PIMCO Income Strategy Fund II SC TO-I/A, filed Sep 20, 2023
PIMCO Income Strategy Fund II (PFN)
As filed with the Securities and Exchange Commission on September 20, 2023
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE TO
Tender Offer Statement Under Section 14(d)(1) or 13(e)(1) of the
Securities Exchange Act Of 1934
Amendment No. 1
PIMCO Income Strategy Fund II
(Name of Subject Company (Issuer))
PIMCO Income Strategy Fund II
(Name of Filing Person (Issuer))
Auction-Rate Preferred Shares, Series M, Series T, Series W, Series TH, and Series F, Par Value $0.00001
(Title of Class of Securities)
72201J500
72201J203
72201J302
72201J401
72201J609
(CUSIP Number of Class of Securities)
Ryan Leshaw
PIMCO Income Strategy Fund II
1633 Broadway
New York, NY 10019
Telephone: (949) 720-6980
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of the Person(s) Filing Statement)
With a Copy to:
David C. Sullivan
Ropes & Gray LLP
Prudential Tower
800 Boylston Street
Boston, MA 02199-3600
Telephone: (617) 951-7362
Calculation of Filing Fee
| Transaction Valuation | Amount of Filing Fee | |
| $82,398,062.50 (a) | $9,080.27 (b) | |
(a) Calculated as the aggregate maximum purchase price to be paid for 3,497 shares in the offer, based upon a price of 94.25% of the liquidation preference of $25,000 per share (or $23,562.50 per share).
(b) Calculated at $110.20 per $1,000,000 of the Transaction Valuation.
| ☒ | Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
| Amount Previously Paid: | $9,080.27 | Filing Party: | PIMCO Income Strategy Fund II | |||
| Form or Registration No.: | Schedule TO | Date Filed: | August 14, 2023 | |||
| ☐ | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes below to designate any transactions to which the statement relates:
| ☐ | third party tender offer subject to Rule 14d-1. |
| ☒ | issuer tender offer subject to Rule 13e-4. |
| ☐ | going-private transaction subject to Rule 13e-3. |
| ☐ | amendment to Schedule 13D under Rule 13d-2. |
Check the following box if the filing is a final amendment reporting the results of the tender offer. ☐
ITEMS 1 THROUGH 9 AND ITEM 11.
This Amendment No. 1 (this “Amendment”) amends and supplements the Tender Offer Statement on Schedule TO initially filed by PIMCO Income Strategy Fund II, a Massachusetts business trust (the “Fund”). This Schedule TO relates to the Fund’s offer to purchase for cash up to 100% of its outstanding shares of auction-rate preferred shares, $0.00001 par value and a liquidation preference of $25,000 per share, designated Auction-Rate Preferred Shares, Series M, Series T, Series W, Series TH, and Series F (the “Preferred Stock”), upon the terms and subject to the conditions set forth in the Offer to Purchase dated August 14, 2023 (the “Offer to Purchase”) and in the Fund’s related Letter of Transmittal (the “Letter of Transmittal” which, together with the Offer to Purchase, as each may be amended and supplemented from time to time, constitutes the “Offer”), copies of which have been previously filed as Exhibits (a)(1)(i) and (a)(1)(ii) to the Schedule TO, respectively. The price to be paid for the Preferred Stock is an amount per share, net to the seller in cash, equal to 94.25% of the liquidation preference of $25,000 per share (or $23,562.50 per share) in cash, plus any unpaid dividends accrued through September 18, 2023, less any applicable withholding taxes and without interest, and subject to the conditions set forth in the Offer, if properly tendered and not withdrawn prior to the Expiration Date (as defined in the Offer). The information set forth in the Offer is incorporated herein by reference with respect to Items 1 through 9 and Item 11 of this Amendment.
This Amendment is the final amendment to the Statement and is being filed to report the results of the Offer. Filed herewith as Exhibit (a)(5)(ii) and incorporated herein by reference is a copy of the press release issued by the Fund dated September 20, 2023 announcing the results of the Offer.
ITEM 10.
Not applicable.
ITEM 12. EXHIBITS.
| Exhibit No. | Document | |
| (a)(1)(i) |
Offer to Purchase dated August 14, 2023. (1) | |
| (a)(1)(ii) |
Form of Letter of Transmittal. (1) | |
| (a)(1)(iii) |
Form of Notice of Guaranteed Delivery. (1) | |
| (a)(1)(iv) |
Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (1) | |
| (a)(1)(v) |
Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (1) | |
| (a)(1)(vi) |
Form of Notice of Withdrawal. (1) | |
| (a)(5)(i) |
Press Release issued on August 14, 2023.(2) | |
| (a)(5)(ii) |
Press Release issued on September 20, 2023.* | |
| (d)(i) |
Tender Offer Agreement, dated August 11, 2023, by and among PIMCO Corporate & Income Opportunity Fund, PIMCO Corporate & Income Strategy Fund, PIMCO High Income Fund, PIMCO Income Strategy Fund, PIMCO Income Strategy Fund II, PIMCO California Municipal Income Fund, PIMCO California Municipal Income Fund II, PIMCO California Municipal Income Fund III, PIMCO Municipal Income Fund, PIMCO Municipal Income Fund II,, PIMCO Municipal Income Fund III, PIMCO New York Municipal Income Fund, PIMCO New York Municipal Income Fund II, PIMCO New York Municipal Income Fund III, Pacific Investment Management Company LLC and Bank of America, N.A. (1) | |
| EX-FILING FEES |
Calculation of Filing Fees Table* | |
|
*Filed herewith. (1) Incorporated by reference to the Fund’s Schedule TO, as filed with the Securities and Exchange Commission on August 14, 2023. (2) Incorporated by reference to the Fund’s Schedule TO-C, as filed with the Securities and Exchange Commission on August 14, 2023. | ||
ITEM 13.
Not applicable.
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
| PIMCO Income Strategy Fund II | ||
| By: | /s/ Eric D. Johnson | |
| Name: | Eric D. Johnson | |
| Title: |
President | |
Dated as of: September 20, 2023
EXHIBIT INDEX
| Exhibit No. | Document | |
| (a)(1)(i) |
Offer to Purchase dated August 14, 2023. (1) | |
| (a)(1)(ii) |
Form of Letter of Transmittal. (1) | |
| (a)(1)(iii) |
Form of Notice of Guaranteed Delivery. (1) | |
| (a)(1)(iv) |
Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (1) | |
| (a)(1)(v) |
Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. (1) | |
| (a)(1)(vi) |
Form of Notice of Withdrawal. (1) | |
| (a)(5)(i) |
Press Release issued on August 14, 2023.(2) | |
| (a)(5)(ii) |
Press Release issued on September 20, 2023.* | |
| (d)(i) |
Tender Offer Agreement, dated August 11, 2023, by and among PIMCO Corporate & Income Opportunity Fund, PIMCO Corporate & Income Strategy Fund, PIMCO High Income Fund, PIMCO Income Strategy Fund, PIMCO Income Strategy Fund II, PIMCO California Municipal Income Fund, PIMCO California Municipal Income Fund II, PIMCO California Municipal Income Fund III, PIMCO Municipal Income Fund, PIMCO Municipal Income Fund II,, PIMCO Municipal Income Fund III, PIMCO New York Municipal Income Fund, PIMCO New York Municipal Income Fund II and PIMCO New York Municipal Income Fund III, Pacific Investment Management Company LLC, and Bank of America, N.A. (1) | |
| EX-FILING FEES |
Calculation of Filing Fees Table* | |
|
*Filed herewith. (1) Incorporated by reference to the Fund’s Schedule TO, as filed with the Securities and Exchange Commission on August 14, 2023. (2) Incorporated by reference to the Fund’s Schedule TO-C, as filed with the Securities and Exchange Commission on August 14, 2023. | ||
September 20, 2023
For information on the Tender Offers:
Financial Advisors: (800) 628-1237
Shareholders: (844) 337-4626 or (844) 33-PIMCO
PIMCO Media Relations: (212) 597-1054
PIMCO CORPORATE & INCOME OPPORTUNITY FUND, PIMCO CORPORATE & INCOME STRATEGY FUND, PIMCO HIGH INCOME FUND, PIMCO INCOME STRATEGY FUND, PIMCO INCOME STRATEGY FUND II, PIMCO CALIFORNIA MUNICIPAL INCOME FUND, PIMCO CALIFORNIA MUNICIPAL INCOME FUND II, PIMCO CALIFORNIA MUNICIPAL INCOME FUND III, PIMCO MUNICIPAL INCOME FUND, PIMCO MUNICIPAL INCOME FUND II, PIMCO MUNICIPAL INCOME FUND III, PIMCO NEW YORK MUNICIPAL INCOME FUND, PIMCO NEW YORK MUNICIPAL INCOME FUND II, AND PIMCO NEW YORK MUNICIPAL INCOME FUND III ANNOUNCE FINAL RESULTS OF TENDER OFFERS FOR AUCTION RATE PREFERRED SHARES
NEW YORK, NY, September 20, 2023 – PIMCO Corporate & Income Opportunity Fund (NYSE: PTY), PIMCO Corporate & Income Strategy Fund (NYSE: PCN), PIMCO High Income Fund (NYSE: PHK), PIMCO Income Strategy Fund (NYSE: PFL), PIMCO Income Strategy Fund II (NYSE: PFN), PIMCO California Municipal Income Fund (NYSE: PCQ), PIMCO California Municipal Income Fund II (NYSE: PCK), PIMCO California Municipal Income Fund III (NYSE: PZC), PIMCO Municipal Income Fund (NYSE: PMF), PIMCO Municipal Income Fund II (NYSE: PML), PIMCO Municipal Income Fund III (NYSE: PMX), PIMCO New York Municipal Income Fund (NYSE: PNF), PIMCO New York Municipal Income Fund II (NYSE: PNI) and PIMCO New York Municipal Income Fund III (NYSE: PYN) (each, a “Fund” and, together, the “Funds”) today announced the expiration and final results of each Fund’s previously-announced voluntary tender offer (each, a “Tender Offer” and, together, the “Tender Offers”) for up to 100% of the Fund’s outstanding auction rate preferred shares (“ARPS”) at a price equal to 96%, with respect to PTY, 93.25%, with respect to PCN and PHK, 94.25%, with respect to PFL and PFN, and 94.5% with respect to PCQ, PCK, PZC, PMF, PML, PMX, PNF, PNI and PYN, of the ARPS’ per share liquidation preference of $25,000 per share (or $24,000 per share for PTY, $23,312.50 per share for PCN and PHK, $23,562.50 per share of PFL and PFN, and $23,625 per share for PCQ, PCK, PZC, PMF, PML, PMX, PNF, PNI, and PYN) and any unpaid dividends accrued through the expiration date of the Tender Offer. The Tender Offers expired on September 18, 2023, at 5:00 p.m. New York City time. All ARPS that were validly tendered and not withdrawn during the offering period of the Tender Offers have been accepted for payment as set forth below.
PTY has accepted for payment 5,085 ARPS, which represents approximately 59.78% of its outstanding ARPS, and 3,421 ARPS remain outstanding.
PCN has accepted for payment 422 ARPS, which represents approximately 44.85% of its outstanding ARPS, and 519 ARPS remain outstanding.
PHK has accepted for payment 581 ARPS, which represents approximately 25.02% of its outstanding ARPS, and 1,741 ARPS remain outstanding.
PFL has accepted for payment 1,404 ARPS, which represents approximately 77.65% of its outstanding ARPS, and 404 ARPS remain outstanding.
PFN has accepted for payment 1,941 ARPS, which represents approximately 55.50% of its outstanding ARPS, and 1,556 ARPS remain outstanding.
PCQ has accepted for payment 429 ARPS, which represents approximately 8.89% of its outstanding ARPS, and 4,396 ARPS remain outstanding.
PCK has accepted for payment 1,232 ARPS, which represents approximately 23.94% of its outstanding ARPS, and 3,915 ARPS remain outstanding.
PZC has accepted for payment 444 ARPS, which represents approximately 11.34% of its outstanding ARPS, and 3,471 ARPS remain outstanding.
PMF has accepted for payment 863 ARPS, which represents approximately 12.94% of its outstanding ARPS, and 5,805 ARPS remain outstanding.
PML has accepted for payment 2,345 ARPS, which represents approximately 19.65% of its outstanding ARPS, and 9,586 ARPS remain outstanding.
PMX has accepted for payment 1,011 ARPS, which represents approximately 16.34% of its outstanding ARPS, and 5,177 ARPS remain outstanding.
PNF has accepted for payment 305 ARPS, which represents approximately 18.59% of its outstanding ARPS, and 1,336 ARPS remain outstanding.
PNI has accepted for payment 276 ARPS, which represents approximately 11.90% of its outstanding ARPS, and 2,044 ARPS remain outstanding.
PYN has accepted for payment 137 ARPS, which represents approximately 11.63% of its outstanding ARPS, and 1,041 ARPS remain outstanding.
All ARPS that were not tendered will remain outstanding, and the terms of the outstanding ARPS will remain the same as prior to the Tender Offers.
-------
Any questions regarding the Tender Offers can be directed to the Funds’ Information Agent, Equiniti Fund Solutions, Inc., at (877) 478-5044. Each Fund’s daily New York Stock Exchange closing market price for its common shares, net asset value per common share, as well as other information, including updated portfolio statistics and performance, are available at www.pimco.com/closedendfunds.
Each Fund may determine to replace all or a portion of the leverage previously obtained through tendered ARPS with other forms of leverage in accordance with the Fund’s investment policies and related public disclosures. There is no guarantee that a Fund will be able to replace all or a portion of the leverage previously obtained through tendered ARPS with leverage at comparable costs and other terms, or will elect to do so, and any replacement leverage may be at a higher interest rate and/or may result in higher costs to the Fund’s common shareholders. In conjunction with the Tender Offers and to replace a portion of the leverage previously obtained through tendered ARPS, PCQ, PCK, PZC, PMF, PML and PMX have issued 102, 292, 105, 204, 555, and 239 Remarketable Variable Rate MuniFund Term Preferred Shares, respectively, each with a liquidation preference of $100,000 per share at a price of $100,000 per share, resulting in total proceeds of $10,200,000, $29,200,000, $10,500,000, $20,400,000, $55,500,000, and $23,900,000, respectively.
The information on or accessible through www.pimco.com/closedendfunds is not incorporated by reference herein.
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.
Except for the historical information and discussions contained herein, statements contained in this news release 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, 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. Neither the Funds, nor the Funds’ Boards of Trustees, nor PIMCO, makes any recommendation as to whether to tender or not to tender any ARPS in the Tender Offers. 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 LLC. in the United States and throughout the world. PIMCO Investments LLC, 1633 Broadway, New York, NY 10019, is a company of PIMCO. ©2023, PIMCO