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Previous: DIVERSIFIED HISTORIC INVESTORS IV INCOME FUND, 10-K, 1998-04-28 |
Next: PROFESSIONALLY MANAGED PORTFOLIOS, 485BPOS, 1998-04-28 |
PART B
PIMCO FUNDS: PACIFIC INVESTMENT MANAGEMENT SERIES
------------------------------------------------------------------------------
Statement of Additional Information
April 27, 1998
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<TABLE>
<S> <C>
Acquisition of the Assets of PIMCO Tax Exempt Fund (a By and in Exchange for Shares of PIMCO Municipal Bond
Series of PIMCO Funds: Multi-Manager Series) Fund (a Series of PIMCO Funds: Pacific Investment
840 Newport Center Drive Management Series)
Newport Beach, California 92660 840 Newport Center Drive
Newport Beach, California 92660
</TABLE>
This Statement of Additional Information is available to the Shareholders of
PIMCO Tax Exempt Fund ("Tax Exempt Fund") in connection with a proposed
transaction whereby PIMCO Municipal Bond Fund ("Municipal Bond Fund"), a series
of PIMCO Funds: Pacific Investment Management Series ("PIMS"), will acquire all
of the assets of the Tax Exempt Fund, a series of PIMCO Funds: Multi-Manager
Series ("MMS"), and certain liabilities, in exchange for shares of Municipal
Bond Fund.
This Statement of Additional Information of PIMS consists of this cover page and
the following documents, each of which has been filed electronically and is
incorporated by reference herein:
(1) The Statement of Additional Information of PIMS dated April 1, 1998,
including financial statements and report of independent accountants regarding
the Municipal Bond Fund;
(2) Financial statements and report of independent accountants regarding the Tax
Exempt Fund included in the June 30, 1997 Annual Report of MMS; and
(3) Financial statements regarding the Tax Exempt Fund included in the December
31, 1997 Semi-Annual Report of MMS.
This Statement of Additional Information is not a prospectus. A Proxy
Statement/Prospectus dated April __, 1998 relating to the reorganization of Tax
Exempt Fund may be obtained by writing to PIMCO Funds Distributors LLC, 2187
Atlantic Street, Stamford, Connecticut 06902, Attn.: Proxy Department, or
calling (800) 426-0107. This Statement of Additional Information should be read
in conjunction with the Proxy Statement/Prospectus.
Financial Statements
Unaudited pro forma financial statements for the Funds relating to the
Reorganization, are set forth below. The following pro forma financial
statements should be read in conjunction with the financial statements referred
to above.
<PAGE>
PIMCO FUNDS
March 31, 1998
Pro Forma Combined Statement of Assets and Liabilities
(unaudited)
<TABLE>
<S> <C> <C> <C> <C> <C>
- ------------------------------------- ----------- ----------------------- --- -------------- -- -- -----------------------
Municipal Bond Tax Exempt Pro Forma Pro Forma
Fund Fund Adjustments Combined
------------------- ------------------------ -------------- -------------------
ASSETS:
Investments at value $ 2,933,374 $ 49,218,631 $ - $ 52,152,005
Cash 149 49,895 - 50,044
Receivable for securities sold 148,896 - - 148,896
Receivable for fund shares sold - 128,788 - 128,788
Interest receivable 40,932 716,735 - 757,667
Other assets - 16,500 - 16,500
------------------- ------------------------ -------------- ----------------
Total Assets 3,123,351 50,130,549 - 53,253,900
------------------- ------------------------ -------------- ----------------
LIABILITIES:
Payable for investments purchased 98,734 976,020 - 1,074,754
Payable for fund shares redeemed - 96,961 - 96,961
Accrued administration fees 618 16,108 - 16,726
Accrued investment advisory fees 618 12,082 - 12,700
Accrued shareholder servicing & distribution - 36,181 - 36,181
fees
Distribution payable 11,593 192,923 - 204,516
Other 31 - 24,241 (1) 24,272
------------------- ------------------ -------------- --------------
Total Liabilities 111,594 1,330,275 24,241 1,466,110
------------------- ------------------ --------------
- -------------------------------------------
NET ASSETS $ 3,011,757 $ 48,800,274 $ (24,241) $ 51,787,790
=== =================== =================== ============== ===========
Cost of investments owned $ 2,942,249 $ 45,956,255 $ - $ 48,898,504
=== =================== =================== ============== ============
NET ASSETS CONSIST OF:
Paid-in capital $ 3,021,193 $ 44,980,612 - $ 48,001,805
Accumulated undistributed net
investment income - 194,669 (24,241)(1) 170,428
Accumulated undistributed net realized gain
(loss) (561) 362,617 - 362,056
Net unrealized appreciation (depreciation) (8,875) 3,262,376 - 3,253,501
=== =================== ======================== ============== =========
NET ASSETS $ 3,011,757 $ 48,800,274 $ (24,241) $ 51,787,790
=== =================== ======================== ============== ===========
<PAGE>
PIMCO FUNDS
March 31, 1998
Pro Forma Combined Statement of Assets and Liabilities
(unaudited)
- ------------------------------------- ----------- ----------------------- --- -------------- -- -- -----------------------
Municipal Bond Tax Exempt Pro Forma Pro Forma
Fund Fund Adjustments Combined
------------------- ------------------------ -------------- -------------------
SHARES OUTSTANDING:
Municipal Bond Fund
Institutional class 302,110 - - 302,110
Class A - - 541,601 541,601
Class B - - 314,478 314,478
Class C - - 3,124,127 3,124,127
Tax Exempt Fund
Institutional class - -
Class A - 541,601 (541,601) -
Class B - 314,478 (314,478) -
Class C - 3,124,127 (3,124,1270 -
NET ASSET VALUE PER SHARE (2):
Municipal Bond Fund
Institutional class $ 9.97 $ - $ - $ 9.97
Class A - - 12.26 12.26
Class B - - 12.26 12.26
Class C - - 12.26 12.26
Tax Exempt Fund
Class A - 12.26 (12.26) -
Class B - 12.26 (12.26) -
Class C - 12.26 (12.26) -
(1) In connection with the reorganization, the shareholders of the Tax Exempt Fund will incur non-recurring reorganization costs
of approximately $24,241.
(2) All amounts per share represent Net Asset Value per share. Maximum offering
price of $12.64 per share for Class A reflects the 3.0% sales commission
charged up front as set forth in the prospectus. Class B and C shares may
be subject to a deferred sales charge depending on the length of time held.
</TABLE>
See Notes to Pro Forma Combined Financial Statement
<PAGE>
PIMCO FUNDS
March 31, 1998
Pro Forma Combined Statement of Operations (unaudited)
<TABLE>
<S> <C> <C> <C> <C>
- -------------------------------------------------------- ------------------- ------------------------ -- ----- -- ------------------
Municipal Bond Tax Exempt Fund(2) Pro Forma Pro Forma
Fund(1) Adjustments Combined
----------------------------------------- ------------- -------------------
INVESTMENT INCOME:
Interest income $ 36,345 $ 2,707,155 $ - $ 2,743,500
EXPENSES
Investment advisory fees 1,779 146,232 (24,372) 123,639
Administration fees (Institutional shares) 1,779 - - 1,779
Administration fees (Class A, B, & C shares) 194,975 (24,372) 170,603
Shareholder servicing fees:
Class A - 14,307 - 14,307
Class B - 7,412 - 7,412
Class C - 100,141 - 100,141
Distribution fees:
Class A - - - -
Class B - 22,235 - 22,235
Class C - 300,424 (100,141) 200,283
Trustees' fees 7 3,371 - 3,378
Other - 1,070 - 1,070
----------------------------------------- ------------- -------------------
Total Expenses 3,565 790,167 (148,885) 644,847
----------------- -------------------
------------------------ -------------
NET INVESTMENT INCOME 32,780 1,916,988 148,885 2,098,653
----------------------------------------- -- ------------- -------------------
NET REALIZED AND UNREALIZED LOSS:
Net realized gain (loss) on investments (561) 1,004,990 - 1,004,429
Net unrealized appreciation (depreciation)on
investments (8,875) 1,112,602 - 1,103,727
----------------------------------------- ------------- -------------------
Net Gain (Loss) on Investments (9,436) 2,117,592 - 2,108,156
----------------------------------------- ------------- -------------------
NET INCREASE IN ASSETS RESULTING FROM OPERATIONS
$ 23,344 $ 4,034,580 $ 148,885 $ 4,206,809
=== ============== ============== ============= ================
(1) For the period January 2, 1998 (commencement of operations) through March
31, 1998.
(2) For the period April 1, 1997 through March 31, 1998.
See Notes to Pro Forma Combined Financial Statement
<PAGE>
PIMCO Funds
Pro Forma Combined Schedule of Investments (unaudited)
March 31, 1998
- --------------------------------------------------------- ----------------- ----- ------------- -------------- -------------- ----
Principal Municipal Tax Exempt
Security Maturity Date Rate Amount Bond Fund Fund Combined
- --------------------------------------------------------- ----------------- ------ ------------ -------------- ----------- --------
MUNICIPAL BONDS AND NOTES
Alabama
Huntsville HLTH SER A 6/01/2017 5.000% 150,000 $ 146,813 - $ 146,813
------- ------ --------
146,813 - 146,813
----------- ------ --------
Arizona
PIMA County, Arizona Community College
District 7/01/2016 5.000% 150,000 149,625 - 149,625
Scottsdale, Arizona Industrial Development
Authority Hospital Revenue Bonds
(AMBAC Insured), Series 1997 A 9/01/2004 6.500% 1,130,00 - 1,264,188 1,264,188
149,625 1,264,188 1,413,813
------- --------- ---------
California
Los Angeles County Metropolitan Transportation
Authority 7/01/2018 4.750% 150,000 141,563 - 141,563
Los Angeles County Transportation Commission,
Sales Tax Revenue Refunding Bonds, Series 1991
B 7/01/2013 6.500% 1,000,000 - 1,075,000 1,075,000
Los Angeles Convention and Exhibition Center 12/01/2010 9.000% 1,250,000 - 1,629,688 1,629,688
Los Angeles Convention and Exhibition Center 12/01/2020 9.000% 1,750,000 - 2,288,125 2,288,125
San Jose Redevelopment Agency Merged Area
Project, Tax Allocation Bonds (MBIA Insured)
Series 1993 8/01/2015 6.000% 500,000 - 560,625 560,625
San Jose Redevelopment Agency Tax Allocation
Bonds 8/01/2021 5.000% 1,000,000 - 972,500 972,500
Southern California Public Power Authority 7/01/2005 5.500% 100,000 107,750 - 107,750
---------- ------- --------
249,313 6,525,938 6,775,251
-------- --------- --------
Colorado
E-470 Public Highway Authority Colorado
Redevelopment 9/01/2026 5.000% 150,000 $ 144,938 1,449,375 $1,594,313
---------- -----------
144,938 1,449,375 1,594,313
----------- ------------- -------
<PAGE>
District of Columbia
District of Columbia Revenue 2/01/2011 4.750% 150,000 148,125 - 148,125
District of Columbia Housing Finance Agency 12/01/2018 5.850% 1,000,000 - 1,028,750 1,028,750
------------- ------------- ---------
148,125 1,028,750 1,176,875
------------- ------------- ---------
Florida
Dade County 10/01/2006 7.600% 1,690,000 - 2,076,588 2,076,588
Jacksonville Electric Authority, Bulk Power
Supply System Revenue Bonds,
(Prerefunded 10/01/00), Scherer
41--A Project, Issue One, Series 1991 10/01/2021 6.750% 1,000,000 - 1,077,500 1,077,500
------------ ---------- ---------
- 3,154,088 3,154,088
------------- ----------- ---------
Georgia
Dawson County School District 4/01/2012 4.900% 105,000 105,656 - 105,656
Georgia Housing & Finance Authority 12/01/2020 5.750% 1,000,000 - 1,017,500 1,017,500
State of Georgia, General Obligation Bond,
Series 1993 12/01/2004 6.500% 2,000,000 - 2,267,500 2,267,500
---------- --------- ---------
105,656 3,285,000 3,390,656
----------- ---------- ---------
Hawaii
State of Hawaii, Airport System Revenue Bonds,
Second Series of 1991 7/01/2012 6.900% 1,000,000 - 1,180,000 1,180,000
---------- ---------- ---------
Illinois
Chicago, Illinois Wastewater Transmission 1/01/2019 5.000% 1,000,000 $ - 967,500 967,500
State of Illinois, Sales Tax Revenue Refunding
Bonds, Series 6/15/2012 5.000% 1,000,000 - 1,108,750 1,108,750
---------- ----------- ----------
- 2,076,250 2,076,250
---------- ------------ ---------
Indiana
Indianapolis, Local Public Improvement Bonds
Bank, Transportation Revenue Bonds, Series
1992 and 1992 D 2/01/2014 6.750% 1,000,000 - 1,177,500 1,177,500
-------- ----------------- ----------
- 1,177,500 1,177,500
<PAGE>
Massachusetts
Massachusetts-CONS LN-SER C 8/01/2017 5.000% 150,000 146,625 - 146,625
Massachusetts State Health & Building
Facilities 1/01/2035 3.650% 600,000 - 600,000 600,000
METHUEN (FGIC) 11/01/2016 5.000% 150,000 148,875 - 148,875
--------- ------------------ --------
295,500 600,000 895,500
--------- ------------------ --------
Michigan
Michigan State Building Authority Revenue
Bonds 10/15/2014 5.000% 100,000 99,375 - 99,375
Michigan State Environmental Protection
General Obligations Bonds, Series 1992 11/01/2012 6.250% 1,100,000 - 1,263,625 -------
1,263,625
---------- -------------- ---------
99,375 1,263,625 1,363,000
------------ ------------ ---------
Mississippi
Mississippi State Dept. Corrections CTF 1/01/2008 4.600% 150,000 150,000 - 150,000
-------------- ----------- ---------
150,000 - 150,000
------------- ---------- ---------
North Carolina
North Carolina Municipal Power Agency,
Catawaba Electric Revenue Bonds, (AMBAC Insured),
Series 1992 1/01/2008 6.000% 1,100,000 $ - 1,105,000 $ 1,105,000
--------------- ----------- ---------
- 1,105,000 1,105,000
--------------- ----------- ---------
North Dakota
Mercer County Pollution Control Revenue Bonds,
Series 1991 2/01/2019 6.900% 1,000,000
- 1,078,750 1,078,750
------------- ------------- ----------
- 1,078,750 1,078,750
-------------- ------------ ----------
New Hampshire
New Hampshire Turnpike System, Refunding
Revenue Bonds, (FGIC Insured),
Series 1991 11/01/2011 6.750% 1,000,000 - 1,160,000 1,160,000
------------- ---------- --------
- 1,160,000 1,160,000
--------- ----------- ----------
New Jersey
New Jersey State Transportation TR FD 6/15/2018 5.000% 150,000 147,750 - 147,750
Rutgers State University, New Jersey 5/01/2011 4.800% 150,000 150,563 - 150,563
---------- --------- -------
298,313 - 298,313
<PAGE>
------------ --------- ---------
New Mexico
Bernalillo County, New Mexico 12/01/2013 4.750% 150,000 149,250 - 149,250
Los Alamos County, Utility Revenue Bonds,
Series 1994A 7/01/2008 6.000% 1,000,000 - 1,096,250 1,096,250
--------- ----------------- ---------
149,250 1,096,250 1,245,500
---------- ---------------- --------
New York
Metropolitan Transportation Authority
NY Commuter 7/01/2021 5.500% 1,000,000 - 1,011,250 1,011,250
New York 8/15/2003 6.750% 1,000,000 $ - 1,110,000 1,110,000
New York City General Obligation Bonds,
Series 1996 A 8/01/2007 7.000% 1,000,000 - 1,161,250 1,161,250
New York City Municipal Water Finance
Authority 6/15/2025 4.750% 1,000,000 - 922,500 922,500
New York Dorm-St Clare Hosp B 2/15/2009 4.900% 100,000 98,625 - 98,625
New York State Dorm Authority Mental
Health Services Revenue Bonds,
Series 1997 B 8/15/2005 6.000% 1,850,000 - 1,991,111 1,991,111
New York State Environmental FACS CORP 4/01/2022 5.125% 1,000,000 - 982,500 982,500
New York State Urban Development Corp. 1/01/2009 4.800% 100,000 98,875 - 98,875
State of New York Thruway Authority Revenue
Bonds, (AMBRAC-TCRS Insured), Series
1995 A 4/01/2005 6.000% 1,000,000 - 1,103,750 1,103,750
State of New York Thruway Authority Revenue
Bonds, (MBIA Insured), Series 1995 A 4/01/2015 5.500% 1,000,000 - ------------- ---------
1,028,750 1,028,750
------------- ---------
197,500 9,311,111 9,508,611
----------- ---------- ---------
<PAGE>
Ohio
Cleveland Water and Sewer Refunding and
Improvement Revenue Bonds, (MBIA Insured),
Series 1993 G 1/01/2021 5.500% 1,000,000 $ - 1,046,501 1,046,501
Ohio State PUB FACS COMMN 11/01/1999 4.500% 100,000 101,125 - 101,125
Ohio State Water Development Authority
Pollution Control Revenue Bonds,
(MBIA Insured), Series 1995 6/01/2005 6.000% 1,000,000 - 1,097,500 1,097,500
------------ -------- ----------
101,125 2,144,001 2,245,126
-------------- ---------- ---------
Pennsylvania
Pittsburgh , Pennsylvania General Obligation
Bonds, (AMBAC Insured), Series 1993 A 9/01/2014 5.500% 1,525,000 - 1,647,000 1,647,000
----------- ---------- ---------
- 1,647,000 1,647,000
------------- ----------- ---------
Puerto Rico
Puerto Rico Commonwealth Aqueduct & Sewer 7/01/2015 5.000% 150,000 148,875 - 148,875
Puerto Rico Indl. Tourist Edl. Med. 10/01/2018 5.000% 1,000,000 - 985,000 985,000
---------- -----------
148,875 985,000 1,133,875
----------- ---------- ----------
South Carolina
Piedmont Municipal Power Agency Electric
Revenue Bonds, (MBIA Insured),
Series 1996 B 1/01/2013 5.250% 1,000,000 - 1,022,500 1,022,500
---------- -------- ---------
- 1,022,500 1,022,500
----------- -------- --------
Tennessee
Memphis-Shelby County, Tennessee ARPT SPL 9/01/2012 5.350% 1,000,000 - 1,023,750 1,023,750
--------- ------------ ------------
Texas
Beaumont, Texas Indpt Sch Dist 2/15/2016 5.000% 150,000 147,938 - 147,938
Houston, Texas, Water & Sewer System
Revenue Bonds, Series 1993 B 12/01/2018 5.000% 2,000,000 $ 1,971,982
<PAGE>
Pflugerville, Texas Independent School
District 8/15/2017 5.000% 150,000 146,813 - 146,813
University of Texas Revenue Bonds 8/15/2013 6.750% 735,000 - 804,823 804,823
University of Texas Revenue Bonds,
Series 1996 8/15/2007 5.250% 1,000,000 - 1,063,750 1,063,750
Waco, Texas 2/01/2011 4.800% 150,000 149,815 - 149,815
------------ ---------- ----------
444,566 3,840,555 4,285,121
----------- ----------- --------
Washington
King Hospital 1 REF AMBAC 9/01/2010 4.750% 100,000 98,500 - 98,500
------------- ----------- --------
98,500 - 98,500
------------- ------------ --------
Wisconsin
La Crosse, Wisconsin Pollution Control
Revenue Bonds 9/01/2014 3.500% 900,000 - 900,000 900,000
----------- ------------- --------
- 900,000 900,000
------------- ------------ -------
Wyoming
Lincoln County Pollution Control Revenue
Bonds 11/01/2014 3.650% 400,000 - 400,000 400,000
Lincoln County Pollution Control Revenue
Bonds 11/01/2014 3.500% 500,000 - 500,000 500,000
-------------- ----------- -------
- 900,000 900,000
------------- ----------- ------
TOTAL MUNICIPAL BONDS AND NOTES 2,927,474 49,218,631 52,146,105
-------------- ---------- ----------
SHORT-TERM INSTRUMENTS
State Street Global Advisors Tax
Free Money Market 4/1/1998 3.070% 5,900 5,900 - 5,900
----------- -----------
5,900 - 5,900
-------- ------------- - -----------
TOTAL INVESTMENTS 2,933,374 49,218,631 52,152,005
OTHER ASSETS AND LIABILITIES 78,383 (418,357) (364,215)
---------------------------
NET ASSETS $ 3,011,757 $ 48,800,274 $ 51,787,790
=========== ============ ===========
</TABLE>
<PAGE>
PIMCO Funds
Notes to Pro Forma Combined Financial Statement (unaudited)
March 31, 1998
- --------------------------------------------------------------------------------
Basis of Presentation:
Subject to the approval of the Agreement and Plan of Reorganization ("Plan of
Reorganization") by the shareholders of the Tax Exempt Fund (the "Acquired
Fund"), a series of PIMCO Funds: Multi-Manager Series ("MMS"), the Municipal
Bond Fund (the "Acquiring Fund"), a series of the PIMCO Funds: Pacific
Investment Management Series ("PF") would acquire all the assets of the Acquired
Fund in exchange for newly issued shares of beneficial interest of the Acquiring
Fund (the "Merger Shares") and the assumption by the respective Acquiring Fund
of all of the liabilities of the Acquired Fund followed by a distribution of the
Merger Shares to the shareholders of the Acquired Fund.
As a result of the proposed transaction, the Acquired Fund will receive a number
of Class A, Class B and Class C shares of the Acquiring Fund equal in value to
the value of the net assets of the Acquired Fund, net of costs incurred to
effect the acquisition, being transferred and attributable to the Class A, Class
B and Class C shares of the Acquired Fund. Following the transfer, each Class A,
Class B and Class C share of the Acquired Fund will receive, on a tax-free
basis, a number of full and fractional Class A, Class B or Class C Merger Shares
of the Acquiring Fund equal in value, as of the close of business on the day of
the exchange, to the value of the shareholder's Class A, Class B or Class C
Acquired Fund shares.
The pro forma combined financial statements reflect the combined financial
position of the PF Municipal Bond Fund with the MMS Tax Exempt Fund (hereafter
the "Combined Fund") at March 31, 1998, and the pro forma combined results of
operations of the Combined Fund for the period from April 1, 1997 to March 31,
1998, as though the reorganization had occurred on April 1, 1997.
The pro forma combined financial statements are presented for the information of
the reader and may not necessarily be representative of how the pro forma
combined financial statements would have appeared had the reorganization
actually occurred. The pro forma combined financial statements should be read in
conjunction with the historical financial statements of the respective
portfolios.
Pro Forma Adjustments:
The pro forma combined Statements of Assets and Liabilities reflect the
reclassification of capital for the Acquired Fund into shares of beneficial
interest of the Acquiring Fund. Also, the paid in capital and total liabilities
reflect an adjustment for $24,241 at March 31, 1998 for the MMS Tax Exempt Fund,
relating to the estimated non-recurring costs to effect the reorganization
including such items as legal, accounting, registration and proxy costs.
The pro forma combined Statements of Operations reflect the following
adjustments:
A decrease in the advisory fee paid by the MMS Tax Exempt Fund as a
result of the application of the .25% advisory fee of the PF Municipal
Bond Fund. Previously, the advisory fees paid by the Acquired Fund
included certain administrative services which will be included under
an administrative fee paid by the retail shareholders of the combined
Funds as described below.
The administration fee paid by the Class A, B and C shareholders of
MMS Tax Exempt Fund was decreased as a result of the application of the
.35% administration fee applicable to the corresponding share classes
of the PF Municipal Bond Fund.
The 12b-1 fee paid by the Class C shareholders of the MMS Tax Exempt
Fund has been decreased by .25% to reflect the voluntary waiver
undertaken by the Distributor.
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