Shareholders in six Pimco closed-end funds and one Nicholas-Applegate closed-end fund are unhappy with the pricing of auction rate securities that were redeemed by the funds. Allianz Global Investors Fund Management, the parent company to both Pimco and Nicholas-Applegate, disclosed Friday that it had received letters from a law firm representing the shareholders that claim that the company's executives and fund trustees breached their fiduciary duties to the funds.
The matter dates back to the freezing of the auction rate market during the liquidity crisis in 2007 and 2008.
The funds had redeemed a portion of the auction rate preferred shares they held at par.
Allianz officials stated that the funds' independent trustees are evaluating the demand letters. All seven of the funds are listed on the NYSE.
The named funds are:
PIMCO Corporate Income Fund (PCN)
PIMCO Corporate Opportunity Fund (PTY)
PIMCO High Income Fund (PHK)
PIMCO Income Strategy Fund (formerly, PIMCO Floating Rate Income Fund) (PFL)
PIMCO Income Strategy Fund II (formerly, PIMCO Floating Rate Strategy Fund) (PFN)
PIMCO Municipal Income Fund II (PML)
Nicholas-Applegate Convertible & Income Fund II (NCZ)
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