Allianz Global Investors Fund Management today suspended dividend payouts on six municipal bond funds subadvised by affiliate PIMCO.
The funds are the $592 million PIMCO Municipal Income Fund II; the $319 million PIMCO Municipal Income Fund III; the $287 million PIMCO California Municipal Income Fund II; the $213 million PIMCO California Municipal Income Fund III; the $74 million PIMCO New York Municipal Income Fund; and the $57 million PIMCO New York Municipal Income Fund III.
According to an Allianz news release, the action followed declines in the value of those funds’ portfolios, which left asset coverage below the 200% of outstanding auction-rate preferred shares required for making dividend payouts under the Investment Company Act of 1940.
All six will resume paying and declaring dividends “as soon as possible,” the news release said.
Spokesmen at Allianz and PIMCO weren’t immediately available for further comment.
