DOW JONES NEWSWIRES
Pacific Investment Management Co. said its Municipal Income Fund (PMF) would pay a monthly common-share dividend Friday that was delayed earlier this week because the fund's asset-coverage ratio fell below a certain level.
The postponement of the December dividend was announced Wednesday because such funds are required to maintain asset coverage of at least 200% with respect to senior securities, such as auction-rate preferred securities, under the Investment Company Act of 1940.
That means that for each $1 of preferred stock issued, a fund must have at least $2 in assets and is prohibited from declaring or paying a dividend that would put it below the 200% asset-coverage ratio. As a result of the market's decline, the Pimco fund's asset-coverage ratio had fallen below the required level but by Friday again reached the necessary mark.
Investors will receive an 8.125-cent dividend.
The company also postponed payment of a 6.625-cent dividend owed to investors in the New York Municipal Income Fund II, but that payment and fund weren't mentioned in Friday's statement.
Last month, six other Pimco funds put off payment of common-share dividends and two others announced they would postpone the declaration of future payments amid "severe market dislocations."
The delay by Pimco, a unit of Munich-based Allianz Group (AZ), and some other asset managers stems from a combination of a declining market, which has eroded the fund's net asset values, and the lack of a quick and efficient option for replacing the leverage now obtained through auction-rate preferred shares.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; Kathy.Shwiff@dowjones.com
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Publié le 02 janvier 2009 Copyright © 2009 Dowjones