PIMCO California Municipal Income Fund II
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT

INVESTMENT COMPANIES

Investment Company Act file number: 811-21077

PIMCO California Municipal Income Fund II

(Exact name of registrant as specified in charter)

1633 Broadway, New York, NY 10019

(Address of principal executive offices)

William G. Galipeau

Treasurer, Principal Financial & Accounting Officer

650 Newport Center Drive

Newport Beach, CA 92660

(Name and address of agent for service)

Copies to:

David C. Sullivan

Ropes & Gray LLP

Prudential Tower

800 Boylston Street

Boston, MA 02199

Registrant’s telephone number, including area code: (844) 337-4626

Date of fiscal year end: May 31, 2015

Date of reporting period: November 30, 2014

Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.


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Item 1. Reports to Shareholders.

The following is a copy of the report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30e-1).


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LOGO

 

Your Global Investment Authority

 

 

PIMCO Closed-End Funds

 

LOGO

 

 

Semiannual Report

November 30, 2014

 

PIMCO Municipal Income Fund II

 

PIMCO California Municipal Income Fund II

 

PIMCO New York Municipal Income Fund II

 

LOGO

 

LOGO


Table of Contents

Table of Contents

 

 

            Page  
     

Letter from the Chairman of the Board & the President

        2   

Important Information About the Funds

        5   

Financial Highlights

        14   

Statements of Assets and Liabilities

        16   

Statements of Operations

        17   

Statements of Changes in Net Assets

        18   

Notes to Financial Statements

        36   

Glossary

        52   

Shareholder Meeting Results

        53   

Changes to Boards of Trustees

        54   

Matters Relating to the Trustees’ Consideration of the Investment Management and Portfolio Management Agreements

        55   
     

Fund

   Fund
Summary
     Schedule of
Investments
 
     

PIMCO Municipal Income Fund II

     8         20   

PIMCO California Municipal Income Fund II

     10         28   

PIMCO New York Municipal Income Fund II

     12         32   


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Letter from the Chairman of the Board & the President

 

Dear Shareholder:

 

As previously announced on September 26, 2014, prior to the close of the reporting period, William “Bill” Gross, PIMCO’s former chief investment officer (CIO) and co-founder, resigned from the firm. PIMCO’s managing directors elected Daniel Ivascyn to serve as group chief investment officer (Group CIO). In addition, PIMCO appointed Andrew Balls, CIO Global; Mark Kiesel, CIO Global Credit; Virginie Maisonneuve, CIO Global Equities; Scott Mather, CIO U.S. Core Strategies; and Mihir Worah, CIO Real Return and Asset Allocation. As announced by PIMCO on November 3, 2014, Marc Seidner returned to the firm effective November 12, 2014, in a new role as CIO Non-Traditional Strategies and head of Portfolio Management in PIMCO’s New York office. Under this leadership structure, Andrew and Mihir have additional managerial responsibility for PIMCO’s Portfolio Management group and trade floor activities globally. Andrew oversees portfolio management and trade floor activities in Europe and Asia-Pacific, and Mihir oversees portfolio management and trade floor activities in the U.S. There have not been any changes to the portfolio management of PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II or PIMCO New York Municipal Income Fund II (collectively, the Funds).

 

Douglas Hodge, PIMCO’s chief executive officer, and Jay Jacobs, PIMCO’s president, continue to serve as the firm’s senior executive leadership team, spearheading PIMCO’s business strategy, client service and the firm’s operations.

 

These appointments are a further evolution of the structure that PIMCO established earlier in 2014, reflecting our belief that the best approach for PIMCO’s clients and our firm is an investment leadership team of seasoned, highly-skilled investors overseeing all areas of PIMCO’s investment activities.

 

During his 43 years at PIMCO, Mr. Gross made great contributions to building the firm and delivering value to PIMCO’s clients. Over this period, PIMCO developed into a global asset manager, expanding beyond core fixed income, and now encompasses over 2,400 employees across 13 offices, including more than 250 portfolio managers. Mr. Gross was also responsible for starting PIMCO’s robust investment process, with a focus on long-term macroeconomic views and bottom-up security selection—a process that is well institutionalized and will continue into PIMCO’s future.

 

For the six-month reporting period ended November 30, 2014:

 

Municipal bonds rallied and produced positive returns during the fiscal six months ended November 30, 2014. Longer-term U.S. Treasury yields declined, whereas shorter-term yields (between two- and seven-year maturities) generally moved higher during the reporting period. Despite a number of potential headwinds, including uncertainties regarding future monetary policy and a host of geopolitical issues, investor demand for municipal securities was strong overall given improving fundamentals.

 

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The Barclays Municipal Bond Index gained 2.45% while the broad taxable bond market, as represented by the Barclays U.S. Aggregate Bond Index, returned 1.92% during the reporting period.

 

Following a period of weakness early in 2014, the U.S. economy was highly resilient and expanded at a solid pace as the year progressed. Looking back, gross domestic product (GDP), the value of goods and services produced in the country, the broadest measure of economic activity and the principal indicator of economic performance, contracted at an annual pace of 2.1% during the first quarter of 2014. However, this was a temporary setback, as the U.S. Commerce Department reported that GDP expanded at a 4.6% annual pace during the second quarter of 2014. This represented the strongest growth rate since the fourth quarter of 2011. According to the Commerce Department’s estimate released on December 23, 2014, GDP expanded at an annual pace of 5.0% during the third quarter of 2014.

 

The Federal Reserve (the Fed) began tapering its monthly asset purchase program in January 2014. At each of its next seven meetings, the Fed announced that it would further taper its asset purchases. Following its meeting in October 2014, the Fed announced that it had concluded its asset purchases. However, the Fed again indicated that it would not raise interest rates in the near future. Finally, at its meeting in December 2014, the Fed said, “Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy. The Committee sees this guidance as consistent with its previous statement that it likely will be appropriate to maintain the 0%– 1/4% target range for the federal funds rate for a considerable time following the end of its asset purchase program in October, especially if projected inflation continues to run below the Committee’s 2% longer-run goal, and provided that longer-term inflation expectations remain well anchored.”

 

Outlook

 

PIMCO’s 2015 forecast for the U.S. is for a continuation of the economic recovery. With the ongoing assistance of easy monetary policy, combined with healthy private financial sector balance sheets, we believe the U.S. economy is poised to grow between 2.5% and 3.0% in the coming calendar year. We anticipate corporate capital expenditures to accelerate on the back of rising pricing power and the expected returns on newly invested capital. We expect very gradually rising wages and product prices, which will allow the Fed to maintain its accommodative monetary policy for 2015. Potential wildcards for the economy in both the U.S. and abroad are geopolitical issues in Ukraine, the Middle East and elsewhere.

 

On the following pages of this PIMCO Closed-End Funds Semiannual Report, please find specific details regarding investment performance and a discussion of factors that most affected each Fund’s performance over the six-month reporting period ended November 30, 2014.

 

  SEMIANNUAL REPORT   NOVEMBER 30, 2014    3


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Letter from the Chairman of the Board & the President (Cont.)

 

 

Thank you for investing with us. We value your trust and will continue to work diligently to meet your investment needs. If you have questions regarding any of your PIMCO Closed-End Funds investments, please contact your financial advisor or call the Funds’ shareholder servicing agent at (844) 33-PIMCO (844-337-4626). We also invite you to visit our website at pimco.com/investments to learn more about our views and global thought leadership.

 

We remain dedicated to serving your investment needs.

 

Sincerely,

 

LOGO   LOGO
LOGO   LOGO
Hans W. Kertess   Peter G. Strelow
Chairman of the Board of Trustees   President; Principal Executive Officer

 

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Important Information About the Funds

 

We believe that bond funds have an important role to play in a well-diversified investment portfolio. It is important to note, however, that in an environment where interest rates trend upward, rising rates would negatively impact the performance of most bond funds, and fixed-income securities held by a Fund are likely to decrease in value. A number of factors can cause interest rates to rise (e.g., central bank monetary policies, inflation rates, general economic conditions, etc.). Accordingly, changes in interest rates can be sudden, and there is no guarantee that Fund Management will anticipate such movement.

 

As of the date of this report, interest rates in the U.S. are at or near historically low levels. As such, bond funds may currently face an increased exposure to the risks associated with rising interest rates. This is especially true since the Federal Reserve Board has concluded its quantitative easing program. Further, while the U.S. bond market has steadily grown over the past three decades, dealer inventories of corporate bonds have remained relatively stagnant. As a result, there has been a significant reduction in the ability of dealers to “make markets” in corporate bonds. All of the factors mentioned above, individually or collectively, could lead to increased volatility and/or lower liquidity in the fixed income markets, which could result in increased losses to a Fund. Bond funds and individual bonds with a longer duration (a measure of the sensitivity of a security’s price to changes in interest rates) tend to be more sensitive to changes in interest rates, usually making them more volatile than securities or funds with shorter durations. In addition, in the current low interest rate environment, the market price of the Funds’ common shares may be particularly sensitive to changes in interest rates or the perception that there will be a change in interest rates.

 

The use of derivatives may subject the Funds to greater volatility than investments in traditional securities. The Funds may use derivative instruments for hedging purposes or as part of an investment strategy. Use of these instruments may involve certain costs and risks such as liquidity risk, interest rate risk, market risk, credit risk, management risk and the risk that a Fund could not close out a position when it would be most advantageous to do so. Certain derivative transactions may have a leveraging effect on a Fund. For example, a small investment in a derivative instrument may have a significant impact on a Fund’s exposure to interest rates, currency exchange rates or other investments. As a result, a relatively small price movement in a derivative instrument may cause an immediate and substantial loss or gain, which translates into heightened volatility in a Fund’s net asset value. A Fund may engage in such transactions regardless of whether the Fund owns the asset, instrument or components of the index underlying a derivative instrument. A Fund may invest a significant portion of its assets in these types of instruments. If it does, a Fund’s investment exposure could far exceed the value of its portfolio securities and its investment performance could be primarily dependent upon securities it does not directly own.

 

A Fund’s use of leverage creates the opportunity for increased income for the Fund’s common shareholders, but also creates special risks. Leverage is a speculative technique that may expose a Fund to greater risk and increased costs. If shorter-term interest rates rise relative to the rate of return on a Fund’s portfolio, the interest and other costs to the Fund of leverage could exceed the rate of return on the debt obligations and other investments held by the Fund, thereby reducing return to the Fund’s common shareholders. In addition, fees and expenses of any form of leverage used by a Fund will be borne entirely by its common shareholders (and not by preferred shareholders, if any) and will reduce the investment return of the Fund’s common shares. There can be no assurance that a Fund’s use of leverage will result in a higher yield on its common shares, and it may result in losses. Leverage creates several major types of risks for a Fund’s common shareholders, including: (1) the likelihood of greater volatility of net asset value and market price of the Fund’s common shares, and of the investment return to the Fund’s common shareholders, than a comparable portfolio without leverage; (2) the possibility either that the Fund’s common share dividends will fall if the interest and other costs of leverage rise, or that dividends paid on the Fund’s common shares will fluctuate because such costs vary over time; and (3) the effects of leverage in a

 

  SEMIANNUAL REPORT   NOVEMBER 30, 2014    5


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Important Information About the Funds (Cont.)

 

 

declining market or a rising interest rate environment, as leverage is likely to cause a greater decline in the net asset value of the Fund’s common shares than if the Fund were not leveraged and may result in a greater decline in the market value of the Fund’s common shares.

 

There is a risk that a Fund investing in a tender option bond program will not be considered the owner of a tender option bond for federal income tax purposes, and thus will not be entitled to treat such interest as exempt from federal income tax. Certain tender option bonds may be illiquid or may become illiquid as a result of, among other things, a credit rating downgrade, a payment default or a disqualification from tax-exempt status. Regulators recently finalized rules implementing Section 619 (the “Volcker Rule”) and Section 941 (the “Risk Retention Rules”) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Both the Volcker Rule and the Risk Retention Rules apply to tender option bond programs and may require that such programs be restructured. The results of these rules are not certain, and there can be no assurance that appropriate restructuring of existing trusts will be possible or that the creation of new trusts will continue. Because of the role that tender option bond programs play in the municipal bond market, it is possible that implementation of these rules may adversely impact the municipal bond market. For example, as a result of the implementation of these rules, the municipal bond market may experience reduced demand or liquidity and increased financing costs. A Fund’s investment in the securities issued by a tender option bond trust may involve greater risk and volatility than an investment in a fixed rate bond, and the value of such securities may decrease significantly when market interest rates increase. Tender option bond trusts could be terminated due to market, credit or other events beyond the Funds’ control, which could require the Funds to reduce leverage and dispose of portfolio investments at inopportune times and prices. A Fund may use a tender option bond program as a way of achieving leverage in its portfolio, in which case the Fund will be subject to leverage risk.

 

High-yield bonds (commonly referred to as “junk bonds”) typically have a lower credit rating than other bonds. Lower-rated bonds generally involve a greater risk to principal than higher-rated bonds. Further, markets for lower-rated bonds are typically less liquid than for higher-rated bonds, and public information is usually less abundant in such markets. Thus, high-yield investments increase the chance that a Fund will lose money. Mortgage-Related and Asset-Backed Securities represent ownership interests in “pools” of mortgages or other assets such as consumer loans or receivables. As a general matter, Mortgage-Related and Asset-Backed Securities are subject to interest rate risk, extension risk, prepayment risk, and credit risk. These risks largely stem from the fact that returns on Mortgage-Related and Asset-Backed Securities depend on the ability of the underlying assets to generate cash flow.

 

The common shares of the Funds trade on the New York Stock Exchange. As with any stock, the price of a Fund’s common shares will fluctuate with market conditions and other factors. If you sell your common shares of a Fund, the price received may be more or less than your original investment. Shares of closed-end management investment companies frequently trade at a discount from their net asset value. The common shares of a Fund may trade at a price that is less than the initial offering price and/or the net asset value of such shares.

 

The Funds may be subject to various risks in addition to those described above. Some of these risks may include, but are not limited to, the following: asset allocation risk, credit risk, stressed securities risk, distressed and defaulted securities risk, corporate bond risk, market risk, issuer risk, liquidity risk, equity securities and related market risk, mortgage-related and other asset-backed securities risk, extension risk, prepayment risk, privately issued mortgage-related securities risk, mortgage market/subprime risk, foreign (non-U.S.) investment risk, emerging markets risk, currency risk, redenomination risk, non-diversification risk, management risk, municipal bond risk, tender option bond risk, inflation-indexed security risk, senior debt risk, loans, participations and assignments risk, reinvestment risk, real estate risk, U.S. Government securities risk, foreign (non-U.S.) government

 

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securities risk, valuation risk, segregation and cover risk, focused investment risk, credit default swaps risk, event-linked securities risk, counterparty risk, preferred securities risk, confidential information access risk, other investment companies risk, private placements risk, inflation/deflation risk, regulatory risk, tax risk, recent economic conditions risk, market disruptions and geopolitical risk, potential conflicts of interest involving allocation of investment opportunities, repurchase agreements risk, securities lending risk, zero-coupon bond and payment-in-kind securities risk, portfolio turnover risk, smaller company risk, short sale risk and convertible securities risk. A description of certain of these risks is available in the Notes to Financial Statements of this Report.

 

On each individual Fund Summary page in this Shareholder Report the Common Share Average Annual Total Return table and Common Share Cumulative Return (if applicable) measure performance assuming that all dividend and capital gain distributions were reinvested. Total return is calculated by determining the percentage change in NAV or market price (as applicable) in the specified period. Returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions. Total return for a period of more than one year represents the average annual total return. Performance at market price will differ from results at NAV. Although market price returns tend to reflect investment results over time, during shorter periods returns at market price can also be influenced by factors such as changing views about the Fund, market conditions, supply and demand for the Fund’s shares, or changes in the Fund’s dividends. Performance shown is net of fees and expenses.

 

The following table discloses the commencement of operations of each Fund:

 

Fund Name       Commencement
of Operations
 
PIMCO Municipal Income Fund II       06/28/02   
PIMCO California Municipal Income Fund II       06/28/02   
PIMCO New York Municipal Income Fund II       06/28/02   

 

An investment in a Fund is not a deposit of a bank and is not guaranteed or insured by the Federal Deposit Insurance Corporation or any other government agency. It is possible to lose money on investments in the Funds.

 

PIMCO has adopted written proxy voting policies and procedures (“Proxy Policy”) as required by Rule 206(4)-6 under the Investment Advisers Act of 1940. The Proxy Policy has been adopted by the Funds as the policies and procedures that PIMCO will use when voting proxies on behalf of the Funds. A description of the policies and procedures that PIMCO uses to vote proxies relating to portfolio securities of each Fund, and information about how each Fund voted proxies relating to portfolio securities held during the most recent twelve-month period ended June 30, are available without charge, upon request, by calling the Funds at (844) 33-PIMCO (844-337-4626), on the Funds’ website at www.pimco.com/investments, and on the Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov.

 

Each Fund files a complete schedule of its portfolio holdings with the SEC for the first and third quarters of its fiscal year on Form N-Q. A copy of each Fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C., and is available without charge, upon request by calling the Funds at (844) 33-PIMCO (844-337-4626) and on the Funds’ website at www.pimco.com/investments. Updated portfolio holdings information about a Fund will be available at www.pimco.com/closedendfunds approximately 15 calendar days after such Fund’s most recent fiscal quarter end, and will remain accessible until such Fund files a Form N-Q or a shareholder report for the period which includes the date of the information. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

 

  SEMIANNUAL REPORT   NOVEMBER 30, 2014    7


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PIMCO Municipal Income Fund II    Symbol on NYSE -  PML

 

Allocation Breakdown  
Texas      13.4%   
New York      13.3%   
California      13.1%   
Arizona      8.1%   
Illinois      5.7%   
Pennsylvania      5.5%   
Ohio      5.3%   
Florida      5.2%   
Other      30.4%   

 

   

% of Investments, at value as of 11/30/14

Fund Information (as of November 30, 2014)(1)  
Market Price     $11.90   
NAV     $12.23   
Premium/(Discount) to NAV     (2.70%
Market Price Distribution Yield (2)     6.55%   
NAV Distribution Yield (2)     6.38%   
Regulatory Leverage Ratio (3)     35.48%   
 

 

Average Annual Total Return for the period ended November 30, 2014  
     6 Month*      1 Year      5 Year      10 Year      Commencement
of Operations
(06/28/02)
 
Market Price      0.40%         20.50%         9.97%         5.21%         5.07%   
NAV      5.82%         19.67%         11.44%         5.30%         5.71%   

 

All Fund returns are net of fees and expenses.

 

* Cumulative return
(1) 

Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Total return, market price, NAV, market price distribution yield, and NAV distribution yield will fluctuate with changes in market conditions. For performance current to the most recent month-end, visit www.pimco.com or call (844) 33-PIMCO.

(2) 

Distribution yields are not performance and are calculated by annualizing the most recent distribution per share and dividing by the NAV or Market Price, as applicable, as of the reported date. Distributions may be comprised of ordinary income, net capital gains, and/or a return of capital (ROC) of your investment in the Fund. Because the distribution rate may include a ROC, it should not be confused with yield or income. If the Fund estimates that a portion of its distribution may be comprised of amounts from sources other than net investment income, the Fund will notify shareholders of the estimated composition of such distribution through a Section 19 Notice. Please refer to the most recent Section 19 Notice, if applicable, for additional information regarding the composition of distributions. Please visit www.pimco.com for most recent Section 19 Notice, if applicable. Final determination of a distribution’s tax character will be made on Form 1099 DIV sent to shareholders each January.

(3) 

Represents regulatory leverage outstanding, as a percentage of total managed assets. Regulatory leverage may include preferred shares, tender option bond transactions, reverse repurchase agreements, and other borrowings (collectively “Leverage”). Total managed assets refer to total assets (including assets attributable to Leverage that may be outstanding) minus accrued liabilities (other than liabilities representing Leverage).

 

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Portfolio Insights

 

»  

The municipal bond market generally generated positive results during the six-month reporting period ended November 30, 2014. The municipal bond market, as measured by Barclays Municipal Bond Index, posted positive returns during all six months of the reporting period. Supporting the municipal market were generally improving fundamentals, attractive valuations and falling longer-term interest rates. In addition, investor demand for municipal securities was largely solid. All told, the municipal market gained 2.45% during the six months ended November 30, 2014. In comparison, the overall taxable fixed income market, as measured by Barclays U.S. Aggregate Bond Index, gained 1.91% during the same period, while Barclays Municipal Long Bond Index (the Index) returned 3.94%.

 

»  

The fund’s overweight duration position relative to the Index contributed to performance as municipal yields moved lower across most portions of the curve. The fund’s overweight exposures to the Revenue-Backed and Health Care sectors were beneficial for results as both sectors outperformed the municipal bond market.

 

»  

The fund’s underweight exposures to the Transportation, Education, and Water and Sewer sectors detracted from results, as all sectors outperformed the municipal bond market.

 

  SEMIANNUAL REPORT   NOVEMBER 30, 2014    9


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PIMCO California Municipal Income Fund II    Symbol on NYSE -  PCK

 

Allocation Breakdown       
California      93.3%   
Rhode Island      2.3%   
Short-Term Instruments      3.0%   
New Jersey      0.7%   
New York      0.7%   

 

   

% of Investments, at value as of 11/30/14

Fund Information (as of November 30, 2014)(1)  
Market Price      $9.61   
NAV      $8.83   
Premium/(Discount) to NAV      8.83%   
Market Price Distribution Yield (2)      6.71%   
NAV Distribution Yield (2)      7.30%   
Regulatory Leverage Ratio (3)      41.84%   
 

 

Average Annual Total Return for the period ended November 30, 2014  
     6 Month*      1 Year      5 Year      10 Year      Commencement
of Operations
(06/28/02)
 
Market Price      4.61%         13.20%         10.57%         3.91%         3.85%   
NAV      6.46%         23.99%         12.63%         3.58%         4.04%   

 

All Fund returns are net of fees and expenses.

 

* Cumulative return
(1) 

Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Total return, market price, NAV, market price distribution yield, and NAV distribution yield will fluctuate with changes in market conditions. For performance current to the most recent month-end, visit www.pimco.com or call (844) 33-PIMCO.

(2) 

Distribution yields are not performance and are calculated by annualizing the most recent distribution per share and dividing by the NAV or Market Price, as applicable, as of the reported date. Distributions may be comprised of ordinary income, net capital gains, and/or a return of capital (ROC) of your investment in the Fund. Because the distribution rate may include a ROC, it should not be confused with yield or income. If the Fund estimates that a portion of its distribution may be comprised of amounts from sources other than net investment income, the Fund will notify shareholders of the estimated composition of such distribution through a Section 19 Notice. Please refer to the most recent Section 19 Notice, if applicable, for additional information regarding the composition of distributions. Please visit www.pimco.com for most recent Section 19 Notice, if applicable. Final determination of a distribution’s tax character will be made on Form 1099 DIV sent to shareholders each January.

(3) 

Represents regulatory leverage outstanding, as a percentage of total managed assets. Regulatory leverage may include preferred shares, tender option bond transactions, reverse repurchase agreements, and other borrowings (collectively “Leverage”). Total managed assets refer to total assets (including assets attributable to Leverage that may be outstanding) minus accrued liabilities (other than liabilities representing Leverage).

 

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Portfolio Insights

 

»  

The municipal bond market generally generated positive results during the six-month reporting period ended November 30, 2014. The municipal bond market, as measured by Barclays Municipal Bond Index, posted positive returns during all six months of the reporting period. Supporting the municipal market were generally improving fundamentals, attractive valuations and falling longer-term interest rates. In addition, investor demand for municipal securities was largely solid. All told, the municipal market gained 2.45% during the six months ended November 30, 2014. In comparison, the overall taxable fixed income market, as measured by Barclays U.S. Aggregate Bond Index, gained 1.91% during the same period, while Barclays AMT-Free California Long Municipal Index (the Index) returned 4.43%.

 

»  

The fund’s overweight duration position relative to the Index contributed to performance as municipal yields moved lower across most portions of the curve. The fund’s overweight exposures to the Revenue-Backed and Health Care sectors were beneficial for results as both sectors outperformed the municipal bond market.

 

»  

The fund’s underweight exposures to the Water and Sewer and Education sectors detracted from results, as both sectors outperformed the municipal bond market. Select exposure to the Lease-Backed sector detracted from results versus the Index.

 

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PIMCO New York Municipal Income Fund II    Symbol on NYSE -  PNI

 

Allocation Breakdown       
New York      93.9%   
Ohio      3.2%   
Short-Term Instruments      1.3%   
Florida      0.6%   
Louisiana      0.5%   
Other      0.5%   

 

   

% of Investments, at value as of 11/30/14

Fund Information (as of November 30, 2014)(1)  
Market Price      $11.98   
NAV      $11.35   
Premium/(Discount) to NAV      5.55%   
Market Price Distribution Yield (2)      6.64%   
NAV Distribution Yield (2)      7.00%   
Regulatory Leverage Ratio (3)      41.11%   
 

 

Average Annual Total Return for the period ended November 30, 2014  
     6 Month*      1 Year      5 Year      10 Year      Commencement
of Operations
(06/28/02)
 
Market Price      3.35%         23.72%         9.59%         5.16%         5.07%   
NAV      7.16%         22.17%         9.76%         5.03%         5.13%   

 

All Fund returns are net of fees and expenses.

 

* Cumulative return
(1) 

Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Current performance may be lower or higher than performance shown. Investment return and the principal value of an investment will fluctuate. Total return, market price, NAV, market price distribution yield, and NAV distribution yield will fluctuate with changes in market conditions. For performance current to the most recent month-end, visit www.pimco.com or call (844) 33-PIMCO.

(2) 

Distribution yields are not performance and are calculated by annualizing the most recent distribution per share and dividing by the NAV or Market Price, as applicable, as of the reported date. Distributions may be comprised of ordinary income, net capital gains, and/or a return of capital (ROC) of your investment in the Fund. Because the distribution rate may include a ROC, it should not be confused with yield or income. If the Fund estimates that a portion of its distribution may be comprised of amounts from sources other than net investment income, the Fund will notify shareholders of the estimated composition of such distribution through a Section 19 Notice. Please refer to the most recent Section 19 Notice, if applicable, for additional information regarding the composition of distributions. Please visit www.pimco.com for most recent Section 19 Notice, if applicable. Final determination of a distribution’s tax character will be made on Form 1099 DIV sent to shareholders each January.

(3) 

Represents regulatory leverage outstanding, as a percentage of total managed assets. Regulatory leverage may include preferred shares, tender option bond transactions, reverse repurchase agreements, and other borrowings (collectively “Leverage”). Total managed assets refer to total assets (including assets attributable to Leverage that may be outstanding) minus accrued liabilities (other than liabilities representing Leverage).

 

12   PIMCO CLOSED-END FUNDS    


Table of Contents

Portfolio Insights

 

»  

The municipal bond market generally generated positive results during the six-month reporting period ended November 30, 2014. The municipal bond market, as measured by Barclays Municipal Bond Index, posted positive returns during all six months of the reporting period. Supporting the municipal market were generally improving fundamentals, attractive valuations and falling longer-term interest rates. In addition, investor demand for municipal securities was largely solid. All told, the municipal market gained 2.45% during the six months ended November 30, 2014. In comparison, the overall taxable fixed income market, as measured by Barclays U.S. Aggregate Bond Index, gained 1.91% during the same period, while Barclays AMT-Free New York Long Municipal Bond Index (the Index) returned 4.23%.

 

»  

The fund’s overweight duration position relative to the Index contributed to performance as municipal yields moved lower across most portions of the curve. The fund’s overweight exposures to the Revenue-Backed and Industrial Revenue sectors were beneficial for results as both sectors outperformed the municipal bond market.

 

»  

The fund’s underweight exposure to the Water and Sewer sector detracted from results, as it outperformed the municipal bond market. Select exposure to the Special Tax and Electric Utility sectors detracted from results versus the Index.

 

  SEMIANNUAL REPORT   NOVEMBER 30, 2014    13


Table of Contents

Financial Highlights

 

Selected Per Common Share Data for the
Year or Period Ended:
  Net Asset
Value
Beginning
of Year
or Period
    Net
Investment
Income  (a)
    Net Realized/
Unrealized
Gain (Loss)
    Net
Increase in
Net Assets
Resulting
from
Investment
Operations
    Dividends
on Preferred
Shares
from Net
Investment
Income
    Net Increase
(Decrease) in
Net Assets
Applicable
to Common
Shareholders
Resulting from
Investment
Operations
    Distributions
to Common
Shareholders
from  Net
Investment
Income
    Tax Basis
Return
of
Capital
 

PIMCO Municipal Income Fund II

               

11/30/2014+

  $   11.94      $ 0.40      $ 0.28      $ 0.68      $ (0.00 )^    $ 0.68      $ (0.39   $ 0.00   

05/31/2014

    12.17        0.81        (0.25     0.56        (0.01     0.55        (0.78     0.00   

05/31/2013

    11.91        0.82        0.23        1.05        (0.01     1.04        (0.78     0.00   

05/31/2012

    10.12        0.88        1.70        2.58        (0.01     2.57        (0.78     0.00   

05/31/2011

    10.77        0.91        (0.75     0.16        (0.03     0.13        (0.78     0.00   

05/31/2010

    8.97        0.88        1.73        2.61        (0.03     2.58        (0.78     0.00   

PIMCO California Municipal Income Fund II

               

11/30/2014+

  $ 8.61      $   0.34      $ 0.20      $ 0.54      $ (0.00 )^    $ 0.54      $ (0.32   $ 0.00   

05/31/2014

    8.93        0.68          (0.26       0.42          (0.01       0.41          (0.66       (0.07

05/31/2013

    8.65        0.69        0.35        1.04        (0.01     1.03        (0.68     (0.07

05/31/2012

    7.38        0.71        1.32        2.03        (0.01     2.02        (0.70     (0.05

05/31/2011

    8.11        0.74        (0.70     0.04        (0.02     0.02        (0.75     0.00   

05/31/2010

    7.48        0.76        0.67        1.43        (0.03     1.40        (0.77     0.00   

PIMCO New York Municipal Income Fund II

               

11/30/2014+

  $ 10.98      $ 0.37      $ 0.40      $ 0.77      $ (0.00 )^    $ 0.77      $ (0.40   $ 0.00   

05/31/2014

    11.32        0.75        (0.28     0.47        (0.01     0.46        (0.80     0.00   

05/31/2013

    11.37        0.79        (0.02     0.77        (0.02     0.75        (0.80     0.00   

05/31/2012

    10.10        0.85        1.24        2.09        (0.02     2.07        (0.80     0.00   

05/31/2011

    10.90        0.88        (0.85     0.03        (0.03     0.00        (0.80     0.00   

05/31/2010

    9.56        0.98        1.19        2.17        (0.03     2.14        (0.80     0.00   

 

+ Unaudited
* Annualized
^ Reflects an amount rounding to less than 0.005.
(a) 

Per share amounts based on average number of common shares outstanding during the year or period.

(b) 

Total investment return is calculated assuming a purchase of a common share at the market price on the first day and a sale of a common share at the market price on the last day of each year or period reported. Dividends and distributions, if any, are assumed, for purposes of this calculation, to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Total investment return does not reflect brokerage commissions in connection with the purchase or sale of Fund shares.

(c) 

Calculated on the basis of income and expenses applicable to both common and preferred shares relative to the average net assets of common shareholders.

(d) 

Interest expense relates to the liability for Floating Rate Notes issued in connection with Inverse Floater transactions and/or participation in reverse repurchase agreement transactions. See Note 5(b) in the Notes to Financial Statements for more information.

 

14   PIMCO CLOSED-END FUNDS     See Accompanying Notes


Table of Contents

(Unaudited)

 

Total
Distributions
to Common
Shareholders
    Net Asset
Value End
of Year
or Period
    Market
Price End
of Year
or Period
    Total
Investment
Return  (b)
    Net Assets
Applicable
to Common
Shareholders
End of
Year or
Period (000s)
    Ratio of
Expenses to
Average
Net Assets (c)(d)
    Ratio of
Expenses to
Average
Net Assets
Excluding
Waivers (c)
    Ratio of
Expenses to
Average
Net  assets
Excluding
Interest
Expense (c)
    Ratio of
Expenses to
Average
Net Assets
Excluding
Interest
Expense
and
Waivers (c)
    Ratio of Net
Investment
Income to
Average
Net Assets (c)
    Preferred
Shares
Asset
Coverage
Per Share
    Portfolio
Turnover
Rate
 
                     
$   (0.39   $ 12.23      $ 11.90        0.40   $ 748,107        1.16 %*      1.16 %*      1.12 %*      1.12 %*      6.64 %*    $ 75,960        2
  (0.78     11.94        12.25        7.76        730,088        1.21        1.21        1.16        1.16        7.22          74,733        16   
  (0.78     12.17        12.19        3.41        741,368        1.16        1.17        1.11        1.12        6.74        75,501        16   
  (0.78     11.91        12.54        28.70        722,161        1.19        1.26        1.11        1.18        8.04        74,192        26   
  (0.78     10.12        10.45        1.30        610,800        1.37        1.37        1.24        1.24        8.80        66,606        21   
  (0.78     10.77        11.12        25.49        645,589        1.38        1.38        1.24        1.24        8.77        68,974        6   
                     
$ (0.32   $ 8.83      $ 9.61        4.61   $ 280,598        1.33 %*      1.33 %*      1.23 %*      1.23 %*      7.72 %*    $ 68,036        1
  (0.73     8.61        9.52        (1.76     273,289        1.41        1.41        1.30        1.30        8.51        66,915        14   
  (0.75     8.93        10.51        11.41        282,181        1.34        1.35        1.23        1.24        7.65        68,279        13   
  (0.75     8.65        10.15        19.59        272,570        1.44        1.52        1.24        1.32        8.99        66,804        25   
  (0.75     7.38        9.21        7.53        231,486        1.55        1.55        1.37        1.37        9.73        60,503        15   
  (0.77     8.11        9.33        16.44        252,816        1.56        1.56        1.33        1.33        9.78        63,773        9   
                     
$ (0.40   $ 11.35      $ 11.98        3.35   $ 124,886        1.40 %*      1.40 %*      1.34 %*      1.34 %*      6.71 %*    $ 64,520        2
  (0.80     10.98        12.01        7.83        120,520        1.51        1.51        1.45        1.45        7.30        63,139        5   
  (0.80     11.32        12.01        4.14        123,685        1.42        1.43        1.33        1.34        6.78        64,140        25   
  (0.80     11.37        12.29        20.97        123,667        1.45        1.53        1.36        1.44        7.86        64,135        18   
  (0.80     10.10        10.92        3.03        109,256        1.55        1.55        1.44        1.44        8.46        59,574        7   
  (0.80       10.90          11.42        19.92          117,161        1.53        1.53        1.43        1.43        9.51        62,073        5   

 

  SEMIANNUAL REPORT   NOVEMBER 30, 2014    15


Table of Contents

Statements of Assets and Liabilities

 

(Unaudited)

November 30, 2014

 

(Amounts in thousands, except per share amounts)    PIMCO
Municipal
Income Fund II
     PIMCO
California
Municipal
Income Fund II
     PIMCO
New York
Municipal
Income Fund II
 

Assets:

        

Investments, at value

                          

Investments in securities*

   $   1,149,647       $    476,419       $   209,744   

Cash

     554         567         514   

Receivable for investments sold

     219         0         0   

Interest receivable

     18,392         7,561         2,976   

Other assets

     38         36         18   
       1,168,850         484,583         213,252   

Liabilities:

        

Borrowings & Other Financing Transactions

                          

Payable for floating rate notes issued

   $ 44,388       $ 38,863       $ 8,195   

Payable for investments purchased

     4,322         0         0   

Distributions payable to common shareholders

     3,978         1,707         729   

Dividends payable to preferred shareholders

     5         2         1   

Accrued management fees

     625         256         123   

Other liabilities

     425         157         318   
       53,743         40,985         9,366   

Preferred Shares ($0.00001 par value and $25,000 liquidation preference per share applicable to an aggregate of 14,680, 6,520, and 3,160 shares issued and outstanding, respectively)

     367,000         163,000         79,000   

Net Assets Applicable to Common Shareholders

   $ 748,107       $ 280,598       $ 124,886   

Composition of Net Assets Applicable to Common Shareholders:

        

Common Shares:

                          

Par value ($0.00001 per share)

   $ 1       $ 0      $ 0  

Paid in capital

     809,386         410,733         148,699   

Undistributed (overdistributed) net investment income

     24,554         (1,367      835   

Accumulated net realized (loss)

     (195,056      (192,094      (43,076

Net unrealized appreciation

     109,222         63,326         18,428   
     $ 748,107       $ 280,598       $ 124,886   

Common Shares Issued and Outstanding

     61,192         31,769         11,005   

Net Asset Value Per Common Share

   $ 12.23       $ 8.83       $ 11.35   

Cost of Investments in Securities

   $ 1,040,419       $ 413,093       $ 191,299   

* Includes repurchase agreements of:

   $ 0       $ 4,000       $ 0   

 

 

Amount is less than $500.

 

16   PIMCO CLOSED-END FUNDS     See Accompanying Notes


Table of Contents

Statements of Operations

 

Six Months Ended November 30, 2014 (Unaudited)                     
(Amounts in thousands)    PIMCO
Municipal
Income Fund II
     PIMCO
California
Municipal
Income Fund II
     PIMCO
New York
Municipal
Income Fund II
 

Investment Income:

        

Interest

   $   28,717       $   12,498       $   4,965   

Total Income

     28,717         12,498         4,965   

Expenses:

        

Management fees

     3,682         1,486         696   

Auction agent fees and commissions

     288         134         66   

Interest expense

     162         138         37   

Trustee fees and related expenses

     31         12         6   

Auction rate preferred shares related expenses

     7         7         7   

Miscellaneous expense

     2         1         1   

Operating expenses pre-transition (a)

                          

Custodian and accounting agent

     39         21         16   

Audit and tax services

     13         11         10   

Shareholder communications

     13         6         4   

New York Stock Exchange listing

     16         8         7   

Transfer agent

     7         6         7   

Legal

     5         2         1   

Insurance

     6         3         2   

Total Expenses

     4,271         1,835         860   

Net Investment Income

     24,446         10,663         4,105   

Net Realized Gain (Loss):

        

Investments in securities

     (57      65         54   

Net Realized Gain (Loss)

     (57      65         54   

Net Change in Unrealized Appreciation:

        

Investments in securities

     17,053         6,493         4,353   

Net Change in Unrealized Appreciation

     17,053         6,493         4,353   

Net Gain

     16,996         6,558         4,407   

Net Increase in Net Assets Resulting from Investment Operations

     41,442         17,221         8,512   

Dividends on Preferred Shares from Net Investment Income

     (189      (84      (40

Net Increase in Net Assets Applicable to Common Shareholders Resulting from Investment Operations

   $ 41,253       $ 17,137       $ 8,472   

 

(a) 

These expenses were incurred by the Fund prior to the close of business on September 5, 2014. Subsequent to the close of business on September 5, 2014, any such operating expenses are borne by PIMCO.

 

  SEMIANNUAL REPORT   NOVEMBER 30, 2014    17


Table of Contents

Statements of Changes in Net Assets

 

 

     PIMCO
Municipal Income Fund II
 
(Amounts in thousands)    Six Months Ended
November 30, 2014
(Unaudited)
     Year Ended
May 31, 2014
 

Increase (Decrease) in Net Assets from:

     

Operations:

     

Net investment income

   $ 24,446       $ 49,179   

Net realized gain (loss)

     (57      (3,169

Net change in unrealized appreciation (depreciation)

     17,053         (11,994

Net increase resulting from operations

     41,442         34,016   

Dividends on Preferred Shares from Net Investment Income

     (189      (426

Net increase in net assets applicable to common shareholders resulting from operations

     41,253         33,590   

Distributions to Common Shareholders**:

     

From net investment income

     (23,863      (47,596

Tax basis return of capital

     0         0   

Total Distributions to Common Shareholders

     (23,863      (47,596

Common Share Transactions:

     

Issued as reinvestment of distributions

     629         2,726   

Total Increase (Decrease) in Net Assets

     18,019         (11,280

Net Assets Applicable to Common Shareholders:

     

Beginning of period

     730,088         741,368   

End of period*

   $   748,107       $   730,088   

* Including undistributed (overdistributed) net investment income of:

   $ 24,554       $ 24,160   

** Common Share Transactions:

     

Shares issued as reinvestment of distributions

     52         243   

 

18   PIMCO CLOSED-END FUNDS     See Accompanying Notes


Table of Contents

 

PIMCO
California Municipal Income Fund II
    PIMCO
New York Municipal Income Fund II
 
Six Months Ended
November 30, 2014
(Unaudited)
    Year Ended
May 31, 2014
    Six Months Ended
November 30, 2014
(Unaudited)
    Year Ended
May 31, 2014
 
     
     
$ 10,663      $ 21,384      $ 4,105      $ 8,148   
  65        (3,108     54        (309
  6,493        (4,794     4,353        (2,765
  17,221        13,482        8,512        5,074   
  (84     (190     (40     (91
  17,137        13,292        8,472        4,983   
     
  (10,239     (20,949     (4,370     (8,711
  0        (2,253     0        0   
  (10,239     (23,202     (4,370     (8,711
     
  411        1,018        264        563   
  7,309        (8,892     4,366        (3,165
     
  273,289        282,181        120,520        123,685   
$   280,598      $   273,289      $   124,886      $   120,520   
$ (1,367   $ (1,707   $ 835      $ 1,140   
     
  46        113        24        54   

 

  SEMIANNUAL REPORT   NOVEMBER 30, 2014    19


Table of Contents

Schedule of Investments PIMCO Municipal Income Fund II

 

 

 

        PRINCIPAL
AMOUNT
(000S)
        MARKET
VALUE
(000S)
 
INVESTMENTS IN SECURITIES 153.7%   
       
MUNICIPAL BONDS & NOTES 151.2%   
       
ALABAMA 4.5%   

Alabama Docks Department State Revenue Bonds, Series 2010

   

6.000% due 10/01/2040

  $     2,000      $     2,297   

Birmingham-Baptist Medical Centers Special Care Facilities Financing Authority, Alabama Revenue Bonds, Series 2005

    

5.000% due 11/15/2030

      1,000          1,011   

Jefferson County, Alabama Sewer Revenue Bonds, Series 2013

   

0.000% due 10/01/2050 (b)

      21,000          12,472   

6.500% due 10/01/2053

      16,000          18,100   
       

 

 

 
          33,880   
       

 

 

 
       
ARIZONA 12.5%   

Arizona Health Facilities Authority Revenue Bonds, Series 2008

   

5.000% due 01/01/2035

      3,500          3,735   

5.500% due 01/01/2038

      2,860          3,095   

Industrial Development Authority of the County, Arizona of Pima Revenue Bonds, Series 2008

   

5.000% due 09/01/2039

      29,700          31,855   

Industrial Development Authority of the County, Arizona of Pima Revenue Bonds, Series 2010

   

5.250% due 10/01/2040

      1,500          1,632   

Pinal County, Arizona Electric District No. 3 Revenue Bonds, Series 2011

   

5.250% due 07/01/2036

      1,750          1,972   

5.250% due 07/01/2041

      3,700          4,135   

Salt River Project Agricultural Improvement & Power District, Arizona Revenue Bonds, Series 2009

   

5.000% due 01/01/2039 (c)

      10,000          11,123   

Salt Verde Financial Corp., Arizona Revenue Bonds, Series 2007

   

5.000% due 12/01/2032

      9,000          10,221   

5.000% due 12/01/2037

      22,400          25,565   
       

 

 

 
            93,333   
       

 

 

 
       
CALIFORNIA 20.1%   

Bay Area Toll Authority, California Revenue Bonds, Series 2008

   

5.000% due 04/01/2034

      1,430          1,633   

Bay Area Toll Authority, California Revenue Bonds, Series 2010

   

5.000% due 10/01/2029

      6,000          6,798   

Bay Area Toll Authority, California Revenue Bonds, Series 2013

   

5.250% due 04/01/2048

      5,000          5,697   
        PRINCIPAL
AMOUNT
(000S)
        MARKET
VALUE
(000S)
 

California Health Facilities Financing Authority Revenue Bonds, (NPFGC/IBC Insured), Series 2007

   

5.000% due 11/15/2042

  $     6,300      $     6,726   

California Health Facilities Financing Authority Revenue Bonds, Series 2010

   

5.000% due 11/15/2036

      1,500          1,694   

9.539% due 11/15/2036 (d)

      5,000          6,320   

California Health Facilities Financing Authority Revenue Bonds, Series 2011

   

6.000% due 08/15/2042

      3,000          3,595   

California Municipal Finance Authority Revenue Bonds, Series 2011

   

7.750% due 04/01/2031

      2,875          3,526   

California State General Obligation Bonds, Series 2007

   

5.000% due 11/01/2032

      2,925          3,204   

5.000% due 06/01/2037

      1,590          1,712   

California State General Obligation Bonds, Series 2008

   

5.125% due 08/01/2036

      5,200          5,757   

5.250% due 03/01/2038

      2,500          2,728   

California State General Obligation Bonds, Series 2009

   

6.000% due 04/01/2038

      9,500          11,194   

California State General Obligation Bonds, Series 2010

   

5.250% due 11/01/2040

      5,945          6,817   

5.500% due 03/01/2040

      5,750          6,580   

California Statewide Communities Development Authority Revenue Bonds, (FHA Insured), Series 2009

    

6.625% due 08/01/2029

      4,890          5,950   

6.750% due 02/01/2038

      17,415            20,924   

California Statewide Communities Development Authority Revenue Bonds, Series 2007

   

5.750% due 11/01/2017

      1,935          2,126   

California Statewide Communities Development Authority Revenue Bonds, Series 2010

   

5.000% due 11/01/2040

      1,000          1,094   

California Statewide Communities Development Authority Revenue Bonds, Series 2011

   

5.000% due 12/01/2041

      1,000          1,103   

6.000% due 08/15/2042

      5,690          6,819   

6.500% due 11/01/2021

      630          726   

Hayward Unified School District, California General Obligation Bonds, Series 2008

   

5.000% due 08/01/2033

      2,000          2,122   

Indian Wells Redevelopment Agency, California Tax Allocation Bonds, (AMBAC Insured), Series 2006

   

4.750% due 09/01/2034

      1,500          1,532   

Los Angeles Community College District, California General Obligation Bonds, (FGIC Insured), Series 2007

    

5.000% due 08/01/2032

      2,000          2,190   
 

 

20   PIMCO CLOSED-END FUNDS     See Accompanying Notes


Table of Contents

(Unaudited)

November 30, 2014

 

 

        PRINCIPAL
AMOUNT
(000S)
        MARKET
VALUE
(000S)
 

Los Angeles Department of Water & Power, California Revenue Bonds, (AMBAC Insured), Series 2007

    

5.000% due 07/01/2039

  $     4,000      $     4,337   

Los Angeles Unified School District, California General Obligation Bonds, (AMBAC Insured), Series 2005

    

5.000% due 07/01/2030

      5,000          5,140   

M-S-R Energy Authority, California Revenue Bonds, Series 2009

   

6.500% due 11/01/2039

      1,750          2,395   

Montebello Unified School District, California General Obligation Bonds, (AGM Insured), Series 2008

    

5.000% due 08/01/2033

      2,000          2,208   

Newport Beach, California Revenue Bonds, Series 2011

   

5.875% due 12/01/2030

      3,000          3,818   

Peralta Community College District, California General Obligation Bonds, Series 2009

   

5.000% due 08/01/2039

      500          559   

San Diego County, California Water Authority Certificates of Participation Bonds, (AGM Insured), Series 2008

    

5.000% due 05/01/2038

      2,000          2,188   

San Marcos Unified School District, California General Obligation Bonds, Series 2011

   

5.000% due 08/01/2038

      3,300          3,645   

Santa Clara County, California Financing Authority Revenue Bonds, (AMBAC Insured), Series 2007

   

5.750% due 02/01/2041

      2,000          2,188   

Torrance, California Revenue Bonds, Series 2010

  

5.000% due 09/01/2040

      4,725          5,073   
       

 

 

 
            150,118   
       

 

 

 
       
COLORADO 2.3%   

Aurora, Colorado Revenue Bonds, Series 2010

  

5.000% due 12/01/2040

      5,800          6,256   

Colorado Health Facilities Authority Revenue Bonds, Series 2007

   

5.900% due 08/01/2037

      1,000          1,008   

Colorado Health Facilities Authority Revenue Bonds, Series 2010

   

5.000% due 01/01/2040

      6,045          6,628   

Denver Health & Hospital Authority, Colorado Revenue Bonds, Series 2010

   

5.625% due 12/01/2040

      1,000          1,104   

Public Authority for Colorado Energy Revenue Bonds, Series 2008

   

6.500% due 11/15/2038

      1,430          1,972   
       

 

 

 
          16,968   
       

 

 

 
       
        PRINCIPAL
AMOUNT
(000S)
        MARKET
VALUE
(000S)
 
CONNECTICUT 0.3%   

Connecticut State Health & Educational Facility Authority Revenue Bonds, Series 2011

   

5.000% due 07/01/2041

  $     1,000      $     1,081   

Harbor Point Infrastructure Improvement District, Connecticut Tax Allocation Bonds, Series 2010

   

7.875% due 04/01/2039

      1,250          1,494   
       

 

 

 
          2,575   
       

 

 

 
       
FLORIDA 8.0%   

Brevard County, Florida Health Facilities Authority Revenue Bonds, Series 2009

   

7.000% due 04/01/2039

      1,000          1,171   

Broward County, Florida Airport System Revenue Bonds, Series 2009

   

5.375% due 10/01/2029

      600          689   

Broward County, Florida Airport System Revenue Bonds, Series 2012

   

5.000% due 10/01/2042

      12,100          13,281   

Broward County, Florida Water & Sewer Utility Revenue Bonds, Series 2009

   

5.250% due 10/01/2034 (c)

      8,500          9,637   

Clearwater, Florida Water & Sewer Revenue Bonds, Series 2009

   

5.250% due 12/01/2039

      1,000          1,136   

Florida Development Finance Corp. Revenue Notes, Series 2011

   

6.500% due 06/15/2021

      320          345   

Florida State General Obligation Bonds, Series 2009

  

5.000% due 06/01/2038 (c)

      7,900          8,864   

Highlands County, Florida Health Facilities Authority Revenue Bonds, Series 2005

   

5.000% due 11/15/2031

      1,830          1,873   

Highlands County, Florida Health Facilities Authority Revenue Bonds, Series 2008

   

5.625% due 11/15/2037

      3,000          3,432   

Leesburg, Florida Revenue Bonds, Series 2002

  

5.500% due 07/01/2032

      3,000          3,001   

Orlando-Orange County, Florida Expressway Authority Revenue Bonds, Series 2010

   

5.000% due 07/01/2040

      10,000          10,987   

Sarasota County, Florida Health Facilities Authority Revenue Bonds, Series 2007

   

5.750% due 07/01/2037

      500          502   

Sumter Landing Community Development District, Florida Revenue Bonds, (NPFGC Insured), Series 2005

    

4.750% due 10/01/2035

      5,000          5,005   
       

 

 

 
            59,923   
       

 

 

 
 

 

See Accompanying Notes   SEMIANNUAL REPORT   NOVEMBER 30, 2014    21


Table of Contents

Schedule of Investments PIMCO Municipal Income Fund II (Cont.)

 

 

 

        PRINCIPAL
AMOUNT
(000S)
        MARKET
VALUE
(000S)
 
GEORGIA 0.6%   

Atlanta Department of Aviation, Georgia Revenue Bonds, Series 2010

   

5.000% due 01/01/2040

  $     1,500      $     1,665   

Medical Center Hospital Authority, Georgia Revenue Bonds, Series 2007

   

5.250% due 07/01/2037

      2,775          2,803   
       

 

 

 
          4,468   
       

 

 

 
       
ILLINOIS 8.8%   

Chicago, Illinois Motor Fuel Tax Revenue Bonds, (AGC Insured), Series 2008

   

5.000% due 01/01/2038

      1,250          1,331   

Chicago, Illinois Special Assessment Bonds, Series 2003

   

6.625% due 12/01/2022

      2,277          2,281   

6.750% due 12/01/2032

      5,406          5,415   

Hillside Village, Illinois Tax Allocation Bonds, Series 2008

   

6.550% due 01/01/2020

      3,495          3,874   

7.000% due 01/01/2028

      2,900          3,212   

Illinois Finance Authority Revenue Bonds, Series 2007

   

5.750% due 05/15/2031

      2,500          2,580   

6.000% due 03/01/2037 ^

      250          50   

Illinois Finance Authority Revenue Bonds, Series 2009

   

5.500% due 07/01/2037 (c)

      5,000          5,819   

7.125% due 11/15/2037

      700          842   

Illinois Finance Authority Revenue Bonds, Series 2010

   

6.000% due 05/01/2028

      2,000          2,286   

Illinois Sports Facilities Authority Revenue Bonds, (AMBAC Insured), Series 2001

   

5.500% due 06/15/2030

      37,000          38,317   
       

 

 

 
            66,007   
       

 

 

 
       
INDIANA 0.7%   

Indiana Finance Authority Revenue Bonds, Series 2009

   

6.000% due 08/01/2039

      1,500          1,750   

Vigo County, Indiana Hospital Authority Revenue Bonds, Series 2007

   

5.800% due 09/01/2047

      990          1,002   

Vigo County, Indiana Hospital Authority Revenue Bonds, Series 2011

   

7.500% due 09/01/2022

      1,900          2,329   
       

 

 

 
          5,081   
       

 

 

 
       
        PRINCIPAL
AMOUNT
(000S)
        MARKET
VALUE
(000S)
 
IOWA 3.4%   

Iowa Finance Authority Revenue Bonds, Series 2007

  

6.750% due 11/15/2042

  $     4,500      $     4,783   

Iowa Finance Authority Revenue Bonds, Series 2013

  

5.250% due 12/01/2025

      6,000          6,353   

Iowa Finance Authority Revenue Bonds, Series 2014

  

2.000% due 05/15/2056

      144          1   

2.700% due 11/15/2046

      769          308   

Iowa Finance Authority Revenue Notes, Series 2013

  

5.500% due 12/01/2022

      5,000          5,237   

Iowa Tobacco Settlement Authority Revenue Bonds, Series 2005

   

5.600% due 06/01/2034

      10,350          9,111   
       

 

 

 
            25,793   
       

 

 

 
       
KANSAS 0.2%   

Kansas Development Finance Authority Revenue Bonds, Series 2009

   

5.750% due 11/15/2038

      500          575   

Manhattan, Kansas Revenue Bonds, Series 2007

  

5.000% due 05/15/2036

      850          851   
       

 

 

 
          1,426   
       

 

 

 
       
KENTUCKY 0.1%   

Kentucky Economic Development Finance Authority Revenue Bonds, Series 2010

   

6.375% due 06/01/2040

      1,000          1,154   
       

 

 

 
       
LOUISIANA 1.1%   

Louisiana Local Government Environmental Facilities & Community Development Authority Revenue Bonds, Series 2010

    

5.875% due 10/01/2040

      750          861   

6.000% due 10/01/2044

      1,000          1,153   

6.500% due 11/01/2035

      450          542   

Louisiana Public Facilities Authority Revenue Bonds, Series 2007

   

5.500% due 05/15/2047

      3,300          3,470   

Louisiana Public Facilities Authority Revenue Bonds, Series 2011

   

6.500% due 05/15/2037

      2,000          2,355   
       

 

 

 
          8,381   
       

 

 

 
       
MARYLAND 1.9%   

Maryland Health & Higher Educational Facilities Authority Revenue Bonds, Series 2008

   

6.000% due 01/01/2043

      4,050          4,274   
 

 

22   PIMCO CLOSED-END FUNDS     See Accompanying Notes


Table of Contents

(Unaudited)

November 30, 2014

 

 

        PRINCIPAL
AMOUNT
(000S)
        MARKET
VALUE
(000S)
 

Maryland Health & Higher Educational Facilities Authority Revenue Bonds, Series 2010

   

6.250% due 01/01/2041

  $     1,400      $     1,579   

Maryland Health & Higher Educational Facilities Authority Revenue Bonds, Series 2011

   

5.000% due 08/15/2041

      2,380          2,575   

Maryland Health & Higher Educational Facilities Authority Revenue Bonds, Series 2014

   

5.000% due 07/01/2039

      5,000          5,507   
       

 

 

 
            13,935   
       

 

 

 
       
MASSACHUSETTS 1.3%   

Massachusetts Development Finance Agency Revenue Bonds, Series 2007

   

6.750% due 10/15/2037

      4,610          4,813   

Massachusetts Development Finance Agency Revenue Bonds, Series 2010

   

7.000% due 07/01/2042

      1,000          1,131   

7.625% due 10/15/2037

      565          629   

Massachusetts State College Building Authority Revenue Bonds, Series 2009

   

5.500% due 05/01/2039

      2,900          3,366   
       

 

 

 
          9,939   
       

 

 

 
       
MICHIGAN 0.7%   

Detroit, Michigan General Obligation Bonds, Series 2010

   

5.250% due 11/01/2035

      1,000          1,101   

Michigan Public Educational Facilities Authority Revenue Bonds, Series 2007

   

6.500% due 09/01/2037

      800          456   

Royal Oak Hospital Finance Authority, Michigan Revenue Bonds, Series 2009

   

8.250% due 09/01/2039

      3,000          3,818   
       

 

 

 
          5,375   
       

 

 

 
       
MINNESOTA 0.4%   

North Oaks, Minnesota Revenue Bonds, Series 2007

  

6.000% due 10/01/2033

      2,640          2,835   

St Louis Park, Minnesota Revenue Bonds, Series 2009

   

5.750% due 07/01/2039

      400          447   
       

 

 

 
          3,282   
       

 

 

 
       
MISSISSIPPI 0.0%   

Mississippi Development Bank Revenue Bonds, (AMBAC Insured), Series 1999

   

5.000% due 07/01/2024

      40          40   
       

 

 

 
       
        PRINCIPAL
AMOUNT
(000S)
        MARKET
VALUE
(000S)
 
MISSOURI 1.5%   

Lee’s Summit, Missouri Tax Allocation Bonds, Series 2011

   

5.625% due 10/01/2023

  $     530      $     562   

Missouri State Health & Educational Facilities Authority Revenue Bonds, Series 2013

   

5.000% due 11/15/2044

      10,000            10,887   
       

 

 

 
          11,449   
       

 

 

 
       
NEVADA 1.4%   

Clark County, Nevada General Obligation Bonds, Series 2006

   

4.750% due 11/01/2035 (c)

      10,000          10,456   
       

 

 

 
          10,456   
       

 

 

 
       
NEW HAMPSHIRE 0.3%   

New Hampshire Business Finance Authority Revenue Bonds, Series 2009

   

6.125% due 10/01/2039

      2,000          2,237   
       

 

 

 
       
NEW JERSEY 6.6%   

Burlington County, New Jersey Bridge Commission Revenue Bonds, Series 2007

   

5.625% due 01/01/2038

      950          975   

New Jersey Economic Development Authority Revenue Bonds, Series 1998

   

6.000% due 05/15/2028

      525          305   

New Jersey Economic Development Authority Revenue Bonds, Series 2010

   

5.875% due 06/01/2042

      2,000          2,202   

New Jersey Economic Development Authority Special Assessment Bonds, Series 2002

   

5.750% due 10/01/2021

      4,000          4,467   

New Jersey Health Care Facilities Financing Authority Revenue Bonds, Series 2007

   

5.750% due 07/01/2037

      1,500          1,536   

New Jersey Health Care Facilities Financing Authority Revenue Bonds, Series 2011

   

6.000% due 07/01/2037

      1,500          1,792   

New Jersey Health Care Facilities Financing Authority Revenue Bonds, Series 2013

   

5.500% due 07/01/2043

      4,000          4,633   

New Jersey Health Care Facilities Financing Authority Revenue Bonds, Series 2014

   

5.000% due 07/01/2044 (a)

      4,000          4,382   

New Jersey State Turnpike Authority Revenue Bonds, Series 2009

   

5.250% due 01/01/2040

      2,000          2,229   
 

 

See Accompanying Notes   SEMIANNUAL REPORT   NOVEMBER 30, 2014    23


Table of Contents

Schedule of Investments PIMCO Municipal Income Fund II (Cont.)

 

 

 

        PRINCIPAL
AMOUNT
(000S)
        MARKET
VALUE
(000S)
 

Tobacco Settlement Financing Corp., New Jersey Revenue Bonds, Series 2007

   

4.625% due 06/01/2026

  $     1,500      $     1,387   

4.750% due 06/01/2034

      3,300          2,499   

5.000% due 06/01/2041

      30,105          22,864   
       

 

 

 
          49,271   
       

 

 

 
       
NEW MEXICO 0.3%   

Farmington, New Mexico Revenue Bonds, Series 2010

   

5.900% due 06/01/2040

      2,000          2,226   
       

 

 

 
       
NEW YORK 20.4%   

Hudson Yards Infrastructure Corp., New York Revenue Bonds, Series 2011

   

5.250% due 02/15/2047

      33,500          37,154   

Metropolitan Transportation Authority, New York Revenue Bonds, Series 2011

   

5.000% due 11/15/2036

      3,880          4,333   

Nassau County, New York Industrial Development Agency Revenue Bonds, Series 2014

   

2.000% due 01/01/2049

      298          42   

6.700% due 01/01/2049

      825          793   

New York City, New York Water & Sewer System Revenue Bonds, Series 2005

   

5.000% due 06/15/2037 (c)

      2,830          2,898   

New York City, New York Water & Sewer System Revenue Bonds, Series 2007

   

4.750% due 06/15/2035 (c)

      4,000          4,298   

New York City, New York Water & Sewer System Revenue Bonds, Series 2009

   

5.000% due 06/15/2039

      2,000          2,229   

New York Liberty Development Corp. Revenue Bonds, Series 2005

   

5.250% due 10/01/2035 (c)

      11,505          13,797   

New York Liberty Development Corp. Revenue Bonds, Series 2010

   

5.125% due 01/15/2044

      1,000          1,106   

5.625% due 07/15/2047

      2,500          2,809   

6.375% due 07/15/2049

      1,250          1,423   

New York Liberty Development Corp. Revenue Bonds, Series 2011

   

5.000% due 12/15/2041

      10,000          11,125   

5.750% due 11/15/2051

      54,000          62,409   

New York Liberty Development Corp. Revenue Bonds, Series 2014

   

5.000% due 11/15/2044

      6,000          6,108   

New York State Dormitory Authority Revenue Bonds, Series 2010

   

5.500% due 07/01/2040

      1,750          2,008   
       

 

 

 
            152,532   
       

 

 

 
        PRINCIPAL
AMOUNT
(000S)
        MARKET
VALUE
(000S)
 
NORTH CAROLINA 0.1%   

North Carolina Medical Care Commission Revenue Bonds, Series 2006

   

5.100% due 10/01/2030

  $     550      $     554   
       

 

 

 
       
NORTH DAKOTA 0.5%   

Stark County, North Dakota Revenue Bonds, Series 2007

   

6.750% due 01/01/2033

      3,710          3,923   
       

 

 

 
       
OHIO 8.2%   

Buckeye Tobacco Settlement Financing Authority, Ohio Revenue Bonds, Series 2007

   

5.875% due 06/01/2047

      14,100          11,541   

6.500% due 06/01/2047

      33,740          29,800   

Hamilton County, Ohio Sales Tax Revenue Bonds, Series 2011

   

5.000% due 12/01/2030

      3,900          4,381   

Ohio Higher Educational Facility Commission Revenue Bonds, Series 2009

   

6.750% due 01/15/2039

      1,000          1,008   

Ohio State Revenue Bonds, Series 2009

  

5.500% due 01/01/2039

      3,000          3,374   

Ohio State Turnpike Commission Revenue Bonds, Series 2013

   

5.000% due 02/15/2048

      10,000          10,919   
       

 

 

 
            61,023   
       

 

 

 
       
OREGON 0.3%   

Clackamas County, Oregon Hospital Facility Authority Revenue Bonds, Series 2009

   

5.500% due 07/15/2035

      1,000          1,105   

Oregon Department of Administrative Services State Certificates of Participation Bonds, Series 2009

   

5.250% due 05/01/2039

      1,155          1,291   
       

 

 

 
          2,396   
       

 

 

 
       
PENNSYLVANIA 8.4%   

Berks County, Pennsylvania Municipal Authority Revenue Bonds, Series 2012

   

5.000% due 11/01/2044

      7,500          8,208   

Capital Region Water, Pennsylvania Revenue Bonds, Series 2007

   

6.000% due 09/01/2036 ^

      3,250          1,535   

Cumberland County, Pennsylvania Municipal Authority Revenue Bonds, Series 2008

   

5.625% due 07/01/2028

      1,000          1,044   

6.000% due 07/01/2035

      670          702   
 

 

24   PIMCO CLOSED-END FUNDS     See Accompanying Notes


Table of Contents

(Unaudited)

November 30, 2014

 

 

        PRINCIPAL
AMOUNT
(000S)
        MARKET
VALUE
(000S)
 

Luzerne County, Pennsylvania Industrial Development Authority Revenue Bonds, Series 2009

    

5.500% due 12/01/2039

  $     500      $     549   

Montgomery County Industrial Development Authority, Pennsylvania Revenue Bonds, (FHA Insured), Series 2010

    

5.375% due 08/01/2038

      8,465          9,532   

Pennsylvania Higher Educational Facilities Authority Revenue Bonds, Series 2010

   

5.000% due 03/01/2040

      400          438   

6.000% due 07/01/2043

      850          926   

Pennsylvania Turnpike Commission Revenue Bonds, Series 2013

   

5.000% due 12/01/2043

      10,000          10,995   

Philadelphia Hospitals & Higher Education Facilities Authority, Pennsylvania Revenue Bonds, Series 2012

    

5.625% due 07/01/2036

      1,000          1,070   

5.625% due 07/01/2042

      7,000          7,450   

Philadelphia, Pennsylvania General Obligation Bonds, (AGM Insured), Series 2008

   

5.250% due 12/15/2032

      17,000          19,047   

Philadelphia, Pennsylvania Water & Wastewater Revenue Bonds, Series 2009

   

5.250% due 01/01/2036

      500          545   

Westmoreland County Industrial Development Authority, Pennsylvania Revenue Bonds, Series 2010

    

5.125% due 07/01/2030

      1,000          1,068   
       

 

 

 
          63,109   
       

 

 

 
       
RHODE ISLAND 7.5%   

Tobacco Settlement Financing Corp., Rhode Island Revenue Bonds, Series 2002

   

6.250% due 06/01/2042

      56,200            56,213   
       

 

 

 
       
SOUTH CAROLINA 2.9%   

Greenwood County, South Carolina Revenue Bonds, Series 2009

   

5.375% due 10/01/2039

    1,000          1,100   

South Carolina State Public Service Authority Revenue Bonds, Series 2013

   

5.500% due 12/01/2053

      10,000          11,326   

South Carolina State Public Service Authority Revenue Bonds, Series 2014

   

5.500% due 12/01/2054

      8,000          9,062   
       

 

 

 
          21,488   
       

 

 

 
       
        PRINCIPAL
AMOUNT
(000S)
        MARKET
VALUE
(000S)
 
TENNESSEE 1.9%   

Claiborne County, Tennessee Industrial Development Board Revenue Bonds, Series 2009

   

6.625% due 10/01/2039

  $     1,750      $     1,940   

Johnson City Health & Educational Facilities Board, Tennessee Revenue Bonds, Series 2010

   

6.000% due 07/01/2038

      1,000          1,134   

Sullivan County, Tennessee Health Educational & Housing Facilities Board Revenue Bonds, Series 2006

    

5.250% due 09/01/2036

      500          523   

Tennessee Energy Acquisition Corp. Revenue Bonds, Series 2006

   

5.000% due 02/01/2023

      3,000          3,474   

5.000% due 02/01/2027

      6,000          6,948   
       

 

 

 
            14,019   
       

 

 

 
       
TEXAS 20.6%   

Aubrey Independent School District, Texas General Obligation Bonds, (PSF Insured), Series 2002

   

5.500% due 02/15/2033

      130          130   

Austin Trust, Texas General Obligation Bonds, Series 2007

   

4.750% due 04/01/2036 (c)

      17,500          18,332   

Dallas, Texas Revenue Bonds, (AGC Insured), Series 2009

   

5.250% due 08/15/2038

      2,500          2,764   

Grand Parkway Transportation Corp., Texas Revenue Bonds, Series 2013

   

5.000% due 04/01/2053

      21,000          23,022   

Harris County, Texas Cultural Education Facilities Finance Corp. Revenue Bonds, Series 2009

   

5.250% due 10/01/2029

      3,750          4,353   

5.500% due 10/01/2039

      12,700          14,336   

HFDC of Central Texas, Inc. Revenue Bonds, Series 2006

   

5.500% due 02/15/2037

      700          704   

North Harris County, Texas Regional Water Authority Revenue Bonds, Series 2008

   

5.250% due 12/15/2033

      10,300          11,570   

5.500% due 12/15/2038

      10,300          11,686   

North Texas Tollway Authority Revenue Bonds, Series 2008

   

5.625% due 01/01/2033

      5,000          5,529   

5.750% due 01/01/2033

      1,200          1,329   

North Texas Tollway Authority Revenue Bonds, Series 2011

   

5.000% due 01/01/2038

      5,750          6,228   

5.500% due 09/01/2041

      1,300          1,515   

San Juan Higher Education Finance Authority, Texas Revenue Bonds, Series 2010

   

6.700% due 08/15/2040

      250          299   
 

 

See Accompanying Notes   SEMIANNUAL REPORT   NOVEMBER 30, 2014    25


Table of Contents

Schedule of Investments PIMCO Municipal Income Fund II (Cont.)

 

        PRINCIPAL
AMOUNT
(000S)
        MARKET
VALUE
(000S)
 

Tarrant County, Texas Cultural Education Facilities Finance Corp. Revenue Bonds, Series 2009

   

6.250% due 11/15/2029

  $     3,000      $     3,489   

Texas Municipal Gas Acquisition & Supply Corp. Revenue Bonds, Series 2008

   

6.250% due 12/15/2026

      19,380          23,995   

Texas Municipal Gas Acquisition & Supply Corp. Revenue Bonds, Series 2012

   

5.000% due 12/15/2026

      5,000          5,566   

Texas State General Obligation Bonds, Series 2005

  

4.750% due 04/01/2035 (c)

      10,025          10,302   

Texas State General Obligation Bonds, Series 2010

  

9.038% due 04/01/2037 (d)

      5,365          6,369   

Texas State Public Finance Authority Charter School Finance Corp. Revenue Bonds, Series 2007

   

5.875% due 12/01/2036

      1,000          1,099   

Wise County, Texas Revenue Bonds, Series 2011

  

8.000% due 08/15/2034

      1,000          1,186   
       

 

 

 
            153,803   
       

 

 

 
       
VIRGINIA 0.3%   

Fairfax County, Virginia Industrial Development Authority Revenue Bonds, Series 2009

   

5.500% due 05/15/2035

      1,000          1,147   

James City County, Virginia Economic Development Authority Revenue Bonds, Series 2013

   

2.000% due 10/01/2048 ^

      412          13   

6.000% due 06/01/2043

      1,273          1,191   
       

 

 

 
          2,351   
       

 

 

 
       
WASHINGTON 2.3%   

Washington Health Care Facilities Authority Revenue Bonds, (AGC Insured), Series 2008

   

6.000% due 08/15/2039

      1,300          1,537   

Washington Health Care Facilities Authority Revenue Bonds, Series 2007

   

6.125% due 08/15/2037

      13,000          14,287   

Washington Health Care Facilities Authority Revenue Bonds, Series 2009

   

7.375% due 03/01/2038

      1,000          1,264   
       

 

 

 
          17,088   
       

 

 

 
        PRINCIPAL
AMOUNT
(000S)
        MARKET
VALUE
(000S)
 
WEST VIRGINIA 0.6%   

West Virginia Economic Development Authority Revenue Bonds, Series 2010

   

5.375% due 12/01/2038

  $     2,000      $     2,201   

West Virginia Hospital Finance Authority Revenue Bonds, Series 2011

   

9.125% due 10/01/2041

      1,955          2,156   
       

 

 

 
          4,357   
       

 

 

 
       
WISCONSIN 0.2%   

Wisconsin Health & Educational Facilities Authority Revenue Bonds, Series 2009

   

6.625% due 02/15/2039

      1,000          1,178   
       

 

 

 

Total Municipal Bonds & Notes
(Cost $1,022,123)

    1,131,351   
       

 

 

 
       
SHORT-TERM INSTRUMENTS 2.5%   
       
SHORT-TERM NOTES 2.5%   

Federal Home Loan Bank

  

0.066% due 03/25/2015

      4,500          4,499   

0.091% due 03/13/2015

      7,000          6,998   

0.096% due 03/06/2015

      6,800          6,799   
       

 

 

 
          18,296   
       

 

 

 
Total Short-Term Instruments
(Cost $18,296)
          18,296   
       

 

 

 
Total Investments in Securities
(Cost $1,040,419)
          1,149,647   
       

 

 

 
Total Investments 153.7%
(Cost $1,040,419)
      $       1,149,647   
Preferred Shares (49.1%)         (367,000
Other Assets and Liabilities, net (4.6%)           (34,540
       

 

 

 
Net Assets Applicable to Common Shareholders 100.0%       $     748,107   
       

 

 

 
 

NOTES TO SCHEDULE OF INVESTMENTS (AMOUNTS IN THOUSANDS):

 

^ Security is in default.
(a) When-issued security.
(b) Security becomes interest bearing at a future date.
(c) Residual Interest Bonds held in trust—Securities represent underlying bonds transferred to a separate securitization trust established in a tender option bond transaction in which the Fund acquired the residual interest certificates. These securities serve as collateral in a financing transaction.

 

26   PIMCO CLOSED-END FUNDS     See Accompanying Notes


Table of Contents

(Unaudited)

November 30, 2014

 

 

(d) Inverse Floater—The interest rate shown bears an inverse relationship to the interest rate on another security or the value of an index. The interest rate disclosed reflects the rate in effect on November 30, 2014.

 

FAIR VALUE MEASUREMENTS

 

The following is a summary of the fair valuations according to the inputs used as of November 30, 2014 in valuing the Fund’s assets and liabilities:

 

Category and Subcategory   Level 1     Level 2     Level 3     Fair
Value at
11/30/2014
 

Investments in Securities, at Value

       

Municipal Bonds & Notes

       

Alabama

  $     0      $ 33,880      $ 0      $ 33,880   

Arizona

    0        93,333        0        93,333   

California

    0            150,118        0        150,118   

Colorado

    0        16,968        0        16,968   

Connecticut

    0        2,575        0        2,575   

Florida

    0        59,923        0        59,923   

Georgia

    0        4,468        0        4,468   

Illinois

    0        66,007        0        66,007   

Indiana

    0        5,081        0        5,081   

Iowa

    0        25,793        0        25,793   

Kansas

    0        1,426        0        1,426   

Kentucky

    0        1,154        0        1,154   

Louisiana

    0        8,381        0        8,381   

Maryland

    0        13,935        0        13,935   

Massachusetts

    0        9,939        0        9,939   

Michigan

    0        5,375        0        5,375   

Minnesota

    0        3,282        0        3,282   

Mississippi

    0        40        0        40   

Missouri

    0        11,449        0        11,449   

Nevada

    0        10,456        0        10,456   

New Hampshire

    0        2,237        0        2,237   

New Jersey

    0        49,271        0        49,271   

New Mexico

    0        2,226        0        2,226   

New York

    0        151,697        835            152,532   

North Carolina

    0        554        0        554   

North Dakota

    0        3,923        0        3,923   

Ohio

    0        61,023        0        61,023   

Oregon

    0        2,396        0        2,396   

Pennsylvania

    0        63,109        0        63,109   

Rhode Island

    0        56,213        0        56,213   

South Carolina

    0        21,488        0        21,488   

Tennessee

    0        14,019        0        14,019   

Texas

    0        153,803        0        153,803   

Virginia

    0        2,351        0        2,351   

Washington

    0        17,088        0        17,088   

West Virginia

    0        4,357        0        4,357   

Wisconsin

    0        1,178        0        1,178   

Short-Term Instruments

       

Short-Term Notes

    0        18,296        0        18,296   

Total Investments

  $     0      $     1,148,812      $     835      $     1,149,647   

 

There were no significant transfers between Level 1, 2, and 3 during the period ended November 30, 2014.

 

See Accompanying Notes   SEMIANNUAL REPORT   NOVEMBER 30, 2014    27


Table of Contents

Schedule of Investments PIMCO California Municipal Income Fund II

 

 

 

        PRINCIPAL
AMOUNT
(000S)
        MARKET
VALUE
(000S)
 
INVESTMENTS IN SECURITIES 169.8%   
       
MUNICIPAL BONDS & NOTES 164.7%   
       
CALIFORNIA 158.5%   

Alhambra, California Revenue Bonds, Series 2010

  

7.625% due 01/01/2040

  $     2,000      $     2,179   

California County Tobacco Securitization Agency Revenue Bonds, Series 2002

   

5.875% due 06/01/2043

      1,800          1,800   

California County Tobacco Securitization Agency Revenue Bonds, Series 2006

   

5.600% due 06/01/2036

      1,500          1,312   

California Health Facilities Financing Authority Revenue Bonds, (NPFGC/IBC Insured), Series 2007

   

5.000% due 11/15/2042

      4,220          4,505   

California Health Facilities Financing Authority Revenue Bonds, Series 2007

   

5.250% due 11/15/2046 (a)

      12,195          13,064   

California Health Facilities Financing Authority Revenue Bonds, Series 2008

   

5.250% due 11/15/2040

      3,700          4,269   

California Health Facilities Financing Authority Revenue Bonds, Series 2009

   

5.750% due 09/01/2039

      250          285   

6.000% due 07/01/2039

      3,000          3,422   

6.500% due 11/01/2038

      500          612   

California Health Facilities Financing Authority Revenue Bonds, Series 2011

   

5.000% due 08/15/2035

      1,000          1,115   

California Health Facilities Financing Authority Revenue Bonds, Series 2012

   

5.000% due 11/15/2034

      1,000          1,080   

5.000% due 11/15/2040

      4,000          4,424   

5.000% due 08/15/2051

      8,755          9,628   

California Infrastructure & Economic Development Bank Revenue Bonds, Series 2008

   

5.250% due 02/01/2038

      175          190   

California Infrastructure & Economic Development Bank Revenue Bonds, Series 2013

   

5.000% due 02/01/2039

      10,000            11,109   

California Municipal Finance Authority Revenue Bonds, Series 2011

   

7.750% due 04/01/2031

      1,130          1,386   

California Pollution Control Financing Authority Revenue Bonds, Series 2010

   

5.250% due 08/01/2040

      1,500          1,616   

California State General Obligation Bonds, Series 2006

   

5.000% due 09/01/2031

      2,500          2,680   

California State General Obligation Bonds, Series 2009

   

6.000% due 04/01/2038

      10,000          11,783   
        PRINCIPAL
AMOUNT
(000S)
        MARKET
VALUE
(000S)
 

California State General Obligation Bonds, Series 2013

   

5.000% due 11/01/2043

  $     7,000      $     7,895   

California State Public Works Board Revenue Bonds, Series 2008

   

5.000% due 03/01/2033

      7,915          9,027   

California State Public Works Board Revenue Bonds, Series 2009

   

5.750% due 10/01/2030

      3,000          3,555   

6.000% due 11/01/2034

      2,000          2,364   

California State Public Works Board Revenue Bonds, Series 2011

   

5.000% due 12/01/2029

      2,000          2,282   

California State Public Works Board Revenue Bonds, Series 2013

   

5.000% due 03/01/2038

      2,500          2,782   

California Statewide Communities Development Authority Revenue Bonds, (FGIC Insured), Series 2007

    

5.750% due 07/01/2047

      3,700          4,106   

California Statewide Communities Development Authority Revenue Bonds, (FHA Insured), Series 2009

    

6.625% due 08/01/2029

      2,135          2,598   

6.750% due 02/01/2038

      7,860          9,444   

California Statewide Communities Development Authority Revenue Bonds, Series 2006

   

5.000% due 11/01/2029

      500          504   

California Statewide Communities Development Authority Revenue Bonds, Series 2007

   

5.150% due 07/01/2030

      250          252   

5.250% due 07/01/2042

      1,250          1,234   

California Statewide Communities Development Authority Revenue Bonds, Series 2008

   

5.250% due 11/15/2048

      5,490          5,941   

5.500% due 07/01/2031

      3,040          3,378   

California Statewide Communities Development Authority Revenue Bonds, Series 2010

   

7.000% due 07/01/2040

      3,760          4,191   

7.500% due 06/01/2042

      1,000          1,113   

California Statewide Communities Development Authority Revenue Bonds, Series 2011

   

6.000% due 08/15/2042

      5,600          6,711   

California Statewide Communities Development Authority Revenue Bonds, Series 2012

   

5.000% due 04/01/2042

      9,705            10,684   

5.375% due 05/15/2038

      4,500          5,030   

Chabot-Las Positas Community College District, California General Obligation Bonds, (AMBAC Insured), Series 2006

    

0.000% due 08/01/2036

      17,305          5,885   

0.000% due 08/01/2037

      5,000          1,613   

0.000% due 08/01/2043

      15,000          3,555   
 

 

28   PIMCO CLOSED-END FUNDS     See Accompanying Notes


Table of Contents

(Unaudited)

November 30, 2014

 

 

        PRINCIPAL
AMOUNT
(000S)
        MARKET
VALUE
(000S)
 

Chula Vista, California Revenue Bonds, Series 2004

  

5.875% due 02/15/2034

  $     1,000      $     1,188   

Coronado Community Development Agency, California Tax Allocation Bonds, (AMBAC Insured), Series 2005

    

4.875% due 09/01/2035

      8,685          8,926   

Desert Community College District, California General Obligation Bonds, (AGM Insured), Series 2007

    

0.000% due 08/01/2046

      25,000          4,726   

Desert Community College District, California General Obligation Bonds, (AGM Insured), Series 2009

    

9.519% due 08/01/2032 (b)

      6,035          7,134   

Fremont Community Facilities District No. 1, California Special Tax Bonds, Series 2005

   

5.300% due 09/01/2030

      1,440          1,447   

Golden State, California Tobacco Securitization Corp. Revenue Bonds, (AMBAC Insured), Series 2005

   

5.000% due 06/01/2045

      13,885          14,172   

Golden State, California Tobacco Securitization Corp. Revenue Bonds, (FGIC Insured), Series 2005

   

5.000% due 06/01/2045

      6,000          6,124   

Golden State, California Tobacco Securitization Corp. Revenue Bonds, Series 2005

   

5.000% due 06/01/2045

      3,500          3,572   

Golden State, California Tobacco Securitization Corp. Revenue Bonds, Series 2007

   

5.125% due 06/01/2047

      8,500          6,493   

5.750% due 06/01/2047

      37,415            31,365   

Imperial Irrigation District, California Revenue Bonds, Series 2011

   

5.000% due 11/01/2041

      4,500          4,971   

Irvine Unified School District, California Special Tax Bonds, Series 2010

   

6.700% due 09/01/2035

      515          619   

JPMorgan Chase Putters/Drivers Trust, California Revenue Bonds, Series 2009

   

5.000% due 07/01/2037 (a)

      5,000          5,494   

JPMorgan Chase Putters/Drivers Trust, California Revenue Bonds, Series 2010

   

9.489% due 05/15/2034 (b)

      7,500          9,080   

JPMorgan Chase Putters/Drivers Trust, California Revenue Notes, Series 2009

   

5.000% due 04/01/2039 (a)

      20,000          22,845   </