Fitch assigns AA to Pimco shares

Fitch Ratings said it assigned an AA long-term rating to the $100 million of remarketable variable-rate munifund term preferred shares, series 2052-B issued by Pimco Flexible Municipal Income Fund.

The rating considers the asset coverage provided to the preferred shares as calculated per the overcollateralization tests, structural protections afforded by mandatory deleveraging provisions in the event of asset coverage declines, legal and regulatory parameters governing the fund's operations and the capabilities of Pacific Investment Management Co. LLC as investment manager, Fitch said.

“Based on discussions with management and review of certain transaction documents, Fitch expects that during the outstanding term of the Rvmtp Shares, the fund may invest up to 40% of its total assets in securities that at the time of investment are rated below the BBB rating category, or, if unrated, determined by Pimco to be of comparable quality,” Fitch said in a press release.

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