Synopsis Pimco | Closed-End Funds Message Board Posts

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Msg  22855 of 23228  at  2/8/2023 10:36:41 AM  by


 In response to msg 22839 by  urhmi
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Re: Synopsis Pimco

Some believe this is foreshadowing a potential dividend cut in 2023 for PDI. It's cost of money has risen so much that something has got to give.
My thoughts exactly - interest rate rises from 1% to 5% have to catch up to them at some point, forcing a div cut - cost of leverage has skyrocketed in two yrs.
With a current yield of 13%, it probably won't be a crushing cut. PDI will still pay something healthy. But it may prove prudent to wait for that moment - and to let long-term rates top out once and for all - before one is to consider re-adding PDI . The current scheduled rates path evaluation could be projecting a March /April Top.
I'm not going to even look at getting back into PDI until the Fed stops raising rates - but haven't they said they're going up another 1% in 2023? It would be quite a shock to the market if they raised 1% more by April - house sales and mortgage originations would come to a total halt.
I looked at the last 3 months of PDI's numbers in Excel and they're not pretty, trend is awful - not sure I've ever seen a rolling coverage ratio as low as 40% - that's really ugly and certainly not sustainable:
Fund Name Ticker Current Fiscal
Year End
Estimated Fiscal Year to Date Net Investment Income (NII)(1) Estimated Undistributed
Net Investment
Income -
UNII/Estimated (ROC)(1)
Estimated 3
Month Average
Net Investment
Income (NII)
Monthly Distribution
per Common
 3 Month Rolling Coverage Ratio(3) 6 Month Rolling Coverage
Ratio (3)
Fiscal Year
to Date Distribution Coverage

Dec PDI 30-Jun-23 $1.13 $0.00 $0.09 $0.220500 40.00% 85.26% 88.93%
Nov     $1.01 $0.71 $0.15 $0.220500 66.22% 96.46% 93.51% <==special 65 cent div paid on Dec 22 - was 6 cents of the Dec regular paid from UNII?
Oct     $1.05 $0.98 $0.25 $0.220500 113.93% 127.37% 120.73%

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