PIMCO Buys $2.5 Billion In Mortgage-Backed Bonds
Kurt Brouwer May 22nd, 2008
As we had noted previously, Bill Gross at PIMCO is looking at beaten-down securities as opportunities (see PIMCO Buys Citigroup Bonds). Now, PIMCO stepped up and purchased the inventory of mortgage-backed securities held by an Israeli bank.
PIMCO Buys $2.55 B In MBS (Emii.com & Bloomberg, May 22, 2008)
PIMCO, the manager of the world’s biggest bond fund, took all the mortgage bonds held by Israel’s biggest bank, which is nursing the most losses from the U.S. subprime crisis of any Israeli bank. Newport Beach, California-based Pimco lifted mortgage-related holdings to the highest since 2000.
”Large parts of the mortgage market are trading cheap,” said Jim Reid, head of fundamental credit strategy at Deutsche Bank AG in London. ”You can still be bearish on house prices and think that the mortgage-bond market offers good value.”…
PIMCO is on a roll. The firm correctly saw the difficulties posed by the subprime lending mess and it dodged the destruction. Now, the firm is taking advantage of opportunities like this one in which it can snap up undervalued securities from those entities that got hit by subprime lending.
For more on this see PIMCO — May Investment Commentary.
Via: Rita Lee
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- Economy , Geopolitics , Investing , Money
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