PIMCO Closed-End Funds Announce Proposed Reorganizations

PIMCO, one of the world’s premier fixed income investment managers, has announced that the Board of Trustees of each of PIMCO Dynamic Credit & Mortgage Income Fund (“PCI”) (NYSE: PCI), PIMCO Income Opportunity Fund (“PKO”) (NYSE: PKO) and PIMCO Dynamic Income Fund (“PDI”) (NYSE: PDI) has approved proposals to reorganize each of PCI and PKO (each, an “Acquired Fund”) into PDI, subject to the various shareholder approvals and other contingencies described below.

Each Acquired Fund’s reorganization is subject to approval by PDI shareholders to issue additional common shares (the “Merger Shares”) to be distributed to the Acquired Fund’s shareholders. In addition, the reorganization of PKO into PDI (the “PKO Merger”) is subject to approval by PKO’s shareholders and contingent on the consummation of the reorganization of PCI into PDI. Shareholders of PDI and PKO will be asked to vote on the applicable proposals at a Special Meeting of Shareholders expected to take place on or about July 28, 2021 at a time and location to be stated in the proxy statement/prospectus (the “Shareholder Meeting”). A proxy statement/prospectus containing information about the meeting and the proposed reorganizations is expected to be mailed to PDI’s and each Acquired Fund’s common shareholders of record as of June 10, 2021. No action is needed from shareholders of PCI.

In addition to the reorganizations, the Board of Trustees of PDI has approved a conditional 0.05% (five basis points) reduction in the annual management fee rate paid by PDI to Pacific Investment Management Company LLC (“PIMCO”) from 1.15% to 1.10% of PDI’s average daily total managed assets effective as of the date of the closing of the reorganization of PCI into PDI. The fee reduction is, however, contingent on the consummation of the reorganization of PCI into PDI, which will require, among other conditions to be satisfied, approval by PDI shareholders of the issuance of the Merger Shares as noted above.

PIMCO has agreed to a 75% management fee waiver for PKO that would be in effect for two months starting on the first date that both the PKO Merger and the issuance of the Merger Shares have been approved by PKO and PDI shareholders, respectively.

As noted, the reorganization of PKO into PDI is contingent on PCI reorganizing into PDI. As a result, it is possible that PKO will not reorganize into PDI even if shareholders of PKO approve the reorganization.

Following the reorganizations, PDI will continue to be managed in accordance with its existing investment objectives and strategies. PDI seeks current income and capital appreciation by utilizing a dynamic asset allocation strategy among multiple sectors of the global credit markets. The proxy statement/prospectus will include a comparison of, and more information regarding, PDI’s and each Acquired Fund’s investment objectives and strategies and other policies.

If the reorganizations are approved, shareholders of PCI and PKO would each receive common shares of PDI (and cash in lieu of fractional shares, if any), based on the Acquired Fund’s net asset value per common share in relation to PDI’s net asset value per common share at the time of closing.

It is currently expected that the reorganizations will be completed approximately two to three months after (and in any event not earlier than two months after) the Shareholder Meeting (including any adjournments or postponements thereto), subject to PIMCO’s market outlook and operational considerations, the shareholder approvals described above and the satisfaction of applicable regulatory requirements and customary closing conditions.

Further information regarding the proposals will be contained in a proxy statement/prospectus to be filed publicly and mailed to shareholders in the near future.

About PIMCO PIMCO was founded in 1971 in Newport Beach, California and is one of the world’s premier fixed income investment managers. Today we have offices across the globe and 3,000+ professionals united by a single purpose: creating opportunities for investors in every environment. PIMCO is owned by Allianz S.E., a leading global diversified financial services provider.

Registration statements relating to each fund’s common shares has been filed with, and declared effective by, the Securities and Exchange Commission (the “SEC”). This press release is not intended to, and does not, constitute an offer to purchase or sell shares of the funds; nor is this press release intended to solicit a proxy from any shareholder of the funds. The solicitation of the purchase or sale of securities or proxies to effect each reorganization described herein will only be made by a final, effective registration statement, which will include a definitive joint proxy statement/prospectus, after the registration statement is declared effective by the SEC.

This press release references a joint proxy statement/prospectus, to be filed by PDI. This joint proxy statement/prospectus has yet to be filed with the SEC. After the joint proxy statement/prospectus is filed with the SEC, it may be amended or withdrawn. The joint proxy statement/prospectus will not be distributed to shareholders of the funds unless and until it is declared effective by the SEC.

Investors and shareholders are urged to read the applicable proxy statement/prospectus and any other relevant documents when they become available because they will contain important information about the proposed reorganizations. After it is filed, free copies of the joint proxy statement/prospectus will be available on the SEC’s website at www.sec.gov.

Except for the historical information and discussions contained herein, statements contained in this news release may constitute forward-looking statements. These statements may involve a number of risks, uncertainties and other factors that could cause actual results to differ materially, including the performance of financial markets, the investment performance of PIMCO's sponsored investment products and separately managed accounts, general economic conditions, future acquisitions, competitive conditions and government regulations, including changes in tax laws. Readers should carefully consider such factors. Further, any such forward-looking statements speak only on the date at which such statements are made. PIMCO undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statement.

This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America L.P. in the United States and throughout the world. PIMCO Investments LLC, 1633 Broadway, New York, NY 10019, is a company of PIMCO. ©2021, PIMCO.

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