UNITED STATES

 

SECURITIES AND EXCHANGE COMMISSION

     OMB APPROVAL    
OMB Number:  3235-0570
Expires:  January 31, 2014
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hours per response:    20.6

Washington, D.C. 20549

 

FORM N-CSR

 

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES


 

 

Investment Company Act file number 

811-21076

 



 

 

PIMCO Municipal Income Fund II


(Exact name of registrant as specified in charter)

 

 

1633 Broadway, New York, New York

10019



(Address of principal executive offices)

(Zip code)

 

 

Lawrence G. Altadonna – 1633 Broadway, New York, New York 10019


(Name and address of agent for service)


 

 

 

Registrant’s telephone number, including area code: 

212-739-3371

 

 


 


 

 

 

Date of fiscal year end: 

May 31, 2011

 

 


 


 

 

 

Date of reporting period: 

May 31, 2011

 

 


 

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e -1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-2001. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.



ITEM 1. REPORT TO SHAREHOLDERS

 

 

(ALLIANZ GLOBAL INVESTORS LOGO)

 

 





 

 

 

 

 

 

 

 

 

Annual Report

 

May 31, 2011






PIMCO Municipal Income Fund II
PIMCO California Municipal Income Fund II
PIMCO New York Municipal Income Fund II



(NYSE LOGO)



 

 

 

Contents

 

 

 

 

 

Letter to Shareholders

 

2 - 3

Fund Insights/Fund Performance & Statistics

 

4 - 6

Schedules of Investments

 

7 - 25

Statements of Assets and Liabilities

 

26

Statements of Operations

 

27

Statements of Changes in Net Assets

 

28 - 29

Statement of Cash Flows

 

30

Notes to Financial Statements

 

31 - 43

Financial Highlights

 

44 - 46

Report of Independent Registered Public Accounting Firm

 

47

Tax Information/Annual Shareholder Meeting Results/
Changes to Board of Trustees

 

48

Privacy Policy/Proxy Voting Policies & Procedures

 

49

Dividend Reinvestment Plan

 

50

Board of Trustees

 

51 - 52

Fund Officers

 

53

5.31.11 | PIMCO Municipal Income Funds II Annual Report  1



 

 

 

Dear Shareholder:

Municipal bond prices experienced volatility for much of the fiscal year ended May 31, 2011 although a solid rally in the latter portion of the reporting period suggested that the municipal market had righted itself.



(PHOTO OF HANS W. KERTESS)
Hans W. Kertess
Chairman

 

 

Year in Review

For the fiscal year ended May 31, 2011:

PIMCO Municipal Income Fund II returned 1.38% on net asset value (“NAV”) and 1.30% on market price.

 

 

 

PIMCO California Municipal Income Fund II returned 0.50% on NAV and 7.53% on market price.  

 

 

 

PIMCO New York Municipal Income Fund II returned 0.05% on NAV and 3.03% on market price.

 

     

 

 

(PHOTO OF BRIAN S. SHLISSEL) Brian S. Shlissel
President & CEO

Lackluster returns for municipal bonds can largely be tied to two events that occurred in the fall of 2010. With U.S. economic growth continuing at a less-than-robust pace, the Federal Reserve (the “Fed”) unveiled plans for a second round of “quantitative easing.” The plan, known as “QE2”, called for the purchase of up to $900 billion in U.S. Treasury securities, which the Fed hoped would push interest rates lower in an effort to spur economic activity. The Fed’s program, however, generally excluded Treasury bonds with longer maturities. Prices for long-term Treasuries declined, and municipal bonds whose prices closely correlate with Treasuries, fell as well.

Municipal bonds also struggled as the federal government’s “Build America Bonds” (“BAB”) program came to end on December 31, 2010. The BAB program, part of the Obama administration’s economic stimulus program, was designed to subsidize borrowing costs for state and local government municipal projects. After the November 2010 election, however, it became clear that the new Congress would not extend the BAB program. With just weeks before the program was due to expire, many state and city governments flooded the municipal market with BABs. Supply exceeded demand, causing municipal bond prices to fall.

The decline proved to be short-lived as in the first five months of 2011, the final months of the Funds’ fiscal year, 51% fewer municipal bonds came to market, according to Thomson Reuters. This lack of supply helped spark a municipal

2  PIMCO Municipal Income Funds II Annual Report | 5.31.11


bond rally, erasing much of the losses which occurred in November and December 2010.

The Road Ahead – and the Case for Municipal Bonds
The U.S. economy has now expanded for seven consecutive quarters, albeit at a modest pace. The Fed has forecast that growth should continue, but at a “frustratingly slow” rate. This will continue to challenge cash-strapped states, which face a collective $112 billion budget shortfall for fiscal year 2012.

The Bush-era tax cuts have been extended for two years and are scheduled to expire on December 31, 2012. While federal tax brackets will remain stable until then, budget pressures at all levels of government, federal, state and local, suggest that taxes will move higher over the long term. This in turn bodes well for municipal bonds, which offer considerable tax advantages for investors.

 

 

 

 

 

 

 

 

Receive this report
electronically and
eliminate paper mailings.
To enroll, go to
www.allianzinvestors.com/
edelivery.

 

 

 

For specific information on the Funds and their performance, please review the following pages. If you have any questions regarding the information provided, we encourage you to contact your financial advisor or call the Funds’ shareholder servicing agent at (800) 254-5197. In addition, a wide range of information and resources are available on our Web site, www.allianzinvestors.com/closedendfunds.

Together with Allianz Global Investors Fund Management LLC, the Funds’ investment manager, and Pacific Investment Management Company LLC, the Funds’ sub-adviser, we thank you for investing with us.

We remain dedicated to serving your investment needs.

Sincerely,

 

 

-s- Hans W. Kertess

-s- Brian S. Shlissel

 

 

Hans W. Kertess

Brian S. Shlissel

Chairman

President & Chief Executive Officer

5.31.11 | PIMCO Municipal Income Funds II Annual Report  3



 

 

PIMCO Municipal Income Funds II  

Fund Insights

May 31, 2011 (unaudited)

 

 

 

 

For the fiscal year ended May 31, 2011, PIMCO Municipal Income Fund II returned 1.38% on net asset value (“NAV”) and 1.30% on market price.

 

 

For the fiscal year ended May 31, 2011, PIMCO California Municipal Income Fund II returned 0.50% on net asset value (“NAV”) and 7.53% on market price.

 

 

For the fiscal year ended May 31, 2011, PIMCO New York Municipal Income Fund II returned 0.05% on net asset value (“NAV”) and 3.03% on market price.

 

 

The municipal bond market experienced periods of heightened volatility during the fiscal year ended May 31, 2011. The overall municipal market (as measured by the Barclays Capital Municipal Bond Index) posted a positive return during the first three months of the fiscal year, aided by overall solid demand from investors seeking tax-free income. A decline in new issuance of tax-free bonds was also beneficial. The municipal market produced poor results from September 2010 through January 2011. A confluence of events dragged down municipal bonds. Rising interest rates, concerns regarding municipal defaults, increasing issuance of Build America Bonds at the end of 2010, and substantial mutual fund redemptions contributed to the downturn in the municipal market. However, the municipal market rallied during much of the remainder of the fiscal year, as tax revenues increased, new issuance fell sharply and a number of states took meaningful steps to improve their balance sheets. In addition, there was increased demand from “crossover buyers,” including non-traditional municipal investors, such as insurance companies and hedge funds.

 

 

During the fiscal year, a slightly shorter duration than that of the benchmark was beneficial to the Funds’ performance, as municipal yields longer than 12 years rose during the reporting period. A steepening yield curve bias was a positive for results, as the municipal curve steepened during the reporting period.

 

 

All three Funds benefited from their exposure to the water and sewer sector, as it held up relatively well during periods of weakness in the municipal market. Having an exposure to the power sector contributed to the performance of Municipal Income II and California Municipal II, whereas New York Municipal II benefited from its exposure to the leasing sector.

 

 

In contrast, the Funds’ exposure to the tobacco sector detracted from performance. During the fourth quarter of 2010, a number of municipal tobacco settlement trusts were downgraded to below investment grade status. This triggered a sharp sell-off, which was exacerbated by forced selling into an illiquid market by mutual funds not permitted to hold non-investment grade securities. The three Funds’ exposure to the corporate-backed sector also adversely impacted performance as they lagged the benchmark. In addition, Municipal Income II and New York Municipal II were hurt by their exposure to the healthcare sector.

4  PIMCO Municipal Income Funds II Annual Report | 5.31.11



 

 

PIMCO Municipal Income Funds II  

Fund Performance & Statistics

May 31, 2011 (unaudited)

 

 

Municipal Income Fund II:

 

 

 

 

 

 

 

 

Total Return (1):

 

Market Price

 

NAV

 

 

1 Year

 

1.30

%

 

 

1.38

%

               

5 Year

 

0.41

%

 

 

–0.59

%

               

Commencement of Operations (6/28/02) to 5/31/11

 

2.84

%

 

 

2.99

%

               

Market Price/NAV Performance:
Commencement of Operations (6/28/02) to 5/31/11
(LINE GRAPH)
Market Price/NAV:

 

 

 

 

 

         

Market Price

 

$

10.45

 

         

NAV

 

$

10.12

 

         

Premium to NAV

 

 

3.26%

 

         

Market Price Yield(2)

 

 

7.46%

 

         

 

Moody’s Ratings
(as a % of total investments)

 

(PIE CHART)



 

 

California Municipal Income Fund II:

 

 

 

 

 

 

 

 

Total Return(1):

 

Market Price

 

NAV

 

 

1 Year

 

7.53

%

 

 

0.50

%

               

5 Year

 

–1.49

%

 

 

–5.23

%

               

Commencement of Operations (6/28/02) to 5/31/11

 

1.75

%

 

 

0.05

%

               

Market Price/NAV Performance:
Commencement of Operations (6/28/02) to 5/31/11
(LINE GRAPH)
Market Price/NAV:

 

 

 

 

 

Market Price

 

 

$9.21

 

         

NAV

 

 

$7.38

 

         

Premium to NAV

 

 

24.80%

 

         

Market Price Yield(2)

 

 

7.74%

 

         

 

Moody’s Ratings
(as a % of total investments)

 

(PIE CHART)



5.31.11 | PIMCO Municipal Income Funds II Annual Report  5



 

 

PIMCO Municipal Income Funds II  

Fund Performance & Statistics

May 31, 2011 (unaudited) (continued)

 

 

New York Municipal Income Fund II:

 

 

 

 

 

 

 

 

Total Return(1):

 

Market Price

 

NAV

 

 

1 Year

 

3.03

%

 

 

0.05

%

               

5 Year

 

1.61

%

 

 

–0.59

%

               

Commencement of Operations (6/28/02) to 5/31/11

 

3.12

%

 

 

2.81

%

               

Market Price/NAV Performance:
Commencement of Operations (6/28/02) to 5/31/11
(LINE GRAPH)
Market Price/NAV:

 

 

 

 

 

Market Price

 

 

$10.92

 

         

NAV

 

 

$10.10

 

         

Premium to NAV

 

 

8.12%

 

         

Market Price Yield(2)

 

 

7.04%

 

         

 

Moody’s Ratings
(as a % of total investments)

 

(PIE CHART)



 

 

(1) Past performance is no guarantee of future results. Total return is calculated by determining the percentage change in NAV or market price (as applicable) in the specified period. The calculation assumes that all income dividends and capital gain distributions, if any, have been reinvested. Total return does not reflect broker commissions or sales charges in connection with the purchase or sale of Fund shares. Total return for a period of more than one year represents the average annual total return.

 

 

Performance at market price will differ from results at NAV. Although market price returns typically reflect investment results over time, during shorter periods returns at market price can also be influenced by factors such as changing views about the Funds, market conditions, supply and demand for the Funds’ shares, or changes in Funds’ dividends.

 

 

An investment in the Funds involves risk, including the loss of principal. Total return, market price, market price yield and NAV will fluctuate with changes in market conditions. This data is provided for information purposes only and is not intended for trading purposes. Closed-end funds, unlike open-end funds, are not continuously offered. There is a onetime public offering and once issued, shares of closed-end funds are traded in the open market through a stock exchange. NAV is equal to total assets attributable to common shareholders less total liabilities divided by the number of common shares outstanding. Holdings are subject to change daily.

 

 

(2) Market Price Yield is determined by dividing the annualized current monthly per share dividend (comprised of net investment income) payable to common shareholders by the market price per common share at May 31, 2011.

6  PIMCO Municipal Income Funds II Annual Report | 5.31.11



 

 

PIMCO Municipal Income Fund II  

Schedule of Investments

May 31, 2011

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

Value

 

  MUNICIPAL BONDS & NOTES—96.4%

 

 

 

Alabama–1.3%

 

 

 

 

 

 

$   10,000

 

Birmingham-Baptist Medical Centers Special Care Facs.

 

 

 

 

 

 

 

 

 

Financing Auth. Rev., Baptist Health Systems, Inc.,

 

 

 

 

 

 

 

 

 

5.00%, 11/15/30, Ser. A

 

Baa2/NR

 

$

8,523,800

 

 

1,235

 

Montgomery BMC Special Care Facs. Financing Auth. Rev.,

 

 

 

 

 

 

 

 

 

5.00%, 11/15/29, Ser. B (NPFGC)

 

A3/BBB+

 

 

1,084,503

 

 

2,000

 

State Docks Department Rev., 6.00%, 10/1/40

 

NR/BBB+

 

 

2,002,620

 

 

2,650

 

Tuscaloosa Public Educational Building Auth. Rev.,

 

 

 

 

 

 

 

 

 

Stillman College Project, 5.00%, 6/1/26, Ser. A

 

NR/BB+

 

 

2,214,658

 

 

 

 

 

 

 

 

 

13,825,581

 

 

 

 

Alaska–0.7%

 

 

 

 

 

 

 

3,550

 

Housing Finance Corp. Rev., 5.25%, 6/1/32, Ser. C (NPFGC)

 

Aa2/AA+

 

 

3,565,656

 

 

5,900

 

Northern Tobacco Securitization Corp. Rev.,

 

 

 

 

 

 

 

 

 

5.00%, 6/1/46, Ser. A

 

Baa3/NR

 

 

3,547,316

 

 

 

 

 

 

 

 

 

7,112,972

 

 

 

 

Arizona–9.1%

 

 

 

 

 

 

 

 

 

Health Facs. Auth. Rev., Banner Health,

 

 

 

 

 

 

 

3,500

 

5.00%, 1/1/35, Ser. A

 

NR/A+

 

 

3,257,100

 

 

2,860

 

5.50%, 1/1/38, Ser. D

 

NR/A+

 

 

2,820,561

 

 

 

 

Pima Cnty. Industrial Dev. Auth. Rev.,

 

 

 

 

 

 

 

29,700

 

5.00%, 9/1/39

 

Aa2/AA

 

 

27,236,682

 

 

1,500

 

Tuscon Electric Power Co., 5.25%, 10/1/40, Ser. A

 

Baa3/BBB–

 

 

1,374,390

 

 

 

 

Salt River Project Agricultural Improvement & Power

 

 

 

 

 

 

 

 

 

Dist. Rev., Ser. A (i),

 

 

 

 

 

 

 

41,100

 

5.00%, 1/1/37

 

Aa1/AA

 

 

41,905,971

 

 

10,000

 

5.00%, 1/1/39

 

Aa1/AA

 

 

10,291,800

 

 

11,400

 

Salt Verde Financial Corp. Rev., 5.00%, 12/1/37

 

A3/A

 

 

10,099,716

 

 

 

 

 

 

 

 

 

96,986,220

 

 

 

 

California–14.9%

 

 

 

 

 

 

 

 

 

Bay Area Toll Auth. Rev., San Francisco Bay Area,

 

 

 

 

 

 

 

6,000

 

5.00%, 10/1/29

 

A1/A+

 

 

6,152,520

 

 

1,430

 

5.00%, 4/1/34, Ser. F-1

 

Aa3/AA

 

 

1,443,900

 

 

1,565

 

Foothill-Eastern Transportation Corridor Agcy. Rev.,

 

 

 

 

 

 

 

 

 

5.875%, 1/15/26 (IBC-NPFGC)

 

Baa1/BBB

 

 

1,499,051

 

 

 

 

Golden State Tobacco Securitization Corp. Rev., Ser. A-1,

 

 

 

 

 

 

 

8,750

 

5.00%, 6/1/33

 

Baa3/BB+

 

 

5,905,112

 

 

7,000

 

5.75%, 6/1/47

 

Baa3/BB+

 

 

4,814,530

 

 

2,000

 

Hayward Unified School Dist., GO, 5.00%, 8/1/33

 

NR/A+

 

 

1,825,980

 

 

1,500

 

Health Facs. Financing Auth. Rev.,

 

 

 

 

 

 

 

 

 

Scripps Health, 5.00%, 11/15/36, Ser. A

 

Aa3/AA–

 

 

1,364,085

 

 

 

 

Sutter Health,

 

 

 

 

 

 

 

6,300

 

5.00%, 11/15/42, Ser. A (IBC-NPFGC)

 

Aa3/AA–

 

 

5,679,954

 

 

3,000

 

6.00%, 8/15/42, Ser. B

 

Aa3/AA–

 

 

3,137,730

 

 

1,500

 

Indian Wells Redev. Agcy., Tax Allocation,

 

 

 

 

 

 

 

 

 

Whitewater Project, 4.75%, 9/1/34, Ser. A (AMBAC)

 

A2/A

 

 

1,163,490

 

5.31.11 | PIMCO Municipal Income Funds II Annual Report  7



 

 

PIMCO Municipal Income Fund II  

Schedule of Investments

May 31, 2011 (continued)

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

Value

 

 

 

 

California–(continued)

 

 

 

 

 

 

$    2,000

 

Los Angeles Community College Dist.,

 

 

 

 

 

 

 

 

 

GO, 5.00%, 8/1/32, Ser. A (FGIC-NPFGC)

 

Aa1/AA

 

$

2,015,680

 

 

4,000

 

Los Angeles Department of Water & Power Rev.,

 

 

 

 

 

 

 

 

 

5.00%, 7/1/39, Ser. A-1 (AMBAC)

 

Aa3/AA–

 

 

4,018,560

 

 

 

 

Los Angeles Unified School Dist., GO,

 

 

 

 

 

 

 

5,000

 

5.00%, 7/1/30, Ser. E (AMBAC)

 

Aa2/AA–

 

 

5,082,700

 

 

5,000

 

5.00%, 7/1/32, Ser. C (AGM)

 

Aa2/AA+

 

 

5,044,100

 

 

1,365

 

Lynwood Utility Auth. Rev., 5.00%, 6/1/29, Ser. A (AGC)

 

Aa3/AA+

 

 

1,373,941

 

 

2,000

 

Montebello Unified School Dist., GO, 5.00%, 8/1/33 (AGM)

 

Aa3/AA+

 

 

2,027,500

 

 

1,750

 

M-S-R Energy Auth. Rev., 6.50%, 11/1/39, Ser. B

 

NR/A

 

 

1,914,290

 

 

3,300

 

Municipal Finance Auth. Rev., Azusa Pacific Univ. Project,

 

 

 

 

 

 

 

 

 

7.75%, 4/1/31, Ser. B

 

NR/NR

 

 

3,394,215

 

 

650

 

Murrieta Valley Unified School Dist. Public Financing Auth.,

 

 

 

 

 

 

 

 

 

Special Tax, 4.75%, 9/1/36, Ser. A

 

Aa3/AA+

 

 

575,061

 

 

3,000

 

Newport Beach Rev., Hoag Memorial Hospital Presbyterian,

 

 

 

 

 

 

 

 

 

5.875%, 12/1/30

 

Aa3/AA

 

 

3,182,130

 

 

500

 

Peralta Community College Dist., GO, 5.00%, 8/1/39, Ser. C

 

NR/AA-

 

 

473,260

 

 

2,000

 

San Diego Cnty. Water Auth., CP, 5.00%, 5/1/38,

 

 

 

 

 

 

 

 

 

Ser. 2008-A (AGM)

 

Aa2/AA+

 

 

1,994,040

 

 

2,000

 

Santa Clara Cnty. Financing Auth. Rev., 5.75%, 2/1/41,

 

 

 

 

 

 

 

 

 

Ser. A (AMBAC)

 

A2/A+

 

 

1,977,360

 

 

 

 

State, GO,

 

 

 

 

 

 

 

3,300

 

4.50%, 8/1/27

 

A1/A–

 

 

3,160,740

 

 

1,000

 

4.50%, 8/1/30

 

A1/A–

 

 

910,940

 

 

1,100

 

4.50%, 10/1/36

 

A1/A–

 

 

958,001

 

 

7,000

 

5.00%, 12/1/31 (NPFGC)

 

A1/A–

 

 

7,019,250

 

 

2,925

 

5.00%, 11/1/32

 

A1/A–

 

 

2,921,051

 

 

1,590

 

5.00%, 6/1/37

 

A1/A–

 

 

1,542,745

 

 

5,200

 

5.125%, 8/1/36

 

A1/A–

 

 

5,188,664

 

 

2,500

 

5.25%, 3/1/38

 

A1/A–

 

 

2,499,800

 

 

5,945

 

5.25%, 11/1/40

 

A1/A–

 

 

5,944,703

 

 

5,750

 

5.50%, 3/1/40

 

A1/A–

 

 

5,959,415

 

 

10,500

 

6.00%, 4/1/38

 

A1/A–

 

 

11,235,525

 

 

2,300

 

State Univ. Rev., 5.00%, 11/1/30, Ser. A (AMBAC)

 

Aa2/A+

 

 

2,277,345

 

 

3,820

 

Statewide Communities Dev. Auth. Rev.,

 

 

 

 

 

 

 

 

 

California Baptist Univ., 9.00%, 11/1/17, Ser. B (a)(c)

 

NR/NR

 

 

3,458,170

 

 

1,000

 

Cottage Health, 5.00%, 11/1/40

 

NR/A+

 

 

907,540

 

 

 

 

Methodist Hospital Project (FHA),

 

 

 

 

 

 

 

5,500

 

6.625%, 8/1/29

 

Aa2/NR

 

 

6,262,300

 

 

19,500

 

6.75%, 2/1/38

 

Aa2/NR

 

 

21,679,320

 

 

5,690

 

Sutter Health, 6.00%, 8/15/42, Ser. A

 

Aa3/AA–

 

 

5,951,228

 

 

4,725

 

Torrance Rev., Memorial Medical Center, 5.00%, 9/1/40, Ser. A

 

A2/A+

 

4,195,138

 

 

 

 

 

 

 

 

 

158,131,064

 

 

 

 

Colorado–1.0%

 

 

 

 

 

 

 

5,800

 

Aurora Rev., Children’s Hospital Assoc., 5.00%, 12/1/40

 

A1/A+

 

 

5,435,238

 

 

1,000

 

Denver Health & Hospital Auth. Rev., 5.625%, 12/1/40

 

NR/BBB

 

 

925,110

 

8  PIMCO Municipal Income Funds II Annual Report | 5.31.11



 

 

PIMCO Municipal Income Fund II  

Schedule of Investments

May 31, 2011 (continued)

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

Value

 

 

 

 

Colorado–(continued)

 

 

 

 

 

 

 

 

 

Health Facs. Auth. Rev., Ser. A,

 

 

 

 

 

 

$    1,000

 

American Baptist Homes, 5.90%, 8/1/37

 

NR/NR

 

$

793,820

 

 

500

 

Evangelical Lutheran, 6.125%, 6/1/38

 

A3/A–

 

 

489,980

 

 

2,000

 

Housing & Finance Auth. Rev., Evergreen Country Day School,

 

 

 

 

 

 

 

 

 

Inc. Project, 5.875%, 6/1/37 (a)(c)

 

NR/CCC

 

 

1,297,380

 

 

1,430

 

Public Auth. for Colorado Energy Rev., 6.50%, 11/15/38

 

A2/A

 

 

1,552,065

 

 

 

 

 

 

 

 

 

10,493,593

 

 

 

 

Connecticut–0.1%

 

 

 

 

 

 

 

1,250

 

Harbor Point Infrastructure Improvement Dist.,

 

 

 

 

 

 

 

 

 

Tax Allocation, 7.875%, 4/1/39, Ser. A

 

NR/NR

 

 

1,315,900

 

 

 

 

Florida–5.4%

 

 

 

 

 

 

 

1,000

 

Brevard Cnty. Health Facs. Auth. Rev.,

 

 

 

 

 

 

 

 

 

Health First, Inc. Project, 7.00%, 4/1/39

 

A3/A–

 

 

1,080,410

 

 

600

 

Broward Cnty. Airport Rev., 5.375%, 10/1/29, Ser. O

 

A1/A+

 

 

620,910

 

 

8,500

 

Broward Cnty. Water & Sewer Rev., 5.25%, 10/1/34, Ser. A (i)

 

Aa2/AA

 

 

8,818,410

 

 

1,000

 

Clearwater Rev., 5.25%, 12/1/39, Ser. A

 

Aa3/AA–

 

 

1,036,740

 

 

6,205

 

Governmental Utility Auth. Rev.,

 

 

 

 

 

 

 

 

 

Barefoot Bay Utilities System, 5.00%, 10/1/29 (AMBAC)

 

WR/NR

 

 

6,210,026

 

 

3,000

 

Highlands Cnty. Health Facs. Auth. Rev.,

 

 

 

 

 

 

 

 

 

Adventist Health System, 5.625%, 11/15/37, Ser. B

 

Aa3/AA–

 

 

3,024,960

 

 

7,135

 

Jacksonville Health Facs. Auth. Rev.,

 

 

 

 

 

 

 

 

 

Ascension Health, 5.25%, 11/15/32, Ser. A

 

Aa1/AA+

 

 

7,164,039

 

 

3,000

 

Leesburg Hospital Rev., Leesburg Regional Medical

 

 

 

 

 

 

 

 

 

Center Project, 5.50%, 7/1/32

 

Baa1/BBB+

 

 

2,764,560

 

 

3,490

 

Miami-Dade Cnty. Airport Rev., 5.50%, 10/1/36, Ser. A

 

A2/A–

 

 

3,512,860

 

 

500

 

Sarasota Cnty. Health Facs. Auth. Rev., 5.75%, 7/1/37

 

NR/NR

 

 

396,595

 

 

7,900

 

State Board of Education, GO, 5.00%, 6/1/38, Ser. D (i)

 

Aa1/AAA

 

 

8,093,471

 

 

5,000

 

Sumter Landing Community Dev. Dist. Rev.,

 

 

 

 

 

 

 

 

 

4.75%, 10/1/35, Ser. A (NPFGC)

 

Baa1/BBB

 

 

4,160,600

 

 

10,000

 

Tallahassee Rev., 5.00%, 10/1/37 (i)

 

Aa1/AA+

 

 

10,216,800

 

 

 

 

 

 

 

 

 

57,100,381

 

 

 

 

Georgia–0.3%

 

 

 

 

 

 

 

1,500

 

Atlanta Airport Rev., 5.00%, 1/1/40, Ser. A

 

A1/NR

 

 

1,499,940

 

 

2,775

 

Medical Center Hospital Auth. Rev.,

 

 

 

 

 

 

 

 

 

Spring Harbor Green Island Project, 5.25%, 7/1/37

 

NR/NR

 

 

2,131,450

 

 

 

 

 

 

 

 

 

3,631,390

 

 

 

 

Illinois–10.2%

 

 

 

 

 

 

 

 

 

Chicago, GO, Ser. C,

 

 

 

 

 

 

 

10,000

 

5.00%, 1/1/34 (i)

 

Aa3/A+

 

 

9,544,000

 

 

4,065

 

5.50%, 1/1/40 (FGIC-NPFGC)

 

Aa3/A+

 

 

3,995,814

 

 

 

 

Chicago, Special Assessment, Lake Shore East,

 

 

 

 

 

 

 

3,161

 

6.625%, 12/1/22

 

NR/NR

 

 

3,127,241

 

 

6,697

 

6.75%, 12/1/32

 

NR/NR

 

 

6,505,064

 

 

1,250

 

Chicago Motor Fuel Tax Rev., 5.00%, 1/1/38, Ser. A (AGC)

 

Aa3/AA+

 

 

1,250,637

 

 

5,000

 

Cicero, GO, 5.25%, 12/1/31 (NPFGC)

 

Baa1/BBB

 

 

5,018,500

 

5.31.11 | PIMCO Municipal Income Funds II Annual Report  9



 

 

PIMCO Municipal Income Fund II  

Schedule of Investments

May 31, 2011 (continued)

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

Value

 

 

 

 

Illinois–(continued)

 

 

 

 

 

 

 

 

 

Finance Auth. Rev.,

 

 

 

 

 

 

$    2,500

 

Christian Homes, Inc., 5.75%, 5/15/31, Ser. A

 

NR/NR

 

$

2,243,125

 

 

20,100

 

Elmhurst Memorial Healthcare, 5.625%, 1/1/28

 

Baa1/NR

 

 

18,141,456

 

 

250

 

Leafs Hockey Club Project, 6.00%, 3/1/37, Ser. A (d)

 

NR/NR

 

 

62,377

 

 

1,000

 

Memorial Health Systems, 5.50%, 4/1/39

 

A1/A+

 

 

957,390

 

 

700

 

OSF Healthcare System, 7.125%, 11/15/37, Ser. A

 

A3/A

 

 

736,099

 

 

2,000

 

Provena Health, 6.00%, 5/1/28, Ser. A

 

Baa1/BBB+

 

 

1,962,420

 

 

5,000

 

Univ. of Chicago, 5.50%, 7/1/37, Ser. B (i)

 

Aa1/AA

 

 

5,232,150

 

 

42,970

 

Sports Facs. Auth. Rev., 5.50%, 6/15/30 (AMBAC)

 

WR/A

 

 

43,174,967

 

 

 

 

Village of Hillside, Tax Allocation, Mannheim Redev. Project,

 

 

 

 

 

 

 

4,500

 

6.55%, 1/1/20

 

NR/NR

 

 

4,181,760

 

 

2,900

 

7.00%, 1/1/28

 

NR/NR

 

 

2,493,768

 

 

 

 

 

 

 

 

 

108,626,768

 

 

 

 

Indiana–0.7%

 

 

 

 

 

 

 

 

 

Finance Auth. Rev.,

 

 

 

 

 

 

 

1,500

 

Duke Energy Indiana, Inc., 6.00%, 8/1/39, Ser. B

 

NR/A

 

 

1,587,030

 

 

2,500

 

U.S. Steel Corp., 6.00%, 12/1/26

 

Ba2/BB

 

 

2,545,150

 

 

 

 

Vigo Cnty. Hospital Auth. Rev., Union Hospital, Inc.,

 

 

 

 

 

 

 

990

 

5.80%, 9/1/47 (a)(c)

 

NR/NR

 

 

780,031

 

 

1,900

 

7.50%, 9/1/22

 

NR/NR

 

 

1,975,373

 

 

 

 

 

 

 

 

 

6,887,584

 

 

 

 

Iowa–4.0%

 

 

 

 

 

 

 

 

 

Finance Auth. Rev.,

 

 

 

 

 

 

 

 

 

Deerfield Retirement Community, Inc., Ser. A,

 

 

 

 

 

 

 

250

 

5.50%, 11/15/27

 

NR/NR

 

 

180,342

 

 

1,075

 

5.50%, 11/15/37

 

NR/NR

 

 

702,986

 

 

4,500

 

Edgewater LLC Project, 6.75%, 11/15/42

 

NR/NR

 

 

3,967,470

 

 

850

 

Wedum Walnut Ridge LLC Project, 5.625%, 12/1/45, Ser. A

 

NR/NR

 

 

495,788

 

 

46,000

 

Tobacco Settlement Auth. Rev., 5.60%, 6/1/34, Ser. B

 

Baa3/BBB

 

 

36,616,920

 

 

 

 

 

 

 

 

 

41,963,506

 

 

 

 

Kansas–0.1%

 

 

 

 

 

 

 

500

 

Dev. Finance Auth. Rev., Adventist Health, 5.75%, 11/15/38

 

Aa3/AA–

 

 

523,820

 

 

850

 

Manhattan Rev., Meadowlark Hills Retirement,

 

 

 

 

 

 

 

 

 

5.00%, 5/15/36, Ser. A

 

NR/NR

 

 

637,874

 

 

 

 

 

 

 

 

 

1,161,694

 

 

 

 

Kentucky–0.3%

 

 

 

 

 

 

 

2,500

 

Economic Dev. Finance Auth. Rev.,

 

 

 

 

 

 

 

 

 

Catholic Healthcare Partners, 5.25%, 10/1/30

 

A1/AA–

 

 

2,490,800

 

 

1,000

 

Owensboro Medical Healthcare Systems,

 

 

 

 

 

 

 

 

 

6.375%, 6/1/40, Ser. A

 

Baa2/NR

 

 

969,840

 

 

 

 

 

 

 

 

 

3,460,640

 

 

 

 

Louisiana–4.4%

 

 

 

 

 

 

 

 

 

Local Gov’t Environmental Facs. & Community Dev. Auth. Rev.,

 

 

 

 

 

 

 

450

 

Westlake Chemical Corp., 6.50%, 11/1/35, Ser. A–2

 

Ba2/BBB-

 

 

462,064

 

 

 

 

Woman’s Hospital Foundation, Ser. A,

 

 

 

 

 

 

 

750

 

5.875%, 10/1/40

 

A3/BBB+

 

 

723,052

 

 

1,000

 

6.00%, 10/1/44

 

A3/BBB+

 

 

975,980

 

10  PIMCO Municipal Income Funds II Annual Report | 5.31.11



 

 

PIMCO Municipal Income Fund II  

Schedule of Investments

May 31, 2011 (continued)

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

Value

 

 

 

 

Louisiana–(continued)

 

 

 

 

 

 

 

 

 

Public Facs. Auth. Rev., Oschsner Clinic Foundation Project,

 

 

 

 

 

 

$    3,300

 

5.50%, 5/15/47, Ser. B

 

Baa1/NR

 

$

2,835,030

 

 

2,000

 

6.50%, 5/15/37

 

Baa1/NR

 

 

2,036,540

 

 

43,395

 

Tobacco Settlement Financing Corp. Rev.,

 

 

 

 

 

 

 

 

 

5.875%, 5/15/39, Ser. 2001-B

 

Baa3/A–

 

 

39,918,627

 

 

 

 

 

 

 

 

 

46,951,293

 

 

 

 

Maryland–0.7%

 

 

 

 

 

 

 

 

 

Health & Higher Educational Facs. Auth. Rev.,

 

 

 

 

 

 

 

1,000

 

Adventist Healthcare, 5.75%, 1/1/25, Ser. A

 

Baa2/NR

 

 

1,003,980

 

 

1,400

 

Charlestown Community, 6.25%, 1/1/41

 

NR/NR

 

 

1,386,868

 

 

1,010

 

King Farm Presbyterian Community, 5.30%, 1/1/37, Ser. A

 

NR/NR

 

 

717,666

 

 

4,050

 

Washington Cnty. Hospital, 6.00%, 1/1/43

 

NR/BBB-

 

 

3,820,810

 

 

 

 

 

 

 

 

 

6,929,324

 

 

 

 

Massachusetts–0.8%

 

 

 

 

 

 

 

 

 

Dev. Finance Agcy. Rev.,

 

 

 

 

 

 

 

 

 

Adventcare Project,

 

 

 

 

 

 

 

4,610

 

6.75%, 10/15/37, Ser. A

 

NR/NR

 

 

4,132,450

 

 

580

 

7.625%, 10/15/37

 

NR/NR

 

 

576,984

 

 

1,000

 

Foxborough Regional Charter School,

 

 

 

 

 

 

 

 

 

7.00%, 7/1/42, Ser. A

 

NR/BBB

 

 

1,016,010

 

 

2,900

 

State College Building Auth. Rev., 5.50%, 5/1/39, Ser. A

 

Aa2/AA–

 

 

3,005,154

 

 

 

 

 

 

 

 

 

8,730,598

 

 

 

 

Michigan–3.1%

 

 

 

 

 

 

 

1,000

 

Detroit, GO, 5.25%, 11/1/35

 

Aa3/AA

 

 

1,014,790

 

 

4,545

 

Garden City Hospital Finance Auth. Rev., 5.00%, 8/15/38, Ser. A

 

NR/NR

 

 

2,959,568

 

 

800

 

Public Educational Facs. Auth. Rev., Bradford Academy,

 

 

 

 

 

 

 

 

 

6.50%, 9/1/37 (a)(c)

 

NR/BBB–

 

 

698,000

 

 

3,000

 

Royal Oak Hospital Finance Auth. Rev.,

 

 

 

 

 

 

 

 

 

William Beaumont Hospital, 8.25%, 9/1/39

 

A1/A

 

 

3,444,600

 

 

5,000

 

State Hospital Finance Auth. Rev.,

 

 

 

 

 

 

 

 

 

Ascension Health, 5.25%, 11/15/26, Ser. B

 

Aa1/AA+

 

 

5,057,050

 

 

 

 

Oakwood Group, Ser. A,

 

 

 

 

 

 

 

13,500

 

5.75%, 4/1/32

 

A2/A

 

 

13,385,520

 

 

1,925

 

6.00%, 4/1/22

 

A2/A

 

 

1,955,723

 

 

6,000

 

Tobacco Settlement Finance Auth. Rev., 6.00%, 6/1/48, Ser. A

 

NR/BB

 

 

4,136,880

 

 

 

 

 

 

 

 

 

32,652,131

 

 

 

 

Minnesota–0.6%

 

 

 

 

 

 

 

150

 

Duluth Housing & Redev. Auth. Rev., 5.875%, 11/1/40, Ser. A

 

NR/BBB–

 

 

131,754

 

 

280

 

Minneapolis, Tax Allocation, Grant Park Project, 5.35%, 2/1/30

 

NR/NR

 

 

229,479

 

 

1,500

 

Minneapolis Rev., Providence Project, 5.75%, 10/1/37, Ser. A

 

NR/NR

 

 

1,285,305

 

 

 

 

North Oaks Rev., Presbyterian Homes North Oaks,

 

 

 

 

 

 

 

2,640

 

6.00%, 10/1/33

 

NR/NR

 

 

2,464,757

 

 

1,530

 

6.125%, 10/1/39

 

NR/NR

 

 

1,431,652

 

 

500

 

Oronoco Rev., Wedum Shorewood Campus Project,

 

 

 

 

 

 

 

 

 

5.40%, 6/1/41

 

NR/NR

 

 

409,820

 

 

400

 

St. Louis Park Rev., Nicollett Health Services, 5.75%, 7/1/39

 

NR/A

 

 

393,412

 

 

 

 

 

 

 

 

 

6,346,179

 

5.31.11 | PIMCO Municipal Income Funds II Annual Report  11



 

 

PIMCO Municipal Income Fund II  

Schedule of Investments

May 31, 2011 (continued)

 

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

Value

 

 

 

 

Mississippi–0.4%

 

 

 

 

 

 

 

$    3,605

 

Business Finance Corp. Rev., System Energy Res.,
Inc. Project, 5.875%, 4/1/22

 

Ba1/BBB

 

$

3,574,790

 

 

740

 

Dev. Bank Special Obligation Rev.,
Capital Projects and Equipment Acquisition,
5.00%, 7/1/24, Ser. A–2 (AMBAC)

 

WR/NR

 

 

705,782

 

 

 

 

 

 

 

 

 

4,280,572

 

 

 

 

Missouri–1.8%

 

 

 

 

 

 

 

20,000

 

JT Municipal Electric Utility Commission Rev.,
5.00%, 1/1/42, Ser. A (AMBAC)

 

A3/NR

 

 

19,301,000

 

 

 

 

Nevada–0.9%

 

 

 

 

 

 

 

10,000

 

Clark Cnty., GO, 4.75%, 11/1/35 (FGIC-NPFGC) (i)

 

Aa1/AA+

 

 

9,731,800

 

 

 

 

New Hampshire–0.2%

 

 

 

 

 

 

 

2,000

 

Business Finance Auth. Rev., Elliot Hospital,
6.125%, 10/1/39, Ser. A

 

Baa1/BBB+

 

 

1,961,580

 

 

360

 

Health & Education Facs. Auth. Rev.,
Catholic Medical Center, 6.125%, 7/1/32, Ser. A

 

Baa1/BBB+

 

 

355,162

 

 

 

 

 

 

 

 

 

2,316,742

 

 

 

 

New Jersey–3.6%

 

 

 

 

 

 

 

950

 

Burlington Cnty. Bridge Commission Rev.,
The Evergreens Project, 5.625%, 1/1/38

 

NR/NR

 

 

797,297

 

 

 

 

Economic Dev. Auth., Special Assessment,
Kapkowski Road Landfill Project,

 

 

 

 

 

 

 

4,000

 

5.75%, 10/1/21

 

Ba2/NR

 

 

3,987,320

 

 

11,405

 

5.75%, 4/1/31

 

Ba2/NR

 

 

10,674,738

 

 

 

 

Economic Dev. Auth. Rev.,

 

 

 

 

 

 

 

525

 

Arbor Glen, 6.00%, 5/15/28, Ser. A

 

NR/NR

 

 

444,339

 

 

2,000

 

MSU Student Housing Project, 5.875%, 6/1/42

 

Baa3/NR

 

 

1,836,640

 

 

3,300

 

Educational Facs. Auth. Rev., Fairfield Dickinson Univ.,
6.00%, 7/1/25, Ser. D

 

NR/NR

 

 

3,308,085

 

 

 

 

Health Care Facs. Financing Auth. Rev.,

 

 

 

 

 

 

 

1,500

 

AHS Hospital Corp., 6.00%, 7/1/37

 

A1/A

 

 

1,563,255

 

 

1,500

 

St. Peters Univ. Hospital, 5.75%, 7/1/37

 

Baa3/BBB–

 

 

1,303,875

 

 

1,830

 

Trinitas Hospital, 5.25%, 7/1/30, Ser. A

 

Baa3/BBB–

 

 

1,620,154

 

 

2,000

 

State Turnpike Auth. Rev., 5.25%, 1/1/40, Ser. E

 

A3/A+

 

 

2,033,660

 

 

 

 

Tobacco Settlement Financing Corp. Rev., Ser. 1-A,

 

 

 

 

 

 

 

3,300

 

4.75%, 6/1/34

 

Baa3/BB+

 

 

2,101,275

 

 

13,150

 

5.00%, 6/1/41

 

Baa3/BB-

 

 

8,397,721

 

 

 

 

 

 

 

 

 

38,068,359

 

 

 

 

New Mexico–0.2%

 

 

 

 

 

 

 

2,000

 

Farmington Pollution Control Rev., 5.90%, 6/1/40, Ser. D

 

Baa3/BB+

 

 

1,932,720

 

 

 

 

New York–2.7%

 

 

 

 

 

 

 

1,200

 

Erie Cnty. Industrial Dev. Agcy. Rev.,
Orchard Park, Inc. Project, 6.00%, 11/15/36, Ser. A

 

NR/NR

 

 

857,988

 

12  PIMCO Municipal Income Funds II Annual Report | 5.31.11



 

 

PIMCO Municipal Income Fund II  

Schedule of Investments

May 31, 2011 (continued)

 

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

Value

 

 

 

 

New York–(continued)

 

 

 

 

 

 

 

 

 

Liberty Dev. Corp. Rev.,

 

 

 

 

 

 

$    1,000

 

5.125%, 1/15/44

 

NR/AA

 

$

972,920

 

 

2,500

 

5.625%, 7/15/47

 

NR/A  

 

 

2,512,525

 

 

1,250

 

6.375%, 7/15/49

 

     NR/BBB–

 

 

1,276,025

 

 

 

 

Goldman Sachs Headquarters,

 

 

 

 

 

 

 

1,505

 

5.25%, 10/1/35

 

A1/A

 

 

1,504,880

 

 

10,000

 

5.25%, 10/1/35 (i)

 

A1/A

 

 

9,999,200

 

 

1,100

 

Nassau Cnty. Industrial Dev. Agcy. Rev.,
Amsterdam at Harborside, 6.70%, 1/1/43, Ser. A

 

NR/NR

 

 

987,998

 

 

2,830

 

New York City Municipal Water Finance Auth.
Water & Sewer Rev.,

 

 

 

 

 

 

 

 

 

5.00%, 6/15/37, Ser. D (i)

 

Aa1/AAA

 

 

2,874,318

 

 

 

 

Second Generation Resolutions,

 

 

 

 

 

 

 

4,000

 

4.75%, 6/15/35, Ser. DD (i)

 

Aa2/AA+

 

 

4,020,760

 

 

2,000

 

5.00%, 6/15/39, Ser. GG-1

 

Aa2/AA+

 

 

2,047,800

 

 

1,750

 

State Dormitory Auth. Rev., The New School, 5.50%, 7/1/40

 

A3/A–

 

 

1,811,862

 

 

250

 

Suffolk Cnty. Industrial Dev. Agcy. Rev.,
New York Institute of Technology, 5.00%, 3/1/26

 

Baa2/BBB+

 

 

243,870

 

 

 

 

 

 

 

 

 

29,110,146

 

 

 

 

North Carolina–0.1%

 

 

 

 

 

 

 

 

 

Medical Care Commission Rev.,

 

 

 

 

 

 

 

550

 

Salemtowne, 5.10%, 10/1/30

 

NR/NR

 

 

476,778

 

 

1,000

 

Village at Brookwood, 5.25%, 1/1/32

 

NR/NR

 

 

728,590

 

 

 

 

 

 

 

 

 

1,205,368

 

 

 

 

North Dakota–0.3%

 

 

 

 

 

 

 

3,710

 

Stark Cnty. Healthcare Rev., Benedictine Living Communities,
6.75%, 1/1/33

 

NR/NR

 

 

3,414,461

 

 

 

 

Ohio–1.5%

 

 

 

 

 

 

 

 

 

Buckeye Tobacco Settlement Financing Auth. Rev.,

 

 

 

 

 

 

 

1,865

 

5.75%, 6/1/34, Ser. A–2

 

Baa3/BB–

 

 

1,316,205

 

 

500

 

5.875%, 6/1/47, Ser. A–2

 

Baa3/BB–

 

 

342,460

 

 

1,000

 

Higher Educational Fac. Commission Rev.,
Univ. Hospital Health Systems, 6.75%, 1/15/39, Ser. 2009-A

 

A2/A

 

 

1,040,410

 

 

7,500

 

Lorain Cnty. Hospital Rev., Catholic Healthcare,
5.375%, 10/1/30

 

A1/AA–

 

 

7,530,375

 

 

500

 

Lorain Cnty. Port Auth. Rev., U.S. Steel Corp. Project,
6.75%, 12/1/40

 

Ba2/BB

 

 

518,060

 

 

1,000

 

Montgomery Cnty. Rev., Miami Valley Hospital,
6.25%, 11/15/39, Ser. A

 

Aa3/NR

 

 

1,027,980

 

 

 

 

State Rev.,

 

 

 

 

 

 

 

550

 

Ashland Univ. Project, 6.25%, 9/1/24

 

Ba1/NR

 

 

547,003

 

 

3,000

 

Cleveland Clinic Health System, 5.50%, 1/1/39, Ser. B

 

Aa2/AA–

 

 

3,042,510

 

 

 

 

 

 

 

 

 

15,365,003

 

 

 

 

Oregon–0.2%

 

 

 

 

 

 

 

1,000

 

Clackamas Cnty. Hospital Fac. Auth. Rev.,
Legacy Health System, 5.50%, 7/15/35, Ser. A

 

A2/A+

 

 

1,019,600

 

5.31.11 | PIMCO Municipal Income Funds II Annual Report  13



 

 

PIMCO Municipal Income Fund II  

Schedule of Investments

May 31, 2011 (continued)

 

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

Value

 

 

 

 

Oregon–(continued)

 

 

 

 

 

 

$    1,155

 

State Department of Administrative Services,
CP, 5.25%, 5/1/39, Ser. A

 

Aa2/AA

 

$

1,181,958

 

 

 

 

 

 

 

 

 

2,201,558

 

 

 

 

Pennsylvania–5.0%

 

 

 

 

 

 

 

 

 

Cumberland Cnty. Municipal Auth. Rev.,
Messiah Village Project, Ser. A,

 

 

 

 

 

 

 

750

 

5.625%, 7/1/28

 

NR/BBB–

 

 

667,268

 

 

670

 

6.00%, 7/1/35

 

NR/BBB–

 

 

591,087

 

 

3,250

 

Harrisburg Auth. Rev., Harrisburg Univ. of Science,
6.00%, 9/1/36, Ser. B

 

NR/NR

 

 

2,792,042

 

 

 

 

Higher Educational Facs. Auth. Rev.,

 

 

 

 

 

 

 

850

 

Edinboro Univ. Foundation, 6.00%, 7/1/43

 

Baa3/BBB–

 

 

832,184

 

 

400

 

Thomas Jefferson Univ., 5.00%, 3/1/40

 

A1/AA–

 

 

400,248

 

 

500

 

Luzerne Cnty. Industrial Dev. Auth. Rev.,
Pennsylvania American Water Co., 5.50%, 12/1/39

 

A2/A

 

 

509,160

 

 

 

 

Montgomery Cnty. Higher Education & Health Auth. Rev.,
Abington Memorial Hospital, Ser. A,

 

 

 

 

 

 

 

5,000

 

5.125%, 6/1/27

 

NR/A

 

 

4,959,600

 

 

3,750

 

5.125%, 6/1/32

 

NR/A

 

 

3,621,413

 

 

8,500

 

Montgomery Cnty. Industrial Dev. Auth. Rev.,
5.375%, 8/1/38 (FHA)

 

Aa2/AA

 

 

8,600,470

 

 

17,000

 

Philadelphia, GO, 5.25%, 12/15/32, Ser. A (AGM)

 

Aa3/AA+

 

 

17,189,210

 

 

11,600

 

Philadelphia Hospitals & Higher Education Facs. Auth. Rev.,
Temple Univ. Hospital, 6.625%, 11/15/23, Ser. A

 

Baa3/BBB

 

 

11,484,348

 

 

500

 

Philadelphia Water Rev., 5.25%, 1/1/36, Ser. A

 

A1/A

 

 

502,460

 

 

1,000

 

Westmoreland Cnty. Industrial Dev. Auth. Rev.,
Excela Health Project, 5.125%, 7/1/30

 

A3/NR

 

 

957,130

 

 

 

 

 

 

 

 

 

53,106,620

 

 

 

 

Puerto Rico–0.9%

 

 

 

 

 

 

 

10,000

 

Sales Tax Financing Corp. Rev., 5.25%, 8/1/41, Ser. C

 

A1/A+

 

 

9,492,400

 

 

 

 

Rhode Island–4.6%

 

 

 

 

 

 

 

56,200

 

Tobacco Settlement Financing Corp. Rev.,
6.25%, 6/1/42, Ser. A

 

Baa3/BBB

 

 

49,176,686

 

 

 

 

South Carolina–1.4%

 

 

 

 

 

 

 

1,000

 

Greenwood Cnty. Rev., Self Regional Healthcare,
5.375%, 10/1/39

 

A2/A+

 

 

968,140

 

 

500

 

Jobs-Economic Dev. Auth. Rev.,
Anmed Health, 5.50%, 2/1/38, Ser. B (AGC)

 

NR/AA+

 

 

504,000

 

 

13,850

 

Bon Secours Health System, 5.625%, 11/15/30, Ser. B

 

A3/A–

 

 

13,776,595

 

 

 

 

 

 

 

 

 

15,248,735

 

 

 

 

Tennessee–0.7%

 

 

 

 

 

 

 

1,750

 

Claiborne Cnty. Industrial Dev. Board Rev.,
Lincoln Memorial Univ. Project, 6.625%, 10/1/39

 

NR/NR

 

 

1,771,542

 

 

1,000

 

Johnson City Health & Educational Facs. Board Rev.,
Mountain States Health Alliance, 6.00%, 7/1/38

 

Baa1/BBB+

 

 

933,020

 

 

500

 

Sullivan Cnty. Health Educational & Housing Facs. Board Rev.,
Wellmont Health Systems Project, 5.25%, 9/1/36, Ser. C

 

NR/BBB+

 

 

430,650

 

14  PIMCO Municipal Income Funds II Annual Report | 5.31.11



 

 

PIMCO Municipal Income Fund II  

Schedule of Investments

May 31, 2011 (continued)

 

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

Value

 

 

 

 

Tennessee–(continued)

 

 

 

 

 

 

 

 

 

Tennessee Energy Acquisition Corp. Rev.,

 

 

 

 

 

 

$    3,000

 

5.00%, 2/1/23, Ser. C

 

Baa3/BBB

 

$

2,924,790

 

 

700

 

5.25%, 9/1/21, Ser. A

 

Ba3/B

 

 

678,104

 

 

700

 

5.25%, 9/1/22, Ser. A

 

Ba3/B

 

 

685,405

 

 

 

 

 

 

 

 

 

7,423,511

 

 

 

 

Texas–12.2%

 

 

 

 

 

 

 

130

 

Aubrey Independent School Dist., GO,
5.50%, 2/15/33 (PSF-GTD)

 

Aaa/NR

 

 

135,597

 

 

6,500

 

Brazos Cnty. Health Facs. Dev. Corp. Rev., 5.375%, 1/1/32

 

NR/A–

 

 

6,093,360

 

 

2,500

 

Dallas Rev., Dallas Civic Center, 5.25%, 8/15/38 (AGC)

 

Aa3/AA+

 

 

2,544,800

 

 

 

 

Harris Cnty. Cultural Education Facs. Finance Corp. Rev.,
Texas Children’s Hospital Project,

 

 

 

 

 

 

 

3,750

 

5.25%, 10/1/29

 

Aa2/AA

 

 

3,887,925

 

 

12,700

 

5.50%, 10/1/39

 

Aa2/AA

 

 

12,868,148

 

 

700

 

HFDC of Central Texas, Inc. Rev.,
Village at Gleannloch Farms, 5.50%, 2/15/37, Ser. A

 

NR/NR

 

 

479,234

 

 

 

 

North Harris Cnty. Regional Water Auth. Rev.,

 

 

 

 

 

 

 

10,300

 

5.25%, 12/15/33

 

A1/A+

 

 

10,603,026

 

 

10,300

 

5.50%, 12/15/38

 

A1/A+

 

 

10,665,547

 

 

 

 

North Texas Tollway Auth. Rev.,

 

 

 

 

 

 

 

5,250

 

4.75%, 1/1/29 (FGIC-NPFGC)

 

A2/A–

 

 

5,121,480

 

 

1,300

 

5.50%, 9/1/41, Ser. A

 

NR/AA

 

 

1,372,865

 

 

5,000

 

5.625%, 1/1/33, Ser. B

 

A2/A–

 

 

5,080,700

 

 

1,200

 

5.75%, 1/1/33, Ser. F

 

A3/BBB+

 

 

1,207,764

 

 

1,250

 

6.25%, 1/1/39, Ser. A

 

A2/A–

 

 

1,293,313

 

 

2,000

 

Sabine River Auth. Pollution Control Rev., 5.20%, 5/1/28, Ser. C

 

Ca/NR

 

 

654,780

 

 

10,000

 

San Antonio Electric & Gas Systems Rev., 5.00%, 2/1/32 (i)

 

Aa1/AA

 

 

10,348,400

 

 

250

 

San Juan Higher Education Finance Auth. Rev.,
6.70%, 8/15/40, Ser. A

 

NR/BBB

 

 

253,562

 

 

 

 

State, Mobility Fund, GO (i),

 

 

 

 

 

 

 

10,025

 

4.75%, 4/1/35, Ser. A

 

Aaa/AA+

 

 

10,108,107

 

 

17,500

 

4.75%, 4/1/36

 

Aaa/AA+

 

 

17,641,575

 

 

1,000

 

State Public Finance Auth. Rev.,
Charter School Finance Corp., 5.875%, 12/1/36, Ser. A

 

Baa3/BBB–

 

 

860,770

 

 

8,880

 

State Turnpike Auth. Rev., 5.00%, 8/15/42, Ser. A (AMBAC)

 

Baa1/BBB+

 

 

7,930,284

 

 

3,000

 

Tarrant Cnty. Cultural Education Facs. Finance Corp. Rev.,
Baylor Health Care Systems Project, 6.25%, 11/15/29

 

Aa2/AA–

 

 

3,255,990

 

 

 

 

Texas Municipal Gas Acquisition & Supply Corp. I Rev.,

 

 

 

 

 

 

 

450

 

5.25%, 12/15/25, Ser. A

 

A2/A

 

 

423,045

 

 

15,300

 

6.25%, 12/15/26, Ser. D

 

A2/A

 

 

16,240,491

 

 

1,000

 

Wise Cnty. Rev., Parker Cnty Junior College Dist.,

 

 

 

 

 

 

 

 

 

8.00%, 8/15/34

 

NR/NR

 

 

1,015,110

 

 

 

 

 

 

 

 

 

130,085,873

 

 

 

 

Virginia–0.3%

 

 

 

 

 

 

 

1,000

 

Fairfax Cnty. Industrial Dev. Auth. Rev.,
Inova Health Systems, 5.50%, 5/15/35, Ser. A

 

Aa2/AA+

 

 

1,021,910

 

 

1,000

 

Henrico Cnty. Economic Dev. Auth. Rev.,
Bon Secours Health System, 4.50%, 11/1/42, Ser. B–1 (AGC)

 

Aa3/AA+

 

 

876,820

 

5.31.11 | PIMCO Municipal Income Funds II Annual Report  15



 

 

PIMCO Municipal Income Fund II  

Schedule of Investments

May 31, 2011 (continued)

 

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

Value

 

 

 

 

Virginia–(continued)

 

 

 

 

 

 

 

$    2,050

 

James City Cnty. Economic Dev. Auth. Rev.,
United Methodist Homes, 5.50%, 7/1/37, Ser. A

 

NR/NR

 

$

1,180,492

 

 

 

 

 

 

 

 

 

3,079,222

 

 

 

 

Washington–1.4%

 

 

 

 

 

 

 

1,300

 

Health Care Facs. Auth. Rev.,
Multicare Health Systems, 6.00%, 8/15/39, Ser. B (AGC)

 

Aa3/AA+

 

 

1,360,645

 

 

1,000

 

Seattle Cancer Care Alliance, 7.375%, 3/1/38

 

A3/NR

 

 

1,086,630

 

 

13,000

 

Virginia Mason Medical Center, 6.125%, 8/15/37, Ser. A

 

Baa2/BBB

 

 

12,388,870

 

 

 

 

 

 

 

 

 

14,836,145

 

 

 

 

West Virginia–0.2%

 

 

 

 

 

 

 

2,000

 

Hospital Finance Auth. Rev., Highland Hospital,
9.125%, 10/1/41

 

NR/NR

 

 

2,035,840

 

 

 

 

Wisconsin–0.1%

 

 

 

 

 

 

 

 

 

Health & Educational Facs. Auth. Rev.,

 

 

 

 

 

 

 

90

 

Froedert & Community Health, 5.375%, 10/1/30

 

NR/AA–

 

 

90,261

 

 

1,000

 

Prohealth Care, Inc., 6.625%, 2/15/39

 

A1/A+

 

 

1,056,900

 

 

 

 

 

 

 

 

 

1,147,161

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Municipal Bonds & Notes (cost–$1,036,312,122)

 

 

 

 

1,024,866,740

 

 

 

 

 

 

 

 

 

 

 

  VARIABLE RATE NOTES (f)—3.0%

 

 

 

California–0.4%

 

 

 

 

 

 

 

5,000

 

Health Facs. Financing Auth. Rev.,
7.98%, 11/15/36, Ser. 3193 (a)(c)(e)

 

NR/NR

 

 

4,371,100

 

 

 

 

Florida–0.2%

 

 

 

 

 

 

 

1,830

 

Highlands Cnty. Health Facs. Auth. Rev.,
Adventist Health System, 5.00%, 11/15/31, Ser. C

 

Aa3/AA–

 

 

1,800,025

 

 

 

 

Illinois–1.3%

 

 

 

 

 

 

 

6,000

 

Chicago, GO, 9.82%, 1/1/34, Ser. 3190 (a)(c)(e)

 

NR/NR

 

 

5,316,000

 

 

 

 

Metropolitan Pier & Exposition Auth. Rev.,

 

 

 

 

 

 

 

4,500

 

8.34%, 6/15/50, Ser. 3217 (a)(c)(e)

 

NR/AAA

 

 

3,824,640

 

 

5,000

 

State, GO, 8.14%, 4/1/27, Ser. 783 (AGC) (a)(c)(e)

 

Aa3/NR

 

 

5,008,100

 

 

 

 

 

 

 

 

 

14,148,740

 

 

 

 

Texas–0.9%

 

 

 

 

 

 

 

3,335

 

JPMorgan Chase Putters/Drivers Trust Rev.,
11.518%, 5/15/18, Ser. 3709 (a)(c)(e)

 

NR/AAA

 

 

3,744,705

 

 

5,365

 

State, GO, 7.54%, 4/1/37, Ser. 3197 (a)(c)(e)

 

NR/NR

 

 

5,400,194

 

 

 

 

 

 

 

 

 

9,144,899

 

 

 

 

West Virginia–0.2%

 

 

 

 

 

 

 

2,000

 

Economic Dev. Auth. Rev., Appalachia Power,
5.375%, 12/1/38, Ser. A

 

Baa2/BBB

 

 

1,945,440

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Variable Rate Notes (cost–$33,641,730)

 

 

 

 

31,410,204

 

 

 

 

 

 

 

 

 

 

 

  SHORT-TERM INVESTMENTS—0.6%

 

 

 

U.S. Treasury Obligations (g)(k)–0.6%

 

 

 

 

 

 

 

 

 

U.S. Treasury Bills,

 

 

 

 

 

 

 

6,797

 

0.015%-0.161%, 8/11/11-9/15/11 (cost–$6,795,561)

 

 

 

 

6,795,561

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Investments (cost–$1,076,749,413)–100.0%

 

 

 

$

1,063,072,505

 

16  PIMCO Municipal Income Funds II Annual Report | 5.31.11



 

 

PIMCO California Municipal Income Fund II  

Schedule of Investments

May 31, 2011

 

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

 

Value

 

  CALIFORNIA MUNICIPAL BONDS & NOTES—88.6%

 

$    2,000

 

Alhambra Rev., Atherton Baptist Homes,
7.625%, 1/1/40, Ser. A

 

NR/NR

 

$

2,047,120

 

 

 

 

Bay Area Toll Auth. Rev., San Francisco Bay Area, Ser. F-1,

 

 

 

 

 

 

 

5,000

 

5.00%, 4/1/34

 

Aa3/AA

 

 

5,048,600

 

 

20,000

 

5.00%, 4/1/39 (i)

 

Aa3/AA

 

 

20,021,600

 

 

1,000

 

Chula Vista Rev., San Diego Gas & Electric,
5.875%, 2/15/34, Ser. B

 

Aa3/A+

 

 

1,061,810

 

 

300

 

City & Cnty. of San Francisco,
Capital Improvement Projects, CP, 5.25%, 4/1/31, Ser. A

 

A1/AA–

 

 

303,045

 

 

1,410

 

Community College Financing Auth. Rev.,
5.00%, 8/1/27, Ser. A (AMBAC)

 

WR/NR

 

 

1,368,828

 

 

9,565

 

Coronado Community Dev. Agcy., Tax Allocation,

 

NR/AA–

 

 

8,349,958

 

 

 

 

4.875%, 9/1/35 (AMBAC)

 

 

 

 

 

 

 

1,110

 

CoronA–Norco Unified School Dist. No. 98-1, Special Tax,
5.10%, 9/1/25 (AMBAC)

 

WR/NR

 

 

1,032,122

 

 

 

 

CoronA–Norco Unified School Dist. Public Financing Auth.,
Special Tax, Ser. A,

 

 

 

 

 

 

 

305

 

5.65%, 9/1/16

 

NR/NR

 

 

307,812

 

 

160

 

5.75%, 9/1/17

 

NR/NR

 

 

160,726

 

 

530

 

6.00%, 9/1/20

 

NR/NR

 

 

532,523

 

 

1,000

 

6.00%, 9/1/25

 

NR/NR

 

 

1,003,690

 

 

4,150

 

6.10%, 9/1/32

 

NR/NR

 

 

4,020,022

 

 

3,000

 

Dinuba Financing Auth. Rev., Public Works Projects,
5.10%, 8/1/32 (NPFGC)

 

Baa1/A–

 

 

3,062,940

 

 

8,300

 

El Dorado Irrigation Dist. & El Dorado Water Agcy., CP,
5.75%, 8/1/39, Ser. A (AGC)

 

Aa3/AA+

 

 

8,416,366

 

 

1,500

 

Foothill-Eastern Transportation Corridor Agcy. Rev.,
5.875%, 1/15/27 (IBC-NPFGC)

 

Baa1/BBB

 

 

1,428,510

 

 

1,440

 

Fremont Community Facs. Dist. No. 1, Special Tax,
Pacific Commons, 5.30%, 9/1/30

 

NR/NR

 

 

1,312,402

 

 

 

 

Golden State Tobacco Securitization Corp. Rev.,

 

 

 

 

 

 

 

13,885

 

5.00%, 6/1/45 (AMBAC-TCRS)

 

A2/BBB+

 

 

11,763,927

 

 

1,500

 

5.00%, 6/1/45, Ser. A

 

A2/BBB+

 

 

1,270,860

 

 

6,000

 

5.00%, 6/1/45, Ser. A (FGIC-TCRS)

 

A2/BBB+

 

 

5,083,440

 

 

8,500

 

5.125%, 6/1/47, Ser. A–1

 

Baa3/BB+

 

 

5,249,770

 

 

22,415

 

5.75%, 6/1/47, Ser. A–1

 

Baa3/BB+

 

 

15,416,813

 

 

500

 

Hartnell Community College Dist., GO,
zero coupon, 8/1/34, Ser. 2002-D (j)

 

Aa2/AA–

 

 

254,550

 

 

 

 

Health Facs. Financing Auth. Rev.,
Adventist Health System, Ser. A,

 

 

 

 

 

 

 

500

 

5.00%, 3/1/33

 

NR/A

 

 

448,495

 

 

250

 

5.75%, 9/1/39

 

NR/A

 

 

245,185

 

 

3,000

 

Catholic Healthcare West, 6.00%, 7/1/39, Ser. A

 

A2/A

 

 

3,063,300

 

 

1,200

 

Children’s Hospital of Los Angeles, 5.25%, 7/1/38 (AGM)

 

Aa3/AA+

 

 

1,113,432

 

 

500

 

Children’s Hospital of Orange Cnty., 6.50%, 11/1/38, Ser. A

 

NR/A

 

 

520,640

 

 

2,000

 

Sutter Health, 5.00%, 11/15/42, Ser. A (IBC-NPFGC)

 

Aa3/AA–

 

 

1,803,160

 

 

175

 

Infrastructure & Economic Dev. Bank Rev., 5.25%, 2/1/38

 

A1/A+

 

 

168,194

 

 

1,000

 

Irvine Unified School Dist., Special Tax, 6.70%, 9/1/35

 

NR/NR

 

 

1,031,110

 

5.31.11 | PIMCO Municipal Income Funds II Annual Report  17



 

 

PIMCO California Municipal Income Fund II  

Schedule of Investments

May 31, 2011 (continued)

 

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

Value

 

 

$    1,000

 

Lancaster Redev. Agcy., Tax Allocation, 6.875%, 8/1/39

 

NR/BBB+

 

$

977,380

 

 

500

 

Lancaster Redev. Agcy. Rev., Capital Improvements Projects,
5.90%, 12/1/35

 

NR/A

 

 

443,435

 

 

5,300

 

Livermore-Amador Valley Water Management Agcy. Rev.,
5.00%, 8/1/31, Ser. A (AMBAC)

 

Aa2/NR

 

 

5,300,159

 

 

7,500

 

Long Beach Bond Finance Auth. Rev.,
Long Beach Natural Gas, 5.50%, 11/15/37, Ser. A

 

A2/A

 

 

7,033,875

 

 

10,000

 

Long Beach Unified School Dist., GO, 5.25%, 8/1/33, Ser. A (i)

 

Aa2/AA–

 

 

10,423,700

 

 

 

 

Los Angeles, Equipment & Real Property Project, CP,

 

 

 

 

 

 

 

4,895

 

5.00%, 2/1/27, Ser. T (NPFGC)

 

A1/A+

 

 

4,906,650

 

 

2,685

 

5.00%, 10/1/27, Ser. AU (NPFGC)

 

A2/A+

 

 

2,699,553

 

 

10,000

 

Los Angeles Community College Dist., GO,
5.00%, 8/1/33, Ser. F-1 (i)

 

Aa1/AA

 

 

10,035,200

 

 

 

 

Los Angeles Department of Water & Power Rev.,

 

 

 

 

 

 

 

15,000

 

4.75%, 7/1/30, Ser. A–2 (AGM) (i)

 

Aa3/AA+

 

 

15,143,400

 

 

15,950

 

5.125%, 7/1/41, Ser. A (FGIC-NPFGC-TCRS)

 

Aa2/AA

 

 

15,973,128

 

 

11,000

 

Los Angeles Unified School Dist., GO, 5.00%, 1/1/34, Ser. I

 

Aa2/AA–

 

 

11,006,820

 

 

10,000

 

Manteca Redev. Agcy., Tax Allocation,
5.00%, 10/1/36 (AMBAC)

 

WR/A

 

 

7,815,500

 

 

5,330

 

Manteca Unified School Dist. No. 89-2, Special Tax,
5.00%, 9/1/29, Ser. C (NPFGC)

 

Baa1/BBB

 

 

5,332,772

 

 

4,000

 

Merced Cnty., Juvenile Justice Correctional Fac., CP,
5.00%, 6/1/32 (AMBAC)

 

A1/NR

 

 

4,021,920

 

 

5,000

 

Metropolitan Water Dist. of Southern California Rev.,
5.00%, 7/1/37, Ser. A (i)

 

Aa1/AAA

 

 

5,107,450

 

 

4,700

 

Moreno Valley Unified School Dist. Community
Facs. Dist. No. 2004-6, Special Tax, 5.20%, 9/1/36

 

NR/NR

 

 

3,896,065

 

 

1,400

 

M-S-R Energy Auth. Rev., 6.50%, 11/1/39, Ser. B

 

NR/A

 

 

1,531,432

 

 

1,300

 

Municipal Finance Auth. Rev., Azusa Pacific Univ. Project,
7.75%, 4/1/31, Ser. B

 

NR/NR

 

 

1,337,115

 

 

5,000

 

Oakland Unified School Dist., Alameda Cnty., GO,
6.125%, 8/1/29, Ser. A

 

A2/NR

 

 

5,117,050

 

 

4,750

 

Palomar Pomerado Health, CP, 6.75%, 11/1/39

 

Baa3/NR

 

 

4,673,002

 

 

10,000

 

PlacentiA–Yorba Linda Unified School Dist., CP,
5.00%, 10/1/32 (FGIC-NPFGC)

 

A1/A+

 

 

9,643,500

 

 

1,500

 

Pollution Control Financing Auth. Rev.,
American Water Capital Corp. Project, 5.25%, 8/1/40 (a)(c)

 

Baa2/BBB+

 

 

1,426,920

 

 

3,000

 

Riverside, CP, 5.00%, 9/1/33 (AMBAC)

 

WR/A+

 

 

2,632,350

 

 

 

 

Riverside Unified School Dist. Community Facs.
School Dist. No. 15, Special Tax, Ser. A,

 

 

 

 

 

 

 

1,000

 

5.25%, 9/1/30

 

NR/NR

 

 

858,840

 

 

1,000

 

5.25%, 9/1/35

 

NR/NR

 

 

822,110

 

 

 

 

Roseville Redev. Agcy., Tax Allocation, Ser. B (NPFGC),

 

 

 

 

 

 

 

2,230

 

5.00%, 9/1/27

 

A2/A–

 

 

1,914,054

 

 

3,365

 

5.00%, 9/1/32

 

A2/A–

 

 

2,775,620

 

18  PIMCO Municipal Income Funds II Annual Report | 5.31.11



 

 

PIMCO California Municipal Income Fund II  

Schedule of Investments

May 31, 2011 (continued)

 

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

Value

 

 

 

 

San Diego Public Facs. Financing Auth. Rev.,

 

 

 

 

 

 

 

$    11,000

 

5.00%, 8/1/32 (NPFGC)

 

Aa3/A+

 

$

11,020,130

 

 

4,000

 

5.25%, 8/1/38, Ser. A

 

Aa2/AA–

 

 

4,042,520

 

 

1,000

 

5.25%, 5/15/39, Ser. A

 

Aa3/A+

 

 

1,022,130

 

 

1,500

 

Fire & Life Safety Facs. Project, 5.00%, 4/1/32, Ser. B (NPFGC)

 

A2/A–

 

 

1,374,825

 

 

2,800

 

San Diego Regional Building Auth. Rev.,
Cnty. Operations Center & Annex, 5.375%, 2/1/36, Ser. A

 

Aa3/AA+

 

 

2,857,008

 

 

2,800

 

San Diego Unified School Dist., GO,
4.75%, 7/1/27, Ser. D-2 (AGM)

 

Aa1/AA+

 

 

2,817,528

 

 

1,000

 

San Jose Rev., Convention Center Expansion, 6.50%, 5/1/36

 

A2/A–

 

 

1,021,900

 

 

1,260

 

Santa Cruz Cnty., CP, 5.25%, 8/1/32

 

A1/NR

 

 

1,291,954

 

 

1,500

 

Santa Cruz Cnty. Redev. Agcy., Tax Allocation,
Live Oak/Soquel Community, 7.00%, 9/1/36, Ser. A

 

A1/A

 

 

1,556,760

 

 

 

 

State, GO,

 

 

 

 

 

 

 

2,500

 

5.00%, 9/1/31

 

A1/A–

 

 

2,513,550

 

 

7,000

 

5.00%, 4/1/38

 

A1/A–

 

 

6,768,720

 

 

11,000

 

6.00%, 4/1/38

 

A1/A–

 

 

11,770,550

 

 

 

 

State Public Works Board Rev.,

 

A2/BBB+

 

 

3,053,310

 

 

3,000

 

5.75%, 10/1/30, Ser. G-1

 

 

 

 

 

 

 

2,000

 

California State Univ., 6.00%, 11/1/34, Ser. J

 

Aa3/BBB+

 

 

2,051,620

 

 

7,915

 

Regents Univ., 5.00%, 3/1/33, Ser. A

 

Aa2/AA–

 

 

7,811,076

 

 

 

 

Statewide Communities Dev. Auth. Rev.,
Bentley School (a)(b)(l),

 

 

 

 

 

 

 

11,180

 

zero coupon, 7/1/50

 

 

 

 

 

 

 

 

 

(acquisition cost–$400,132; purchased 6/24/10)

 

NR/NR

 

 

294,258

 

 

3,760

 

7.00%, 7/1/40, Ser. A

 

 

 

 

 

 

 

 

 

(acquisition cost–$3,645,621; purchased 6/24/10)

 

NR/NR

 

 

3,122,266

 

 

 

 

Catholic Healthcare West,

 

 

 

 

 

 

 

1,800

 

5.50%, 7/1/31, Ser. D

 

A2/A

 

 

1,795,572

 

 

1,800

 

5.50%, 7/1/31, Ser. E

 

A2/A

 

 

1,795,572

 

 

 

 

Huntington Park Charter School Project, Ser. A,

 

 

 

 

 

 

 

250

 

5.15%, 7/1/30

 

NR/NR

 

 

196,615

 

 

1,250

 

5.25%, 7/1/42

 

NR/NR

 

 

921,162

 

 

500

 

International School of the Peninsula Project, 5.00%, 11/1/29

 

NR/NR

 

 

362,805

 

 

2,770

 

Kaiser Permanente, 5.50%, 11/1/32, Ser. A

 

WR/A+

 

 

2,728,755

 

 

1,000

 

Lancer Student Housing Project, 7.50%, 6/1/42

 

NR/NR

 

 

1,008,940

 

 

9,700

 

Los Angeles Jewish Home, 5.50%, 11/15/33 (CA St. Mtg.)

 

NR/A–

 

 

9,613,282

 

 

 

 

Methodist Hospital Project (FHA),

 

 

 

 

 

 

 

2,400

 

6.625%, 8/1/29

 

Aa2/NR

 

 

2,732,640

 

 

8,800

 

6.75%, 2/1/38

 

Aa2/NR

 

 

9,783,488

 

 

3,700

 

St. Joseph Health System, 5.75%, 7/1/47, Ser. A (FGIC)

 

A1/AA–

 

 

3,622,670

 

 

 

 

Sutter Health, Ser. A,

 

 

 

 

 

 

 

5,500

 

5.00%, 11/15/43

 

Aa3/AA–

 

 

4,986,300

 

 

5,600

 

6.00%, 8/15/42

 

Aa3/AA–

 

 

5,857,096

 

 

1,365

 

Windrush School, 5.50%, 7/1/37

 

NR/NR

 

 

983,141

 

 

1,450

 

Statewide Financing Auth. Tobacco Settlement Rev.,
5.625%, 5/1/29, Ser. A

 

Baa3/NR

 

 

1,315,368

 

5.31.11 | PIMCO Municipal Income Funds II Annual Report  19



 

 

PIMCO California Municipal Income Fund II  

Schedule of Investments

May 31, 2011 (continued)

 

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

Value

 

 

 

 

Tobacco Securitization Agcy. Rev.,

 

 

 

 

 

 

 

$    4,500

 

Alameda Cnty., 6.00%, 6/1/42

 

Baa3/NR

 

$

3,337,695

 

 

1,800

 

Stanislaus Cnty., 5.875%, 6/1/43, Ser. A

 

Baa3/NR

 

 

1,306,926

 

 

3,100

 

Torrance Rev., Memorial Medical Center, 5.00%, 9/1/40, Ser. A

 

A2/A+

 

 

2,752,366

 

 

1,000

 

Tustin Unified School Dist., Special Tax,
6.00%, 9/1/40, Ser. 2006-1

 

NR/BBB

 

 

925,010

 

 

 

 

Univ. of California Rev.,

 

 

 

 

 

 

 

5,500

 

4.75%, 5/15/35, Ser. F (AGM) (i)

 

Aa1/AA+

 

 

5,257,340

 

 

5,000

 

4.75%, 5/15/35, Ser. G (FGIC-NPFGC) (i)

 

Aa1/AA  

 

 

4,779,400

 

 

5,650

 

4.75%, 5/15/38, Ser. B

 

Aa2/AA–

 

 

5,283,484

 

 

10,000

 

Ventura Cnty. Community College Dist., GO,
5.00%, 8/1/27, Ser. A (NPFGC) (i)

 

Aa2/AA  

 

 

10,082,800

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total California Municipal Bonds & Notes (cost–$383,779,011)

 

 

 

 

395,578,482

 

 

 

 

 

 

 

 

 

 

 

  CALIFORNIA VARIABLE RATE NOTES (a)(c)(f)—5.2%

 

 

6,035

 

Desert Community College Dist., GO,
7.98%, 8/1/32, Ser. 3016-1 (AGC) (e)

 

NR/AA+

 

 

6,107,420

 

 

7,500

 

JPMorgan Chase Putters/Drivers Trust Rev.,
7.977%, 5/15/40, Ser. 3838 (e)

 

Aa3/NR

 

 

7,657,950

 

 

4,000

 

Los Angeles Community College Dist., GO,
11.65%, 8/1/33, Ser. 3096 (e)

 

NR/AA

 

 

4,041,600

 

 

5,000

 

San Diego Community College Dist., GO, 9.896%, 2/1/17

 

  NR/AA+

 

 

5,204,150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total California Variable Rate Notes (cost–$22,331,269)

 

 

 

 

23,011,120

 

 

 

 

 

 

 

 

 

 

 

  OTHER MUNICIPAL BONDS & NOTES—4.2%

 

 

 

 

New Jersey–0.6%

 

 

 

 

 

 

 

 

 

Tobacco Settlement Financing Corp. Rev., Ser. 1-A,

 

 

 

 

 

 

 

1,300

 

4.75%, 6/1/34

 

Baa3/BB+

 

 

827,775

 

 

3,000

 

5.00%, 6/1/41

 

Baa3/BB–

 

 

1,915,830

 

 

 

 

 

 

 

 

 

2,743,605

 

 

 

 

New York–0.7%

 

 

 

 

 

 

 

1,250

 

Liberty Dev. Corp. Rev., Goldman Sachs Headquarters,
5.25%, 10/1/35

 

A1/A

 

 

1,249,900

 

 

1,900

 

New York City Municipal Water Finance Auth.
Water & Sewer Rev.,
5.00%, 6/15/37, Ser. D (i)

 

Aa1/AAA

 

 

1,929,754

 

 

 

 

 

 

 

 

 

3,179,654

 

 

 

 

Ohio–0.3%

 

 

 

 

 

 

 

2,250

 

Buckeye Tobacco Settlement Financing Auth. Rev.,
5.875%, 6/1/47, Ser. A–2

 

Baa3/BB–

 

 

1,541,070

 

 

 

 

Puerto Rico–0.4%

 

 

 

 

 

 

 

1,600

 

Sales Tax Financing Corp. Rev., 5.00%, 8/1/40, Ser. A (AGM) (i)

 

Aa3/AA+

 

 

1,552,128

 

 

 

 

Rhode Island–2.2%

 

 

 

 

 

 

 

11,000

 

Tobacco Settlement Financing Corp. Rev.,
6.25%, 6/1/42, Ser. A

 

Baa3/BBB

 

 

9,625,330

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Other Municipal Bonds & Notes (cost–$17,977,933)

 

 

 

 

18,641,787

 

20  PIMCO Municipal Income Funds II Annual Report | 5.31.11



 

 

PIMCO California Municipal Income Fund II  

Schedule of Investments

May 31, 2011 (continued)

 

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

Value

 

  SHORT-TERM INVESTMENTS–2.0%

 

 

 

 

U.S. Treasury Obligations (g)(k)–1.2%

 

 

 

 

 

 

 

 

 

U.S. Treasury Bills,

 

 

 

 

 

 

 

$    5,389

 

0.015%-0.159%, 8/11/11-9/15/11 (cost–$5,388,310)

 

 

 

$

5,388,310

 

 

 

 

Corporate Notes–0.8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Services–0.8%

 

 

 

 

 

 

 

3,540

 

International Lease Finance Corp., 5.40%, 2/15/12 (h)

 

 

 

 

 

 

 

 

 

(cost–$3,292,369)

 

B1/BBB-

 

 

3,646,200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Short-Term Investments (cost–$8,680,679)

 

 

 

 

9,034,510

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Investments (cost–$432,768,892)–100.0%

 

 

 

$

446,265,899

 

5.31.11 | PIMCO Municipal Income Funds II Annual Report  21



 

 

PIMCO New York Municipal Income Fund II  

Schedule of Investments

May 31, 2011

 

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

Value

 

  NEW YORK MUNICIPAL BONDS & NOTES—89.5%

 

 

$    1,000

 

Chautauqua Cnty. Industrial Dev. Agcy. Rev.,
Dunkirk Power Project, 5.875%, 4/1/42

 

Baa3/BB+

 

$

951,510

 

 

2,400

 

Erie Cnty. Industrial Dev. Agcy. Rev.,
Orchard Park, Inc. Project, 6.00%, 11/15/36, Ser. A

 

NR/NR

 

 

1,715,976

 

 

 

 

Liberty Dev. Corp. Rev.,

 

 

 

 

 

 

 

1,400

 

5.625%, 7/15/47

 

NR/A

 

 

1,407,014

 

 

1,300

 

6.375%, 7/15/49

 

NR/BBB–

 

 

1,327,066

 

 

 

 

Goldman Sachs Headquarters,

 

 

 

 

 

 

 

3,000

 

5.25%, 10/1/35

 

A1/A

 

 

2,999,760

 

 

4,120

 

5.25%, 10/1/35 (i)

 

A1/A

 

 

4,119,670

 

 

3,500

 

5.50%, 10/1/37

 

A1/A

 

 

3,588,410

 

 

500

 

Long Island Power Auth. Rev., 5.00%, 9/1/34, Ser. A (AMBAC)

 

A3/A–

 

 

503,830

 

 

 

 

Metropolitan Transportation Auth. Rev.,

 

 

 

 

 

 

 

1,850

 

5.00%, 11/15/30, Ser. A (AGM)

 

Aa3/AA+

 

 

1,855,069

 

 

2,000

 

5.00%, 11/15/34, Ser. B

 

NR/AA

 

 

2,042,800

 

 

7,300

 

5.25%, 11/15/31, Ser. E

 

A2/A

 

 

7,336,135

 

 

7,000

 

5.35%, 7/1/31, Ser. B

 

Aa3/AA–

 

 

7,051,380

 

 

5,000

 

5.50%, 11/15/39, Ser. A

 

NR/AA

 

 

5,220,100

 

 

7,000

 

Monroe Cnty. Industrial Dev. Corp. Rev.,
Unity Hospital Rochester Project, 5.50%, 8/15/40 (FHA) (i)

 

Aa2/AA–

 

 

7,211,610

 

 

2,870

 

Mortgage Agcy. Rev., 4.75%, 10/1/27, Ser. 128

 

Aa1/NR

 

 

2,877,491

 

 

2,400

 

Nassau Cnty. Industrial Dev. Agcy. Rev.,
Amsterdam at Harborside, 6.70%, 1/1/43, Ser. A

 

NR/NR

 

 

2,155,632

 

 

4,000

 

New York City, GO, 5.00%, 3/1/33, Ser. I

 

Aa2/AA

 

 

4,034,920

 

 

1,500

 

New York City Health & Hospital Corp. Rev.,
5.00%, 2/15/30, Ser. A

 

Aa3/A+

 

 

1,501,980

 

 

 

 

New York City Industrial Dev. Agcy. Rev.,

 

 

 

 

 

 

 

975

 

Eger Harbor Project, 4.95%, 11/20/32, Ser. A (GNMA)

 

NR/AAA

 

 

977,750

 

 

1,415

 

Liberty Interactive Corp., 5.00%, 9/1/35

 

Ba2/BB+

 

 

1,250,082

 

 

1,500

 

Queens Baseball Stadium, 6.50%, 1/1/46 (AGC)

 

Aa3/AA+

 

 

1,545,045

 

 

1,170

 

Staten Island Univ. Hospital Project, 6.45%, 7/1/32, Ser. C

 

Baa3/NR

 

 

1,172,176

 

 

1,500

 

United Jewish Appeal Federation Project,
5.00%, 7/1/27, Ser. A

 

Aa1/NR

 

 

1,545,615

 

 

 

 

Yankee Stadium,

 

 

 

 

 

 

 

750

 

5.00%, 3/1/31 (FGIC)

 

Baa3/BBB–

 

 

695,738

 

 

2,400

 

5.00%, 3/1/36 (NPFGC)

 

Baa1/BBB

 

 

2,129,064

 

 

4,900

 

7.00%, 3/1/49 (AGC)

 

Aa3/AA+

 

 

5,426,260

 

 

 

 

New York City Municipal Water Finance Auth.
Water & Sewer Rev.,

 

 

 

 

 

 

 

1,500

 

5.25%, 6/15/40, Ser. EE

 

Aa2/AA+

 

 

1,555,665

 

 

500

 

Second Generation Resolutions,
5.00%, 6/15/39, Ser. GG-1

 

Aa2/AA+

 

 

511,950

 

 

 

 

New York City Transitional Finance Auth. Rev.,

 

 

 

 

 

 

 

6,000

 

5.00%, 11/1/27, Ser. B

 

Aaa/AAA

 

 

6,241,440

 

 

5,000

 

5.25%, 1/15/39, Ser. S-3

 

Aa3/AA–

 

 

5,129,000

 

 

2,700

 

New York City Trust for Cultural Res. Rev.,
Julliard School, 5.00%, 1/1/34, Ser. A

 

Aa2/AA

 

 

2,796,309

 

 

6,785

 

Wildlife Conservation Society, 5.00%, 2/1/34 (FGIC-NPFGC)

 

Aa3/AA–

 

 

6,828,220

 

22  PIMCO Municipal Income Funds II Annual Report | 5.31.11



 

 

PIMCO New York Municipal Income Fund II  

Schedule of Investments

May 31, 2011 (continued)

 

 

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

 

Value

 

 

$    3,600

 

Port Auth. of New York & New Jersey Rev.,
5.00%, 4/15/32, Ser. 125 (AGM)

 

Aa2/AA+

 

$

3,654,792

 

 

1,400

 

JFK International Air Terminal, 6.00%, 12/1/36

 

Baa3/BBB–

 

 

1,413,104

 

 

 

 

State Dormitory Auth. Rev.,

 

 

 

 

 

 

 

3,000

 

5.00%, 3/15/38, Ser. A

 

NR/AAA

 

 

3,071,640

 

 

7,490

 

5.50%, 5/15/31, Ser. A (AMBAC)

 

Aa3/AA–

 

 

8,117,737

 

 

2,600

 

Catholic Health of Long Island, 5.10%, 7/1/34

 

A3/A–

 

 

2,458,040

 

 

1,500

 

Fordham Univ., 5.50%, 7/1/36, Ser. A

 

A2/A

 

 

1,558,740

 

 

2,000

 

Kaleida Health Hospital, 5.05%, 2/15/25 (FHA)

 

NR/NR

 

 

2,053,640

 

 

5,300

 

Lenox Hill Hospital, 5.50%, 7/1/30

 

Baa3/NR

 

 

5,189,495

 

 

1,320

 

Long Island Univ., 5.25%, 9/1/28 (Radian)

 

Baa3/NR

 

 

1,320,356

 

 

 

 

Memorial Sloan-Kettering Cancer Center,

 

 

 

 

 

 

 

2,750

 

5.00%, 7/1/35, Ser. 1

 

Aa2/AA

 

 

2,767,022

 

 

2,000

 

5.00%, 7/1/36, Ser. A–1

 

Aa2/AA

 

 

2,015,340

 

 

2,100

 

New York Univ., 5.00%, 7/1/38, Ser. A

 

Aa3/AA–

 

 

2,136,225

 

 

1,000

 

New York Univ. Hospital Center, 5.625%, 7/1/37, Ser. B

 

Baa1/BBB+

 

 

972,640

 

 

5,850

 

North General Hospital, 5.00%, 2/15/25

 

NR/AA–

 

 

5,865,620

 

 

600

 

North Shore-Long Island Jewish Health System,

 

 

 

 

 

 

 

 

 

5.50%, 5/1/37, Ser. A

 

Baa1/A–

 

 

592,620

 

 

5,000

 

Rochester General Hospital, 5.00%, 12/1/35 (Radian)

 

WR/NR

 

 

4,510,500

 

 

 

 

Teachers College,

 

 

 

 

 

 

 

4,270

 

5.00%, 7/1/32 (NPFGC)

 

A1/NR

 

 

4,295,193

 

 

3,000

 

5.50%, 3/1/39

 

A1/NR

 

 

3,083,460

 

 

1,000

 

The New School, 5.50%, 7/1/40

 

A3/A–

 

 

1,035,350

 

 

3,000

 

Yeshiva Univ., 5.125%, 7/1/34 (AMBAC)

 

Aa3/NR

 

 

3,054,090

 

 

5,000

 

State Environmental Facs. Corp. Rev., 5.125%, 6/15/38, Ser. A

 

Aa1/AA+

 

 

5,147,500

 

 

1,000

 

State Thruway Auth. Rev., 4.75%, 1/1/29, Ser. G (AGM)

 

Aa3/AA+

 

 

1,008,810

 

 

6,000

 

State Urban Dev. Corp. Rev., 5.00%, 3/15/36, Ser. B–1 (i)

 

NR/AAA

 

 

6,155,100

 

 

 

 

Triborough Bridge & Tunnel Auth. Rev.,

 

 

 

 

 

 

 

710

 

5.00%, 1/1/32, Ser. A (FGIC-TCRS)

 

Aa2/AA–

 

 

712,861

 

 

5,000

 

5.25%, 11/15/34, Ser. A–2 (i)

 

Aa2/AA–

 

 

5,222,150

 

 

150

 

Troy Rev., Rensselaer Polytechnic Institute,
5.125%, 9/1/40, Ser. A

 

A3/A

 

 

148,306

 

 

850

 

TSACS, Inc. Rev., 5.125%, 6/1/42, Ser. 1

 

NR/BBB–

 

 

565,140

 

 

1,815

 

Ulster Cnty. Industrial Dev. Agcy. Rev., 6.00%, 9/15/37, Ser. A

 

NR/NR

 

 

1,352,774

 

 

2,000

 

Warren & Washington Cntys. Industrial Dev. Agcy. Rev.,
Glens Falls Hospital Project, 5.00%, 12/1/35, Ser. A (AGM)

 

Aa3/AA+

 

 

2,004,640

 

 

1,490

 

Westchester Cnty. Healthcare Corp. Rev.,
6.125%, 11/1/37, Ser. C-2

 

A3/BBB

 

 

1,492,533

 

 

1,000

 

Yonkers Economic Dev. Corp. Rev., 6.00%, 10/15/30, Ser. A

 

NR/BB+

 

 

925,600

 

 

600

 

Yonkers Industrial Dev. Agcy. Rev.,
Sarah Lawrence College Project, 6.00%, 6/1/41, Ser. A

 

WR/BBB

 

 

608,352

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total New York Municipal Bonds & Notes (cost—$177,225,038)

 

 

 

 

180,214,037

 

5.31.11 | PIMCO Municipal Income Funds II Annual Report  23



 

 

PIMCO New York Municipal Income Fund II  

Schedule of Investments

May 31, 2011 (continued)

 

 

 

 

 

 

 

 

 

 

 

Principal
Amount
(000s)

 

 

 

Credit Rating
(Moody’s/S&P)*

 

Value

 

  OTHER MUNICIPAL BONDS & NOTES—7.1%

 

 

 

 

Florida–1.0%

 

 

 

 

 

 

 

$    1,000

 

Clearwater Rev., 5.25%, 12/1/39, Ser. A

 

Aa3/AA–

 

$

1,036,740

 

 

1,000

 

Miami-Dade Cnty. Airport Rev., 5.50%, 10/1/36, Ser. A

 

A2/A–

 

 

1,006,550

 

 

 

 

 

 

 

 

 

2,043,290

 

 

 

 

Louisiana–0.5%

 

 

 

 

 

 

 

1,000

 

East Baton Rouge Sewerage Commission Rev.,
5.25%, 2/1/39, Ser. A

 

Aa2/AA–

 

 

1,038,890

 

 

 

 

Ohio–0.5%

 

 

 

 

 

 

 

1,435

 

Buckeye Tobacco Settlement Financing Auth. Rev.,
5.875%, 6/1/47, Ser. A–2

 

Baa3/BB–

 

 

982,860

 

 

 

 

Puerto Rico–4.6%

 

 

 

 

 

 

 

5,675

 

Children’s Trust Fund Rev., 5.625%, 5/15/43

 

Baa3/BBB

 

 

4,390,975

 

 

 

 

Sales Tax Financing Corp. Rev., Ser. A,

 

 

 

 

 

 

 

14,250

 

zero coupon, 8/1/54 (AMBAC)

 

Aa2/AA–

 

 

804,982

 

 

2,000

 

5.00%, 8/1/40 (AGM) (i)

 

Aa3/AA+

 

 

1,940,160

 

 

1,000

 

5.50%, 8/1/42

 

A1/A+

 

 

985,250

 

 

1,000

 

5.75%, 8/1/37

 

A1/A+

 

 

1,014,860

 

 

 

 

 

 

 

 

 

9,136,227

 

 

 

 

U. S. Virgin Islands–0.5%

 

 

 

 

 

 

 

1,000

 

Public Finance Auth. Rev., 6.00%, 10/1/39, Ser. A

 

Baa3/NR

 

 

1,007,710

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Other Municipal Bonds & Notes (cost–$15,965,600)

 

 

 

 

14,208,977

 

 

 

 

 

 

 

 

 

 

 

  NEW YORK VARIABLE RATE NOTES (a)(c)(e)(f)–2.9%

 

 

 

 

JPMorgan Chase Putters/Drivers Trust Rev.,

 

 

 

 

 

 

 

5,000

 

7.924%, 7/1/33, Ser. 3382

 

Aa1/NR

 

 

5,336,250

 

 

500

 

8.37%, 6/15/31, Ser. 3223

 

NR/AA+

 

 

566,285

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total New York Variable Rate Notes (cost–$5,393,887)

 

 

 

 

5,902,535

 

 

 

 

 

 

 

 

 

 

 

  SHORT-TERM INVESTMENTS–0.5%

 

 

 

 

U.S. Treasury Obligations (g)(k)—0.5%

 

 

 

 

 

 

 

 

 

U.S. Treasury Bills,

 

 

 

 

 

 

 

970

 

0.103%, 9/15/11 (cost–$969,737)

 

 

 

 

969,737

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Investments (cost–$199,554,262)–100.0%

 

 

 

$

201,295,286

 

24  PIMCO Municipal Income Funds II Annual Report | 5.31.11



 

 

 

PIMCO Municipal Income Funds II  

Notes to Schedule of Investments

May 31, 2011

 

 

 

 

*

Unaudited.

 

 

(a)

Private Placement–Restricted as to resale and may not have a readily available market. Securities with an aggregate value of $33,898,320, representing 3.2% of total investments in Municipal Income II, $27,854,564, representing 6.2% of total investments in California Municipal II and $5,902,535, representing 2.9% of total investments in New York Municipal II.

 

 

(b)

Illiquid.

 

 

(c)

144A–Exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, typically only to qualified institutional buyers. Unless otherwise indicated, these securities are not considered to be illiquid.

 

 

(d)

In default.

 

 

(e)

Inverse Floater–The interest rate shown bears an inverse relationship to the interest rate on another security or the value of an index. The interest rate disclosed reflects the rate in effect on May 31, 2011.

 

 

(f)

Variable Rate Notes–Instruments whose interest rates change on specified date (such as a coupon date or interest payment date) and/or whose interest rates vary with changes in a designated base rate (such as the prime interest rate). The interest rate disclosed reflects the rate in effect on May 31, 2011.

 

 

(g)

All or partial amount segregated for the benefit of the counterparty as collateral for derivatives.

 

 

(h)

All or partial amount segregated for the benefit of the counterparty as collateral for reverse repurchase agreements.

 

 

(i)

Residual Interest Bonds held in Trust–Securities represent underlying bonds transferred to a separate securitization trust established in a tender option bond transaction in which each Fund acquired the residual interest certificates. These securities serve as collateral in a financing transaction.

 

 

(j)

Step Bond–Coupon is a fixed rate for an initial period then resets at a specific date and rate.

 

 

(k)

Rates reflect the effective yields at purchase date.

 

 

(l)

Restricted. The aggregate acquisition cost of such securities is $4,045,753 in California Municipal II. The aggregate market value is $3,416,524, representing 0.8% of total investments in California Municipal II.

 

 

Glossary:

 

AGC–insured by Assured Guaranty Corp.

AGM–insured by Assured Guaranty Municipal Corp.

AMBAC–insured by American Municipal Bond Assurance Corp.

CA St. Mtg.–insured by California State Mortgage

CP–Certificates of Participation

FGIC–insured by Financial Guaranty Insurance Co.

FHA–insured by Federal Housing Administration

GNMA–insured by Government National Mortgage Association

GO–General Obligation Bond

GTD–Guaranteed

IBC–Insurance Bond Certificate

NPFGC–insured by National Public Finance Guarantee Corp.

NR–Not Rated

PSF–Public School Fund

Radian–insured by Radian Guaranty, Inc.

TCRS–Temporary Custodian Receipts

WR–Withdrawn Rating

See accompanying Notes to Financial Statements | 5.31.11 | PIMCO Municipal Income Funds II Annual Report  25



 

 

PIMCO Municipal Income Funds II  

Statements of Assets and Liabilities

May 31, 2011


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal II

 

 

California
Municipal II

 

 

New York
Municipal II

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

Investments, at value (cost–$1,076,749,413, $432,768,892 and $199,554,262, respectively)

 

$

1,063,072,505

 

 

 

$446,265,899

 

 

$

201,295,286

 

Cash

 

 

 

 

 

 

 

 

342,698

 

Interest receivable

 

 

19,757,224

 

 

 

7,812,848

 

 

 

2,946,449

 

Swap premiums paid

 

 

449,410

 

 

 

 

 

 

 

Receivable for investments sold

 

 

158,987

 

 

 

 

 

 

 

Prepaid expenses and other assets

 

 

48,579

 

 

 

42,941

 

 

 

21,381

 

Total Assets

 

 

1,083,486,705

 

 

 

454,121,688

 

 

 

204,605,814

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Payable for floating rate notes issued

 

 

91,469,472

 

 

 

46,820,833

 

 

 

13,851,894

 

Unrealized depreciation on swaps

 

 

6,850,035

 

 

 

4,176,010

 

 

 

1,153,882

 

Dividends payable to common and preferred shareholders

 

 

3,934,553

 

 

 

1,965,053

 

 

 

719,193

 

Payable to custodian for cash overdraft

 

 

1,562,960

 

 

 

521,064

 

 

 

 

Swap premiums received

 

 

770,800

 

 

 

652,750

 

 

 

232,594

 

Investment management fees payable

 

 

535,607

 

 

 

216,379

 

 

 

103,552

 

Interest payable

 

 

220,627

 

 

 

105,762

 

 

 

19,995

 

Payable for reverse repurchase agreements

 

 

 

 

 

3,294,000

 

 

 

 

Interest payable for reverse repurchase agreements

 

 

 

 

 

833

 

 

 

 

Accrued expenses and other liabilities

 

 

343,133

 

 

 

1,883,183

 

 

 

268,427

 

Total Liabilities

 

 

105,687,187

 

 

 

59,635,867

 

 

 

16,349,537

 

Preferred Shares ($0.00001 par value and $25,000 liquidation preference per share applicable to an aggregate of 14,680, 6,520 and 3,160 shares issued and outstanding, respectively)

 

 

367,000,000

 

 

 

163,000,000

 

 

 

79,000,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Assets Applicable to Common Shareholders

 

 

$610,799,518

 

 

 

$231,485,821

 

 

$

109,256,277

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Composition of Net Assets Applicable to Common Shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares:

 

 

 

 

 

 

 

 

 

 

 

 

Par value ($0.00001 per share)

 

$

603

 

 

$

314

 

 

$

108

 

Paid-in-capital in excess of par

 

 

853,155,068

 

 

 

432,085,969

 

 

 

152,567,497

 

Undistributed (dividends in excess of) net investment income

 

 

15,462,847

 

 

 

(1,965,053

)

 

 

1,959,285

 

Accumulated net realized loss on investments and swaps

 

 

(237,289,807

)

 

 

(208,107,449

)

 

 

(45,879,324

)

Net unrealized appreciation (depreciation) of investments and swaps

 

 

(20,529,193

)

 

 

9,472,040

 

 

 

608,711

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Assets Applicable to Common Shareholders

 

 

$610,799,518

 

 

 

$231,485,821

 

 

$

109,256,277

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Shares Issued and Outstanding

 

 

60,343,182

 

 

 

31,353,825

 

 

 

10,820,934

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Asset Value Per Common Share

 

 

$10.12

 

 

 

$7.38

 

 

 

$10.10

 

26  PIMCO Municipal Income Funds II Annual Report | 5.31.11 | See accompanying Notes to Financial Statements



 

 

PIMCO Municipal Income Funds II  

Statements of Operations

Year ended May 31, 2011


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal II

 

 

California
Municipal II

 

 

New York
Municipal II

 

Investment Income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

 

$63,071,493

 

 

 

$26,829,690

 

 

 

$11,224,912

 

Other income

 

 

 

 

 

2,136

 

 

 

 

Total Investment Income

 

 

63,071,493

 

 

 

26,831,826

 

 

 

11,224,912

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Investment management fees

 

 

6,419,920

 

 

 

2,605,854

 

 

 

1,243,030

 

Interest expense

 

 

760,518

 

 

 

440,838

 

 

 

114,601

 

Auction agent fees and commissions

 

 

583,854

 

 

 

275,981

 

 

 

133,361

 

Custodian and accounting agent fees

 

 

164,457

 

 

 

98,267

 

 

 

61,475

 

Audit and tax services

 

 

100,773

 

 

 

63,792

 

 

 

45,608

 

Shareholder communications

 

 

98,803

 

 

 

64,099

 

 

 

35,642

 

Legal fees

 

 

95,867

 

 

 

18,625

 

 

 

10,785

 

Trustees’ fees and expenses

 

 

84,197

 

 

 

38,284

 

 

 

16,146

 

New York Stock Exchange listing fees

 

 

50,525

 

 

 

26,286

 

 

 

22,176

 

Transfer agent fees

 

 

37,045

 

 

 

36,690

 

 

 

34,703

 

Excise tax expense

 

 

35,550

 

 

 

 

 

 

 

Insurance expense

 

 

26,848

 

 

 

11,502

 

 

 

5,801

 

Miscellaneous

 

 

16,551

 

 

 

15,751

 

 

 

12,706

 

Total Expenses

 

 

8,474,908

 

 

 

3,695,969

 

 

 

1,736,034

 

Less: custody credits earned on cash balances

 

 

(1,145

)

 

 

(329

)

 

 

(841

)

Net Expenses

 

 

8,473,763

 

 

 

3,695,640

 

 

 

1,735,193

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Investment Income

 

 

54,597,730

 

 

 

23,136,186

 

 

 

9,489,719

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Realized and Change In Unrealized Gain (Loss):

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gain (loss) on:

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

 

8,238,206

 

 

 

1,077,704

 

 

 

(579,506

)

Swaps

 

 

(392,040

)

 

 

(1,015,545

)

 

 

(535,850

)

Net change in unrealized appreciation/depreciation of:

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

 

(45,827,779

)

 

 

(17,815,338

)

 

 

(6,937,248

)

Swaps

 

 

(6,850,035

)

 

 

(4,176,010

)

 

 

(1,153,882

)

Net realized and change in unrealized loss on investments and swaps

 

 

(44,831,648

)

 

 

(21,929,189

)

 

 

(9,206,486

)

Net Increase in Net Assets Resulting from Investment Operations

 

 

9,766,082

 

 

 

1,206,997

 

 

 

283,233

 

Dividends on Preferred Shares from Net Investment Income

 

 

(1,520,460

)

 

 

(689,435

)

 

 

(329,688

)

Net Increase (Decrease) in Net Assets Applicable to Common Shareholders Resulting from Investment Operations

 

 

$8,245,622

 

 

 

$517,562

 

 

 

$(46,455

)

See accompanying Notes to Financial Statements | 5.31.11 | PIMCO Municipal Income Funds II Annual Report  27



 

 

PIMCO Municipal Income Funds II  

Statements of Changes in Net Assets
Applicable to Common Shareholders


 

 

 

 

 

 

 

 

 

 

 

Municipal II

 

 

 

Year ended May 31,

 

 

 

2011

 

2010

 

Investment Operations:

 

 

 

 

 

 

 

 

Net investment income

 

 

$54,597,730

 

 

 

$52,452,681

 

Net realized gain (loss) on investments and swaps

 

 

7,846,166

 

 

 

151,024

 

Net change in unrealized appreciation/depreciation of investments and swaps

 

 

(52,677,814

)

 

 

103,180,602

 

Net increase in net assets resulting from investment operations

 

 

9,766,082

 

 

 

155,784,307

 

 

 

 

 

 

 

 

 

 

Dividends on Preferred Shares from Net Investment Income:

 

 

(1,520,460

)

 

 

(1,651,157

)

Net increase (decrease) in net assets applicable to common shareholders resulting from investment operations

 

 

8,245,622

 

 

 

154,133,150

 

 

 

 

 

 

 

 

 

 

Dividends to Common Shareholders from Net Investment Income:

 

 

(46,931,445

)

 

 

(46,637,024

)

 

 

 

 

 

 

 

 

 

Common Share Transactions:

 

 

 

 

 

 

 

 

Reinvestment of dividends

 

 

3,896,483

 

 

 

4,046,441

 

Total increase (decrease) in net assets applicable to common shareholders

 

 

(34,789,340

)

 

 

111,542,567

 

 

 

 

 

 

 

 

 

 

Net Assets Applicable to Common Shareholders:

 

 

 

 

 

 

 

 

Beginning of year

 

 

645,588,858

 

 

 

534,046,291

 

End of year (including undistributed (dividends in excess of) net investment income of $15,462,847 and $9,284,682; $(1,965,053) and $(1,960,287); $1,959,285 and $1,108,502; respectively)

 

$

610,799,518

 

 

$

645,588,858

 

Common Shares Issued in Reinvestment of Dividends

 

 

373,938

 

 

 

400,876

 

28  PIMCO Municipal Income Funds II Annual Report | 5.31.11 | See accompanying Notes to Financial Statements



 

 

PIMCO Municipal Income Funds II  

Statement of Changes in Net Assets

 

Applicable to Common Shareholders (continued)


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

California Municipal II

 

 

New York Municipal II

 

 

 

Year ended May 31,

 

Year ended May 31,

 

 

 

2011

 

 

2010

 

 

2011

 

 

2010

 

Investment Operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net investment income

 

 

$23,136,186

 

 

 

$23,419,545

 

 

 

$9,489,719

 

 

 

$10,474,659

 

Net realized gain (loss) on investments and swaps

 

 

62,159

 

 

 

(2,327,882

)

 

 

(1,115,356

)

 

 

(770,215

)

Net change in unrealized appreciation/depreciation of investments and swaps

 

 

(21,991,348

)

 

 

23,246,648

 

 

 

(8,091,130

)

 

 

13,497,488

 

Net increase in net assets resulting from investment operations

 

 

1,206,997

 

 

 

44,338,311

 

 

 

283,233

 

 

 

23,201,932

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends on Preferred Shares from Net Investment Income:

 

 

(689,435

)

 

 

(777,175

)

 

 

(329,688

)

 

 

(363,065

)

Net increase (decrease) in net assets applicable to common shareholders resulting from investment operations

 

 

517,562

 

 

 

43,561,136

 

 

 

(46,455

)

 

 

22,838,867

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends to Common Shareholders from Net Investment Income:

 

 

(23,452,319

)

 

 

(24,003,858

)

 

 

(8,576,979

)

 

 

(8,524,998

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Share Transactions:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reinvestment of dividends

 

 

1,604,973

 

 

 

1,843,810

 

 

 

718,710

 

 

 

721,255

 

Total increase (decrease) in net assets applicable to common shareholders

 

 

(21,329,784

)

 

 

21,401,088

 

 

 

(7,904,724

)

 

 

15,035,124

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Assets Applicable to Common Shareholders:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning of year

 

 

252,815,605

 

 

 

231,414,517

 

 

 

117,161,001

 

 

 

102,125,877

 

End of year (including undistributed (dividends in excess of) net investment income of $15,462,847 and $9,284,682; $(1,965,053) and $(1,960,287); $1,959,285 and $1,108,502; respectively)

 

 

$231,485,821

 

 

 

$252,815,605

 

 

 

$109,256,277

 

 

 

$117,161,001

 

Common Shares Issued in Reinvestment of Dividends

 

 

183,513

 

 

 

220,172

 

 

 

67,458

 

 

 

68,673

 

See accompanying Notes to Financial Statements | 5.31.11 | PIMCO Municipal Income Funds II Annual Report  29



 

 

PIMCO California Municipal Income Fund II  

Statement of Cash Flows†

Year ended May 31, 2011

 

 

 

 

 

Decrease in Cash from:

 

 

 

 

Cash Flows provided by Operating Activities:

 

 

 

 

Net increase in net assets resulting from investment operations

 

 

$1,206,997

 

 

 

 

 

 

Adjustments to Reconcile Net Increase in Net Assets Resulting from Investment Operations to Net Cash provided by Operating Activities:

 

 

 

 

Purchases of long-term investments

 

 

(69,437,484

)

Proceeds from sales of long-term investments

 

 

82,948,991

 

Purchases of short-term portfolio investments, net

 

 

(387,732

)

Net change in unrealized appreciation/depreciation of investments and swaps

 

 

22,070,382

 

Net realized gain on investments and swaps

 

 

(310,212

)

Net amortization on investments

 

 

(991,317

)

Increase in interest receivable

 

 

(631,996

)

Decrease in prepaid expenses and other assets

 

 

1,203

 

Periodic and termination payments of swaps, net

 

 

(362,795

)

Decrease in investment management fees payable

 

 

(12,858

)

Decrease in interest payable for reverse repurchase agreements

 

 

(2,071

)

Increase in accrued expenses and other liabilities

 

 

17,662

 

Net cash provided by operating activities*

 

 

34,108,770

 

 

 

 

 

 

Cash Flows used for Financing Activities:

 

 

 

 

Decrease in payable for reverse repurchase agreements

 

 

(4,596,123

)

Cash dividends paid (excluding reinvestment of dividends of $1,604,973)

 

 

(22,532,015

)

Cash payments on retirement of floating rate notes

 

 

(7,502,889

)

Increase in payable to custodian for cash overdraft

 

 

521,064

 

Net cash used for financing activities

 

 

(34,109,963

)

Net decrease in cash

 

 

(1,193

)

Cash at beginning of year

 

 

1,193

 

Cash at end of year

 

 

$0

 

 

 

Municipal II and New York Municipal II are not required to provide a Statement of Cash Flows.

*

Included in operating expenses is cash paid by California Municipal II for interest related to participation in reverse repurchase agreement transactions of $27,009.

30  PIMCO Municipal Income Funds II Annual Report | 5.31.11 | See accompanying Notes to Financial Statements



 

 

PIMCO Municipal Income Funds II  

Notes to Financial Statements

May 31, 2011

 

 

1. Organization and Significant Accounting Policies

PIMCO Municipal Income Fund II (“Municipal II”), PIMCO California Municipal Income Fund II (“California Municipal II”) and PIMCO New York Municipal Income Fund II (“New York Municipal II”), each a “Fund” and collectively referred to as the “Funds” or “PIMCO Municipal Income Funds II”, were organized as Massachusetts business trusts on March 29, 2002. Prior to commencing operations on June 28, 2002, the Funds had no operations other than matters relating to their organization and registration as non-diversified, closed-end management investment companies registered under the Investment Company Act of 1940 and the rules and regulations thereunder, as amended. Allianz Global Investors Fund Management LLC (the “Investment Manager”) serves as the Investment Manager and is an indirect, wholly-owned subsidiary of Allianz Global Investors of America L.P. (“Allianz Global”). Allianz Global is an indirect, wholly-owned subsidiary of Allianz SE, a publicly traded European insurance and financial services company. Each Fund has an unlimited amount of $0.00001 par value per share of common shares authorized.

Under normal market conditions, Municipal II invests substantially all of its assets in a portfolio of municipal bonds, the interest from which is exempt from federal income taxes. Under normal market conditions, California Municipal II invests substantially all of its assets in municipal bonds which pay interest that is exempt from federal and California state income taxes. Under normal market conditions, New York Municipal II invests substantially all of its assets in municipal bonds which pay interest that is exempt from federal, New York State and New York City income taxes. There is no guarantee that the Funds will meet their stated objectives. The Funds will generally seek to avoid investing in bonds generating interest income which could potentially subject individuals to alternative minimum tax. The issuers’ abilities to meet their obligations may be affected by economic and political developments in a specific state or region.

The preparation of the financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts and disclosures in each Fund’s financial statements. Actual results could differ from those estimates.

In the normal course of business, the Funds enter into contracts that contain a variety of representations that provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred.

The following is a summary of significant accounting policies consistently followed by the Funds:

 

(a) Valuation of Investments

Portfolio securities and other financial instruments for which market quotations are readily available are stated at market value. Market value is generally determined on the basis of last reported sales prices, or if no sales are reported, on the basis of quotes obtained from a quotation reporting system, established market makers, or independent pricing services.

Portfolio securities and other financial instruments for which market quotations are not readily available, or for which a development/event occurs that may significantly impact the value of a security, are fair-valued, in good faith, pursuant to procedures established by the Board of Trustees, or persons acting at their discretion pursuant to procedures established by the Board of Trustees. The Funds’ investments are valued daily using prices supplied by an independent pricing service or dealer quotations, or by using the last sale price on the exchange that is the primary market for such securities, or the mean between the last quoted bid and ask price. Independent pricing services use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Short-term securities maturing in 60 days or less are valued at amortized cost, if their original term to maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if the original term to maturity exceeded 60 days.

The prices used by the Funds to value securities may differ from the value that would be realized if the securities were sold and these differences could be material to the Funds’ financial statements. Each Fund’s net asset value (“NAV”) is normally determined as of the close of regular trading (normally, 4:00 p.m. Eastern time) on the New York Stock Exchange (“NYSE”) on each day the NYSE is open for business.

 

(b) Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the “exit price”) in an orderly transaction between market participants. The three levels of the fair value hierarchy are described below:


 

 

Level 1 – quoted prices in active markets for identical investments that the Funds have the ability to access

 

 

Level 2 – valuations based on other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) or quotes from inactive exchanges

5.31.11 | PIMCO Municipal Income Funds II Annual Report  31



 

 

PIMCO Municipal Income Funds II  

Notes to Financial Statements

May 31, 2011

 

1. Organization and Significant Accounting Policies (continued)

 

 

Level 3 – valuations based on significant unobservable inputs (including each Funds’ own assumptions in determining the fair value of investments)

An investment asset’s or liability’s level within the fair value hierarchy is based on the lowest level input, individually or in aggregate, that is significant to fair value measurement. The objective of fair value measurement remains the same even when there is a significant decrease in the volume and level of activity for an asset or liability and regardless of the valuation technique used.

The valuation techniques used by the Funds to measure fair value during the year ended May 31, 2011 maximized the use of observable inputs and minimized the use of unobservable inputs.

The inputs or methodology used for valuing securities is not necessarily an indication of the risk associated with investing in those securities. The following are certain inputs and techniques that the Funds generally use to evaluate how to classify each major category of assets and liabilities for Level 2 and Level 3, in accordance with Generally Accepted Accounting Principles (“GAAP”).

Municipal Bonds & Notes and Variable Rate Notes – Municipal bonds and notes and variable rate notes are valued by independent pricing services based on pricing models that take into account, among other factors, information received from market makers and broker-dealers, current trades, bid-want lists, offerings, market movements, the callability of the bond, state of issuance, benchmark yield curves, and bond insurance. To the extent that these inputs are observable, the values of municipal bonds and notes and variable rate notes are categorized as Level 2. To the extent that these inputs are unobservable, the values are categorized as Level 3.

U.S. Treasury Obligations – U.S. Treasury obligations are valued by independent pricing services based on pricing models that evaluate the mean between the most recently quoted bid and ask price. The models also take into consideration data received from active market makers and broker-dealers, yield curves, and the spread over comparable U.S. Treasury issues. The spreads change daily in response to market conditions and are generally obtained from the new issue market and broker-dealer sources. To the extent that these inputs are observable, the values of U.S. Treasury obligations are categorized as Level 2. To the extent that these inputs are unobservable, the values are categorized as Level 3.

Corporate Bonds & Notes – Corporate bonds and notes are generally comprised of two main categories: investment grade bonds and high yield bonds. Investment grade bonds are valued by independent pricing services using various inputs and techniques, which include broker-dealer quotations, live trading levels, recently executed transactions in securities of the issuer or comparable issuers, and option adjusted spread models that include base curve and spread curve inputs. Adjustments to individual bonds can be applied to recognize trading differences compared to other bonds issued by the same issuer. High yield bonds are valued by independent pricing services based primarily on broker-dealer quotations from relevant market makers and recently executed transactions in securities of the issuer or comparable issuers. The broker-dealer quotations received are supported by credit analysis of the issuer that takes into consideration credit quality assessments, daily trading activity, and the activity of the underlying equities, listed bonds and sector-specific trends. To the extent that these inputs are observable, the values of corporate bonds and notes are categorized as Level 2. To the extent that these inputs are unobservable, the values are categorized as Level 3.

Interest Rate Swaps – Interest rate swaps are valued by independent pricing services using pricing models that are based on real-time intraday snapshots of relevant interest rate curves that are built using the most actively traded securities for a given maturity. The pricing models also incorporate cash and money market rates. In addition, market data pertaining to interest rate swaps is monitored regularly to ensure that interest rates are properly depicting the current market rate. To the extent that these inputs are observable, the values of interest rate swaps are categorized as Level 2. To the extent that these inputs are unobservable, the values are categorized as Level 3.

The Funds’ policy is to recognize transfers between levels at the end of the reporting period.

32  PIMCO Municipal Income Funds II Annual Report | 5.31.11



 

 

PIMCO Municipal Income Funds II  

Notes to Financial Statements

May 31, 2011

 

1. Organization and Significant Accounting Policies (continued)

A summary of the inputs used at May 31, 2011 in valuing each Fund’s assets and liabilities is listed below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal II:

 

 

 

 

 

 

 

 

 

 

 

Level 1 –
Quoted Prices

 

Level 2 –
Other Significant
Observable
Inputs

 

Level 3 –
Significant
Unobservable
Inputs

 

Value at
5/31/11

 

 

Investments in Securities – Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Municipal Bonds & Notes

 

 

 

 

 

 

$

1,024,866,740

 

 

 

 

 

 

 

$

1,024,866,740

 

 

Variable Rate Notes

 

 

 

 

 

 

 

31,410,204

 

 

 

 

 

 

 

 

31,410,204

 

 

Short-Term Investments

 

 

 

 

 

 

 

6,795,561

 

 

 

 

 

 

 

 

6,795,561

 

 

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

Total Investments in Securities – Assets

 

 

 

 

 

 

$

1,063,072,505

 

 

 

 

 

 

 

$

1,063,072,505

 

 

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

Other Financial Instruments* – Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Rate Contracts

 

 

 

 

 

 

 

$(6,850,035

)

 

 

 

 

 

 

 

$(6,850,035

)

 

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

Total Investments

 

 

 

 

 

 

$

1,056,222,470

 

 

 

 

 

 

 

$

1,056,222,470

 

 

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

California Municipal II:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 1 –
Quoted Prices

 

Level 2 –
Other Significant
Observable
Inputs

 

Level 3 –
Significant
Unobservable
Inputs

 

Value at
5/31/11

 

 

Investments in Securities – Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

California Municipal Bonds & Notes

 

 

 

 

 

 

 

$395,578,482

 

 

 

 

 

 

 

 

$395,578,482

 

 

California Variable Rate Notes

 

 

 

 

 

 

 

23,011,120

 

 

 

 

 

 

 

 

23,011,120

 

 

Other Municipal Bonds & Notes

 

 

 

 

 

 

 

18,641,787

 

 

 

 

 

 

 

 

18,641,787

 

 

Short-Term Investments

 

 

 

 

 

 

 

9,034,510

 

 

 

 

 

 

 

 

9,034,510

 

 

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

Total Investments in Securities – Assets

 

 

 

 

 

 

 

$446,265,899

 

 

 

 

 

 

 

 

$446,265,899

 

 

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

Other Financial Instruments* – Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Rate Contracts

 

 

 

 

 

 

 

$ (4,176,010

)

 

 

 

 

 

 

 

$ (4,176,010

)

 

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

Total Investments

 

 

 

 

 

 

 

$442,089,889

 

 

 

 

 

 

 

 

$442,089,889

 

 

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New York Municipal II:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 1 –
Quoted Prices

 

Level 2 –
Other Significant
Observable
Inputs

 

Level 3 –
Significant
Unobservable
Inputs

 

Value at
5/31/11

 

 

Investments in Securities – Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

New York Municipal Bonds & Notes

 

 

 

 

 

 

 

$180,214,037

 

 

 

 

 

 

 

 

$180,214,037

 

 

Other Municipal Bonds & Notes

 

 

 

 

 

 

 

14,208,977

 

 

 

 

 

 

 

 

14,208,977

 

 

New York Variable Rate Notes

 

 

 

 

 

 

 

5,902,535

 

 

 

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