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Pimco funds receive tenders for 35%, 43% of auction-rate preferreds
New York, Oct. 31 – Pimco Income Strategy Fund and Pimco Income Strategy Fund II said they received tenders for 35% and 43% of their outstanding auction-rate preferred shares, respectively.
Pimco Income Strategy Fund accepted $27.7 million, or 1,108 of the $25,000 par preferred shares for purchase, according to a press release.
Pimco Income Strategy Fund II accepted $68.55 million, or 2,742 of the $25,000 par preferreds.
The tenders were announced on Sept. 18. They expired at 5 p.m. ET on Oct. 31.
The purchase price for both funds was 90% of the per-share liquidation preference of $25,000, or $22,500 per share, and accrued dividends through the expiration date of the tender offers.
In addition, tendering holders will receive one non-transferrable contingent payment right.
The contingent payment right represents a non-transferrable contractual right to receive an additional payment if the fund completes an additional tender offer for its auction-rate preferreds or a voluntary redemption of the shares during the 365 calendar days following the expiration date of the tender offer and that subsequent tender offer or voluntary redemption is for a price per share that is greater than 90% of the auction-rate preferreds’ liquidation preference.
The additional payment would be equal to the number of auction-rate preferreds accepted for payment in the fund's tender offer multiplied by the price differential per share between the price received in the tender offer and the price of the subsequent tender offer or voluntary redemption by the fund.
The tender agent is Deutsche Bank Trust Co. Americas (877 843-9767).
Pimco is an investment management firm based in Newport Beach, Calif.
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