Inside Pimco's Bet on Risky European Bank Bonds

The transcript discusses PIMCO's investment in tier one bonds, particularly those of Deutsche Bank, amidst market concerns and volatility. It highlights the risks associated with 81 securities, market reactions, and the strategies of asset managers. Despite the volatility, PIMCO believes in the potential returns, while other firms remain cautious. The discussion also touches on distressed investments and the current market levels of Deutsche Bank bonds.

Why is PIMCO investing in tier one bonds when other firms are hesitant?

• They are following a trend set by other firms.

• They believe the bonds are undervalued.

• They have done thorough research and are selective in their investments.

• They are looking to diversify their portfolio.

What is a significant risk associated with 81 securities?

• Currency fluctuations

• Coupon cancellations

• Government regulations

• High inflation rates

What return can investors expect from tier one bonds?

• Between 6% and 10%

• Between 3% and 5%

• Over 10%

• Between 1% and 3%

How does Deutsche Bank view the trading level of their debt?

• As stable and secure

• As highly profitable

• As highly volatile

• As not trading at a distress level

What strategy is a big French asset manager adopting regarding 81 securities?

• Increasing their exposure

• Maintaining their current exposure

• Cutting their exposure and demanding higher yields

• Avoiding them completely