Pimco to launch Floating Rate Income Fund to invest primarily in leveraged loans

By Sara Rosenberg

New York, June 20 - Pimco Advisors Fund Management LLC is launching a new fund, the Floating Rate Income Fund, which will invest mainly in senior secured floating-rate loans and other debt securities that are rated below investment grade, according to a filing with the Securities and Exchange Commission. Common shares of the fund are being offer at $15 each.

More specifically, the fund plans to invest at least 80% of its net assets in a diversified portfolio of floating-rate debt instruments, a substantial portion of which will be senior secured loans. No more than 10% of the fund's total assets will be invested in securities rated CCC+/Caa1 or lower.

Other floating-rate debt instruments in which the fund may invest include catastrophe bonds, bank capital, unsecured bank loans, corporate bonds, money market instruments and certain types of mortgage-backed and other asset-backed securities that pay interest at rates which adjust, according to the SEC filing.

Up to 20% of the net assets can be invested in fixed-rate securities, such as convertibles, high-yield bonds, and mortgage-backed and other asset-backed securities.

It is expected that no more than 25% of the total assets will be invested in debt securities that are denominated in foreign currencies.

Raymond G. Kennedy will be managing the fund with the help of David C. Hinman and Jason R. Rosiak.

Kennedy is a managing director, portfolio manager and senior member of Pimco's investment strategy group who also manages high-yield funds and oversees bank loan trading and collateralized debt obligations.

Hinman is an executive vice president and portfolio manager at Pimco who focuses on high-yield corporate bonds and co-manages high-yield funds and structured-credit products.

Rosiak is a vice president and portfolio manager, who focuses on high-yield corporate bonds and bank loans, oversees the construction of Pimco's Structured Products and manages a trade desk research group.

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