|
Post by jeffolie on Sept 12, 2007 18:11:22 GMT -6
Pimco's Gross Exited Commercial Paper in August, Holdings Show By Elizabeth Stanton Sept. 12 (Bloomberg) -- Bill Gross, manager of the world's biggest bond fund at Pacific Investment Management Co., sold the fund's remaining holdings of commercial paper last month as demand for short-term corporate debt dried up. The $104.4 billion Pimco Total Return Fund had none of its assets in debt carrying the ratings given to issuers of commercial paper at the end of August, according to data published on the Newport Beach, California-based firm's Web site. As recently as April the fund had 20 percent of its assets in debt carrying the highest commercial paper ratings. The market for commercial paper, debt maturing in 270 days or less, shrank 13 percent to $1.93 trillion in the four weeks ended Sept. 5. The decline was led by an 18 percent drop in asset-backed commercial paper to $966.7 billion, according to the Federal Reserve data. The drop was the biggest in at least seven years. Traditional buyers of securities have fled amid concern about the impact of mortgage defaults on borrowers. Gross last month said the asset-backed commercial paper market ``is basically history.'' Pimco has never bought asset- backed commercial paper, focusing instead on short-term debt issued by ``the top 10 to 15 banks,'' he said in an interview. Asset-backed commercial paper is issued by separate entities to finance holdings of loans and bonds. www.bloomberg.com/apps/news?pid=20601087&sid=apJ8lUVZf0FY&refer=bondheads
|
|
|
Post by unlawflcombatnt on Sept 13, 2007 4:37:12 GMT -6
Also from the article:
"Gross also boosted the fund's holdings of mortgage-backed securities to 59 percent, the most since March 2006, from 54 percent...."
Is Gross anticipating a government bailout of the housing industry? Maybe this explains why he's been pushing so hard for a government bail-out. With 59% of the fund's holdings in mortgage-backed securities, he stands to gain a lot from a bail-out.
|
|