PIMCO Emerging Markets Debt Fund

completed

The proposed Fund is a closed-end special purpose vehicle, structured as a Collateralized Debt Obligation (CDO), which will invest in emerging market debt issues, both in primary and secondary markets. The Fund is expected to be at least 70% invested at target closing, in a globally diversified portfolio of US Dollar denominated debt issues from approximately 33 countries. Pacific Investment Management Company LLC (PIMCO, or the Fund Manager) will manage the Fund. The Fund is structured to offer investment opportunities both to existing emerging markets investors and to credit quality-sensitive institutional investors who can only invest in investment grade instruments. Against the assets of the Fund, three classes of obligations are expected to be issued in the amount of $300 - 400 million: - Senior Notes, - Second Priority Notes, and - Subordinated Shares (Equity). The Senior and Second Priority Notes will be rated by the rating agencies including Moody’s and Standard & Poor’s. At inception, all three classes of obligations will have a 12-year maturity. The assets of the Fund (the Collateral Pool) will consist of a US Dollar denominated portfolio of emerging market corporate bonds and loans, quasi-sovereign bonds and loans, sovereign bonds and loans, and synthetic securities, and include both investment and non-investment grade securities. The exact composition of the Collateral Pool will be determined after the rating requirements of the rating agencies are met. The expected profile of the Collateral Pool is: - up to 52% invested in emerging markets corporate and quasi sovereign bonds and loans; and - up to 48% invested in sovereign bonds and loans. In addition, IFC will require the Fund Manager to accumulate a minimum of 10-15% bucket of primary issues consisting of credits which are one-notch below their respective sovereign ratings.