1933 Act File No. 333-236669

1940 Act File No. 811-23211

 

 

EXPLANATORY NOTE

This Amendment is organized as follows: (a) Prospectus; (b) Statement of Additional Information; and (c) Part C

Information relating to the Registrant.

Prospectus

PIMCO Flexible Credit Income Fund

 

 

PIMCO Flexible Credit Income Fund (the “Fund”) is a diversified, closed-end

management investment company that continuously offers its shares of beneficial interest, par

value of $0.00001 per share (the “Common Shares”), and is operated as an “interval fund.”

The Fund currently offers five separate classes of Common Shares: Institutional Class,

Class A-1, Class A-2, Class A-3 and Class A-4.

 

The Fund seeks to provide attractive risk-adjusted returns and

current income.

 

The Fund will invest, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment

purposes) in a portfolio of debt instruments of varying maturities. The Fund may invest without

limitation

in investment grade sovereign debt

denominated in the relevant country’s local currency with less than 1 year remaining to maturity (“short term investment grade sovereign debt”),

including short term investment grade sovereign debt issued by emerging market issuers. The Fund may invest up to 40% of its total assets in

securities and instruments that are economically tied to “emerging market” countries other than investments in short term investment grade

sovereign debt issued by emerging market issuers, where as noted above there is no limit. The Fund may also invest directly in foreign

currencies of emerging market countries. As a matter of fundamental policy, the Fund will normally invest at least 25% of its total assets (i.e.,

concentrate) in mortgage-related assets issued by government agencies or other governmental entities or by private originators or issuers.

Subject to applicable limits under the Investment Company Act of 1940, as amended (the “1940 Act”), the Fund may also invest up to 20% of its

total assets in common stocks, common shares of other investment companies (including those advised by PIMCO), such as open-end or

closed-end management investment companies and exchange-traded funds, and equity securities of private funds or real estate investment

trusts. The Fund limits its investments in private equity funds and hedge funds that rely on the exclusion from the definition of “investment

company” in Section 3(c)(1) or Section 3(c)(7) of the 1940 Act to no more than 15% of the Fund’s total assets at the time of investment. For the

avoidance of doubt, such limit shall not apply to investments in, for example, REITs and asset-backed issuers, including, without limitation,

collateralized loan obligations, collateralized bond obligations and other collateralized debt obligations, mortgage-backed securities,

collateralized mortgage obligations and tender options bonds. Common stocks include common shares and other common equity interest issued

by public or private issuers. To the extent consistent with the applicable liquidity requirements for interval funds under Rule 23c-3 of the 1940 Act,

the Fund may invest without

limitation

in illiquid investments.

The Fund may invest in and/or originate loans, including, without limitation, residential and/or commercial real estate or mortgage-related loans,

consumer loans or other types of loans, which may be in the form of, and without limitation as to a loan’s level of seniority within a capital

structure, whole loans, assignments, participations, secured and unsecured notes, senior and second lien loans, mezzanine loans, bridge loans

or similar investments. The Fund may invest in and/or originate loans to corporations and/or other legal entities and individuals, including foreign

(non-U.S.) entities and individuals.

The Fund may make investments directly or indirectly through one or more wholly owned and controlled subsidiaries. Such investments may be

in shares, certificates, notes or other securities issued by a special purpose entity (“SPE”) sponsored by an alternative lending platform or its

affiliates (the “Sponsor”) that represent the right to receive principal and interest payments due on pools of whole loans or fractions of whole

loans, which may (but may not) be issued by the Sponsor, held by the SPE (“Alt Lending ABS”). Any such Alt Lending ABS may be backed by

consumer, residential or other loans.

When acquiring and/or originating loans, or purchasing Alt Lending ABS, the Fund is not restricted by any particular borrower credit criteria.

Accordingly, certain loans acquired or originated by the Fund or underlying any Alt Lending ABS purchased by the Fund may be subprime in

quality, or may become subprime in quality.

The Fund may invest indirectly in U.S. and non-U.S. real estate investments through one or more controlled subsidiaries structured as real estate

investment trusts (each a “REIT Subsidiary”) and/or through joint ventures with affiliated or unaffiliated third parties. A REIT Subsidiary acts as an

investment vehicle for the Fund in order to effect certain investments on behalf of the Fund, consistent with the Fund’s investment objective and

policies.

 

The Fund is an “interval fund,” a type of fund that, in order to provide liquidity to shareholders, has adopted

a fundamental investment policy to make quarterly offers to repurchase between 5% and 25% of its outstanding Common Shares at net asset

value. Subject to applicable law and approval of the Fund’s Board of Trustees, for each quarterly repurchase offer, the Fund currently expects to

offer to repurchase 5% of the Fund’s outstanding Common Shares at net asset value, which is the minimum amount permitted.

 

The Fund’s investment manager is Pacific Investment Management Company LLC. As of September 30,

2026

, PIMCO

had approximately $

2.29

trillion in assets under management, including $

1.90

trillion in third-party client assets.

Institutional Class, Class A-1, Class A-2, Class A-3 and Class A-4 Common Shares are offered in this prospectus. Each share class represents

an investment in the same portfolio of investments, but each class has its own expense structure and arrangements for shareholder services or

distribution, which allows you to choose the class that best fits your situation and eligibility requirements. Class A-1, Class A-2, Class A-3 and

Class A-4 Common Shares are primarily offered and sold to retail investors by certain broker-dealers that are members of the Financial Industry

Regulatory Authority and that have agreements with PIMCO Investments LLC, the Fund's principal underwriter and distributor, to sell Class A-1,

Class A-2, Class A-3 and/or Class A-4 Common Shares, but may be made available through other financial firms, including banks and trust

companies and to specified benefit plans and other retirement accounts. Only certain investors are eligible to purchase Institutional

Class Common Shares. See “Plan of Distribution – Share Classes.”

The minimum initial investment for Institutional Class Common Shares is $1 million per account, except that the minimum investment may be

higher or lower for certain financial firms that submit orders on behalf of their customers, including retail investors in separately managed

accounts (i.e., wrap accounts) managed by PIMCO, the Trustees and certain employees and their extended family members of PIMCO and its

affiliates. There is no minimum subsequent investment amount. See “Plan of Distribution – Share Classes.”

The minimum initial investment for Class A-1, Class A-2, Class A-3 and Class A-4 Common Shares is $2,500 per account, except that the

minimum investment may be higher or lower for certain financial firms that submit orders on behalf of their customers, the Trustees and certain

employees and their extended family members of PIMCO and its affiliates. The minimum subsequent investment amount for Class A-1,

Class A-2, Class A-3 and Class A-4 Common Shares is $50. See “Plan of Distribution – Purchasing Shares.”

The Fund’s Common Shares are sold at a public offering price equal to their net asset value per share, plus a sales charge, where applicable.

See “Plan of Distribution-Purchasing Shares.”

Please read this prospectus carefully before deciding whether to invest and retain it for future reference. It sets forth concisely the information

about the Fund that a prospective investor ought to know before investing in the Fund. The Fund has filed with the Securities and Exchange

Commission (“SEC”) a Statement of Additional Information dated October

30

,

2026

, as it may be supplemented from time to time, (the

“Statement of Additional Information”), containing additional information about the Fund. The Statement of Additional Information is incorporated

by reference into this prospectus, which means it is part of this prospectus for legal purposes. The Fund also produces both annual and

semi-annual reports that will contain important information about the Fund. Copies of the Statement of Additional Information and the Fund’s

annual and semi-annual reports, when available, may be obtained upon request, without charge, by calling 844.312.2113 or by writing to the

Fund at Regulatory Document Request, 650 Newport Center Drive, Newport Beach, California 92660. You may also call this toll-free telephone

number to request other information about the Fund or to make shareholder inquiries. The Statement of Additional Information and the most

recent annual and semiannual reports are available free of charge on the Fund’s website at www.pimco.com. Information on, or accessible

through, the Fund’s website is not a part of, and is not incorporated into, this prospectus. You may also access reports and other information

about the Fund on the EDGAR Database on the SEC’s Internet site at www.sec.gov. You may get copies of this information, with payment of a

duplication fee, by electronic request at the following e-mail address: publicinfo@sec.gov.

The Fund has not authorized anyone to provide you with information other than that contained or incorporated by reference in this prospectus.

The Fund does not take any responsibility for, and does not provide any assurances as to the reliability of, any other information that others may

give you. The Fund is not making an offer of these securities in any jurisdiction where the offer is not permitted. You should not assume that the

information contained in this prospectus is accurate as of any date other than the date on the front of this prospectus. The Fund’s business,

financial condition, results of operations and prospects may have changed since that date.

Prospectus Summary

The Fund is a diversified, closed-end management investment company

that continuously offers its Common Shares. The Fund is operated as an

“interval fund” (as defined below). The Fund currently offers five

separate classes of Common Shares: Institutional Class, Class A-1,

Class A-2, Class A-3 and Class A-4. The Fund commenced operations on

February 22, 2017, in connection with its initial public offering of

Institutional Class Common Shares. An investment in the Fund may not

be appropriate for all investors.

The Fund continuously offers its Common Shares through PIMCO

Investments LLC (the “Distributor”), as principal underwriter, on a best

efforts basis. Institutional Class, Class A-1 and Class A-3 Common

Shares are sold at their offering price, which is net asset value (“NAV”)

per share. While neither the Fund nor the Distributor impose an initial

sales charge on Institutional Class, Class A-1 or Class A-3 Common

Shares, if you buy Institutional Class, Class A-1 or Class A-3 Common

Shares through certain financial firms, they may directly charge you

transaction or other fees in such amount as they may determine. Please

consult your financial firm for additional information.

Unless you are eligible for a waiver, Class A-2 and Class A-4 Common

Shares are sold at a public offering price equal to their net asset value

plus an initial sales charge. The initial sales charge varies depending

upon the size of your purchase.

The minimum initial investment for Institutional Class Common Shares

is $1 million per account. The minimum initial investment for Class A-1,

Class A-2, Class A-3 and Class A-4 Common Shares is $2,500 per

account. These investment minimums may be higher or lower for certain

financial firms that submit orders on behalf of their customers, the

Trustees and certain employees and their extended family members of

Pacific Investment Management Company LLC (“PIMCO” or the

“Investment Manager”), the Fund’s investment manager, PIMCO and its

affiliates. There is no minimum subsequent investment amount for

Institutional Class Common Shares. The minimum subsequent

investment amount for Class A-1, Class A-2, Class A-3 and Class A-4

Common Shares is $50. Proceeds from the offering will be held by the

Fund's custodian.

For additional information regarding each share class please see “Plan

of Distribution—Share Classes” in this prospectus. The Fund reserves

the right in its sole discretion to reject any purchase order, in whole or in

The Fund is an “interval fund,” a type of fund that, in order to provide

liquidity to shareholders, has adopted a fundamental investment policy

to make quarterly offers to repurchase between 5% and 25% of its

outstanding Common Shares at NAV. Subject to applicable law and

approval of the Fund’s Board of Trustees (the “Board” or “Board of

Trustees”), for each quarterly repurchase offer, the Fund currently

expects to offer to repurchase 5% of the Fund’s outstanding Common

Shares at NAV, which is the minimum amount permitted. Written

notification of each quarterly repurchase offer (the “Repurchase Offer

Notice”) will be sent to shareholders at least 21 calendar days before

the repurchase request deadline (i.e., the date by which shareholders

can tender their Common Shares in response to a repurchase offer) (the

“Repurchase Request Deadline”). Subject to Board approval,

Repurchase Request Deadlines are expected to occur each February,

May, August and November, and Repurchase Offer Notices are expected

to be sent to shareholders each January, April, July and October

preceding each such Repurchase Request Deadline. The Fund’s Common

Shares are not listed on any securities exchange, and the Fund

anticipates that no secondary market will develop for its Common

Shares. Accordingly, shareholders may not be able to sell Common

Shares when and/or in the amount desired. Investors should consider

Common Shares of the Fund to be an illiquid investment. Thus, the

Common Shares are appropriate only as a long-term investment. In

addition, the Fund’s repurchase offers may subject the Fund and

shareholders to special risks. See “Principal Risks of the Fund —

Repurchase Offers Risk.”

When used in this prospectus, the term “invest” includes both direct

investing and indirect investing and the term “investments” includes

both direct investments and indirect investments. For example, the Fund

may invest indirectly by investing in derivatives or through wholly

owned and controlled subsidiaries (each, a “Subsidiary” and

collectively, the “Subsidiaries”). References herein to the Fund include,

as appropriate, Subsidiaries through which the Fund may gain exposure

to investments. The Fund may be exposed to the different types of

investments described below through its investments in its Subsidiaries.

The allocation of the Fund’s assets to a Subsidiary will vary over time

and will likely not include all of the different types of investments

described herein at any given time.

The Fund seeks to provide attractive risk-adjusted returns and current

income.

The Fund seeks to achieve its investment objective by investing,

under normal circumstances, across a wide array of global credit sectors,

including corporate, mortgage, consumer, emerging market and

municipal credit markets, and utilizing a flexible asset allocation strategy

among multiple public and private credit sectors in the global credit

markets, including corporate debt (including, among other things, fixed-,

variable- and floating-rate bonds, loans, convertible and contingent

convertible securities and stressed, distressed or defaulted debt

securities issued by U.S. or foreign (non-U.S.) corporations or other

business entities, including emerging market issuers), mortgage-related

and other consumer-related instruments, collateralized debt obligations,

including, without limitation, collateralized loan obligations,

government and sovereign debt, municipal bonds and other fixed-,

variable- and floating-rate income-producing securities of U.S. and

foreign issuers, including emerging market issuers. The Fund may invest

without

limitation

in investment grade debt securities and may invest

without

limitation

in below investment grade debt securities (commonly

referred to as “high yield” securities or “junk bonds”), including

securities of stressed, distressed or defaulted issuers. The types of

securities and instruments in which the Fund may invest are

summarized under “Portfolio Contents and Other Information” below.

No assurance can be given that the Fund’s investment objective will be

achieved, and you could lose all of your investment in the Fund.

 

In managing the Fund, PIMCO

employs an active approach to allocation among multiple credit sectors

based on, among other things, market conditions, valuation

assessments, economic outlook, credit market trends and other

economic factors. With PIMCO’s macroeconomic analysis as the basis

for top-down investment decisions, including geographic and credit

sector emphasis, the Fund expects to focus on seeking attractive

risk-adjusted returns across multiple credit sectors. PIMCO may choose

to focus on particular countries or regions, asset classes, industries and

sectors to the exclusion of others at any time and from time to time

based on market conditions and other factors. The relative value

assessment within credit sectors draws on PIMCO’s regional and sector

specialist insights. As a matter of fundamental policy, the Fund will

normally invest at least 25% of its total assets (i.e., concentrate) in

mortgage-related assets issued by government agencies or other

governmental entities or by private originators or issuers.

 

Once the Fund’s top-down,

portfolio positioning decisions have been made as described above,

PIMCO generally selects particular investments for the Fund by

employing a bottom-up, disciplined credit approach which is driven by

fundamental, independent research within each sector represented in

the Fund, with a focus on seeking to identify securities and other

instruments with solid and/or improving fundamentals.

 

PIMCO relies primarily on its own

analysis of the credit quality and risks associated with individual debt

instruments considered for the Fund, rather than relying exclusively on

rating agencies or third-party research. The Fund’s portfolio managers

utilize this information in an attempt to manage credit risk and/or to

identify issuers, industries and/or sectors that they believe are

undervalued and/or that offer potentially attractive yields relative to

PIMCO’s assessment of their credit characteristics. This aspect of

PIMCO’s capabilities will be particularly important to the extent that the

Fund invests in high yield securities and in securities of emerging market

issuers.

 

It is expected that the Fund normally will

have a short to intermediate average portfolio duration (i.e., within a

zero to eight year range), as calculated by the Investment Manager,

although it may be shorter or longer at any time depending on market

conditions and other factors. While the Fund seeks to maintain a short

to intermediate average portfolio duration, there is no limit on the

maturity or duration of any individual security in which the Fund may

invest. Duration is a measure used to determine the sensitivity of a

security’s price to changes in interest rates. For example, if the Fund has

an average portfolio duration of eight years, a 1% increase in interest

rates would tend to correspond to an 8% decrease in the value of the

Fund’s portfolio. The Fund’s duration strategy may entail maintaining a

negative average portfolio duration from time to time, meaning the

portfolio would tend to increase in value in response to an increase in

interest rates. For example, if the Fund has a negative average portfolio

duration, a 1% increase in interest rates would tend to correspond to a

1% increase in the value of the Fund’s portfolio for every year of

negative duration. A negative average portfolio duration would

potentially benefit the portfolio in an environment of rising market

interest rates, but would generally adversely impact the portfolio in an

environment of falling or neutral market interest rates.

The

Fund

may

use

various

 

derivatives strategies to manage (increase or decrease) the

dollar-weighted average effective duration of the Fund's portfolio.

PIMCO may also utilize certain strategies including, without limitation,

investments in structured notes or interest rate futures contracts or

swap, cap, floor or collar transactions, for the purpose of reducing the

interest rate sensitivity of the Fund’s portfolio, although there is no

assurance that it will do so or that such strategies will be successful. The

foregoing is a description of interest rate duration management only.

The credit spread duration of the Fund’s portfolio may vary, in some

cases significantly, from its interest rate duration.

 

The Fund will invest, under normal

circumstances, at least 80% of its net assets (plus any borrowings for

investment purposes) in a portfolio of debt instruments of varying

maturities (the “80% policy”). The Fund will not change its 80% policy

unless the Fund provides shareholders with the notice required by

Rule 35d-1 under the Investment Company Act of 1940, as it may be

amended from time to time (the “1940 Act”).

loans, delayed draw and delayed funding loans, revolving credit facilities

and loan participations and assignments); loans held and/or originated

by private financial institutions, including commercial and residential

mortgage loans, corporate loans and consumer loans (such as credit

card receivables, automobile loans and student loans) (“private credit

assets”); payment-in-kind securities; zero-coupon bonds;

inflation-indexed bonds issued by both governments and corporations;

structured notes, including hybrid or indexed securities; insurance-linked

instruments, catastrophe bonds and other event-linked bonds;

credit-linked notes; covenant-lite obligations; preferred securities;

convertible debt securities (i.e., debt securities that may be converted at

either a stated price or stated rate into underlying shares of common

stock), including synthetic convertible debt securities (i.e., instruments

created through a combination of separate securities that possess the

two principal characteristics of a traditional convertible security, such as

an income-producing security and the right to acquire an equity

security); and bank certificates of deposit, fixed time deposits and

bankers’ acceptances. The rate of interest on an income-producing

instrument may be fixed, floating or variable. At any given time and from

time to time substantially all of the Fund’s portfolio may consist of

below investment grade securities. The Fund may invest in debt

securities of stressed, distressed or defaulted issuers as well as in

defaulted or unrated investments and debtor-in-possession financings.

For tax or other structuring reasons, the Fund may purchase a loan or

debt investment structured as an equity interest (e.g., a joint venture

interest). The Fund may invest in any level of the capital structure of an

issuer of mortgage-backed or asset-backed instruments, including the

equity or “first loss” tranche. The Fund may invest in unsecured loans

and subordinated or mezzanine obligations, including second and lower

lien loans and the mezzanine and equity (or “first loss”) tranches of CLO

issues. The Fund’s investments in derivatives transactions and other

similar instruments (referred to collectively as “derivatives”) and other

synthetic instruments that have economic characteristics similar to debt

instruments will be counted toward satisfaction of the 80% policy.

The Fund may invest in and/or originate loans, including, without

limitation, residential and/or commercial real estate or mortgage-related

loans, consumer loans or other types of loans, which may be in the form

of, and without limitation as to a loan’s level of seniority within a capital

structure, whole loans, assignments, participations, secured and

unsecured notes, senior and second lien loans, mezzanine loans, bridge

loans or similar investments. The Fund may invest in and/or originate

loans to corporations and/or other legal entities and individuals,

including foreign (non-U.S.) entities and individuals. Such borrowers

may have credit ratings that are determined by one or more NRSROs or

PIMCO to be below investment grade. The loans the Fund invests in

and/or originates may vary in maturity and/or duration. The Fund is not

limited in the amount, size or type of loans it may invest in and/or

originate, including with respect to a single borrower or with respect to

borrowers that are determined to be below investment grade, other

than pursuant to any applicable law. The Fund’s investments in and/or

origination of loans may also be limited by the requirements the Fund

intends to observe under Subchapter M of the Internal Revenue Code of

1986, as amended (the “Code”) in order to

qualify as a regulated

investment company (a “RIC”).

As a matter of fundamental policy, the Fund will normally invest at least

25% of its total assets (i.e., concentrate) in mortgage-related assets

issued by government agencies or other governmental entities or by

private originators or issuers.

The Fund may, but is not required to, utilize various derivative strategies

(both long and short positions) involving the purchase or sale of futures

and forward contracts (including foreign currency exchange contracts),

call and put options, credit default swaps, total return swaps, basis

swaps and other swap agreements and other derivative instruments for

investment purposes, leveraging purposes or in an attempt to hedge

against market, credit, interest rate, currency and other risks in the

portfolio. The Fund may purchase and sell securities on a when-issued,

delayed delivery or forward commitment basis and may engage in short

sales. The Fund may also seek to obtain market exposure to the

securities in which it invests by entering into a series of purchase and

sale contracts. The Fund may use derivative instruments for other

purposes, including to seek to increase liquidity, provide efficient

portfolio management, broaden investment opportunities (including

taking short or negative positions), implement a tax or cash

management strategy, gain exposure to a particular security or segment

of the market, modify the effective duration of the Fund's portfolio

investments and/or enhance total return.

Subject to applicable limits under the 1940 Act, the Fund may also

invest up to 20% of its total assets in common stocks, common shares

of other investment companies (including those advised by PIMCO),

such as open-end or closed-end management investment companies

and exchange-traded funds, and equity securities of private funds or real

estate investment trusts (“REITs”). The Fund limits its investments in

private equity funds and hedge funds that rely on the exclusion from the

definition of “investment company” in Section 3(c)(1) or Section 3(c)(7)

of the 1940 Act to no more than 15% of the Fund’s total assets at the

time of investment. For the avoidance of doubt, such limit shall not

apply to investments in, for example, REITs and asset-backed issuers,

including, without limitation, collateralized loan obligations,

collateralized bond obligations and other collateralized debt obligations,

mortgage-backed securities, collateralized mortgage obligations and

tender options bonds. Common stocks include common shares and

other common equity interest issued by public or private issuers. For

these purposes, common stocks the Fund has received through the

conversion of a convertible security held by the Fund or in connection

with the restructuring of a debt security will not count towards this 20%

limit. The Fund may invest in securities that have not been registered for

public sale in the U.S. or relevant non-U.S.

jurisdictions

, including

without limitation securities eligible for purchase and sale pursuant to

Rule 144A under the Securities Act of 1933, as amended (the

“Securities Act”) or relevant provisions of applicable non-U.S. law, and

other securities issued in private placements. The Fund may invest in

securities of companies with any market capitalization, including small,

medium and large capitalizations.

The Fund may make investments directly or indirectly through one or

more Subsidiaries. Such investments may be in shares, certificates, notes

or other securities issued by a special purpose entity (“SPE”) sponsored

by an alternative lending platform or its affiliates (the “Sponsor”) that

represent the right to receive principal and interest payments due on

pools of whole loans or fractions of whole loans, which may (but may

not) be issued by the Sponsor, held by the SPE (“Alt Lending ABS”). Any

such Alt Lending ABS may be backed by consumer, residential or other

loans.

When acquiring and/or originating loans, or purchasing Alt Lending ABS,

the Fund is not restricted by any particular borrower credit criteria.

Accordingly, certain loans acquired or originated by the Fund or

underlying any Alt Lending ABS purchased by the Fund may be subprime

in quality, or may become subprime in quality.

The Fund may invest indirectly in U.S. and non-U.S. real estate

investments through one or more controlled subsidiaries structured as

real estate investment trusts (each a “REIT Subsidiary”) and/or through

joint ventures with affiliated or unaffiliated third parties. A REIT

Subsidiary acts as an investment vehicle for the Fund in order to effect

certain investments on behalf of the Fund, consistent with the Fund’s

investment objective and policies.

The Fund may make investments in debt instruments and other

securities directly or through one or more Subsidiaries. Each Subsidiary

may invest, for example, in whole loans or in shares, certificates, notes

or other securities representing the right to receive principal and interest

payments due on fractions of whole loans or pools of whole loans, or

any other security or other instrument that the Fund may hold directly.

References herein to the Fund include references to a Subsidiary in

respect of the Fund’s investment exposure. The allocation of the Fund’s

portfolio in a Subsidiary will vary over time and might not always

include all of the different types of investments described herein. The

Fund will treat a Subsidiary’s assets as assets of the Fund for purposes

of determining compliance with various provisions of the 1940 Act

applicable to the Fund, including those relating to investment policies

(Section 8), capital structure and leverage (Section 18) and affiliated

The Fund has received exemptive relief from the SEC that, to the extent

the Fund relies on such relief, permits it to (among other things)

co-invest with certain other persons, including certain affiliates of the

Investment Manager and certain public or private funds managed by the

Investment Manager and its affiliates, subject to certain terms and

conditions. The exemptive relief from the SEC with respect to

co-investments imposes extensive conditions on any co-investments

made in reliance on such relief.

The Fund's investments may utilize property-level debt financing

(mortgages on properties held indirectly through a REIT Subsidiary that

are not recourse to the Fund except in extremely limited circumstances).

Property-level debt will be incurred by special purpose entities (entities

established to own a real estate investment) or operating entities

(entities that hold and operate real estate investments) held by a REIT

Subsidiary or by joint ventures entered into by a REIT Subsidiary

(including through wholly owned special purpose companies). Such

entities or joint ventures would solely own real estate assets and would

borrow from a lender using the owned property as mortgage collateral.

Joint ventures entered into by the REIT Subsidiary (including through

wholly owned special purpose companies) would only include

arrangements in which the REIT Subsidiary does not primarily control

the joint venture. If such an entity or joint venture were to default on a

The Fund's investments in the REIT Subsidiary could cause the Fund to

recognize income in excess of cash received from the REIT Subsidiary

and, as a result, the Fund may be required to sell portfolio securities,

including when it is not advantageous to do so, in order to make

distributions.

The net proceeds the Fund obtains from reverse repurchase agreements,

credit default swaps, dollar rolls/buybacks or other forms of leverage

utilized will be invested in accordance with the Fund’s investment

objective and policies as described in this prospectus. So long as the rate

of return, net of applicable Fund expenses, on the debt obligations and

other Fund assets attributable to leverage exceeds the costs to the Fund

of the leverage it utilizes, the investment of the Fund’s assets

attributable to leverage will generate more income than will be needed

to pay the costs of the leverage. If so, and all other things being equal,

the excess may be used to pay higher dividends to Common

Shareholders than if the Fund were not so leveraged.

The 1940 Act generally prohibits the Fund from engaging in most forms

of leverage representing indebtedness (including the use of bank loans,

commercial paper or other credit facilities) unless immediately after the

issuance of the leverage the Fund has satisfied the asset coverage test

with respect to senior securities representing indebtedness prescribed

by the 1940 Act; that is, the value of the Fund’s total assets less all

liabilities and indebtedness not represented by senior securities (for

these purposes, “total net assets”) is at least 300% of the senior

securities representing indebtedness (effectively limiting the use of

leverage through senior securities representing indebtedness to 33

 1

∕

3

%

of the Fund’s total net assets, including assets attributable to such

leverage). In addition, the Fund is not permitted to declare any cash

dividend or other distribution on Common Shares unless, at the time of

such declaration, this asset coverage test is satisfied. The Fund's use of

derivatives transactions and other similar instruments is generally

subject to a value-at-risk leverage limit, derivatives risk management

program, and reporting requirements under Rule 18f-4 under the 1940

Act unless the Fund qualifies as a “limited derivatives user” as defined

in the rule or the Fund's use of such an instrument satisfies the

conditions of certain exemptions under the rule. Derivatives, reverse

repurchase agreements and other such instruments may represent a

form of economic leverage and create special risks. The use of these

forms of leverage increases the volatility of the Fund's investment

portfolio and could result in larger losses to Common Shareholders than

if these strategies were not used. To the extent that the Fund engages in

borrowings, it may prepay a portion of the principal amount of the

borrowing to the extent necessary in order to maintain the required

asset coverage. Failure to maintain certain asset coverage requirements

could result in an event of default by the Fund with respect to bank

borrowings or other arrangements.

Leveraging is a speculative technique and there are special risks and

costs involved. There is no assurance that the Fund will utilize reverse

repurchase agreements, credit default swaps, dollar rolls/buybacks or

The Fund also may borrow money in order to repurchase its shares or as

a temporary measure for extraordinary or emergency purposes,

including for the payment of dividends or the settlement of securities

transactions which otherwise might require untimely dispositions of

portfolio securities held by the Fund. Please see “Use of Leverage,”

“Principal Risks of the Fund—Leverage Risk” for additional information

regarding leverage and related risks.

PIMCO serves as the Investment Manager for the Fund. Subject to the

supervision of the Board, PIMCO is responsible for managing the

investment activities of the Fund and the Fund’s business affairs and

other administrative matters. Daniel J. Ivascyn, Alfred T. Murata, Jamie

Weinstein, Jason Steiner, Josh Anderson and Russell Gannaway serve as

portfolio managers collectively responsible for the Fund’s overall

investment portfolio, and Jason Duko, Matthew Tuten, Michael Chiao,

Vineet Agrawal and Will Dionisio each have portfolio management

responsibilities focused on particular sectors represented in the Fund’s

portfolio.

The Fund intends to distribute substantially all of its net investment

income to shareholders in the form of dividends. The Fund intends to

declare income dividends daily and distribute them monthly to

Unless shareholders specify otherwise, distributions will be reinvested in

Common Shares of the Fund in accordance with the Fund’s dividend

reinvestment plan (the “Plan”). The Fund may pay distributions from

sources that may not be available in the future and that are unrelated to

the Fund’s performance, such as from offering proceeds and/or

borrowings. See “Distributions” and “Dividend Reinvestment Plan.”

The Fund might not distribute all or a portion of any net capital gain for

a taxable year. If the Fund does not distribute all of its net capital gain

for a taxable year, it will pay federal income tax on the retained gain.

Each Common Shareholder of record as of the end of the Fund's taxable

year will include in income for federal income tax purposes, as

long-term capital gain, his or her share of the retained gain, will be

deemed to have paid his or her proportionate share of the tax paid by

the Fund on such retained gain, and will be entitled to an income tax

credit or refund for that share of the tax. The Fund will treat the retained

capital gain amount as a substitute for equivalent cash distributions. The

Fund will send shareholders detailed tax information with respect to the

Fund's distributions annually. See “Tax Matters.”

PIMCO Investments LLC, an affiliate of PIMCO, serves as the Fund’s

principal underwriter and distributor. State Street Bank and Trust

Company serves as the primary custodian of the Fund’s assets and also

provides certain fund accounting, sub-administrative and compliance

services to the Fund on behalf of the Investment Manager. UMB Bank,

n.a. serves as a custodian of the Fund for the purpose of processing

investor subscriptions and repurchases. SS&C Global Investor and

Distribution Solutions, Inc. (“SS&C”) serves as the Fund’s transfer agent

and dividend disbursement agent.  Wells Fargo Bank, N.A., serves as a

custodian of certain assets held by the Fund’s Subsidiaries.

The Fund’s Common Shares are not listed for trading on any securities

exchange. There is currently no secondary market for its Common Shares

and the Fund does not expect any secondary market to develop for its

Common Shares. Common Shareholders of the Fund are not able to

have their Common Shares redeemed or otherwise sell their Common

Shares on a daily basis because the Fund is an unlisted closed-end fund.

In order to provide liquidity to Common Shareholders, the Fund is

structured as an “interval fund” and conducts quarterly repurchase

offers for a portion of its outstanding Common Shares, as described

herein. Investors should consider Common Shares of the Fund to be an

illiquid investment. An investment in the Fund is suitable only for

long-term investors who can bear the risks associated with the limited

liquidity of the Common Shares. Investors should consider their

investment goals, time horizons and risk tolerance before investing in

the Fund.

Investor Suitability

An investment in the Fund involves a considerable amount of risk. It is

possible that you will lose money. An investment in the Fund is suitable

only for investors who can bear the risks associated with the limited

liquidity of the Common Shares and should be viewed as a long-term

investment. Before making your investment decision, you should (i)

consider the suitability of this investment with respect to your

investment objectives and personal financial situation and (ii) consider

factors such as your personal net worth, income, age, risk tolerance and

liquidity needs. An investment in the Fund should not be viewed as a

complete investment program.

other things, war and other armed conflicts, tariffs, extreme weather

events, and natural disasters.

These events could reduce consumer

demand or economic output, result in market closures, changes in

interest rates, inflation/deflation, travel restrictions or quarantines, and

significantly adversely impact the economy.

When inflationary price movements occur, fixed income securities

markets may experience heightened levels of interest rate, volatility and

liquidity risk.

Interest rate increases

in the future could cause the value

of a fund that invests in fixed income securities to decrease, which could

force the Fund to liquidate investments at disadvantageous times or

prices,

therefore adversely affecting the Fund and its shareholders.

Higher interest rates generally lower the values of

real estate-related

assets

. When this does not occur as expected

,

it presents an increased

risk of a correction or severe downturn in real-estate related asset

prices,

which could, by extension, adversely impact the value of other

investments (such as loans, securitized debt and other fixed income

securities). Such an impact could materialize in one real estate sector

and not another, or in a different manner in different real estate sectors.

Examples of the

risks faced by real estate-related assets include: tenant

vacancy rates, increased tenant turnover and tenant concentration;

general real estate headwinds, including delinquencies and difficulties in

collecting rents and other payments (which increases the risk of owners

being unable to pay or otherwise defaulting on their own borrowings

and obligations); decreases in property values; increases in inflation,

upkeep costs and other expenses; fluctuations in rents; and increased

concentration in ownership of certain types of properties.

Exchanges and securities markets may close early, close late or issue

trading halts on specific securities, which may result in, among other

things, the Fund being unable to buy or sell certain securities or financial

instruments at an advantageous time or accurately price its portfolio

investments.

The value of a security may decline for a number of reasons that directly

relate to the issuer, such as management performance, major litigation,

investigations or other controversies, changes in the issuer’s financial

condition or credit rating, changes in government regulations affecting

the issuer or its competitive environment and strategic initiatives such

as mergers, acquisitions or dispositions and the market response to any

such initiatives, financial leverage, reputation or reduced demand for the

issuer’s goods or services, as well as the historical and prospective

earnings of the issuer and the value of its assets. A change in the

As described under “Periodic Repurchase Offers” above, the Fund is an

“interval fund” and, in order to provide liquidity to shareholders, the

Fund, subject to applicable law, conducts quarterly repurchase offers of

the Fund’s outstanding Common Shares at NAV, subject to approval of

the Board. In all cases, repurchase offers will be for at least 5% and not

more than 25% of its outstanding Common Shares at NAV, pursuant to

Rule 23c-3 under the 1940 Act. The Fund currently expects to conduct

quarterly repurchase offers for 5% of its outstanding Common Shares

under ordinary circumstances. The Fund believes that these repurchase

offers are generally beneficial to the Fund’s shareholders and

repurchases generally will be funded from available cash or sales of

portfolio securities. However, repurchase offers and the need to fund

repurchase obligations may affect the ability of the Fund to be fully

invested or force the Fund to maintain a higher percentage of its assets

in liquid investments, which may harm the Fund’s investment

performance. Moreover, diminution in the size of the Fund through

repurchases may result in untimely sales of portfolio securities (with

associated imputed transaction costs, which may be significant), and

may limit the ability of the Fund to participate in new investment

opportunities or to achieve its investment objective. The Fund may

accumulate cash by holding back (i.e., not reinvesting) payments

received in connection with the Fund’s investments. The Fund believes

that payments received in connection with the Fund’s investments will

generate sufficient cash to meet the maximum potential amount of the

Fund’s repurchase obligations. If at any time cash and other liquid

assets held by the Fund are not sufficient to meet the Fund’s repurchase

obligations, the Fund intends, if necessary, to sell investments. To the

extent the Fund employs investment leverage, repurchases of Common

Shares would compound the adverse effects of leverage in a declining

market. In addition, if the Fund borrows to finance repurchases, interest

on that borrowing will negatively affect Common Shareholders who do

not tender their Common Shares by increasing the Fund’s expenses and

reducing any net investment income. If a repurchase offer is

oversubscribed, the Fund may, but is not required to, determine to

increase the amount repurchased by up to 2% of the Fund’s

outstanding shares as of the date of the Repurchase Request Deadline.

In the event that the Fund determines not to repurchase more than the

repurchase offer amount, or if shareholders tender more than the

repurchase offer amount plus 2% of the Fund’s outstanding shares as of

the date of the Repurchase Request Deadline, the Fund will repurchase

the Common Shares tendered on a pro rata basis, and shareholders will

have to wait until the next repurchase offer to make another repurchase

request. As a result, shareholders may be unable to liquidate all or a

given percentage of their investment in the Fund during a particular

repurchase offer. Notwithstanding the foregoing, the Fund may accept

all Common Shares tendered for repurchase by shareholders who own

less than one hundred Common Shares and who tender all of their

To the extent a large proportion of the Common Shares are held by a

small number of shareholders (or a single shareholder), including

affiliates of the Investment Manager, the Fund may be adversely

impacted if such shareholders purchase or request repurchases of large

amounts of Common Shares. For example, it is possible that in response

to a repurchase offer, the total amount of Common Shares tendered by

a small number of shareholders (or a single shareholder) may exceed

the number of Common Shares that the Fund has offered to repurchase.

If a repurchase offer is oversubscribed, the Fund will repurchase only a

pro rata portion of the Common Shares tendered by each shareholder.

In addition, substantial repurchases of Common Shares could result in a

decrease in the Fund's net assets, resulting in an increase in the Fund's

total annual operating expense ratio. See “Repurchase Offers Risk”

above for additional information about certain risks related to

Repurchase Offers.

securities or instruments may not perform as intended, which could

result in losses to the Fund. To the extent the Fund employs strategies

targeting perceived pricing inefficiencies, arbitrage strategies or similar

strategies, it is subject to the risk that the pricing or valuation of the

securities and instruments involved in such strategies may change

unexpectedly, which may result in reduced returns or losses to the Fund.

Additionally, legislative, regulatory or tax developments may adversely

affect management of the Fund.

The Fund is also subject to the risk that

deficiencies in the internal systems or controls of PIMCO or another

service provider will cause losses for the Fund or hinder Fund

operations. For example, trading delays or errors (both human and

systemic) could prevent the Fund from purchasing a security expected to

appreciate in value.

Please refer to

“Portfolio Managers - Conflicts of

Interest” in the SAI for further information.

Additionally, actual or

perceived conflicts of interest, legislative, regulatory or tax restrictions,

policies or developments may affect the investment techniques available

to PIMCO

in connection with managing the Fund

,

may cause PIMCO to

restrict or prohibit participation in certain investments

and may also

adversely affect the ability of the Fund to achieve its investment

objective. There also can be no assurance that all of the personnel of

PIMCO will continue to be associated with PIMCO for any length of

time. The loss of the services of one or more key employees of PIMCO

could have an adverse impact on the Fund’s ability to realize its

investment objective.

In addition, the Fund may rely on various third-party sources to calculate

its NAV. As a result, the Fund is subject to certain operational risks

associated with reliance on service providers and service providers’ data

sources. In particular, errors or systems failures and other technological

issues may adversely impact the Fund’s calculations of its NAV, and such

NAV calculation issues may result in inaccurately calculated NAVs,

delays in NAV calculation and/or the inability to calculate NAVs over

extended periods. The Fund may be unable to recover any losses

associated with such failures.

During periods of very low or negative interest rates, the Fund may be

unable to maintain positive returns. Very low or negative interest rates

may magnify interest rate risk. Changing interest rates, including rates

that fall below zero, may have unpredictable effects on markets, may

result in heightened market volatility and may detract from Fund

performance to the extent the Fund is exposed to such interest rates.

Measures such as average duration may not accurately reflect the true

interest rate sensitivity of the Fund. This is especially the case if the Fund

consists of securities with widely varying durations. Therefore, if the

Fund has an average duration that suggests a certain level of interest

rate risk, the Fund may in fact be subject to greater interest rate risk

than the average would suggest. This risk is greater to the extent the

Fund uses leverage or derivatives in connection with the management

of the Fund

, which would be magnified in the event that initial or

variation margin is not provided by the counterparty to such

transactions (or not provided below a certain threshold amount)

.

Convexity is an additional measure used to understand a security's or

Fund's interest rate sensitivity. Convexity measures the rate of change of

duration in response to changes in interest rates. With respect to a

security's price, a larger convexity (positive or negative) may imply more

dramatic price changes in response to changing interest rates. Convexity

may be positive or negative. Negative convexity implies that interest

rate increases result in increased duration, and vice versa, meaning

increased sensitivity in prices in response to changes in interest rates.

Thus, securities with negative convexity, which may include bonds with

traditional call features and certain mortgage-backed securities, may

experience greater losses in periods of rising interest rates. Accordingly,

if the Fund holds such securities, the Fund may be subject to a greater

risk of losses in periods of rising interest rates.

The market value of corporate debt securities generally may be expected

to rise and fall inversely with interest rates. The value of intermediate

and longer-term corporate debt securities normally fluctuates more in

response to changes in interest rates than does the value of

shorter-term corporate debt securities. The market value of a corporate

debt security also may be affected by factors directly relating to the

issuer, such as investors’ perceptions of the creditworthiness of the

issuer, the issuer’s financial performance, perceptions of the issuer in the

marketplace, performance of management of the issuer, the issuer’s

capital structure and use of financial leverage and demand for the

issuer’s goods and services. Certain risks associated with investments in

corporate debt securities are described elsewhere in this prospectus in

further detail. There is a risk that the issuers of corporate debt securities

may not be able to meet their obligations on interest or principal

payments at the time called for by an instrument. The Fund may invest

in below investment grade corporate bonds, often referred to as “high

yield” securities or “junk bonds.” High yield corporate bonds are often

high risk and have speculative characteristics. High yield corporate

bonds may be particularly susceptible to adverse issuer-specific

developments. High yield corporate bonds are subject to the risks

described under “Principal Risks of the Fund—High Yield Securities

Risk.” In addition, certain corporate debt securities may be highly

customized and as a result may be subject to, among others, liquidity

and valuation/pricing transparency risks.

The mortgage-related assets in which the Fund may invest include, but

are not limited to, any security, instrument or other asset that is related

to U.S. or non-U.S. mortgages, including those issued by private

originators or issuers, or issued or guaranteed as to principal or interest

by the U.S. government or its agencies or instrumentalities or by

non-U.S. governments or authorities, such as, without limitation, assets

representing interests in, collateralized or backed by, or whose values

are determined in whole or in part by reference to any number of

mortgages or pools of mortgages or the payment experience of such

The Fund may also invest in other types of asset-backed securities,

including CDOs, CBOs and CLOs and other similarly structured

securities. See “The Fund’s Investment Objective and Strategies-Portfolio

Contents and Other Information-Mortgage-Related and Other

Asset-Backed Instruments” in this prospectus and “Investment

Objective and Policies-Mortgage-Related and Other Asset-Backed

Instruments” in the Statement of Additional Information for a

description of the various mortgage-related and other asset-backed

instruments in which the Fund may invest and their related risks.

Mortgage-related and other asset-backed instruments represent

interests in “pools” of mortgages or other assets such as consumer

loans or receivables held in trust and often involve risks that are

different from or possibly more acute than risks associated with other

types of debt instruments.

Generally, rising interest rates tend to extend the duration of fixed rate

mortgage-related assets, making them more sensitive to changes in

interest rates. Compared to other fixed income investments with similar

maturity and credit, mortgage-related securities may increase in value to

a lesser extent when interest rates decline and may decline in value to a

similar or greater extent when interest rates rise. As a result, in a period

of rising interest rates, the Fund may exhibit additional volatility since

individual mortgage holders are less likely to exercise prepayment

options, thereby putting additional downward pressure on the value of

these securities and potentially causing the Fund to experience losses.

This is known as extension risk. Mortgage-backed securities can be

highly sensitive to rising interest rates, such that even small movements

can cause the Fund to lose value. Mortgage-backed securities, and in

particular those not backed by a government guarantee, are subject to

credit risk. When interest rates decline, borrowers may pay off their

mortgages sooner than expected. This can reduce the returns of the

Fund because the Fund may have to reinvest that money at the lower

prevailing interest rates. In addition, the creditworthiness, servicing

practices, and financial viability of the servicers of the underlying

mortgage pools present significant risks. For instance, a servicer may be

required to make advances in respect of delinquent loans underlying the

mortgage-related securities; however, servicers experiencing financial

difficulties may not be able to perform these obligations. Additionally,

both mortgage-related securities and asset-backed securities are subject

to risks associated with fraud or negligence by, or defalcation of, their

servicers. These securities are also subject to the risks of the underlying

Subordinate mortgage-backed or asset-backed instruments are paid

interest only to the extent that there are funds available to make

payments. To the extent the collateral pool includes a large percentage

of delinquent loans, there is a risk that interest payments on

subordinate mortgage-backed or asset-backed instruments will not be

fully paid.

There are multiple tranches of mortgage-backed and asset-backed

instruments, offering investors various maturity and credit risk

characteristics. For example, tranches may be categorized as senior,

mezzanine, and subordinated/equity or “first loss.” The most senior

tranche of a mortgage-backed or asset-backed instrument generally has

the greatest collateralization and generally pays the lowest interest rate.

If there are defaults or the collateral otherwise underperforms,

scheduled payments to senior tranches generally take precedence over

those of mezzanine tranches, and scheduled payments to mezzanine

tranches take precedence over those to subordinated/equity tranches.

Lower tranches represent lower degrees of credit quality and pay higher

interest rates intended to compensate for the attendant risks. The return

on the lower tranches is especially sensitive to the rate of defaults in the

collateral pool. The lowest tranche (i.e., the “equity” or “residual”

tranche) generally specifically receives the residual interest payments

(i.e., money that is left over after the higher tranches have been paid

and expenses of the issuing entities have been paid) rather than a fixed

interest rate. The Fund may also invest in the residual or equity tranches

of mortgage-related and other asset-backed instruments, which may be

referred to as subordinate mortgage-backed or asset-backed

instruments and interest-only mortgage-backed or asset-backed

instruments. The Fund expects that investments in subordinate

mortgage-backed and other asset-backed instruments will be subject to

risks arising from delinquencies and foreclosures, thereby exposing its

investment portfolio to potential losses. Subordinate securities of

mortgage-backed and other asset-backed instruments are also subject

to greater credit risk than those mortgage-backed or other asset-backed

instruments that are more highly rated.

With respect to risk retention tranches (i.e., eligible residual interests

initially held by the sponsors of commercial mortgage backed securities

(“CMBS”) and other eligible securitizations pursuant to the U.S. Risk

Retention Rules), a third-party purchaser, such as the Fund, must hold its

retained interest, unhedged, for at least five years following the closing

of the CMBS transaction, after which it is entitled to transfer its interest

in the securitization to another person that meets the requirements for a

third-party purchaser. Even after the required holding period has

expired, due to the generally illiquid nature of such investments, no

assurance can be given as to what, if any, exit strategies will ultimately

be available for any given position.

In addition, there is limited guidance on the application of the final

U.S. Risk Retention Rules to specific securitization structures. There can

be no assurance that the applicable federal agencies charged with the

implementation of the final U.S. Risk Retention Rules (e.g., the Federal

Deposit Insurance Corporation (“FDIC”), the Comptroller of the

Currency, the Federal Reserve Board, the SEC, the Department of

Housing and Urban Development, and the Federal Housing Finance

Agency) could not take positions in the future that differ from the

interpretation of such rules taken or embodied in such securitizations, or

that the final U.S. Risk Retention Rules will not change.

Furthermore, in situations where the Fund invests in risk retention

tranches of securitizations structured by third parties, the Fund may be

required to execute one or more letters or other agreements, the exact

form and nature of which will vary (each, a “Risk Retention

Agreement”) under which it will make certain undertakings designed to

ensure such securitization complies with the U.S. Risk Retention Rules.

Such Risk Retention Agreements may include a variety of

representations, warranties, covenants and other indemnities, each of

which may run to various transaction parties. If the Fund breaches any

undertakings in any Risk Retention Agreement, it will be exposed to

claims by the other parties thereto, including for any losses incurred as a

result of such breach, which could be significant and exceed the value of

the Fund’s investments. Direct investments in mortgages and other

types of collateral are subject to risks similar (and in some cases to a

greater degree) to those described above.

Privately-Issued Mortgage-Related Securities Risk

Privately-issued mortgage-related securities are not traded on an

exchange and there may be a limited market for the securities, especially

when there is a perceived weakness in the mortgage and real estate

market sectors. Without an active trading market, mortgage-related

securities held in the Fund’s portfolio may be particularly difficult to

value because of the complexities involved in assessing the value of the

underlying mortgage loans.

Loans, and debt instruments collateralized by loans (including shares,

certificates, notes or other securities issued by a special purpose entity

(“SPE”) sponsored by an alternative lending platform (i.e., an online

lending marketplace or lender that is not a traditional banker, such as a

bank) or its affiliates (the “Sponsor”) that represent the right to receive

principal and interest payments due on pools of whole loans or fractions

of whole loans, which may (but may not) be issued by the Sponsor, held

by the SPE (“Alt Lending ABS”)), acquired by the Fund may be subprime

in quality, or may become subprime in quality. Although there is no

specific legal or market definition of “subprime,” subprime loans are

generally understood to refer to loans made to borrowers that display

poor credit histories and other characteristics that correlate with a

higher default risk. Accordingly, subprime loans, and debt instruments

secured by such loans (including Alt Lending ABS), have speculative

characteristics and are subject to heightened risks, including the risk of

nonpayment of interest or repayment of principal, and the risks

associated with investments in high yield securities. In addition, these

instruments could be subject to increased regulatory scrutiny. The Fund

is not restricted by any particular borrower credit risk criteria and/or

qualifications when acquiring loans or debt instruments collateralized

by loans.

Investing in the municipal bond market involves the risks of investing in

debt securities generally and certain other risks. The amount of public

information available about the municipal bonds in which the Fund may

The Fund may invest in trust certificates issued in tender option bond

programs. In these programs, a trust typically issues two classes of

certificates and uses the proceeds to purchase municipal securities

having relatively long maturities and bearing interest at a fixed interest

rate substantially higher than prevailing short-term tax-exempt rates.

There is a risk that the Fund 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 less liquid or may become less

liquid as a result of, among other things, a credit rating downgrade, a

payment default or a disqualification from tax-exempt status. The Fund’s

The Fund may invest in revenue bonds, which are typically issued to

fund a wide variety of capital projects including electric, gas, water and

sewer systems; highways, bridges and tunnels; port and airport facilities;

colleges and universities; and hospitals. Because the principal security

for a revenue bond is generally the net revenues derived from a

particular facility or group of facilities or, in some cases, from the

proceeds of a special excise or other specific revenue source or annual

revenues, there is no guarantee that the particular project will generate

enough revenue to pay its obligations, in which case the Fund’s

performance may be adversely affected.

The Fund may invest in participations in lease obligations or installment

purchase contract obligations of municipal authorities or entities.

Although a municipal lease obligation does not constitute a general

obligation of the municipality for which the municipality's taxing power

is pledged, a municipal lease obligation is ordinarily backed by the

municipality's covenant to budget for, appropriate and make the

payments due under the municipal lease obligation. However, certain

municipal lease obligations contain “non-appropriation” clauses, which

provide that the municipality has no obligation to make lease or

installment purchase payments in future years unless money is

appropriated for such purpose on a yearly basis. In the case of a

“non-appropriation” lease, the Fund's ability to recover under the lease

in the event of non-appropriation or default will be limited solely to the

repossession of the leased property, without recourse to the general

credit of the lessee, and the disposition or re-leasing of the property

might prove difficult.

The value of municipal securities, similar to other fixed income

securities, will likely drop as interest rates rise in the general market.

Conversely, when rates decline, bond prices generally rise.

Credit Risk

The risk that a borrower may be unable to make interest or principal

payments when they are due. Funds that invest in municipal securities

rely on the ability of the issuer to service its debt. This subjects the Fund

to credit risk in that the municipal issuer may be fiscally unstable or

exposed to large liabilities that could impair its ability to honor its

financial obligations. Municipal issuers with significant debt service

requirements, in the near-to mid-term; unrated issuers and those with

less capital and liquidity to absorb additional expenses may be most at

risk. To the extent the Fund invests in lower quality or high yield

municipal securities, it may be more sensitive to the adverse credit

events in the municipal market. The treatment of municipalities in

bankruptcy is more uncertain, and potentially more adverse to debt

holders, than for corporate issues.

The risk that investors may have difficulty finding a buyer when they

seek to sell, and therefore, may be forced to sell at a discount to the

market value. Liquidity may sometimes be impaired in the municipal

market and because the Fund primarily invests in municipal securities, it

may find it difficult to purchase or sell such securities at opportune

times. The municipal securities market can be susceptible to increases in

volatility and decreases in liquidity. Liquidity can decline unpredictably

in response to a variety of factors, including overall economic conditions

or credit tightening. Increases in volatility and decreases in liquidity also

may be caused by a rise in interest rates (or the expectation of a rise in

interest rates). Liquidity can be impaired due to interest rate concerns,

credit events, or general supply and demand imbalances. Depending on

the particular issuer and current economic conditions, municipal

securities could be deemed more volatile investments.

In addition to general municipal market risks, different municipal sectors

may face different risks. For instance, general obligation bonds are

secured by the full faith, credit, and taxing power of the municipality

issuing the obligation. As such, timely payment depends on the

municipality's ability to raise tax revenue and maintain a fiscally sound

budget. The timely payments may also be influenced by any unfunded

pension liabilities or other post-employee benefit plan liabilities.

Revenue bonds are secured by special tax revenues or other revenue

sources. If the specified revenues do not materialize, then the bonds

may not be repaid.

Private activity bonds are yet another type of municipal security.

Municipalities use private activity bonds to finance the development of

industrial facilities for use by private enterprise. Principal and interest

payments are to be made by the private enterprise benefiting from the

development, which means that the holder of the bond is exposed to

the risk that the private issuer may default on the bond.

Moral obligation bonds are usually issued by special purpose public

entities. If the public entity defaults, repayment becomes a “moral

obligation” instead of a legal one. The lack of a legally enforceable right

to payment in the event of default poses a special risk for a holder of

the bond because it has little or no ability to seek recourse in the event

of default.

Similarly, changes to state or federal regulation tied to a specific sector,

such as the hospital sector, could have an impact on the revenue stream

for a given subset of the market.

Municipal notes are similar to general municipal debt obligations, but

they generally possess shorter terms. Municipal notes can be used to

provide interim financing and may not be repaid if anticipated revenues

are not realized.

High yield securities structured as zero-coupon bonds or pay-in-kind

securities tend to be especially volatile as they are particularly sensitive

to downward pricing pressures from rising interest rates or widening

spreads and may require the Fund to make taxable distributions of

imputed income without receiving the actual cash currency. Issuers of

high yield securities may have the right to “call” or redeem the issue

prior to maturity, which may result in the Fund having to reinvest the

proceeds in other high yield securities or similar instruments that may

pay lower interest rates. The Fund may also be subject to greater levels

of liquidity risk than funds that do not invest in high yield securities.

Consequently, transactions in high yield securities may involve greater

costs than transactions in more actively traded securities. A lack of

publicly

available information, irregular trading activity and wide bid/ask

spreads among other factors, may, in certain circumstances, make high

yield debt more difficult to sell at an advantageous time or price than

other types of securities or instruments. These factors may result in the

Fund being unable to realize full value for these securities and/or may

result in the Fund not receiving the proceeds from a sale of a high yield

security for an extended period after such sale, each of which could

result in losses to the Fund. Because of the risks involved in investing in

high yield securities, an investment in the Fund should be considered

speculative.

Investments in the securities of financially distressed issuers involve

substantial risks, including the risk of default. Distressed securities

generally trade significantly below “par” or full value because

investments in such securities and debt of distressed issuers or issuers in

default are considered speculative and involve substantial risks in

addition to the risks of investing in high-yield bonds. Such investments

may be in default at the time of investment. In addition, these securities

may fluctuate more in price, and are typically less liquid. The Fund also

will be subject to significant uncertainty as to when, and in what

manner, and for what value obligations evidenced by securities of

financially distressed issuers will eventually be satisfied. Defaulted

obligations might be repaid only after lengthy workout or bankruptcy

proceedings, during which the issuer might not make any interest or

other payments. In any such proceeding relating to a defaulted

obligation, the Fund may lose its entire investment or may be required

to accept cash or securities with a value substantially less than its

original investment. Moreover, any securities received by the Fund upon

completion of a workout or bankruptcy proceeding may be less liquid,

speculative or restricted as to resale. Similarly, if the Fund participates in

negotiations with respect to any exchange offer or plan of

reorganization with respect to the securities of a distressed issuer, the

Fund may be restricted from disposing of such securities. To the extent

that the Fund becomes involved in such proceedings, the Fund may

have a more active participation in the affairs of the issuer than that

assumed generally by an investor. The Fund may incur additional

expenses to the extent it is required to seek recovery upon a default in

the payment of principal or interest on its portfolio holdings.

Also among the risks inherent in investments in a troubled issuer is that

it frequently may be difficult to obtain information as to the true

financial condition of such issuer. PIMCO’s judgments about the credit

quality of a financially distressed issuer and the relative value of its

securities may prove to be wrong.

Loans and Other Indebtedness; Loan Acquisitions,

Participations and Assignments Risk

During periods of deteriorating economic conditions, such as recessions

or periods of rising unemployment, or changing interest rates (notably

increases), delinquencies and losses generally increase, sometimes

dramatically, with respect to obligations under such loans. An economic

downturn or individual corporate developments could adversely affect

the market for these instruments and reduce the Fund’s ability to sell

these instruments at an advantageous time or price. An economic

downturn could also lead to a higher non-payment rate and, a loan may

lose significant market value before a default occurs.

The Fund may obtain exposure to loans made to private investment

vehicles, including private funds that are not registered under the 1940

Act. Such loans may be for various purposes, including but not limited

to, subscription line or “sub-line” credit facilities secured by the uncalled

Delayed draw and delayed funding loans and revolving credit facilities

may be subject to restrictions on transfer, and only limited opportunities

may exist to resell such instruments. As a result, the Fund may be unable

to sell such investments at an opportune time or may have to resell

them at less than fair market value. Further, the Fund may need to hold

liquid assets in order to provide funding for these types of

commitments, meaning the Fund may not be able to invest in other

attractive investments, or the Fund may need to liquidate existing assets

in order to provide such funding.

More generally, sales of the Fund's

portfolio holdings may result in short-term capital gains (which are

generally taxed to shareholders at ordinary income tax rates when

distributed net of short-term capital losses and net of long-term capital

losses), potentially subjecting shareholders of the Fund to adverse tax

consequences.

The Fund may invest in loans used to finance the cost of construction,

acquisition, development, and/ or rehabilitation of a property including,

but not limited to, development of single-family for-sale homes,

multi-family rentals and/or commercial facilities. Such construction

lending may expose the Fund to increased risk of non-payment and loss

because the loan is not backed by a finished project. Such risk may

depend on the nature of the construction and the relevant counterparty

or counterparties, which may include, but not be limited to,

homebuilders, private developers and/or entities with limited capital.

Repayment of these types of loans may depend on the borrower’s ability

to secure permanent “take-out” financing, which requires the successful

completion of the project, or operation of the property with an income

stream sufficient to meet operating and loan expenses. In addition,

these types of loans are subject to the risk of errors in estimations of the

property’s value at completion of construction and the estimated cost of

construction, as well as the risk that the projects may not be completed

and have limited liquidity.

principal and interest payments and may be more volatile than other

types of securities. The Fund may also be subject to greater levels of

liquidity risk than funds that do not invest in loans. In addition, the loans

in which the Fund invests may not be listed on any exchange and a

secondary market for such loans may be comparatively illiquid relative

to markets for other more liquid fixed income securities. Consequently,

transactions in loans may involve greater costs than transactions in

more actively traded securities. In connection with certain loan

transactions, transaction costs that are borne by the Fund may include

the expenses of third parties that are retained to assist with reviewing

and conducting diligence, negotiating, structuring and servicing a loan

transaction, and/or providing other services in connection therewith.

Furthermore, the Fund may incur such costs in connection with loan

transactions that are pursued by the Fund but not ultimately

consummated (so-called “broken deal costs”).

The Fund’s investments in subordinated and unsecured loans generally

are subject to similar risks as those associated with investments in

secured loans. Subordinated or unsecured loans are lower in priority of

payment to secured loans and are subject to the additional risk that the

cash flow of the borrower and property securing the loan or debt, if any,

may be insufficient to meet scheduled payments after giving effect to

the senior secured obligations of the borrower. This risk is generally

higher for subordinated unsecured loans or debt, which are not backed

by a security interest in any specific collateral. Subordinated and

unsecured loans generally have greater price volatility than secured

loans and may be less liquid. There is also a possibility that originators

will not be able to sell participations in subordinated or unsecured

loans, which would create greater credit risk exposure for the holders of

such loans. Subordinate and unsecured loans share the same risks as

other below investment grade securities.

There may be less readily available information about most loans and

the underlying borrowers than is the case for many other types of

securities. Loans may be issued by borrowers that are not subject to SEC

reporting requirements and therefore may not be required to file reports

with the SEC or may file reports that are not required to comply with

SEC form requirements. In addition, such borrowers may be subject to a

less stringent liability disclosure regime than companies subject to SEC

reporting requirements. Loans may not be considered “securities,” and

purchasers, such as the Fund, therefore may not be entitled to rely on

the anti-fraud protections of the federal securities laws. Because there is

limited public information available regarding loan investments, the

Fund is particularly dependent on the analytical abilities of the Fund’s

Investment Manager

.

Economic exposure to loan interests through the use of derivative

transactions may involve greater risks than if the Fund had invested in

the loan interest directly during a primary distribution, through direct

originations or through assignments of, novations of or participations in

a loan acquired in secondary markets since, in addition to the risks

described above, certain derivative transactions may be subject to

leverage risk and greater illiquidity risk, counterparty risk, valuation risk

and other risks.

The Fund may originate loans, including, without limitation, residential

and/or commercial real estate or mortgage-related loans, consumer

loans or other types of loans, which may be in the form of, and without

limitation as to a loan’s level of seniority within a capital structure,

whole loans, assignments, participations, secured and unsecured notes,

senior and second lien loans, mezzanine loans, bridge loans or similar

investments. The Fund may originate loans to corporations and/or other

legal entities and individuals, including foreign (non-U.S.) and emerging

market entities and individuals. Loans may carry significant credit risks

(for example, a borrower may not have a credit rating or score or may

have a rating or score that indicates significant credit risk). This may

include loans to public or private firms or individuals, such as in

connection with housing development projects. The loans the Fund

invests in or originates may vary in maturity and/or duration. The Fund is

not limited in the amount, size or type of loans it may invest in and/or

originate, including with respect to a single borrower or with respect to

borrowers that are determined to be below investment grade, other

than pursuant to any applicable law. The Fund's investment in or

origination of loans may also be limited by the requirements the Fund

intends to observe under Subchapter M of the Code in order to qualify

as a RIC. The Fund may subsequently offer such investments for sale to

third parties; provided, that there is no assurance that the Fund will

complete the sale of such an investment. If the Fund is unable to sell,

assign or successfully close transactions for the loans that it originates,

the Fund will be forced to hold its interest in such loans for an

indeterminate period of time. This could result in the Fund's investments

having high exposure to certain borrowers. The Fund will be responsible

for the expenses associated with originating a loan (whether or not

consummated). This may include significant legal and due diligence

expenses, which will be indirectly borne by the Fund and Common

Shareholders.

Bridge loans are generally made with the expectation that the borrower

will be able to obtain permanent financing in the near future. Any delay

in obtaining permanent financing subjects the bridge loan investor to

increased risk. A borrower's use of bridge loans also involves the risk

Loan origination and servicing companies are routinely involved in legal

proceedings concerning matters that arise in the ordinary course of their

business. In addition, a number of participants in the loan origination

and servicing industry (including control persons of industry

participants) have been the subject of regulatory actions by state

regulators, including state attorneys general, and by the federal

government. Governmental investigations, examinations or regulatory

actions, or private lawsuits, including purported class action lawsuits,

may adversely affect such companies' financial results. To the extent the

Fund engages in origination and/or servicing directly, or has a financial

interest in, or is otherwise affiliated with, an origination or servicing

company, the Fund will be subject to enhanced risks of litigation,

regulatory actions and other proceedings. As a result, the Fund may be

required to pay legal fees, settlement costs, damages, penalties or other

charges, any or all of which could materially adversely affect the Fund

and its holdings.

The Fund’s exposure to loans to foreign entities and individuals may be

subject to withholding and other foreign taxes, which may adversely

affect the net return on such investments. In addition, fluctuations in

foreign currency exchange rates and exchange controls may adversely

affect the market value of the Fund’s exposure to loans to foreign

entities and individuals. The Fund is unlikely to be able to pass through

to its shareholders foreign income tax credits in respect of any foreign

income taxes it pays.

Privacy and Data Security Risk

The Gramm-Leach-Bliley Act (“GLBA”) and other laws limit the

disclosure of certain non-public personal information about a consumer

to non-affiliated third parties and require financial institutions to

disclose certain privacy policies and practices with respect to

information sharing with both affiliates and non-affiliated third parties.

Many states and a number of non-U.S. jurisdictions have enacted

privacy and data security laws requiring safeguards on the privacy and

security of consumers’ personally identifiable information. Other laws

deal with obligations to safeguard and dispose of private information in

a manner designed to avoid its dissemination. Privacy rules adopted by

the U.S. Federal Trade Commission and SEC implement the GLBA and

other requirements and govern the disclosure of consumer financial

information by certain financial institutions, ranging from banks to

private investment funds. U.S. platforms following certain models

generally are required to have privacy policies that conform to these

GLBA and other requirements. In addition, such platforms typically have

policies and procedures intended to maintain platform participants’

personal information securely and dispose of it properly.

The Alt Lending ABS in which the Fund may invest are typically not listed

on any securities exchange and not registered under the Securities Act.

In addition, the Fund anticipates that these instruments may only be

sold to a limited number of investors and may have a limited or

non-existent secondary market. Accordingly, the Fund currently expects

that certain of the investments it may make in Alt Lending ABS will face

heightened levels of liquidity risk. Although currently there is generally

no reliable, active secondary market for certain Alt Lending ABS, a

secondary market for these Alt Lending ABS may develop. If the Fund

purchases Alt Lending ABS on an alternative lending platform, the Fund

will have the right to receive principal and interest payments due on

loans underlying the Alt Lending ABS only if the platform servicing the

The Fund may have limited knowledge about the underlying loans and

is dependent upon the platform for information regarding underlying

loans. Although PIMCO may conduct diligence on the platforms, the

Fund generally does not have the ability to independently verify the

information provided by the platforms, other than payment information

regarding loans underlying the Alt Lending ABS owned by the Fund,

which the Fund observes directly as payments are received. With respect

to Alt Lending ABS that the Fund purchases in the secondary market

(i.e., not directly from an alternative lending platform), the Fund may not

perform the same level of diligence on such platform or at all. The Fund

may not review the particular characteristics of the loans collateralizing

an Alt Lending ABS, but rather negotiate in advance with platforms the

general criteria of the underlying loans. As a result, the Fund is

dependent on the platforms’ ability to collect, verify and provide

information to the Fund about each loan and borrower.

The Fund relies on the borrower’s credit information, which is provided

by the platforms. However, such information may be out of date,

incomplete or inaccurate and may, therefore, not accurately reflect the

borrower’s actual creditworthiness. Platforms may not have an

obligation to update borrower information, and, therefore, the Fund

may not be aware of any impairment in a borrower’s creditworthiness

subsequent to the making of a particular loan. The platforms’ credit

decisions and scoring models may be based on algorithms that could

potentially contain programming or other errors or prove to be

ineffective or otherwise flawed. This could adversely affect loan pricing

data and approval processes and could cause loans to be mispriced or

misclassified, which could ultimately have a negative impact on the

Fund’s performance.

In addition, the underlying loans, in some cases, may be affected by the

success of the platforms through which they are facilitated. Therefore,

disruptions in the businesses of such platforms may also negatively

impact the value of the Fund’s investments. In addition, disruption in the

business of a platform could limit or eliminate the ability of the Fund to

invest in loans originated by that platform, and therefore the Fund could

lose some or all of the benefit of its diligence effort with respect to that

platform.

Platforms are for-profit businesses that, as a general matter, generate

revenue by collecting fees on funded loans from borrowers and by

assessing a loan servicing fee on investors, which may be a fixed annual

amount or a percentage of the loan or amounts collected. This business

could be disrupted in multiple ways; for example, a platform could file

for bankruptcy or a platform might suffer reputational harm from

Platforms may also be forced to defend legal action taken by regulators

or governmental bodies. Alternative lending is a newer industry

operating in an evolving legal environment. Platforms may be subject to

risk of litigation alleging violations of law and/or regulations, including,

for example, consumer protection laws, whether in the U.S. or in foreign

jurisdictions. Platforms may be unsuccessful in defending against such

lawsuits or other actions and, in addition to the costs incurred in

fighting any such actions, platforms may be required to pay money in

connection with the judgments, settlements or fines or may be forced to

modify the terms of its borrower loans, which could cause the platform

to realize a loss or receive a lower return on a loan than originally

anticipated. Platforms may also be parties to litigation or other legal

action in an attempt to protect or enforce their rights or those of

affiliates, including intellectual property rights, and may incur similar

costs in connection with any such efforts.

The Fund’s investments in Alt Lending ABS may expose the Fund to the

credit risk of the issuer. Generally, such instruments are unsecured

obligations of the issuer; an issuer that becomes subject to bankruptcy

proceedings may be unable to make full and timely payments on its

obligations to the Fund, even if the payments on the underlying loan or

loans continue to be made timely and in full. In addition, when the Fund

owns Alt Lending ABS, the Fund and its custodian generally do not have

a contractual relationship with, or personally identifiable information

regarding, individual borrowers, so the Fund will not be able to enforce

underlying loans directly against borrowers and may not be able to

appoint an alternative servicing agent in the event that a platform or

third-party servicer, as applicable, ceases to service the underlying loans.

Therefore, the Fund is more dependent on the platform for servicing

than if the Fund had owned whole loans through the platform. Where

such interests are secured, the Fund relies on the platform to perfect the

Fund’s security interest. In addition, there may be a delay between the

time the Fund commits to purchase an instrument issued by a platform,

its affiliate or a special purpose entity sponsored by the platform or its

affiliate and the issuance of such instrument and, during such delay, the

funds committed to such an investment will not earn interest on the

investment nor will they be available for investment in other alternative

lending-related instruments, which will reduce the effective rate of

return on the investment. The Fund’s investments in Alt Lending ABS

may be illiquid.

be sold or disposed of in current market conditions in seven calendar

days or less without the sale or disposition significantly changing the

market value of the investment. Illiquid investments may become harder

to value, especially in changing markets. The Fund’s investments in

illiquid investments may reduce the returns of the Fund because it may

be unable to sell the illiquid investments at an advantageous time or

price or possibly require the Fund to dispose of other investments at

unfavorable times or prices in order to satisfy its obligations, which

could prevent the Fund from taking advantage of other investment

opportunities. Illiquidity can be caused by, among other things, a drop in

overall market trading volume, an inability to find a willing buyer, or

legal restrictions on the securities’ resale

, capital controls, delays or

limits on repatriation of local currency, or insolvency of local

governments

. Additionally, the market for certain investments may

become illiquid under adverse market or economic conditions

independent of any specific adverse changes in the conditions of a

particular issuer,

changes in interest rates,

elevated

volatility,

market or

geopolitical disruptions,

economic uncertainty

or public health crises

.

There can be no assurance that an investment that is deemed to be

liquid when purchased will continue to be liquid while it is held by the

Fund and/or when the Fund wishes to dispose of it. Bond markets have

consistently grown over

time

while the capacity for traditional dealer

counterparties to engage in fixed income trading has not kept pace

with

the growth of bond markets and may remain constrained

. As a result,

dealer inventories of corporate bonds, which provide a core indication of

the ability of financial intermediaries to “make markets,”

remain limited

relative to the size of the market

. Because market makers seek to

provide stability to a market through their intermediary services, the

significant reduction in dealer inventories could potentially lead to

decreased liquidity and increased volatility in the fixed income markets

,

especially

during periods of economic uncertainty

or market stress

. In

such cases, the Fund, due to

the difficulty in purchasing and selling such

securities or instruments, may be unable to achieve its desired level of

exposure to a certain sector. To the extent that the Fund’s principal

investment strategies involve securities of companies with smaller

market capitalizations, foreign (non-U.S.) securities, Rule 144A

securities, illiquid sectors of fixed income securities, derivatives or

securities with substantial market and/or credit risk, the Fund will tend

to have the greatest exposure to liquidity risk.

Further, fixed income securities with longer durations until maturity face

heightened levels of liquidity risk as compared to fixed income securities

with shorter durations until maturity. The risks associated with illiquid

instruments may be particularly acute in situations in which the Fund’s

operations require cash (such as in connection with repurchase offers)

and could result in the Fund borrowing to meet its short-term needs or

incurring losses on the sale of illiquid instruments. It may also be the

case that other market participants may be attempting to liquidate fixed

income holdings at the same time as the Fund, causing increased supply

in the market and contributing to liquidity risk and downward pricing

pressure.

To the extent the Fund invests in Alt Lending ABS, the Alt Lending ABS in

which the Fund invests are typically not listed on any securities

exchange and not registered under the Securities Act. In addition, the

Liquidity risk also refers to the risk that the Fund may be required to

hold additional cash or sell other investments in order to obtain cash to

close out derivatives or meet the liquidity demands that derivatives can

create to make payments of margin, collateral, or settlement payments

to counterparties. The Fund may have to sell a security at a

disadvantageous time or price to meet such obligations. The action(s) of

governments and regulators may have the effect of reducing market

liquidity, market resiliency and money supply.

Covenant-lite obligations contain fewer maintenance covenants than

other obligations, or no maintenance covenants, and may not include

terms that allow the lender to monitor the performance of the borrower

and declare a default if certain criteria are breached, which would allow

the lender to restructure the loan or take other action intended to help

mitigate losses. Covenant-lite loans carry a risk that the borrower could

transfer or encumber its assets, which could reduce the amount of

assets that can be used to satisfy debts and result in losses for

debtholders. Covenant-lite loans may carry more risk than traditional

loans as they allow individuals and corporations to engage in activities

that would otherwise be difficult or impossible under a covenant-heavy

loan agreement. In the event of default, covenant-lite loans may exhibit

diminished recovery values as the lender may not have the opportunity

to negotiate with the borrower prior to default.

which prepayments or redemptions occur can affect the return on

investment of these securities

. If an issuer calls a security in which the

Fund has invested, the Fund may not recoup the full amount of its initial

investment or may not realize the full anticipated earnings from the

investment and may be forced to reinvest in lower-yielding securities,

securities with greater credit risks or securities with other, less favorable

features.

sanctions or other similar measures could adversely affect the Fund’s

investments in a foreign (non-U.S.) country and may render holdings in

that foreign (non-U.S.) country illiquid or even worthless. In the event of

nationalization, expropriation or other confiscation, the Fund could lose

its entire investment in foreign (non-U.S.) securities. The type and

severity of sanctions and other similar measures, including counter

sanctions and other retaliatory actions, that may be imposed could vary

broadly in scope, and their impact is difficult to ascertain. These types of

measures may include, but are not limited to, banning a sanctioned

country or certain persons or entities associated with such country from

global payment systems that facilitate cross-border payments, restricting

securities transactions, restricting dealings with entities that are critical

to the infrastructure of securities and related transactions in specific

jurisdictions, restricting transactions in specified sectors of certain

countries, and freezing the assets of particular countries, entities or

persons. The imposition of sanctions and other similar measures could

impact the Fund's portfolio holdings by

, among other things,

reducing

their

value and/or liquidity

or causing a

downgrade

in

credit ratings

.

In

addition,

these measures could result

in

currency devaluation or

volatility, and increased market volatility and

/or economic

disruption in

the securities or sanctioned country and throughout the world.

Sanctions and other similar measures could directly or indirectly limit or

prevent the Fund from buying and selling securities, receiving interest or

principal payments due on the securities, significantly delay or prevent

the settlement of

securities transactions and adversely impact the

Fund's liquidity and performance and/or prevent the liquidation

,

closure

or other activities

of a portfolio holding sanctioned securities.

 

The Fund may invest in securities and

instruments that are economically tied to Russia. Investments in Russia

are subject to various risks such as, but not limited to political,

economic, legal, market and currency risks. The risks include uncertain

political and economic policies, short -term market volatility, poor

 

The Russian securities market, as compared to U.S. markets, has

significant price volatility, less liquidity, a smaller market capitalization

and a smaller number of traded securities. There may be little publicly

available information about issuers. Settlement, clearing and

registration of securities transactions are subject to risks. Prior to the

implementation of the National Settlement Depository (“NSD”), a

recognized central securities depository, there was no central

registration system for equity share registration in Russia, and

registration was carried out by either the issuers themselves or by

registrars located throughout Russia. Title to Russian equities held

through the NSD is now based on the records of the NSD and not the

registrars. Although the implementation of the NSD has enhanced the

efficiency and transparency of the Russian securities market, issues

resulting in loss can still occur. In addition, sanctions by the European

Union against the NSD, as well as the potential for sanctions by other

governments, could make it more difficult to conduct or confirm

transactions involving Russian securities. Ownership of securities issued

by Russian companies that are not held through depositories such as

the NSD may be recorded by companies themselves and by registrars.

Moreover, changes in Russian laws and regulations could require the

transfer of securities from the NSD to registrars or other parties outside

of standard custodial arrangements

, which could lead to additional risks

and possible conflicts with U

.

S.

laws.

In such cases, the risk is increased

that the Fund could lose ownership rights through fraud, negligence or

oversight. While applicable Russian regulations impose liability on

registrars for losses resulting from their errors, it may be difficult for the

Fund to enforce any rights it may have against the registrar or issuer of

the securities in the event of loss of share registration. In addition,

issuers and registrars are still prominent in the validation and approval

of documentation requirements for corporate action processing in

Russia. Because the documentation requirements and approval criteria

vary between registrars and issuers, there remain unclear and

inconsistent market standards in the Russian market with respect to the

completion and submission of corporate action elections. In addition,

sanctions or Russian countermeasures may prohibit or limit the Fund's

ability to participate in corporate actions, and therefore require the Fund

to forego voting on or receiving funds that would otherwise be

beneficial to the Fund. To the extent that the Fund suffers a loss relating

to title or corporate actions relating to its portfolio securities, it may be

difficult for the Fund to enforce its rights or otherwise remedy the loss.

Russian securities laws may not recognize foreign nominee accounts

held with a custodian bank, and therefore the custodian may be

considered the ultimate owner of securities they hold for their clients.

Adverse currency exchange rates are a risk and there may be a lack of

available currency hedging instruments. Investments in Russia may be

subject to the risk of nationalization or expropriation of assets. Oil,

natural gas, metals, minerals and timber account for a significant

portion of Russia's exports, leaving the country vulnerable to swings in

world prices and to sanctions or other actions that may be directed at

the Russian economy as a whole or at Russian oil, natural gas, metals,

minerals or timber industries.

Emerging Markets Risk

Foreign (non-U.S.) investment risk may be particularly high to the extent

that the Fund invests in securities of issuers based in or doing business

in emerging market countries or invests in securities denominated in the

currencies of emerging market countries. Investing in securities of

issuers based in or doing business in emerging markets entails all of the

risks of investing in foreign securities noted above, but to a heightened

degree.

Investments in emerging market countries pose a greater degree of

systemic risk (i.e., the risk of a cascading collapse of multiple institutions

within a country, and even multiple national economies). The

inter-relatedness of economic and financial institutions within and

among emerging market economies has deepened over the years, with

the effect that institutional failures and/or economic difficulties that are

of initially limited scope may spread throughout a country, a region or

all or most emerging market countries. This may undermine any attempt

by the Fund to reduce risk through geographic diversification of its

portfolio.

There is a heightened possibility of imposition of withholding or other

taxes on interest or dividend income or capital gains generated from

emerging market securities. Governments of emerging market countries

may engage in confiscatory taxation or expropriation of income and/or

assets to raise revenues or to pursue a domestic political agenda. In the

past, emerging market countries have nationalized assets, companies

and even entire sectors, including the assets of foreign investors, with

inadequate or no compensation to the prior owners. There can be no

assurance that the Fund will not suffer a loss of any or all of its

investments, or interest or dividends thereon, due to adverse fiscal or

other policy changes in emerging market countries.

There is also a greater risk that an emerging market government may

take action that impedes or prevents the Fund from taking income

and/or capital gains earned in the local currency and converting into

U.S. dollars (i.e., “repatriating” local currency investments or profits).

Certain emerging market countries have sought to maintain foreign

exchange reserves and/or address the economic volatility and

dislocations caused by the large international capital flows by

controlling or restricting the conversion of the local currency into other

currencies. This risk tends to become more acute when economic

conditions otherwise worsen. There can be no assurance that if the Fund

earns income or capital gains in an emerging market currency or PIMCO

otherwise seeks to withdraw the Fund’s investments from a given

emerging market country, capital controls imposed by such country will

not prevent, or cause significant expense, or delay in, doing so.

Bankruptcy law and creditor reorganization processes may differ

substantially from those in the United States, resulting in greater

uncertainty as to the rights of creditors, the enforceability of such rights,

reorganization timing and the classification, seniority and treatment of

claims. In certain emerging market countries, although bankruptcy laws

have been enacted, the process for reorganization remains highly

uncertain. In addition, it may be impossible to seek legal redress against

an issuer that is a sovereign state.

Other heightened risks associated with emerging markets investments

include without limitation (i) risks due to less social, political and

economic stability; (ii) the smaller size of the market for such securities

and a lower volume of trading, resulting in a lack of liquidity and in

price volatility; (iii) certain national policies which may restrict the Fund’s

investment opportunities, including sanctions and restrictions on

investing in issuers or industries deemed sensitive to relevant national

interests and requirements that government approval be obtained prior

to investment by foreign persons; (iv) certain national policies that may

restrict the Fund’s repatriation of investment income, capital or the

proceeds of sales of securities, including temporary restrictions on

foreign capital remittances; (v) the lack of uniform accounting and

auditing standards and/or standards that may be significantly different

from the standards required in the United States; (vi) less publicly

available financial and other information regarding issuers; (vii)

potential difficulties in enforcing contractual obligations; and (viii)

higher rates of inflation, higher interest rates and other economic

concerns. Countries with emerging securities markets may additionally

experience problems with share registration, settlement and custody,

which may result in losses to the Fund. The Fund may invest to a

substantial extent in emerging market securities that are denominated

in local currencies, subjecting the Fund to a greater degree of foreign

currency risk. Also, investing in emerging market countries may entail

purchases of securities of issuers that are insolvent, bankrupt or

otherwise of questionable ability to satisfy their payment obligations as

they become due, subjecting the Fund to a greater amount of credit risk

and/or high yield risk. The economy of some emerging markets may be

particularly exposed to or affected by a certain industry or sector, and

therefore issuers and/or securities of such emerging markets may be

more affected by the performance of such industries or sectors.

Currency risk may be particularly high because the Fund may, at times

or in general, have substantial exposure to emerging market currencies,

and engage in foreign currency transactions that are economically tied

Investments denominated in foreign (non-U.S.) currencies or that trade

in and receive revenues in, foreign (non-U.S.) currencies, derivatives or

other instruments that provide exposure to foreign (non-U.S.)

currencies, are subject to the risk that those currencies will decline in

value relative to the U.S. dollar, or, in the case of hedging positions, that

the U.S. dollar will decline in value relative to the currency being

hedged.

Currency rates in foreign (non-U.S.) countries may fluctuate significantly

over short periods of time for a number of reasons, including changes in

interest or inflation rates, balance of payments and governmental

surpluses or deficits, intervention (or the failure to intervene) by U.S. or

foreign (non-U.S.) governments, central banks or supranational entities

such as the International Monetary Fund, the imposition of currency

controls or other political developments in the United States or abroad.

These fluctuations may have a significant adverse impact on the value of

the Fund’s portfolio and/or the level of Fund distributions made to

Common Shareholders. There is no assurance that a hedging strategy, if

used, will be successful.

Moreover, currency hedging techniques may be unavailable with respect

to emerging market currencies. As a result, the Fund’s investments in or

exposure to foreign (non-U.S.) currencies and/or foreign (non-U.S.)

currency-denominated, and especially emerging market-currency

denominated, securities may reduce the returns of the Fund.

The local emerging market currencies in which the Fund may be

invested from time to time may experience substantially greater

volatility against the U.S. dollar than the major convertible currencies of

developed countries. Some of the local currencies in which the Fund

may invest are neither freely convertible into one of the major currencies

nor internationally traded. The local currencies may be convertible into

other currencies only inside the relevant emerging market where the

limited availability of such other currencies may tend to inflate their

values relative to the local currency in question. Such internal exchange

markets can therefore be said to be neither liquid nor competitive. In

addition, many of the currencies of emerging market countries in which

the Fund may invest have experienced steady devaluation relative to

freely convertible currencies.

Continuing uncertainty as to the status of the euro and the European

Monetary Union (“EMU”) has created significant volatility in currency

and financial markets generally. Any partial or complete dissolution of

the EMU could have significant adverse effects on currency and financial

markets, and on the values of the Fund’s portfolio investments. If one or

more EMU countries were to stop using the euro as its primary currency,

the Fund’s investments in such countries may be redenominated into a

different or newly adopted currency. As a result, the value of those

investments could decline significantly and unpredictably. In addition,

securities or other investments that are redenominated may be subject

to foreign currency risk, liquidity risk and valuation risk to a greater

There can be no assurance that if the Fund earns income or capital gains

in a non-U.S. country or PIMCO otherwise seeks to withdraw the Fund’s

investments from a given country, capital controls imposed by such

country will not prevent, or cause significant expense in, doing so.

To the extent that the Fund invests directly or indirectly in real estate

investments, including investments in equity or debt securities issued by

private and public REITs, real estate operating companies (“REOCs”),

private or public real estate-related loans and real estate-linked

derivative instruments and pooled investment vehicles (including

registered investment companies and private funds or other pooled

investment vehicles that would qualify as “investment companies”

under the 1940 Act but for an applicable exemption or exclusion) that

invest in real estate investments, it will be subject to the risks associated

with owning real estate and with the real estate industry generally.

These investments carry increased risks, which include, but are not

limited to: the burdens of ownership of real property; general and local

economic conditions (such as an oversupply of space or a reduction in

demand for space); fluctuations in the supply and demand for properties

(including competition based on rental rates); energy and supply

shortages; fluctuations in average occupancy and room rates; the

attractiveness, type and location of the properties and changes in the

relative popularity of commercial properties as an investment; the

financial condition and resources of tenants, buyers and sellers of

properties; increased mortgage defaults; the quality of maintenance,

insurance and management services; changes in the availability of debt

financing which may render the sale or refinancing of properties difficult

or impracticable; changes in building, environmental and other laws

and/or regulations (including those governing usage and

improvements), fiscal policies and zoning laws; changes in real property

tax rates; changes in interest rates and the availability of mortgage

funds which may render the sale or refinancing of properties difficult or

impracticable; changes in operating costs and expenses; energy and

supply shortages; uninsured losses or delays from casualties or

condemnation; negative developments in the economy that depress

travel or leasing activity; environmental liabilities; contingent liabilities

on disposition of assets; uninsured or uninsurable casualties; acts of

God, including earthquakes, hurricanes and other natural disasters;

social unrest and civil disturbances, epidemics, pandemics or other

public crises; terrorist attacks and war; risks and operating problems

arising out of the presence of certain construction materials, structural

or property level latent defects, work stoppages, shortages of labor,

strikes, union relations and contracts, fluctuating prices and supply of

labor and/or other labor-related factor; and other factors which are

Ultimately, to the extent it is not possible to renew leases or re-let space

as leases expire, decreased cash flow from tenants will result, which

could adversely impact the Fund’s operating results.

Real estate values have historically been cyclical. As the general

economy grows, demand for real estate increases and occupancies and

rents may increase. As occupancies and rents increase, property values

increase, and new development occurs. As development may occur,

occupancies, rents and property values may decline. Because leases are

usually entered into for long periods and development activities often

require extended times to complete, the real estate value cycle often

lags the general business cycle. Because of this cycle, real estate

companies may incur large swings in their profits and the prices of their

securities. Developments following the onset of COVID-19 have

adversely impacted certain commercial real estate markets, causing the

deferral of mortgage payments, renegotiated commercial mortgage

loans, commercial real estate vacancies or outright mortgage defaults.

These developments accelerated macro trends such as work from home

and online shopping which have negatively impacted (and may continue

to negatively impact) certain industries, such as brick-and-mortar retail.

The total returns available from investments in real estate generally

depend on the amount of income and capital appreciation generated by

the related properties. The performance of real estate, and thereby the

Fund, will be reduced by any related expenses, such as expenses paid

directly at the property level and other expenses that are capitalized or

otherwise embedded into the cost basis of the real estate.

Separately, certain service providers to the Fund and/or its subsidiaries,

as applicable, with respect to its real estate or real estate-related

investments may be owned by, employed by, or otherwise related to,

PIMCO, Allianz SE, their affiliates and/or their respective employees,

consultants and other personnel. PIMCO may, in its sole discretion,

determine to provide, or engage or recommend an affiliate of PIMCO to

provide, certain services to the Fund, instead of engaging or

recommending one or more third parties to provide such services.

Subject to the governance requirements of a particular fund and

applicable law, PIMCO or its affiliates, as applicable, will receive

compensation in connection with the provision of such services. As a

result, PIMCO faces a conflict of interest when selecting or

recommending service providers for the Fund. Fees paid to an affiliated

The Fund’s investments in real estate (including indirectly through

private funds treated as partnerships for U.S. federal income tax

purposes) will potentially be limited by the Fund’s intention to qualify as

a RIC and will potentially limit the Fund’s ability to so qualify. Income

and gains from direct investments in real estate do not constitute

qualifying income to a RIC for purposes of the 90% gross income test

described below. If the Fund’s income or gain from a particular

investment were determined to constitute nonqualifying income, which

in certain cases may be determined retroactively, and the Fund’s

nonqualifying income from all sources were to exceed 10% of its gross

income in any taxable year, the Fund would fail to qualify as a RIC

unless it were eligible to and did pay a tax at the Fund level. See “Tax

Risk” below for additional details.

REITs are pooled investment vehicles that own, and usually operate,

income-producing real estate. Some REITs also finance real estate. If a

REIT meets certain requirements, including distributing to shareholders

substantially all of its taxable income (other than net capital gains), then

it is not typically taxed on the income distributed to shareholders.

REITs are sometimes informally characterized as: equity REITs, mortgage

REITs and hybrid REITs. Equity REITs invest the majority of their assets

directly in real property. They derive their income primarily from rents

received and any profits on the sale of their properties. Equity REITs can

also realize capital gains by selling properties that have appreciated in

value. Mortgage REITs invest the majority of their assets in real estate

mortgages and derive most of their income from mortgage interest

payments. As its name suggests, hybrid REITs combine characteristics of

both equity REITs and mortgage REITs. Finally, REITs may either be

public or private. Private REITs are not traded on a national securities

exchange, whereas public REITs are traded on a national securities

exchange. Accordingly, private REITs may be less liquid than public

REITs. This reduces the ability of the Fund to redeem its investment in a

private REIT early. Private REITs are also generally harder to value and

may bear higher fees than public REITs.

An investment in a REIT, or in a real estate linked derivative instrument

linked to the value of a REIT, is subject to the risks that impact the value

of the underlying properties of the REIT. These risks include loss to

casualty or condemnation, and changes in supply and demand.

Additional risks include changes in interest rates, zoning laws,

regulatory limitations on rents, property taxes, and operating expenses.

Real estate income and values may also be affected by demographic

trends, such as population shifts or changing tastes, preferences (such

as remote work arrangements) and social values. Other factors that may

adversely affect REITs include poor performance by management of the

REIT, changes to the tax laws, or failure by the REIT to qualify for

The Fund may form and/or invest in REIT Subsidiaries that intend to be

eligible for treatment as REITs under the Code, which are private real

estate investment companies that may invest in certain real estate and

real estate-related investments and that intend to elect to be taxed as

REITs beginning with the first year in which they commence material

operations. Investments in REIT Subsidiaries are subject to risks

associated with the direct ownership of real estate. REIT Subsidiaries

may be affected by changes in the real estate markets generally as well

as changes in the values of any properties owned by the REIT

Subsidiaries or securing any mortgages owned by the REIT Subsidiaries

(which changes in value could be influenced by market conditions for

real estate in general or fluctuations in the value of rights to natural

resources appurtenant to the properties held by the REIT Subsidiaries). If

a REIT Subsidiary’s underlying assets are exposed to properties used by

a particular industry, it will be subject to risks associated with such

industry. A REIT Subsidiary will not be diversified and will be subject to

heavy cash flow dependency, possible lack of availability of financing,

changes in interest rates, prepayment and defaults by borrowers,

self-liquidation, adverse economic conditions, adverse changes in tax

laws, and the possibility of failing to qualify for favorable tax treatment

and/or maintain an exemption under the 1940 Act. Certain rental

income or income from the disposition of real estate could adversely

affect the REIT Subsidiary’s ability to retain its tax status, which would

have adverse tax consequences and, as a result, negatively impact the

Fund’s performance. See “REIT Subsidiary Risk—Tax Risk” below. A

REIT Subsidiary is subject to the risk that it will need to liquidate a

holding at an economically inopportune time.

A REIT Subsidiary may have limited diversification because it may invest

in a limited number of properties, a narrow geographic area, or a single

type of property.

A REIT Subsidiary may be affected by changes in the value of the

underlying real property, fluctuations in the demand for real estate,

defaults by tenants, and decreases in market rates for rent. To the extent

A REIT Subsidiary likely will depend on its ability to generate cash flow

to make distributions to the Fund. The Fund’s investments in the REIT

Subsidiary could cause the Fund to recognize income in excess of cash

received from the REIT Subsidiary and, as a result, the Fund may be

required to sell portfolio securities, including when it is not

advantageous to do so, in order to make distributions. By investing in a

REIT Subsidiary, the Fund is indirectly exposed to risks associated with

the REIT Subsidiary’s investments. Because a REIT Subsidiary will not be

registered under the 1940 Act, the Fund, as an investor in the REIT

Subsidiary, will not have the protections afforded to investors in

registered investment companies. Changes in the laws of the

United States, under which the Fund and a REIT Subsidiary are

organized, including the regulations under the Code, could result in the

inability of the Fund and/or a REIT Subsidiary to operate as described in

this prospectus and the Statement of Additional Information, and could

negatively affect the Fund and its shareholders. Differences between the

statutory and regulatory regimes applicable to a regulated investment

company and a REIT present additional challenges and risks with regard

to a REIT Subsidiary’s qualification and eligibility for treatment as a REIT

under the Code, which could result in a REIT Subsidiary and the Fund

having additional tax liability, and reduce the Fund’s current income and

total returns. See “Principal Risks of the Fund—Tax Risk.”

The Fund, indirectly through a REIT Subsidiary, expects to enter into

joint ventures with third parties to make investments. Joint ventures

entered into by the REIT Subsidiary (including through wholly owned

special purpose companies) would only include arrangements in which

the REIT Subsidiary does not primarily control the joint venture. The REIT

Subsidiary’s partial interest investments will generally be structured as

joint ventures or co-investment arrangements with third parties. In these

joint ventures, the REIT Subsidiary would generally share control with

the third-party partner (for example the REIT Subsidiary may have

approval rights over some or all of the joint venture’s activities, and in

limited circumstances that do not amount to primary control of the joint

venture, may have the ability to require that the joint venture take

specific actions), even though the REIT Subsidiary may hold a majority of

the economic interests of a joint venture. In many cases the third-party

partner may provide services for the joint venture or its assets, including,

without limitation, management of day-to-day operations, asset

management, property management, construction or development

management, and leasing, refinancing or disposition related services.

The REIT Subsidiary may also make investments in partnerships or other

co-ownership arrangements or participations. Such investments may

involve risks not otherwise present with other methods of investment. In

addition, disputes between the REIT Subsidiary and its joint venture

partners may result in litigation or arbitration that would increase the

REIT Subsidiary’s expenses and prevent the REIT Subsidiary’s officers

The Fund may invest in private real estate investments directly or

indirectly, including through one or more REIT Subsidiaries. Exposure to

private commercial real estate comes with a variety of risks. Lease

defaults, terminations by one or more tenants or landlord-tenant

disputes may reduce the REIT Subsidiary’s revenues and net income,

which would reduce the amount of income payable by the REIT

Subsidiary to the Fund. Any of these situations may result in extended

periods during which there is a significant decline in revenues or no

revenues generated by a property. If this occurred, it could adversely

affect the Fund’s performance.

A private real estate investment’s financial position and its ability to

make distributions may also be adversely affected by financial

difficulties experienced by any major tenants, including bankruptcy,

insolvency or a general downturn in the business, or in the event any

major tenants do not renew or extend their relationship as their lease

terms expire. A tenant in bankruptcy may be able to restrict the ability to

collect unpaid rents or interest during the bankruptcy proceeding.

Furthermore, dealing with a tenant’s bankruptcy or other default may

divert management’s attention and cause the investment and/or Fund

to incur substantial legal and other costs.

The Fund’s investments in real estate will be pressured in challenging

economic and rental market conditions. If a private real estate

investment is unable to re-let or renew leases for all or substantially all

of the space at these properties, if the rental rates upon such renewal or

re-letting are significantly lower than expected, or if the private real

estate investment’s reserves for these purposes prove inadequate, the

private real estate investment will experience a reduction in net income

and may be required to reduce or eliminate cash distributions, which

would reduce the amount of income payable by the private real estate

investment to the Fund and, as a result, negatively impact the Fund's

performance.

The Fund may seek to gain exposure to transactions involving the

acquisition or financing of undeveloped land for residential or

commercial land banking purposes. In addition to risks associated with

real estate development generally, due to the long-term investment

holding period often associated with land banking investments,

entitlement and other regulatory risks may be heightened. Further, until

the disposition or development of such undeveloped land, no income

would be realized from such land banking investment. Undeveloped

land is also a highly illiquid investment that may not be able to be

disposed of when desired due to various changes in market conditions.

REIT Subsidiary Risk – Tax Risk

A REIT Subsidiary intends to elect to be taxed as a REIT beginning with

the first year in which it commences material operations. As long as

certain requirements are met, a REIT is not subject to entity-level tax on

the income and gain it distributes to shareholders. In order to qualify as

a REIT under the Code, a REIT Subsidiary must satisfy a number of

requirements on a continuing basis, including requirements regarding

the composition of its assets, sources of its gross income, distributions

and shareholder ownership. The Fund intends to structure a REIT

Subsidiary and its activities in a manner designed to satisfy all of these

requirements. However, the application of such requirements is not

entirely clear, and it is possible that the IRS may interpret or apply those

requirements in a manner that jeopardizes the ability of a REIT

Subsidiary to satisfy all of the requirements for qualification as a REIT.

Not more than 50% of the value of a REIT Subsidiary’s outstanding

capital stock may be owned, directly or indirectly, by five or fewer

individuals or certain specified entities at any time during the last half of

any calendar year (the “Five or Fewer Test”), and the REIT Subsidiary’s

shares must be held by a minimum of 100 persons during at least

335 days in each taxable year (the “100-shareholder test”) subsequent

to the first taxable year for which the REIT Subsidiary’s qualification as a

REIT is effective. For purposes of the Five or Fewer Test, a REIT

Subsidiary will generally “look through” to the beneficial owners of the

Fund’s shares. Accordingly, if five or fewer individuals or certain

specified entities, at any time during the last half of any calendar year

own, directly or indirectly, more than 50% of a REIT Subsidiary’s shares

through the Fund, then the REIT Subsidiary’s qualification as a REIT

could be jeopardized. Although, as described in the Fund's Statement of

Additional Information, the Fund reserves the right to take certain

actions to comply with a Five or Fewer Test, the provisions of the 1940

Act, such as those pertaining to a closed-end fund’s purchase of its own

shares, may conflict with the kind of shareholder ownership limitations

that are commonly used by REITs to ensure compliance with the Five or

Fewer Test. The Fund may not have the information necessary for it to

ascertain whether or not a REIT Subsidiary satisfies the Five or Fewer

Test and there can be no assurances that, regardless of whether the

Fund were to have such information, it would be able to satisfy such

test with respect to all relevant periods. Accordingly there can be no

assurance that any REIT Subsidiary will qualify as a REIT and be able to

minimize its corporate level tax liability through distributions, as

discussed below.

In order to meet the 100-shareholder test necessary to qualify as a REIT

under the Code, a REIT Subsidiary will have approximately 100 to 125

preferred shareholders who will be “accredited investors” as defined in

Regulation D of the Securities Act and will be “qualified purchasers” for

purposes of the 1940 Act and the rules and regulations promulgated

thereunder. The preferred shareholders will be unaffiliated with PIMCO,

and private placement, administrative, distribution and reporting

services with respect to the preferred shareholders will be provided by a

third party firm. A REIT Subsidiary’s preferred shareholders will have

priority in the payment of dividends on their preferred shares at the

established rate. As such, dividend payments to a REIT Subsidiary’s

Further, to be eligible for treatment as a REIT under the Code, among

other things, a REIT Subsidiary generally will be required each year to

distribute to its shareholders at least 90% of its REIT taxable income

determined without regard to the dividends-paid deduction and

excluding net capital gain. To the extent that it does not distribute all of

its net capital gains, or distributes at least 90%, but less than 100%, of

its REIT taxable income, as adjusted, it will have to pay a corporate level

tax on amounts retained. Furthermore, if it fails to distribute during each

calendar year at least the sum of (a) 85% of its ordinary income for that

year, (b) 95% of its capital gain net income for that year, and (c) any

undistributed taxable income from preceding calendar year, it would

have to pay a 4% nondeductible excise tax on the excess of the

amounts required to be distributed over the sum of (a) the amounts that

it actually distributed and (b) the amounts it retained and upon which it

paid U.S. federal corporate income tax. These requirements could cause

it to distribute amounts that otherwise would be spent on investments

in real estate assets, and it is possible that a REIT Subsidiary might be

required to borrow funds, possibly at unfavorable rates, or sell assets,

possibly at unfavorable prices, to fund the required distributions.

Even if a REIT Subsidiary qualifies for taxation as a REIT, it may be

subject to certain U.S. federal, state and local taxes on its income and

assets, including taxes on any undistributed income, taxes on income

from certain prohibited activities, including certain activities conducted

as a result of a foreclosure, and state or local income, franchise, property

and transfer taxes, including mortgage recording taxes. Dividends

payable by a REIT Subsidiary to the Fund and, in turn, by the Fund to its

shareholders, generally are not qualified dividends eligible for reduced

rates of tax.

If a REIT Subsidiary fails to qualify as a REIT for any taxable year and it

does not qualify for certain statutory relief provisions, it will be subject

to U.S. federal income tax on its taxable income at corporate rates. In

addition, it will generally be disqualified from treatment as a REIT for

the four taxable years following the year of losing its REIT status. Losing

its REIT status will reduce its net earnings available for investment or

distribution to shareholders because of the additional tax liability,

negatively impacting the Fund's performance. In addition, distributions

to shareholders will no longer qualify for the dividends paid deduction,

and a REIT Subsidiary will no longer be required to make distributions. If

this occurs, the REIT Subsidiary might be required to borrow funds or

liquidate some investments in order to pay the applicable tax.

Certain U.S. government securities, such as U.S. Treasury bills, notes and

bonds, and mortgage-related securities guaranteed by the Government

National Mortgage Association (“GNMA”), are supported by the full

faith and credit of the United States; others, such as those of Federal

Home Loan Banks (“FHLBs”) or the Federal Home Loan Mortgage

Yields available from U.S. government debt securities are generally

lower than the yields available from such other securities. The values of

U.S. government securities change as interest rates fluctuate.

Periodically, uncertainty regarding the status of negotiations in the

U.S. government to increase the statutory debt ceiling could increase the

risk that the U.S. government may default on payments on certain

U.S. government securities, cause the credit rating of the

U.S. government to be downgraded, increase volatility in the stock and

bond markets, result in higher interest rates, reduce prices of

U.S. Treasury and other securities, and/or increase the costs of various

kinds of debt. If a government-sponsored entity is negatively impacted

by legislative or regulatory action (or lack thereof), is unable to meet its

obligations, or its creditworthiness declines, the performance of a fund

that holds securities of the entity will be adversely impacted.

The Fund’s investments in Foreign Government Securities involve a high

degree of risk. The foreign governmental entity that controls the

repayment of debt may not be able or willing to repay the principal

and/or interest when due. A governmental entity’s willingness or ability

to timely repay principal and interest may be affected by, among other

factors, its cash flow situation, the extent of its foreign reserves, the

availability of sufficient foreign exchange on the date a payment is due,

the relative size of the debt service burden to the economy as a whole,

the governmental entity’s policy towards the International Monetary

Fund and the political constraints to which a governmental entity may

be subject. Foreign governmental entities also may be dependent on

expected disbursements from other governments, multilateral agencies

and others abroad to reduce principal and interest arrearages on their

debt. The commitment on the part of these governments, agencies and

others to make such disbursements may be conditioned on the

implementation of economic reforms and/or economic performance and

the timely service of such debtor’s obligations. Failure to implement such

reforms, achieve such levels of economic performance or repay principal

or interest when due may result in the cancellation of such third parties’

commitments to lend funds to the foreign governmental entity, which

may further impair such debtor’s ability or willingness to timely service

its debts. Consequently, foreign governmental entities may default on

their debt. Holders of Foreign Government Securities may be requested

to participate in the rescheduling of such debt and to extend further

loans to governmental entities. In the event of a default by a

governmental entity, there may be few or no effective legal remedies for

collecting on such debt. These risks are particularly severe with respect

to investments in Foreign Government Securities of emerging market

countries. Among other risks, if the Fund’s investments in Foreign

Government Securities issued by an emerging market country need to

be liquidated quickly, the Fund could sustain significant transaction

costs. Also, governments in many emerging market countries participate

to a significant degree in their economies and securities markets, which

may impair investment and economic growth, and which may in turn

diminish the value of the Fund’s holdings in emerging market Foreign

Government Securities and the currencies in which they are

denominated and/or pay revenues.

Convertible securities are fixed income securities, preferred securities or

other securities that are convertible into or exercisable for common

stock of the issuer (or cash or securities of equivalent value) at either a

stated price or a stated rate. Convertible debt securities pay interest and

convertible preferred stocks pay dividends until they mature or are

converted, exchanged or redeemed. The market values of convertible

securities may decline as interest rates increase and, conversely, may

increase as interest rates decline. A convertible security’s market value,

however, tends to reflect the market price of the common stock of the

Certain securities in which the Fund invests may be less liquid and more

difficult to value than other types of securities. Investments for which

market quotations are not readily available are valued at fair value as

determined in good faith pursuant to Rule 2a-5 under the 1940 Act. Fair

value pricing may require subjective determinations about the value of a

security or other asset. As a result, there can be no assurance that fair

value pricing will result in adjustments to the prices of securities or other

assets or that fair value pricing will reflect actual market value, and it is

For the purposes of calculating the Fund’s NAV, private commercial real

estate investments made indirectly through a REIT Subsidiary typically

will initially be valued at cost, which the Fund expects to represent fair

value at that time. Thereafter, valuations of properties will be derived

from independent property appraisals or based on one or more fair

valuation methodologies as determined by PIMCO in accordance with

its policies and procedures.

The valuation methodologies used to value a REIT Subsidiary’s private

commercial real estate investments will involve subjective judgments

and projections that may not materialize. Valuation methodologies will

also involve assumptions and opinions about future events, which may

or may not materialize. Valuations and appraisals of a REIT Subsidiary’s

private commercial real estate investments will be only estimates of fair

value. Ultimate realization of the value of an asset depends to a great

extent on economic, market and other conditions beyond the control of

the Fund and/or a REIT Subsidiary.

The Fund’s use of leverage, if any, creates the opportunity for increased

Common Share net income, but also creates special risks for Common

Shareholders (including an increased risk of loss). To the extent used,

there is no assurance that the Fund’s leveraging strategies will be

successful. Leverage is a speculative technique that may expose the

Fund to greater risk and increased costs. The Fund’s assets attributable

to leverage, if any, will be invested in accordance with the Fund’s

investment objective and policies. Interest expense payable by the Fund

with respect to derivatives and other forms of leverage, and dividends

payable with respect to preferred shares outstanding, if any, will

generally be based on shorter-term interest rates that would be

periodically reset. So long as the Fund’s portfolio investments provide a

higher rate of return (net of applicable Fund expenses) than the interest

expenses and other costs to the Fund of such leverage, the investment

of the proceeds thereof will generate more income than will be needed

to pay the costs of the leverage. If so, and all other things being equal,

the excess may be used to pay higher dividends to Common

Shareholders than if the Fund were not so leveraged. There can be no

assurance these circumstances will occur. If, however, shorter-term

interest rates rise relative to the rate of return on the 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 Common Shareholders. When the Fund

reduces or discontinues its use of leverage (“deleveraging”), it may be

required to sell portfolio securities at inopportune times to repay

leverage obligations, which could result in realized losses and a

decrease in the Fund's net asset value. Deleveraging involves complex

operational processes, including the coordination of asset sales,

repayment of debt, and potential restructuring of the Fund's capital and

may involve significant costs, including transaction costs associated with

Reverse repurchase agreements involve the risks that the interest

income earned on the investment of the proceeds will be less than the

interest expense and Fund expenses associated with the repurchase

agreement, that the market value of the securities sold by the Fund may

decline below the price at which the Fund is obligated to repurchase

such securities and that the securities may not be returned to the Fund.

There is no assurance that reverse repurchase agreements can be

successfully employed. Dollar roll/buyback transactions involve the risk

that the market value of the securities the Fund is required to purchase

may decline below the agreed upon repurchase price of those securities.

Successful use of dollar rolls/buybacks may depend upon the Investment

Manager’s ability to correctly predict interest rates and prepayments.

There is no assurance that dollar rolls/buybacks can be successfully

employed. In connection with reverse repurchase agreements and dollar

rolls/buybacks, the Fund will also be subject to counterparty risk with

respect to the purchaser of the securities. If the broker/dealer to whom

the Fund sells securities becomes insolvent, the Fund’s right to purchase

or repurchase securities may be restricted.

The Fund may engage in total return swaps, reverse repurchases, loans

of portfolio securities, short sales and when-issued, delayed delivery and

forward commitment transactions, credit default swaps, basis swaps

Any total return swaps, reverse repurchases, loans of portfolio securities,

short sales and when-issued, delayed delivery and forward commitment

transactions, credit default swaps, basis swaps and other swap

agreements, purchases or sales of futures and forward contracts

(including foreign currency exchange contracts), call and put options or

other derivatives by the Fund or counterparties to the Fund’s other

leveraging transactions, if any, would have seniority over the Fund’s

Common Shares.

Because the fees received by the Investment Manager may increase

depending on the types of leverage utilized by the Fund, the Investment

Manager has a financial incentive for the Fund to use certain forms of

leverage, which may create a conflict of interest between the Investment

Manager, on the one hand, and the Common Shareholders, on the other

hand.

To the extent that any Subsidiary of the Fund directly incurs leverage in

the form of debt or preferred shares, the amount of such leverage used

by the Fund and such Subsidiaries will be consolidated and treated as

senior securities for purposes of complying with the 1940 Act’s

limitations on leverage by the Fund.

To the extent that the Fund focuses its investments in a particular sector,

it may be susceptible to loss due to adverse developments affecting that

sector, including (but not limited to): governmental regulation; inflation;

rising interest rates; cost increases in raw materials, fuel and other

operating expenses; technological innovations that may render existing

products and equipment obsolete; competition from new entrants; high

research and development costs; increased costs associated with

compliance with environmental or other governmental regulations; and

other economic, business or political developments specific to that

sector. Furthermore, the Fund may invest a substantial portion of its

assets in companies in related sectors that may share common

characteristics, are often subject to similar business risks and regulatory

burdens, and whose securities may react similarly to the types of

developments described above, which will subject the Fund to greater

risk. The Fund also will be subject to focused investment risk to the

extent that it invests a substantial portion of its assets in a particular

issuer, market, asset class, country or geographic region.

The Fund may, but is not required to, utilize a variety of derivative

instruments (both long and short positions) for investment or risk

management purposes. Additionally, the Fund may invest in futures and

other derivatives that provide equity exposures, including for

The Fund may engage in investment strategies, including the use of

derivatives, to, among other things, generate current, distributable

income, even if such strategies could potentially result in declines in the

Fund’s net asset value. The Fund’s income and gain-generating

strategies, including certain derivatives strategies, may generate current

income and gains, including short-term capital gains, taxable as

ordinary income sufficient to support distributions, even in situations

when the Fund has experienced a decline in net assets due to, for

example, adverse changes in the broad U.S. or non-U.S. securities

markets or the Fund’s portfolio of investments, or arising from its use of

derivatives. Consequently, Fund shareholders may receive distributions

subject to tax at ordinary income rates at a time when their investment

in the Fund has declined in value, which may be economically similar to

a taxable return of capital.

The use of derivatives involves risks different from, and possibly greater

than, the risks associated with investing directly in securities and other

traditional investments. Derivatives which may increase market

exposure, are subject to a number of risks, including leverage risk,

liquidity risk (which may be heightened for highly-customized

derivatives), interest rate risk, market risk, counterparty (including credit)

risk, operational risk (such as documentation issues, settlement issues

and systems failures), legal risk (such as insufficient documentation,

insufficient capacity or authority of a counterparty, and issues with the

legality or enforceability of a contract), management risk, risks arising

from changes in applicable regulatory requirements,

governmental risk,

sanctions risk,

risks arising from margin requirements and risks arising

from mispricing or valuation complexity (including the risk of improper

valuation),

as well as the risks associated with the underlying asset,

reference rate or index

. They also involve the risk that changes in the

value of a derivative instrument may not correlate perfectly with the

underlying asset, rate or index. By investing in a derivative instrument,

the Fund could lose more than the initial amount invested, and

derivatives may increase the volatility of the Fund, especially in unusual

or extreme market conditions. In addition, the use of derivatives may

cause the Fund’s investment returns to be impacted by the performance

of assets the Fund does not own, potentially resulting in the Fund’s total

investment exposure exceeding the value of its portfolio. Certain

derivatives have the potential for unlimited loss, regardless of the size of

the initial investment. The Fund may utilize asset segregation and

posting of collateral for risk management or other purposes. The Fund

may be required to hold additional cash or sell other investments in

order to obtain cash to close out a position and changes in the value of

a derivative may also create margin delivery or settlement payment

obligations for the Fund. Also, suitable derivative transactions may not

be available in all circumstances and there can be no assurance that the

Fund will engage in these transactions to reduce exposure to other risks

when that would be beneficial or that, if used, such strategies will be

successful. The Fund's use of derivatives may increase or accelerate the

amount of taxes payable by Common Shareholders.

Participation in the markets for derivative instruments involves

investment risks and transaction costs to which the Fund may not be

subject absent the use of these strategies. The skills needed to

successfully execute derivative strategies may be different from those

needed for other types of transactions. If the Fund incorrectly forecasts

the value and/or creditworthiness of securities, currencies, interest rates,

counterparties or other economic factors involved in a derivative

transaction, the Fund might have been in a better position if the Fund

had not entered into such derivative transaction. In evaluating the risks

and contractual obligations associated with particular derivative

instruments or other similar investments, it is important to consider that

certain derivative transactions, absent a default or termination event,

may only be modified or terminated by mutual consent of the Fund and

its counterparty.

Because the markets for certain derivative instruments (including

markets located in foreign countries) are relatively new and still

developing, appropriate derivative transactions may not be available in

all circumstances for risk management or other purposes. Upon the

expiration of a particular contract, the Fund may wish to retain the

Fund’s position in the derivative instrument by entering into a similar

contract but may be unable to do so if the counterparty to the original

contract is unwilling to enter into the new contract and no other

appropriate counterparty can be found. When such markets are

unavailable, the Fund will be subject to increased liquidity and

investment risk.

The Fund may enter into opposite sides of interest rate swap and other

derivatives for the principal purpose of generating distributable gains on

the one side (characterized as ordinary income for tax purposes) that

are not part of the Fund’s duration or yield curve management

strategies (“paired swap transactions”), and with a substantial

possibility that the Fund will experience a corresponding capital loss

and decline in NAV with respect to the opposite side transaction (to the

extent it does not have corresponding offsetting capital gains).

Consequently, Common Shareholders may receive distributions and owe

tax on amounts that are effectively a taxable return of the shareholder’s

investment in the Fund, at a time when their investment in the Fund has

declined in value, which tax may be at ordinary income rates. In

addition, the Fund’s use of derivatives may cause the Fund to realize

higher amounts of short-term capital gains (generally taxed at ordinary

income tax rates), potentially subjecting shareholders of the Fund to

adverse tax consequences. The tax treatment of certain derivatives in

which the Fund invests may be unclear and thus subject to

recharacterization. Any recharacterization of payments made or received

by the Fund pursuant to derivatives potentially could affect the amount,

timing or character of Fund distributions. In addition, the tax treatment

of such investment strategies may be changed by regulation or

otherwise.

Credit default swap agreements may involve greater risks than if the

Fund had invested in the reference obligation directly since, in addition

to general market risks, credit default swaps are subject to leverage risk,

illiquidity risk, counterparty risk and credit risk. A buyer generally also

will lose its investment and recover nothing should no credit event occur

and the swap is held to its termination date. If a credit event were to

occur, the value of any deliverable obligation received by the seller (if

any), coupled with the upfront or periodic payments previously received,

may be less than the full notional value it pays to the buyer, resulting in

a loss of value to the seller. When the Fund acts as a seller of a credit

default swap, it is exposed to many of the same risks of leverage

described herein. As the seller, the Fund would receive a stream of

payments over the term of the swap agreement provided that no event

of default has occurred with respect to the referenced debt obligation

upon which the swap is based. The Fund would effectively add leverage

to its portfolio because, if a default occurs, the stream of payments may

stop and, in addition to its total net assets, the Fund would be subject to

investment exposure on the notional amount of the swap.

Although the Fund may seek to realize gains by selling credit default

swaps that increase in value, to realize gains on selling credit default

swaps, an active secondary market for such instruments must exist or

the Fund must otherwise be able to close out these transactions at

advantageous times. In addition to the risk of losses described above, if

no such secondary market exists or the Fund is otherwise unable to

close out these transactions at advantageous times, selling credit

default swaps may not be profitable for the Fund.