Pimco Buys Struggling Assets To Support Banks Looking To Offload Battered Companies: Report

In recent months, Pacific Investment Management Co has spent more than $2 billion to snap up consumer companies that have struggled due to the cost of living crisis, surging inflation, and rising interest rates.
The purchases are part of a broader strategy at the firm to capitalize on depressed prices, Bloomberg reported citing people familiar with the matter.
The fund has $1.8 trillion of assets under management, making it well placed for such moves but with risks as the global economy is on the edge of recession.
“For this to pay off over the long term, two things have to be true: first, you need to be correct about the investment thesis; and second, you need to have a good handle on liquidity,” said Mara Dobrescu, an analyst at Morningstar in Paris. “Historically, Pimco has been able to do both with a fair degree of success.”
At the end of May, Pimco bought €600 million of loans and €545 million of bonds backing the unsuccessful sale of Wm Morrison Supermarkets Plc.
Last month, Pimco snapped up €1 billion of loans backing Apollo Global Management Inc’s APO acquisition of Worldline SA’s payment terminals unit, also at a steep discount.
“You buy at a price that fits your view of the credit,” said Noel Hebert, director of credit research at Bloomberg Intelligence.