NEW YORK, Dec. 4, 2008 (GLOBE NEWSWIRE) -- Nicholas-Applegate Convertible & Income Fund (NYSE:NCV) and Nicholas-Applegate Convertible & Income Fund II (NYSE:NCZ) (collectively, the "Funds") today announced additional redemptions, at par, of a portion of the Funds' auction rate preferred shares ("ARPS"), beginning December 26, 2008 and concluding Wednesday, December 31, 2008. The Boards of Trustees of the Funds approved the redemptions.
NCV will redeem an additional $83 million and NCZ will redeem an additional $66 million of ARPS. These redemptions are mandatory under the Funds' By-laws as a result of the Funds' failure to maintain the minimum asset coverage of 200% ("200% Level") required by the Investment Company Act of 1940, as amended ("1940 Act") and each Fund's By-laws. These redemptions of the Funds' ARPS follow the previous two redemptions announced on October 9, 2008 and November 7, 2008 which totaled $85 million and $165 million for NCV and NCZ, respectively. Following completion of the redemptions, NCV will have outstanding $357 million of ARPS and NCZ will have outstanding $274 million of ARPS.
As previously announced on November 3, 2008, NCV and NCZ have postponed the payment and scheduled declaration of dividends on the Funds' common shares due to the failure by each Fund to maintain the 200% Level. A Fund is not permitted to pay or declare common share dividends unless the Fund's ARPS have a minimum asset coverage of 200% after payment or declaration of the common share dividend, in accordance with the 1940 Act and the Fund's By-laws.
Each Fund intends to redeem the following amounts of ARPS at their full liquidation preference of $25,000 per share plus accumulated but unpaid dividends, pro rata across each Fund's five Series of ARPS, on their respective dates of redemption listed below:
Nicholas-Applegate Convertible & Income Fund
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Series Redemption Redemption Redemption Amount as a %
Date Amount of Outstanding ARPS in
that Series
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Series C Dec 26, 2008 $16,600,000 Approx. 18.9%
(CUSIP: (664 shares
65370F408) x $25,000)
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Series D Dec 26, 2008 $16,600,000 Approx. 18.9%
(CUSIP: (664 shares
65370F507) x $25,000)
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Series E Dec 29, 2008 $16,600,000 Approx. 18.9%
(CUSIP: (664 shares
65370F606) x $25,000)
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Series A Dec 30, 2008 $16,600,000 Approx. 18.9%
(CUSIP: (200 shares
65370F200) x $25,000)
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Series B Dec 31, 2008 $16,600,000 Approx. 18.9%
(CUSIP: (664 shares
65370F309) x $25,000)
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Total $83,000,000
(3,320 shares
x $25,000)
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Nicholas-Applegate Convertible & Income Fund II
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Series Redemption Redemption Redemption amount as a %
date Amount of outstanding ARPS in
that Series
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Series C Dec 26, 2008 $13,200,000 Approx. 19.4%
(CUSIP: (528 shares
65370G406) x $25,000)
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Series D Dec 26, 2008 $13,200,000 Approx. 19.4%
(CUSIP: (528 shares
65370G505) x $25,000)
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Series E Dec 29, 2008 $13,200,000 Approx. 19.4%
(CUSIP: (528 shares
65370G604) x $25,000)
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Series A Dec 30, 2008 $13,200,000 Approx. 19.4%
(CUSIP: (528 shares
65370G208) x $25,000)
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Series B Dec 31, 2008 $13,200,000 Approx. 19.4%
(CUSIP: (528 shares
65370G307) x $25,000)
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Total $66,000,000
(2,640 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 redemptions 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.
Each Fund's 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 as well as the Investment Company Act of 1940.