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Pimco preferred holders seek redemption, nominate trustee to boards
By Angela McDaniels
Tacoma, Wash., Oct. 25 - Two holders of Pimco Income Strategy Fund's and Pimco Income Strategy Fund II's auction-rate preferred shares want the preferreds redeemed and are soliciting proxies to get their nominee elected to the funds' boards of trustees, according to a schedule 14A filing with the Securities and Exchange Commission.
Brigade Leveraged Capital Structures Fund Ltd. and Brigade Capital Management, LLC said they are the second-largest holders of the funds' preferreds. They beneficially hold 1,037 of Pimco's preferreds and 1,669 of Pimco II's preferreds.
They have nominated Neal P. Goldman as a class II preferred shares trustee of Pimco and a class I preferred shares trustee of Pimco II.
Goldman has been a partner at Brigade Capital Management since January 2007. In the past five years, he has been a director on the boards of NII Holdings Inc. (2002-2007), Catalyst Paper Corp. (2006-2008) and Jacuzzi Brands Corp. (2010-2011).
"In this historically low interest rate environment, there are a number of attractive financing alternatives to replace the preferred shares that the funds should be exploring and that would be in the funds' best interests," the Brigade companies said in the filing.
In addition, the Brigade companies are concerned about the "performance, investment strategy, concentration of investments in financial companies and corporate governance policies and practices of the funds."
Pimco Income Strategy Fund and Pimco Income Strategy Fund II are based in New York. They seek high current income through investments in floating- and fixed-rate debt instruments.
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