NEW YORK, Jan. 9, 2009 (GLOBE NEWSWIRE) -- PIMCO Municipal Income Fund (NYSE:PMF) and PIMCO New York Municipal Income Fund II (NYSE:PNI) (each a "Fund" and collectively, the "Funds") today announced each Fund will redeem, at par, a portion of its auction rate preferred shares ("ARPS"), beginning January 26, 2009 and concluding January 30, 2009 for PMF, and beginning January 26, 2009 and concluding January 29, 2009 for PNI.
The decision to redeem a portion of the Funds' ARPS was made at the recommendation of the Funds' investment manager and sub-adviser and approved by the Boards of Trustees. PMF will redeem $10 million and PNI will redeem $11 million of its ARPS. As previously communicated in a press release dated December 31, 2008, a Fund is not permitted to pay or declare common share dividends unless the Fund's ARPS have a minimum asset coverage of 200% ("200% Level") after payment or declaration of the common share dividend, in accordance with each Fund's By-laws and the Investment Company Act of 1940, as amended. PNI's redemption is intended to increase and maintain asset coverage of the Fund's ARPS above the 200% Level, permitting the Fund to pay the previously declared common share dividend (December 1, 2008) and to declare and pay future common share dividends. Depending on market conditions, the coverage ratio may increase or decrease further. An announcement regarding PNI's actual dividend payment and declarations dates will be made at a future date.
As reported in press releases dated January 2 and January 5, 2009, PMF was eligible to and paid its December declared common share dividend on January 2 and declared its January common share dividend on January 5, 2009 (payable on February 2, 2009). PMF continues to satisfy the 200% Level, but has determined to redeem $10 million of its ARPS in order to increase the Fund's asset coverage further above the 200% Level, subject to market conditions.
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:
PIMCO Municipal Income Fund (PMF)
Redemption
Amount
as a % of
Outstanding
Redemption ARPS in that
Series Date Redemption Amount Series
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Series A
(CUSIP: $2,000,000
72200R206) January 27, 2009 (80 shares x $25,000) 5.0%
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Series B
(CUSIP: $2,000,000
72200R305) January 28, 2009 (80 shares x $25,000) 5.0%
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Series C
(CUSIP: $2,000,000
72200R404) January 29, 2009 (80 shares x $25,000) 5.0%
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Series D
(CUSIP: $2,000,000
72200R503) January 30, 2009 (80 shares x $25,000) 5.0%
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Series E
(CUSIP: $2,000,000
72200R602) January 26, 2009 (80 shares x $25,000) 5.0%
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$10,000,000
Total (400 shares x $25,000) 5.0%
PIMCO New York Municipal Income Fund II (PNI)
Redemption
Amount
as a % of
Outstanding
Redemption ARPS in that
Series Date Redemption Amount Series
---------------------------------------------------------------------
Series A
(CUSIP: $5,500,000
72200Y201) January 29, 2009 (220 shares x $25,000) Approx. 12.2%
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Series B
(CUSIP: $5,500,000
72200Y300) January 26, 2009 (220 shares x $25,000) Approx. 12.2%
=====================================================================
$11,000,000
Total (440 shares x $25,000) Approx. 12.2%
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 investment objective of each Fund is to provide current income exempt from federal income tax. PIMCO New York Municipal Income Fund II also seeks to provide income exempt from New York State and city income taxes. There can be no assurance that the Funds will meet their 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, 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 their 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 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.