NEW YORK, Nov. 7, 2008 (GLOBE NEWSWIRE) -- PIMCO Floating Rate Income Fund (NYSE:PFL) and PIMCO Floating Rate Strategy Fund (NYSE:PFN) (each a "Fund" and collectively the "Funds") announced today that the Funds have postponed the payment of the previously declared (October 3, 2008) dividends on the Funds' common shares scheduled for payment on November 7, 2008 and the declaration of the next dividends on the Funds' common shares, which would have been paid in December 2008, due to recent market conditions and requirements under the Funds' By-laws and the Investment Company Act of 1940, as amended (the "1940 Act").
Accordingly, the declared dividends ($0.102841 and $0.098675 per common share for PFL and PFN, respectively) payable on November 7, 2008 to shareholders of record on October 13, 2008, with an ex-dividend date of October 8, 2008, will not be paid on November 7, 2008.
In accordance with the 1940 Act and each Fund's By-laws, each Fund is not permitted to pay or declare common share dividends unless that Fund's auction rate preferred shares ("ARPS") have a minimum asset coverage of 200% ("200% Level") after payment of the common share dividend or declaration of the common share dividend. Due to current market conditions, the values of the Funds' portfolio securities have declined, which has caused the Funds' asset coverage ratios to fall below the 200% Level.
As the Funds announced in a press release dated October 24, 2008, the Funds' ability to earn sufficient income to pay the previously declared dividends or declare the December dividends was not impacted by this decline in the asset coverage ratios or market conditions. Therefore, if market conditions improve and the values of the Funds' assets increase to a point where the Funds have adequate asset coverage, the Funds intend to pay the common share dividends previously declared and declare the dividends scheduled to be declared today. The Funds will make a subsequent public announcement as to the payment of the November common share dividends and the declaration of future dividends. In the event that a Fund's asset coverage does not increase to at least the 200% Level on or before a cure date as specified in the By-laws, that Fund will redeem, within 35 days after such cure date, an amount of ARPS sufficient to bring the asset coverage back up to the 200% Level.
Each Fund's investment objective is to seek high current income, consistent with the preservation of capital. 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). Pacific Investment Management Company LLC, an Allianz Global Investors Fund Management affiliate, serves as the Funds' sub-adviser.
The Funds' daily New York Stock Exchange closing prices and net asset values per share are available by calling the Funds' shareholder servicing agent at (800) 331-1710. This information, as well as updated portfolio statistics and performance, is available at http://www.allianzinvestors.com.
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, 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 maintain leverage and to declare and pay dividends to common shareholders is subject to the restrictions in its registration statement, By-laws and other governing documents.