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PIMCO Income Strategy Fund II Message Board

  • up1.down2 up1.down2 Jul 20, 2012 9:38 AM Flag

    Danger Danger Mr Robinson

    Is anyone aware of the lawsuit by Brigade ? I realize most buy Mutual Funds so they don't have to chase the daily activities of a specific company but you can't just put this on the shelf and take a nap.

    Brigade is attempting to obtain a seat on the board of directors as settlement for the Fund violating it's own bylaws. Once obtained the Brigade representative (Goldman) will push for redemption of the ARP's.

    The ARP's are the mechanism which provides the leverage thus allowing the high Yield most bought this for. If the ARP's are redeemed the dividend HAS to drop. Per the last report the fund burned $12M in cash in order to pay the dividends. Take away the leverage and it get's worse yet.

    Ask yourself. Is getting a promised 9% annual yield worth it if the price starts dropping 10% a week ?

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • what is your intent by continually crying wolf. It is up .75 today. If you have a short position to cover I would do it soooon!@

    • most disturbing- we r in one of the tightest corporate bond spread environments. Clearly, i can only observe the indices and not PIMCO book, but still. Also, premium to NAV, while not excessive at 6.5% currently, given other funds, it is close to a high for this fund. I also perform TA, and per my personal chart analysis, we might be at an intermediate top.

    • The wild card here is if they cannot replace them at the same rate a divi cut is inevitable. This fund burned $12M in cash the last 2 reported quarters to support the current divi. Even without the ADR issue the cash burn
      is troubling.

      What is it on the asset side has you concerned ?

    • No offense but it seems lately like the market knows something you don't. PFN is advancing quite nicely of late. Should I put my money on you or the market trend?

      • 1 Reply to sky_king_66
      • No offense taken. PFN is advancing because there are soooo many with 5yr/5% CD's that are expiring and now are running to these type of funds to replace that income.

        PFN is not advancing because of their income statement or balance sheet. If you wish to adopt the herd mentality and trample with the rest just remember sheeple do get slaughtered.

        You shouldn't put your money on Me or a market trend. It would much wiser to put your money where direct due diligence reveals to do so. Anyone performing due diligence on this fund should be concerned about pending events. Likely most don't have a clue what is pending.

 
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