Fitch acts on 12 Pimco preferreds

Fitch Ratings said it downgraded to AA from AAA the long-term ratings assigned to eight series of variable rate muni-term preferred shares and two series of remarketable variable rate muni-term preferred shares issued across eight municipal closed-end funds, including an unlisted interval fund, managed by Pacific Investment Management Co. LLC.

The funds lowered are: Pimco Corporate & Income Strategy Fund, Pimco High Income Fund, Pimco New York Municipal Income Fund II, Pimco Income Strategy Fund II, Pimco Income Strategy Fund, Pimco Municipal Income Fund III and Pimco Municipal Income Fund.

Fitch affirmed a third series of Rvmtp shares, the series 2050-B Rvmtp shares issued by Pimco Flexible Municipal Income Fund at AA. Fitch lowered auction-rate preferred shares (ARPS) issued by four Pimco funds to A from Aa and removed them from rating watch negative. All downgraded ratings were removed from under criteria observation.

“The long-term rating actions are driven by changes to Fitch's rating criteria for CEFs (including interval funds) rather than by any fundamental changes to the funds' credit profiles,” the agency said in a press release.

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