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PIMCO Income Strategy Fund II Message Board

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  • up1.down2 up1.down2 Jul 24, 2012 10:27 AM Flag

    Danger Danger Mr Robinson

    Although ARPs are Preferred Shares they are auctioned off like bonds in the secondary market. The auctions of late have been dismal for ARPs so Brigade feels Allianz (formerly Pimco) should redeem them. Brigade is basically crying in their own cereal bowl expecting Allianz to bail them out by using precedence of redemption history.

    Your thoughts on alternate sources of funding does have merit but only if Allianz can obtain debt at the same rate. The highest rate on the ARPs issued by Allianz is 1.466%. Personally I don't think Allianz can come even close to this rate.

    At 1.466% it's clear why Allianz doesn't want to redeem these ARPs. Nobody can unequivocally state the outcome of this battle but the historically cheap leverage is definitely being challenged with the Brigade development.

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    • thank you. i am still not convinced that such a gorilla as Allianz/PIMCO can not replace ARP with other sources, just as cheap of even cheaper in the current environment. Especially given that ARP is not the only source they use now. To me, thats a very minor liabilitys side of ledger issue. The assets side is the reason I sold. Quite frankly, hoping to pick it up again few months later at hopefully cheaper valuation.

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