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Pimco Corporate & Income Opport Message Board

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  • walsingmalinda walsingmalinda Jul 14, 2009 3:43 PM Flag

    how safe are PTY's distributions?

    We own 2 Pimco ETFs, PTY @ PGP. We do believe they are safe. We bought PTY in Jul 08 @ 13.57. While it went down to 7 or so, It doesn't seem to stand out of place to other stocks. We owned this stock in previous years and did sell at a profit. We don't show any return of capital the way others we own are doing to us. We intend to ride it out with PTY. Pray for us. If you want to see an ETF doing ROC, Look up JLA. doing 87% ROC, but that is another story.

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    • jdfunnell Jul 16, 2009 12:47 AM Flag

      I assume you are aware the PGP dividend paid July 1 was north of 72% ROC. Not sure of the earlier ones.......Dave

      • 3 Replies to jdfunnell
      • If you read my macro view from a top/down fundamental view as the credit risk to individual corporate borrowers and the financial system are reduced, the likelihood of issuer payments to bondholders increases. This reduces the fundamental risk both micro and macro for investment grade and high-yield corporate bonds. Couple the reduction of credit and economic risk with an economy that is gaining traction from the effects of recession and the likelihood of continued fiscal stimulus that is forthcoming the safety of PTY and PCN increases.

        The economy could fall back into recession and the credit and financial risks could materially increase threatening credit qualities and increase default risk. Couple this with the potential of increasing inflation from monetary and fiscal policy ease and the huge budget deficits that could crowd out corporate borrowing and there exists substantial risks to corporate borrowers.

        Conclusion: At this particular time in the business cycle all of the risks mentioned are actually favorable to corporate borrowers and investment grade and high yield bonds, particularly with the spreads that exist between corporates of all qualities and US Treasuries.

      • DAVE:--All I can find re: the PGP dividend is a regular monthly div. of .183c. ($2.20) annual. Was there a "special" div?

      • DAVE:--Thanx for your post regarding PGP. The difference between PTY & PGP is that PTY is trading abt. 9-10% over NAV while PGP is trading almost 50% above it's NAV.--I am quite risk averse. Accordingly, IMHO PGP & PHK present an opportunity for a small high risk/high reward buy. AT THIS TIME, while IMHO PTY presents less return but much less risk.--As you stated, some of us are in PTY for the steady cash flow.--

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