NEW YORK, Oct. 9, 2008 (GLOBE NEWSWIRE) -- Nicholas-Applegate Convertible & Income Fund (NYSE:NCV) and Nicholas-Applegate Convertible & Income Fund II (NYSE:NCZ) (collectively, the "Funds") today called for the redemption at par of a portion of the Funds' Auction Rate Preferred Shares ("ARPS"), beginning October 27, 2008. The Boards of Trustees of the Funds approved the redemptions.
The decision to partially redeem the Funds' ARPS was made at the recommendation of Fund management, due in part to the current market environment of unparalleled liquidity constraints and resulting market imbalances. Doug Forsyth, managing director at Nicholas-Applegate Capital Management LLC, the Funds' sub-adviser, and lead portfolio manager for the Funds commented: "The Funds will experience a reduction in leverage as a result of the partial ARPS redemption. However, we think the Funds may still be able to take advantage of income opportunities currently available in the convertible and high yield markets. Market volatility has negatively impacted the net asset value ("NAV") of the Funds' common shares and asset coverage with respect to the ARPS. We believe it to be prudent for the Funds to reduce their leverage at this time in an effort to reduce the common shares' NAV volatility in these difficult market conditions."
As previously announced on October 1, 2008, NCV intends to pay its declared monthly dividend of $0.125 per common share and NCZ intends to pay its declared monthly dividend of $0.11875 per common share, as scheduled, on November 3, 2008. The Funds also anticipate declaring their next monthly common share dividends on November 3, 2008, which would be payable on December 1, 2008.
Each Fund intends to redeem the following series and amounts of ARPS at their full liquidation preference of $25,000 per share plus accumulated but unpaid dividends up to their respective dates of redemption:
Nicholas-Applegate Convertible & Income Fund
Redemption
Amount
as a % of
Outstanding
Redemption APS in
Series Date Redemption Amount that Series
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Series E Oct 27, $5,000,000 Approx. 4.8%
(CUSIP: 65370F606) 2008 (200 shares x $25,000)
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Series A Oct 28, $5,000,000 Approx. 4.8%
(CUSIP: 65370F200) 2008 (200 shares x $25,000)
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Series B Oct 29, $5,000,000 Approx. 4.8%
(CUSIP: 65370F309) 2008 (200 shares x $25,000)
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Series C Oct 30, $5,000,000 Approx. 4.8%
(CUSIP: 65370F408) 2008 (200 shares x $25,000)
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Series D Oct 31, $5,000,000 Approx. 4.8%
(CUSIP: 65370F507) 2008 (200 shares x $25,000)
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Total $25,000,000 Approx. 4.8%
(1,000 shares x $25,000)
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Nicholas-Applegate Convertible & Income Fund II
Redemption
Amount
as a % of
Outstanding
Redemption APS in
Series Date Redemption Amount that Series
---------------------------------------------------------------------
Series E Oct 27, $21,000,000 Approx. 20.8%
(CUSIP: 65370G604) 2008 (840 shares x $25,000)
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Series A Oct 28, $21,000,000 Approx. 20.8%
(CUSIP: 65370G208) 2008 (840 shares x $25,000)
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Series B Oct 29, $21,000,000 Approx. 20.8%
(CUSIP: 65370G307) 2008 (840 shares x $25,000)
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Series C Oct 30, $21,000,000 Approx. 20.8%
(CUSIP: 65370G406) 2008 (840 shares x $25,000)
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Series D Oct 31, $21,000,000 Approx. 20.8%
(CUSIP: 65370G505) 2008 (840 shares x $25,000)
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Total $105,000,000 Approx. 20.8%
(4,200 shares x $25,000)
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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.
The Funds' investment objective is to provide total return through a combination of capital appreciation and high current income. 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). Nicholas-Applegate Capital Management LLC, an Allianz Global Investors Fund Management affiliate, serves as the Funds' sub-adviser.
The Funds' daily New York Stock Exchange closing prices, net asset values per share, as well as other information, including updated portfolio statistics and performance, is available at http://www.allianzinvestors.com or by calling the Funds' shareholder servicing agent at (800) 331-1710.
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.