NEW YORK, Nov. 26, 2008 (GLOBE NEWSWIRE) -- PIMCO Corporate Income Fund (NYSE:PCN) and PIMCO Corporate Opportunity Fund (NYSE:PTY) (each, a "Fund" and collectively, the "Funds") today announced that each Fund will redeem, at par, a portion of its auction rate preferred shares ("ARPS"), beginning December 15, 2008 and concluding on December 19, 2008. The Funds also announced that they may postpone the payment of previously declared November dividends for common shares and postpone the declaration of dividends for common shares, currently scheduled to occur on December 1, 2008.
A Fund is not permitted to pay or declare common share dividends unless the Fund's ARPS have a minimum asset coverage of 200% ("200% Level") after payment or declaration of the common share dividends, in accordance with the Investment Company Act of 1940, as amended and each Fund's By-laws. Continued severe market dislocations have caused the values of the Funds' portfolio securities to decline, and as a result the Funds' asset coverage ratios have fallen below the 200% Level.
In the event that the 200% Level is not met by a Fund at the time of the scheduled payment of dividends on December 1, 2008, the applicable Fund or Funds whose asset coverage is below the 200% Level would have to postpone the payment of the previously declared November dividends. This same date is also planned as the declaration date for the December common share dividends, and either Fund that does not meet the coverage test would have to postpone the declaration of the December dividend beyond its previously planned declaration date until the situation is corrected.
The decision to redeem a portion of the Funds' ARPS was made at the recommendation of the Funds' managers and approved by the Boards of Trustees. This redemption is intended to increase and maintain asset coverage of the Funds' ARPS above the 200% Level, permitting the Funds to pay the previously declared common share dividends and to declare and pay future common share dividends. Depending on market conditions, these coverage ratios may increase or decrease further. An announcement regarding actual dividend payment and declaration dates will be made at a future date.
Each Fund intends to redeem the following amount of ARPS per Series, at their full liquidation preference of $25,000 per share plus accumulated but unpaid dividends, up to their respective dates of redemption:
PIMCO Corporate Income Fund (PCN)
------------------- -------------- ---------------------- -----------
Series Redemption Redemption Amount Redemption
Date Amount as
a % of
Outstanding
ARPS in that
Series
------------------- -------------- ---------------------- -----------
Series M Dec. 16, 2008 $6,000,000 10%
(CUSIP: 72200U209) (240 shares x $25,000)
------------------- -------------- ---------------------- -----------
Series T Dec. 17, 2008 $6,000,000 10%
(CUSIP: 72200U308) (240 shares x $25,000)
------------------- -------------- ---------------------- -----------
Series W Dec. 18, 2008 $6,000,000 10%
(CUSIP: 72200U407) (240 shares x $25,000)
------------------- -------------- ---------------------- -----------
Series TH Dec. 19, 2008 $6,000,000 10%
(CUSIP: 72200U506) (240 shares x $25,000)
------------------- -------------- ---------------------- -----------
Series F Dec. 15, 2008 $6,000,000 10%
(CUSIP: 72200U605) (240 shares x $25,000)
------------------- -------------- ---------------------- -----------
Total $30,000,000
(1,200 shares x
$25,000)
------------------- -------------- ---------------------- -----------
PIMCO Corporate Opportunity Fund (PTY)
-------------------- --------- ---------------------- ---------------
Series Redemption Redemption Amount Redemption Amount
Date as a % of
Outstanding ARPS
in that Series
-------------------- --------- ---------------------- ---------------
Series M Dec. 16, $13,800,000 Approx 12.2%
(CUSIP: 72201B200) 2008 (552 shares x $25,000)
-------------------- --------- ---------------------- ---------------
Series T Dec. 17, $13,800,000 Approx 12.2%
(CUSIP: 72201B309) 2008 (552 shares x $25,000)
-------------------- --------- ---------------------- ---------------
Series W Dec. 18, $13,800,000 Approx 12.2%
(CUSIP: 72201B408) 2008 (552 shares x $25,000)
-------------------- --------- ---------------------- ---------------
Series TH Dec. 19, $13,800,000 Approx 12.2%
(CUSIP: 72201B507) 2008 (552 shares x $25,000)
-------------------- --------- ---------------------- ---------------
Series F Dec. 15, $13,800,000 Approx 12.2%
(CUSIP: 72201B606) 2008 (552 shares x $25,000)
-------------------- --------- ---------------------- ---------------
Total $69,000,000
(2,760 shares x
$25,000)
-------------------- --------- ---------------------- ---------------
The Funds are partially redeeming their ARPS on a pro rata basis by Series. The Depositary Trust Company ("DTC"), holder of record of the ARPS, determines how the redemption will be allocated among each participant broker-dealer account that holds ARPS and each participant broker-dealer determines how to allocate each redemption among the beneficial holders of the ARPS held by it. The procedures used by participant broker-dealers to allocate redeemed ARPS among their clients may differ from each other and from the procedures used by DTC.
PCN's investment objective is to seek high current income with a secondary objective of capital preservation and appreciation. PTY's investment objective is to seek maximum total return through a combination of current income and capital appreciation. There can be no assurance that the Funds will achieve their stated objectives.
Allianz Global Investors Fund Management LLC, an indirect, wholly-owned subsidiary of Allianz Global Investors of America L.P., serves as the Funds' investment manager and is a member of Munich-based Allianz Group (NYSE:AZ). Pacific Investment Management Company LLC, an Allianz Global Investors Fund Management affiliate, serves as the Funds' sub-adviser.
The Funds' daily New York Stock Exchange closing prices and net asset values per share are available by calling the Funds' shareholder servicing agent at (800) 331-1710. This information, as well as updated portfolio statistics and performance, is available at http://www.allianzinvestors.com.
Statements made in this release that look forward in time involve risks and uncertainties and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such risks and uncertainties include, without limitation, the adverse effect from further declines in the securities markets and in the Funds' performance, a general downturn in the economy, inability to obtain leverage to replace ARPS that have been redeemed, competition from other companies, changes in government policy or regulation, inability to attract or retain key employees, inability to implement its operating strategy and/or acquisition strategy, and unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations. The Funds' ability to pay dividends to common shareholders is subject to the restrictions in their registration statements, By-laws and other governing documents.