Small Enterprise Assistance
Fund and Wilberforce
University; Advisory Board
member, Washington Mutual
Investors Fund, a registered
investment company; U.S.
Alternate Executive Director,
International Monetary Fund
(1984-1988); and Managing
Director, Federal Housing
Finance Board (1989-1991)
RICHARD H. EGDAHL, M.D., 71... Alexander Graham Bell Professor 1993 1,000
Trustee of Health Care Entrepreneurship,
Boston University Boston University; Professor of
Health Policy Institute Management, Boston University
53 Bay State Road School of Management; Professor
Boston, MA 02215 of Public Health, Boston
University School of Public
Health; Professor of Surgery,
Boston University School of
Medicine; University Professor,
Boston University; Director,
Boston University Health Policy
Institute and Boston University
Program for Health Care
Entrepreneurship; Director,
CORE (management of workers'
compensation and disability
costs - NASDAQ); Director,
WellSpace (provider of
complementary health care);
Trustee, Boston Medical Center,
and Honorary Trustee,
Franciscan Children's Hospital
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
SHARES OF BENEFICIAL
INTEREST OF THE FUND
BENEFICIALLY OWNED AND
NAME, AGE, PRINCIPAL OCCUPATION FIRST PERCENTAGE OF TOTAL
POSITION(s) WITH THE OR EMPLOYMENT BECAME A SHARES OUTSTANDING ON
FUND AND ADDRESS AND DIRECTORSHIPS/TRUSTEESHIPS(1) TRUSTEE MAY 5, 1998(2)
- ------------------------------ --------------------------------- -------- ----------------------
<S> <C> <C> <C>
MARGARET B.W. GRAHAM, 50...... Founding Director, The Winthrop 1993 100
Trustee Group, Inc. (consulting firm); (0.0)%
The Keep Manager of Research Operations,
P.O. Box 110 Xerox Palo Alto Research
Little Deer Isle, Center, from 1991 to 1994;
ME 04650 Professor of Operations
Management and Management of
Technology; and Associate Dean,
Boston University School of
Management, from 1989 to 1993
JOHN W. KENDRICK, 80.......... Professor Emeritus, George 1993 300
Trustee Washington University; Director, (0.0)%
6363 Waterway Dr. American Productivity and
Falls Church, VA 22044 Quality Center; Adjunct
Scholar, American Enterprise
Institute; and Economic
Consultant
MARGUERITE A. PIRET, 49....... President, Newbury, Piret & 1993 100
Trustee Company, Inc. (merchant banking (0.0)%
One Boston Place firm); Trustee of Boston
Suite 2635 Medical Center; and a Member of
Boston, MA 02108 The Board of Governors of The
Investment Company Institute
("ICI")
DAVID D. TRIPPLE, 53*......... Executive Vice President and a 1993 100
Executive Vice Director of PGI; President, Chief (0.0)%
President and Trustee Investment Officer and a
60 State Street Director of PMC; Director of
Boston, MA 02109 PFD, PCC, PIntl, PMIL, First
Russia, Omega, Pioneer SBIC
Corporation ("Pioneer SBIC"),
PMIL, Pioneer Global Equity
Fund Plc, Pioneer Global Bond
Fund Plc, Pioneer DM Cashfonds
Plc, Pioneer European Equity
Fund Plc, Pioneer Central &
Eastern Europe Fund Plc and
Pioneer US Real Estate Fund Plc
STEPHEN K. WEST, 69........... Of Counsel to Sullivan & Cromwell 1993 300
Trustee (a law firm); and Trustee, The (0.0)%
125 Broad Street Winthrop Focus Funds (mutual
New York, NY 10004 funds)
JOHN WINTHROP, 61............. President, John Winthrop & Co., 1993 101
Trustee Inc. (private investment firm) (0.0)%
One North Adgers Wharf and Director of NUI Corp.,
Charleston, SC 29401 (energy sales, services and
distribution)
</TABLE>
- ---------------
* Messrs. Cogan and Tripple are "interested persons" of the Fund, PMC and PFD
within the meaning of the Investment Company Act of 1940, as amended (the
"1940 Act").

(1) Each nominee also serves as a trustee for each of the open-end investment
companies (mutual funds) in the Pioneer family of mutual funds and for each
of the portfolios of the Pioneer Variable Contracts Trust (except Messrs.
Kendrick and Winthrop and Mesdames Bush and Graham who do not serve as
Trustees for Pioneer Variable Contracts Trust). Each Trustee was elected by
the shareholders of the Fund in 1997.

(2) As of May 5, 1998, the Trustees and officers of the Fund beneficially
owned, directly or indirectly, in the aggregate less than 1% of the Fund's
outstanding shares.
4
<PAGE>

Ms. Piret, Mr. West and Mr. Winthrop serve on the Audit Committee of the
Board of Trustees. The functions of the Audit Committee include recommending
independent auditors to the Trustees, monitoring the independent auditors'
performance, reviewing the results of audits and responding to certain other
matters deemed appropriate by the Trustees. Ms. Graham, Ms. Piret and Mr.
Winthrop also serve on the Nominating Committee of the Board of Trustees. The
primary responsibility of the Nominating Committee is the selection and
nomination of candidates to serve as independent trustees. The Nominating
Committee will also consider nominees recommended by shareholders to serve as
Trustees provided that shareholders submitting such recommendations comply with
all relevant provisions of Rule 14a-8 under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"). Ms. Bush, Dr. Egdahl, Ms. Graham, Mr. Kendrick,
Ms. Piret, Mr. West and Mr. Winthrop (the "Non-Interested Trustees") also serve
on the Non-Interested Trustees Committee of the Board of Trustees. The
Non-Interested Trustees Committee meets at least quarterly to discuss matters of
particular interest to the Non-Interested Trustees.

During the fiscal year ended December 31, 1997, the Board of Trustees held
12 meetings, the Audit Committee held 11 meetings and the Nominating Committee
held one meeting. All of the current Trustees and Committee Members then serving
attended at least 75% of the meetings of the Board of Trustees or applicable
committee, if any, held during the fiscal year ended December 31, 1997.

OTHER EXECUTIVE OFFICERS

In addition to Messrs. Cogan and Tripple, who serve as executive officers
of the Fund, the following table provides information with respect to the other
executive officers of the Fund. Each executive officer is elected by the Board
of Trustees and serves until his successor is chosen and qualified or until his
resignation or removal by the Board. The business address of all officers of the
Fund is 60 State Street, Boston, Massachusetts 02109.

<TABLE>
<CAPTION>
NAME, AGE AND
POSITION WITH THE FUND PRINCIPAL OCCUPATION(s)
---------------------- ----------------------------------------------
<S> <C>
William H. Keough, 61,......... Senior Vice President, Chief Financial Officer
Treasurer and Treasurer of PGI; Treasurer of PFD, PMC,
PSC, PCC, Pioneer SBIC, PIntl, PMT, PGL,
First Russia, Omega and each fund in the
Pioneer family of mutual funds.
Joseph P. Barri, 51,........... Secretary of PGI, PMC, PCC, PIntl, PMT, First
Secretary Russia, Omega and each fund in the Pioneer
family of mutual funds; Clerk of PFD and PSC
and Partner, Hale and Dorr (Counsel to the
Fund).
</TABLE>

REMUNERATION OF TRUSTEES AND OFFICERS

The following table provides information regarding the compensation paid by
the Fund and the other investment companies in the Pioneer Family of mutual
funds to the Trustees for their services as indicated below. Compensation paid
by the Fund to

<PAGE>

Messrs. Cogan and Tripple, interested persons of PMC, is reimbursed to the Fund
by PMC. The Fund pays no salary or other compensation to its officers.

<TABLE>
<CAPTION>
TOTAL COMPENSATION
FROM THE FUND
AGGREGATE AND OTHER FUNDS IN
COMPENSATION THE PIONEER FAMILY
TRUSTEE FROM THE FUND(+) OF MUTUAL FUNDS(++)
------- ---------------- -------------------
<S> <C> <C>
John F. Cogan, Jr........................ $ 500 $ 12,000
Mary K. Bush*............................ 909 30,000
Richard H. Egdahl, M.D................... 1,832 62,000
Margaret B.W. Graham..................... 1,832 60,000
John W. Kendrick......................... 1,699 55,800
Marguerite A. Piret...................... 2,114 80,000
David D. Tripple......................... 500 12,000
Stephen K. West.......................... 1,828 63,800
John Winthrop............................ 2,058 69,000
------- --------
Totals............................... $13,272 $444,600
======= ========
</TABLE>

- ---------------

(+) For the fiscal year ended December 31, 1997.

(++) For the calendar year ended December 31, 1997.

* Ms. Bush was first elected as a Trustee in June, 1997.

INVESTMENT ADVISER

PMC, whose executive offices are located at 60 State Street, Boston,
Massachusetts 02109, serves as investment adviser to the Fund.

PMC is a wholly owned subsidiary of PGI. As of March 31, 1998, Mr. Cogan
beneficially owned 3,602,901 shares (13.97%) of the outstanding Common Stock of
PGI. Mr. Cogan's beneficial holdings included 777,950 shares held in trusts with
respect to which Mr. Cogan may be deemed to be a beneficial owner by reason of
his interest as a beneficiary and/or position as a trustee and shares which Mr.
Cogan has the right to acquire under outstanding options within sixty days of
March 31, 1998. At such date, Robert L. Butler and David D. Tripple, PMC's other
directors, each owned beneficially less than 2% of the outstanding Common Stock
of PGI. As of March 31, 1998, officers and directors of PMC and Trustees and
officers of the Fund beneficially owned an aggregate of 4,584,479 shares of
Common Stock of PGI, approximately 17.32% of the outstanding Common Stock of
PGI. During PGI's fiscal year ended December 31, 1997, there were no
transactions in PGI Common Stock by any officer, Trustee or nominee for election
as Trustee of the Fund, PMC and/or PFD in an amount equal to or exceeding 1% of
the outstanding Common Stock of PGI.

<PAGE>

REQUIRED VOTE

In accordance with the Fund's Agreement and Declaration of Trust, the vote
of a plurality of all of the shares of the Fund voted at the Meeting is
sufficient to elect the nominees.

PROPOSAL 2.

RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS

The firm of Arthur Andersen LLP has served as the Fund's independent public
accountant since 1994. Audit services during the fiscal year ending December 31,
1998 will consist of examinations of the Fund's financial statements and reviews
of the Fund's filings with the Commission.

The Board of Trustees, including a majority of the Trustees who are not
"interested persons" of the Fund or PMC, has selected Arthur Andersen LLP as the
Fund's independent public accountants for the fiscal year ending December 31,
1998, subject to shareholder ratification at the Meeting. A representative of
Arthur Andersen LLP is expected to be available at the Meeting to make a
statement if he or she desires to do so and to respond to appropriate questions.
Arthur Andersen LLP has advised the Fund that it has no direct or indirect
financial interest in the Fund.

REQUIRED VOTE

The ratification of the selection of Arthur Andersen LLP as the Fund's
independent public accountants for the fiscal year ending December 31, 1998
requires the affirmative vote of a majority of the shares of the Fund, present
in person or by proxy and entitled to vote at the Meeting.

THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS VOTE IN FAVOR OF THE
RATIFICATION OF ARTHUR ANDERSEN LLP AS THE FUND'S INDEPENDENT PUBLIC ACCOUNTANTS
FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998.

OTHER MATTERS

SHAREHOLDER PROPOSALS

Shareholder proposals to be presented at the next meeting of shareholders,
whenever held, must be received at the Fund's offices, 60 State Street, Boston,
Massachusetts 02109, at a reasonable time prior to the Trustees' solicitation of
proxies for such meeting and must comply with the requirements of Rule 14a-8
under the Exchange Act. The Fund currently expects to hold the next annual
shareholders' meeting on or about June 22, 1999, which date is subject to
change.

<PAGE>

PROXIES, QUORUM AND VOTING AT THE MEETING

Any person giving a proxy has the power to revoke it at any time prior to
its exercise by executing a superseding proxy or by submitting a notice of
revocation to the Secretary of the Fund. In addition, although mere attendance
at the Meeting will not revoke a proxy, a shareholder present at the Meeting may
withdraw his or her proxy and vote in person. All properly executed and
unrevoked proxies received in time for the Meeting will be voted in accordance
with the instructions contained in the proxies. If no instruction is given, the
persons named as proxies will vote the shares represented thereby in favor of
the Proposals described above and will use their best judgment in connection
with the transaction of such other business as may properly come before the
Meeting or any adjournment thereof.

A majority of the shares entitled to vote -- present in person or
represented by proxy -- constitutes a quorum for the transaction of business
with respect to any Proposal (unless otherwise noted in the Proxy Statement). In
the event that at the time any session of the Meeting is called to order and a
quorum is not present in person or by proxy, the persons named as proxies may
vote those proxies which have been received to adjourn such Meeting to a later
date. In the event that a quorum is present at the Meeting but sufficient votes
in favor of any Proposal, including the electing of the nominees to the Board of
Trustees, have not been received, the persons named as proxies may propose one
or more adjournments of such Meeting to permit further solicitation of proxies
with respect to such Proposal. Any such adjournment will require the affirmative
vote of a majority of the shares present in person or by proxy at the session of
the Meeting to be adjourned. The persons named as proxies will vote those
proxies which they are entitled to vote in favor of any such Proposal in favor
of such adjournment and will vote those proxies required to be voted against any
such Proposal against such adjournment. A shareholder vote may be taken on one
or all of the Proposals prior to such adjournment if sufficient votes for the
Proposal's approval have been received and it is otherwise appropriate. Such
vote will be considered final regardless of whether the Meeting is adjourned to
permit additional solicitation with respect to any other Proposal.

Shares of the Fund represented at the Meeting (including shares which
abstain or do not vote with respect to one or more of the Proposals) will be
counted for purposes of determining whether a quorum is present at the Meeting.
Abstentions will be treated as shares that are present and entitled to vote for
purposes of determining the number of shares that are present and entitled to
vote with respect to any particular Proposal, but will not be counted as a vote
in favor of such Proposal. Accordingly, an abstention from voting on a Proposal
has the same legal effect as a vote against the Proposal.

If a broker or nominee holding shares in "street name" indicates on the
proxy that it does not have discretionary authority to vote as to any Proposal,
those shares will not be considered present and entitled to vote as to that
Proposal. Accordingly, a
8

<PAGE>

"broker non-vote" has no effect on the voting in determining whether a proposal
has been adopted. In general, brokers or nominees are given discretionary
authority to vote shares held in street name with respect to the election of
trustees/directors and the ratification of auditors.

OTHER BUSINESS

While the Meeting has been called to transact any business that may
properly come before it, the only matters that the Trustees intend to present
are those matters stated in the attached Notice of Annual Meeting of
Shareholders. However, if any additional matters properly come before the
Meeting, and on all matters incidental to the conduct of the Meeting, it is the
intention of the persons named in the enclosed proxy to vote the proxy in
accordance with their judgment on such matters unless instructed to the
contrary.

METHODS OF SOLICITATION AND EXPENSES

The cost of preparing, assembling and mailing this proxy statement and the
attached Notice of Annual Meeting of Shareholders and the accompanying proxy
card will be borne by the Fund. In addition to soliciting proxies by mail, the
Fund may, at its expense, have one or more of its officers, representatives or
compensated third-party agents, including PMC, PSC and PFD, aid in the
solicitation of proxies by personal interview or telephone and telegraph and may
request brokerage houses and other custodians, nominees and fiduciaries to
forward proxy soliciting materials to the beneficial owners of the shares held
of record by such persons.

The Fund may also arrange to have votes recorded by telephone. The
telephone voting procedure is designed to authenticate shareholders' identities,
to allow shareholders to authorize the voting of their shares in accordance with
their instructions and to confirm that their instructions have been properly
recorded. The Fund has been advised by counsel that these procedures are
consistent with the requirements of applicable law. If these procedures were
subject to a successful legal challenge, such votes would not be counted at the
Meeting. The Fund is unaware of any such challenge at this time. Shareholders
would be called at the phone number PSC has in its records for their accounts,
and would be asked for their Social Security number or other identifying
information. The shareholders would then be given an opportunity to authorize
proxies to vote their shares at the Meeting in accordance with their
instructions. To ensure that the shareholders' instructions have been recorded
correctly, they will also receive a confirmation of their instructions in the
mail. A special toll-free number will be available in case the information
contained in the confirmation is incorrect.

<PAGE>

Persons holding shares as nominees will be reimbursed by the Fund, upon
request, for the reasonable expense of mailing soliciting materials to the
principals of the accounts.

PIONEER INTEREST SHARES

May 11, 1998

VOTE THIS PROXY CARD TODAY! YOUR PROMPT RESPONSE WILL
SAVE THE EXPENSE OF ADDITIONAL MAILINGS
Please sign and return this proxy card in the enclosed envelope or mail to:

PIONEER INTEREST SHARES
Proxy Tabulator
P.O. Box 9138
Hingham, MA 02043

Please fold and detach card at perforation before mailing

PIONEER INTEREST SHARES
60 STATE STREET
BOSTON, MASSACHUSETTS 02109

NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD TUESDAY, JUNE 23, 1998

The undersigned, having received notice of the meeting and management's proxy
statement therefor, and revoking all prior proxies, hereby appoint(s) John F.
Cogan, Jr., David D. Tripple, Robert P. Nault and Joseph P. Barri, and each of
them, attorneys or attorney of the undersigned (with full power of substitution
in them and each of them) for and in the name(s) of the undersigned to attend
the Annual Meeting of Shareholders of Pioneer Interest Shares (the "Fund") to be
held on Tuesday, June 23, 1998 at 2:00 p.m. (Boston time) at the offices of Hale
and Dorr LLP, counsel to the Fund, 60 State Street, 26th Floor, Boston,
Massachusetts 02109 (the "Meeting"), and any adjourned session or sessions
thereof, and there to vote and act upon the following matters (as more fully
described in the accompanying Proxy Statement) in respect of all shares of the
Fund which the undersigned will be entitled to vote or act upon, with all the
powers the undersigned would possess if personally present:

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES OF THE FUND AND
SHOULD BE RETURNED AS SOON AS POSSIBLE IN THE ENVELOPE PROVIDED. THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE UNDERSIGNED. IF NO
DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE PROPOSALS.

DATED:..........., 199..

In signing, please write name(s) exactly as appearing hereon. When signing
as attorney, executor, administrator or other fiduciary, please give your
full title as such. Joint owners should each sign personally.

..........................
Signature(s)

<PAGE>

VOTE THIS PROXY CARD TODAY! YOUR PROMPT RESPONSE WILL
SAVE THE EXPENSE OF ADDITIONAL MAILINGS
Please sign and return this proxy card in the enclosed envelope or mail to:

PIONEER INTEREST SHARES
Proxy Tabulator
P.O.Box 9138 Hingham, MA 02043

Please fold and detach card at perforation before mailing

Please vote by filling in the boxes below.

(1) To elect the nine (9) Trustees to serve on the Board of Trustees until
their successors have been duly elected and qualified. The nominees
are:

John F. Cogan, Jr., Mary K. Bush, Richard H. Egdahl, M.D.,
Margaret B.W. Graham, John W. Kendrick, Marguerite A. Piret,
David D. Tripple, Stephen K. West and John Winthrop.

FOR electing |_| WITHHOLD authority to vote |_|
all the nominees for all nominees
(except as marked to the contrary)

(NOTE: To withhold authority to vote for one or more of the nominees, write
the nominee name(s) on the line below.)

..............................................

(2) To ratify the selection of Arthur Andersen LLP as the Fund's
independent public accountants for the fiscal year ending December 31,
1998;

FOR |_| AGAINST |_| ABSTAIN |_|

IN THEIR DISCRETION, THE PROXIES ARE AUTHORIZED TO VOTE UPON SUCH OTHER BUSINESS
AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.

Pioneer Interest Shares
60 State Street
Boston, MA 02109-1820

May 1998

Dear Shareowner,

I am writing to let you know that the annual meeting for shareowners of Pioneer
Interest Shares will be held June 23, 1998. As a shareowner in the Fund, you
have the opportunity to voice your opinion on a number of important proposals.

This package contains information about the proposals, along with the proxy card
for you to use when voting by mail. Please take a moment to read the enclosed
materials and cast your vote on the proxy card.

Your prompt vote will help save the Fund money. If a majority of the Fund's
shareowners have not voted prior to the meeting, we must try to obtain their
votes with additional mailings or phone solicitation. That is a costly process.

(callout in margin) VOTING YOUR SHARES BY MAIL IS QUICK AND EASY. EVERYTHING
YOU NEED IS ENCLOSED.

Each of the proposals up for approval has been reviewed by Pioneer Interest
Shares' Board of Trustees, whose primary role is to protect your interests as a
shareowner. In the Trustees' opinion, the proposals are fair and reasonable. The
Trustees recommend that you vote FOR each proposal.

(callout in margin) THE FUND'S BOARD OF TRUSTEES RECOMMENDS THAT YOU VOTE FOR
EACH PROPOSAL.

HERE IS WHAT A FOR VOTE MEANS FOR EACH OF THE PROPOSALS BEING CONSIDERED.

(callout in margin) PROPOSAL 1:
ELECT NINE TRUSTEES TO THE BOARD. The Trustees supervise the Fund's activities
and review contractual arrangements with companies that provide services to the
Fund. All of the nominees previously were elected by shareowners. The proxy
statement includes detailed information about all nominees.

(callout in margin) PROPOSAL 2:
RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP AS THE FUND'S INDEPENDENT PUBLIC
ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998.

Cast your vote by completing and signing the proxy card enclosed in this
package. Please mail your completed and signed proxy card as quickly as
possible, using the postage-paid envelope provided. Thank you for your prompt
response

(callout in margin) PLEASE VOTE! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER
HOW MANY SHARES YOU OWN.

Sincerely,

John F. Cogan, Jr.
Chairman and President

0598-xxxx
<PAGE>
URGENT
PLEASE VOTE YOUR SHARES TODAY

Dear Shareowner,

Not too long ago we sent you a proxy card and materials for Pioneer Interest
Shares (the Fund) explaining the proposals up for a vote at the June 23, 1998
shareowner meeting. WE NEED YOU TO CAST YOUR VOTE!

If you have not already completed and returned the proxy card included in our
earlier package, PLEASE TAKE A MOMENT NOW TO COMPLETE THE ENCLOSED PROXY CARD
AND MAIL IT TO US IN THE POSTAGE-PAID ENVELOPE PROVIDED.

The proposals in the Proxy Statement have been reviewed by the Fund's Board of
Trustees, whose primary role is to protect your interests as a shareowner. In
the Trustees' opinion, the proposals are fair and reasonable. The Trustees
recommend that you vote FOR each proposal. For your easy reference, on the back
of this page is a summary of what a FOR vote would mean for each proposal.

PLEASE VOTE! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW MANY SHARES YOU
OWN.

Thank you for your prompt response.

Sincerely,

John F. Cogan, Jr.,
Chairman and President

Here is what a FOR vote means for each of the proposals being considered.

PROPOSAL 1:
ELECT NINE TRUSTEES TO THE BOARD. The Trustees supervise the Fund's activities
and review contractual arrangements with companies that provide services to the
Fund. All of the nominees currently serve as Trustees. The proxy statement
includes detailed information about all nominees.

PROPOSAL 2:
RATIFY THE SELECTION OF ARTHUR ANDERSEN LLP as the Fund's independent public
accountants for the fiscal year ending December 31, 1998.

PLEASE VOTE! YOUR VOTE IS EXTREMELY IMPORTANT, NO MATTER HOW MANY SHARES YOU
OWN.