Pimco’s Gross is buying bank bonds
The founder and managing director of Pacific Investment Management Co. is buying debt of investment banks.
Bill Gross, the founder and managing director of Pacific Investment Management Co., is buying debt of investment banks.
Mr. Gross, who oversees the $103 billion Total Bond Fund, is purchasing new corporate bond issues from Bank of America Corp. of Charlotte, N.C., Merrill Lynch & Co. of New York, Deutsche Bank AG of Frankfurt, Germany and Goldman Sachs Group Inc, of New York, he said to Bloomberg.
Mr. Gross said that coupons of more than 6% on some debt of financial companies are enough to entice him to purchase them.
“We like that yield,” Mr. Gross said, from the company’s Newport Beach, Calif., headquarters.
Yields on financial bonds rose in the past two months as losses from subprime mortgages spread, freezing credit markets and leaving banks unable to offload debt of leveraged buyouts they had agreed to finance.
Credit-default swaps linked to some finance companies, measuring the risk that a bond may default, are also attractive, Mr. Gross said.
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