NEW YORK, Nov. 3, 2008 (GLOBE NEWSWIRE) -- PIMCO High Income Fund (NYSE:PHK) (the "Fund") announced today that it has postponed the payment of the previously declared (October 1, 2008) dividend on the Fund's common shares scheduled for payment on November 3, 2008 and the declaration of the next dividend on the Fund's common shares, which would have been paid in December 2008, due to recent market conditions and requirements under the Fund's By-laws and the Investment Company Act of 1940, as amended (the "1940 Act").
Accordingly, the declared dividend ($0.121875 per common share) payable on November 3, 2008 to shareholders of record on October 11, 2008, with an ex-dividend date of October 8, 2008, will not be paid on November 3, 2008.
In accordance with the 1940 Act and the Fund's By-laws, the Fund is not permitted to pay or declare common share dividends unless the Fund's auction rate preferred shares ("ARPS") have a minimum asset coverage of 200% ("200% Level") after payment of the common share dividend or declaration of the common share dividend. Due to current market conditions, the value of the Fund's portfolio securities has declined, which has caused the Fund's asset coverage ratio to fall below the 200% Level.
As the Fund announced in a press release dated October 24, 2008, the Fund's ability to earn sufficient income to pay the previously declared dividend or declare the December dividend was not impacted by this decline in the asset coverage ratio or market conditions. Therefore, if market conditions improve and the value of the Fund's assets increases to a point where the Fund has adequate asset coverage, the Fund intends to pay the common share dividend previously declared and declare the dividend scheduled to be declared today. The Fund will make a subsequent public announcement as to the payment of the November common share dividend and the declaration of future dividends. In the event that the Fund's asset coverage does not increase to at least the 200% Level on or before a cure date as specified in the By-laws, the Fund will redeem, within 35 days after such cure date, an amount of ARPS sufficient to bring the asset coverage back up to the 200% Level.
PHK's investment objective is to seek high current income. There can be no assurance that the Fund will achieve its stated objective.
Allianz Global Investors Fund Management LLC, an indirect, wholly-owned subsidiary of Allianz Global Investors of America L.P., serves as the Fund's investment manager and is a member of Munich-based Allianz Group (NYSE:AZ). Pacific Investment Management Company LLC, an Allianz Global Investors Fund Management affiliate, serves as the Fund's sub-adviser.
The Fund's daily New York Stock Exchange closing prices and net asset values per share are available by calling the Fund's shareholder servicing agent at (800) 331-1710. This information, as well as updated portfolio statistics and performance, is available at http://www.allianzinvestors.com.
Statements made in this release that look forward in time involve risks and uncertainties and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such risks and uncertainties include, without limitation, the adverse effect from further declines in the securities markets and in the Fund's performance, a general downturn in the economy, competition from other companies, changes in government policy or regulation, inability to attract or retain key employees, inability to implement its operating strategy and/or acquisition strategy, and unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations. The Fund's ability to maintain leverage and to declare and pay dividends to common shareholders is subject to the restrictions in its registration statement, By-laws and other governing documents.