UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-21284
---------
Nicholas-Applegate Convertible & Income Fund
--------------------------------------------
(Exact name of registrant as specified in charter)
1345 Avenue of the Americas, New York, New York 10105
-----------------------------------------------------
(Address of principal executive offices) (Zip code)
Brian Shlissel - 1345 Avenue of the Americas, New York, New York 10105
------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-739-3369
------------
Date of fiscal year end: February 29, 2004
-----------------
Date of reporting period: August 31, 2003
---------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORT(S) TO STOCKHOLDERS
SEMI-ANNUAL REPORT
8.31.03
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND
--------------------------------------------------------------------------------
[NYSE LOGO OMITTED]
CONTENTS
Letter to Shareholders ......................... 1
Performance and Statistics ..................... 2
Schedule of Investments ........................ 3-8
Statement of Assets and Liabilities ............ 9
Statement of Operations ........................ 10
Statement of Changes in Net Assets ............. 11
Notes to Financial Statements .................. 12-13
Financial Highlights ........................... 14
[PIMCO LOGO OMITTED]
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND LETTER TO SHAREHOLDERS
September 29, 2003
Dear Shareholder:
We are pleased to provide you with the initial financial report of the
Nicholas-Applegate Convertible & Income Fund (the "Fund") for the period March
31, 2003 (commencement of operations) through August 31, 2003.
Please refer to the following page for specific Fund information. If you have
any questions regarding the information provided, please contact your financial
advisor or call our shareholder services area at 1-800-331-1710. Please note
that a wide range of information and resources can be accessed through our Web
site, www.pimcoadvisors.com.
We at the Fund, together with PIMCO Advisors Fund Management LLC, the Fund's
investment manager and Nicholas-Applegate Capital Management LLC, the Fund's
sub-adviser, thank you for investing with us. We remain dedicated to serving
your investment needs.
Sincerely,
/s/ Stephen Treadway /s/ Brian S. Shlissel
Stephen Treadway Brian S. Shlissel
CHAIRMAN PRESIDENT, CHIEF EXECUTIVE OFFICER
| 08.31.03 | Nicholas-Applegate Convertible & Income Fund Semi-Annual Report 1
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND
PERFORMANCE AND STATISTICS (UNAUDITED)
--------------------------------------------------------------------------------
SYMBOL:
NCV
OBJECTIVE:
To provide total return through a combination of capital appreciation and high
current income.
PRIMARY INVESTMENTS:
At least 50% of total assets in convertible securities.
FUND INCEPTION DATE:
3/31/03
TOTAL NET ASSETS(1):
$1,538.5 million (as of 8/31/03)
PORTFOLIO MANAGERS:
Douglas Forsyth
--------------------------------------------------------------------------------
TOTAL RETURN(2): Market Price NAV
--------------------------------------------------------------------------------
Commencement of Operations (3/31/03) to 8/31/03 1.39% 11.05%
[THE FOLLOWING TABLE IS PRESENTED AS A GRAPH IN THE PRINTED DOCUMENT]
COMMON SHARE PRICE PERFORMANCE (WEEKLY):
For the period 3/31/03 (commencement of operations)
to 8/31/03
DATE NAV MARKET PRICE
------- ----- ------------
3/26/03 14.32 15
14.32 15.01
14.32 15
14.31 15.01
14.31 15.01
14.33 15.03
14.32 15.04
14.33 15.04
14.35 15.04
14.31 15.01
14.23 15.03
14.21 15.05
14.21 15.06
14.28 15.04
14.34 15.08
14.33 15.06
14.39 15.1
14.43 15.14
14.5 15.04
14.57 15
14.61 15
14.58 15.02
14.64 15.02
14.68 15
14.74 15.08
14.73 15.07
14.78 15.1
14.81 15.06
14.83 15.02
14.8 14.88
14.73 14.93
14.79 14.99
14.86 14.91
14.86 15
14.85 15.02
14.87 15.12
14.89 15.15
14.8 15.12
14.78 15.14
14.65 15.02
14.71 15
14.63 14.99
14.71 14.81
14.72 14.93
14.77 14.98
14.89 15
15.01 15.06
14.96 15.22
15.13 15.38
15.25 15.24
15.24 15.34
15.13 15.33
15.18 15.4
15.31 15.29
15.25 15.22
15.18 15.3
15.3 15.35
15.16 15.39
15.4 15.25
15.31 15.17
15.23 15.1
15.08 15.01
15.09 15.01
15.09 15.01
15.13 14.97
15.11 14.99
15.09 15
15.09 15.13
15.2 15.2
15.16 15.15
15.29 15.25
15.39 15.25
15.36 15.24
15.26 15.17
15.33 15.34
15.47 15.25
15.44 15.24
15.3 15.15
15.17 15.14
15.24 15.1
15.15 15.01
15.18 15
15.21 15
15.2 15.02
15.31 15.15
15.35 14.98
15.27 14.98
15.13 14.97
15.1 14.95
14.96 14.95
14.89 14.11
14.73 14.3
14.64 14.58
14.63 14.7
14.67 14.75
14.74 14.75
14.81 14.83
14.66 14.6
14.64 14.58
14.64 14.58
14.76 14.3
14.92 14.29
15.02 14.5
15.11 14.7
15.06 14.69
15.02 14.33
15.09 14.28
15.19 14.45
15.28 14.58
8/29/03 15.39 14.71
PORTFOLIO STATISTICS:
-----------------------------------------
Market Price $14.71
-----------------------------------------
Net Asset Value $15.39
-----------------------------------------
Market Price Yield(3) 10.20%
-----------------------------------------
(1) Inclusive of net assets attributable to Preferred Shares outstanding.
(2) PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. Total return is
determined by subtracting the initial investment from the redeemable value at
the end of the period and dividing the remainder by the initial investment and
expressing the result as a percentage. The calculation assumes that all income
dividends have been reinvested at prices obtained under the Fund's dividend
reinvestment plan. Total investment return does not reflect broker commissions
or sales charges. Total return for a period of less than one year is not
annualized.
An investment in the Fund involves risk, including the loss of principal.
Investment return, price, yield and net asset value will fluctuate with changes
in market conditions. This data is provided for information only and is not
intended for trading purposes. Closed-end funds, unlike open-end funds, are not
continuously offered. There is a one-time public offering and once issued,
shares of closed-end funds are sold in the open market through a stock exchange.
Net asset value is total assets applicable to common shareholders less total
liabilities divided by the number of common shares outstanding. Holdings are
subject to change daily.
(3) Market Price Yield is determined by dividing the annualized current per
share dividend to common shareholders by the market price per common share.
2 Nicholas-Applegate Convertible & Income Fund Semi-Annual Report | 08.31.03 |
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND SCHEDULE OF INVESTMENTS
August 31, 2003 (unaudited)
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
==========================================================================================================
CORPORATE BONDS & NOTES--40.2%
----------------------------------------------------------------------------------------------------------
AIRLINES--1.2%
$10,505 Continental Airlines, Inc., 8.00%, 12/15/05 Caa2/CCC+ $ 9,244,400
10,000 Delta Airlines, Inc., 7.70%, 12/15/05 B3/B 8,750,000
-----------
17,994,400
===========
APPAREL--0.8%
3,000 Oxford Industries, Inc., 8.875%, 6/1/11 (a) B3/B 3,120,000
5,200 Phillips-Van Heusen Corp., 9.50%, 5/1/08 B3/B+ 5,304,000
3,500 Russell Corp., 9.25%, 5/1/10 B1/BB 3,718,750
-----------
12,142,750
===========
AUTOMOTIVE--0.4%
5,060 CSK Auto, Inc., 12.00%, 6/15/06 B2/B 5,603,950
===========
COMMERCIAL SERVICES--1.0%
12,200 United Rentals, Inc., 9.00%, 4/1/09 B2/B+ 12,078,000
3,000 United Rentals North America, Inc., 10.75%, 4/15/08 (a) B1/BB- 3,300,000
-----------
15,378,000
===========
ELECTRONICS--1.4%
7,180 Imax Corp., 7.875%,12/1/05 Caa2/CCC 7,036,400
500 Integrated Electrical Services, Inc., 9.375%, 2/1/09 Ser. B B2/B+ 505,000
5,350 Salton, Inc., 10.75%, 12/15/05 B3/B 5,136,000
7,000 Sanmina-SCI Corp., 10.375%, 1/15/10 Ba2/BB- 7,980,000
1,100 Stoneridge, Inc., 11.50%, 5/01/12 B2/B 1,232,000
-----------
21,889,400
===========
ENERGY--0.7%
13,500 Calpine Corp., 8.50%, 2/15/11 B1/CCC+ 10,057,500
===========
ENTERTAINMENT--1.7%
4,350 Alliance Atlantis Communications, Inc., 13.00%, 12/15/09 B1/B 4,866,563
13,200 Argosy Gaming Corp., 10.75%, 6/1/09 B2/B+ 14,421,000
7,605 Premier Parks, Inc., 9.75%, 6/15/07 B2/B 7,338,825
-----------
26,626,388
===========
HEALTHCARE--2.6%
4,000 Beverly Enterprises, Inc., 9.00%, 2/15/06 B1/B+ 4,060,000
9,710 Extendicare Health Services, Inc., 9.35%, 12/15/07 B3/CCC+ 9,952,750
4,000 Hanger Orthopedic Group, Inc., 10.375%, 2/15/09 B2/B- 4,440,000
5,000 Province Healthcare Co., 7.50%, 6/1/13 B3/B- 4,812,500
6,500 Select Medical Corp., 9.50%, 6/15/09 B2/B 7,020,000
6,000 Triad Hospitals Holdings, Inc., 11.00%, 5/15/09 B2/B 6,555,000
2,000 Vicar Operating, Inc., 9.875%, 12/1/09 B3/B- 2,160,000
-----------
39,000,250
===========
HOME BUILDERS--1.1%
12,325 Ryland Group, Inc., 9.125%, 6/15/11 Ba2/BB- 13,495,875
3,500 Standard-Pacific Corp., 9.50%, 9/15/10 Ba2/BB 3,762,500
-----------
17,258,375
===========
HOME FURNISHINGS--0.3%
4,225 Central Garden & Pet Co., 9.125%, 2/1/13 B2/B+ 4,457,375
===========
| 8.31.03 | Nicholas-Applegate Convertible & Income Fund Semi-Annual Report 3
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND SCHEDULE OF INVESTMENTS
August 31, 2003 (unaudited)
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
==========================================================================================================
HOTELS/GAMING--2.0%
$ 7,750 Alliance Gaming Corp., 10.00%, 8/1/07 B3/B $ 8,021,250
8,500 Mandalay Resort Group, Inc., 10.25%, 8/1/07 Ba3/BB- 9,498,750
3,000 Penn National Gaming, Inc., 11.125%, 3/1/08 B3/B- 3,345,000
8,430 Wynn Resorts Ltd., 12.00%, 11/1/10 B3/CCC+ 9,568,050
-----------
30,433,050
===========
LEISURE--1.7%
11,250 Bally Total Fitness Holdings Corp., 9.875%, 10/15/07, Ser. D B3/B- 10,743,750
4,000 Bally Total Fitness Holdings Corp., 10.50%, 7/15/11 (a) B2/B 4,100,000
9,900 Royal Caribbean Cruises, Inc., 8.75%, 2/2/11 Ba2/BB+ 10,494,000
-----------
25,337,750
===========
MISCELLANEOUS--4.3%
64,350 HYDI 100, 8.00%, 6/20/08 (a) B2/NA 65,556,563
===========
MULTI-MEDIA--4.3%
12,250 Charter Communications, Inc., 10.75%, 10/1/09 Ca/CCC- 9,800,000
5,960 CSC Holdings, Inc., 9.875%, 2/15/13 B2/B+ 6,228,200
8,115 CSC Holdings, Inc., Ser. B, 7.625%, 4/1/11 B1/BB- 8,115,000
5,000 DirecTV Holdings, Inc., 8.375% , 3/15/13 (a) B1/B 5,462,500
14,600 Echostar DBS Corp., 10.375%, 10/1/07 Ba3/BB- 16,151,250
1,000 Sinclair Broadcast Group, Inc., 8.75%, 12/15/11 B2/B 1,077,500
3,000 Spanish Broadcasting System., 9.625%, 11/1/09 B3/B- 3,172,500
5,000 Vivendi Universal SA., 9.25%, 4/15/10 (a) B1/B+ 5,587,500
10,600 Xm Satellite Radio Holdings, Inc., 12.00%, 6/15/10 (a) Caa1/CCC+ 10,494,000
-----------
66,088,450
===========
OFFICE FURNISHINGS--0.3%
5,000 Tempur-Pedic Inc., 10.25%, 8/15/10 (a) B3/B- 5,250,000
===========
OIL & GAS--2.3%
11,900 Premcor Refining Group, Inc., 8.875%, 11/15/07 B2/B 12,019,000
14,500 Sonat, Inc., 7.625%, 7/15/11 Caa1/B 12,615,000
10,000 Williams Cos. Inc., 9.25%, 3/15/04 B3/B+ 10,175,000
-----------
34,809,000
===========
PAPER PRODUCTS--0.8%
12,000 Georgia-Pacific Corp., 9.375%, 2/1/13 (a) Ba2/BB+ 12,870,000
===========
PHARMACEUTICALS--0.8%
4,130 aaiPharma Inc., 11.00%, 4/1/10 Caa1/B- 4,522,350
7,000 Alpharma, Inc., 8.625%, 5/1/11 (a) B3/B+ 7,070,000
-----------
11,592,350
===========
RETAIL--1.7%
4,500 Hollywood Entertainment Corp., 9.625%, 3/15/11 B3/B- 4,837,500
2,820 Michaels Stores, Inc., 9.25%, 7/1/09 Ba1/BB+ 3,052,650
14,990 Rite Aid Corp., 11.25%, 7/1/08 Caa2/B- 16,039,300
2,000 Tuesday Morning Corp., 11.00%, 12/15/07, Ser. B Ba3/B 2,110,000
-----------
26,039,450
===========
SEMI-CONDUCTORS--1.4%
12,625 Amkor Technology, Inc., 10.50%, 5/1/09 B3/CCC+ 13,256,250
7,195 Fairchild Semiconductor International, Inc., 10.50%, 2/1/09 B2/B 7,932,488
-----------
21,188,738
===========
4 Nicholas-Applegate Convertible & Income Fund Semi-Annual Report | 8.31.03 |
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND SCHEDULE OF INVESTMENTS
August 31, 2003 (unaudited)
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
==========================================================================================================
TELECOMMUNICATIONS--7.2%
$13,500 American Tower Corp., 9.375%, 2/1/09 Caa1/CCC $ 13,668,750
6,000 Centennial Cellular Operating Co., 10.125%, 6/15/06 (a) Caa1/CCC 6,210,000
14,490 Crown Castle International, Inc., 9.00%-10.75%,
5/15/11-8/1/11 B3/CCC 15,737,775
11,970 Nextel Communications, Inc., 12.00%, 11/1/08 B2/B+ 12,688,200
6,700 Nextel Partners, Inc., 11.00%, 3/15/10 Caa1/CCC+ 7,202,500
12,000 Nortel Networks Ltd., 6.125%, 2/15/06 B3/B 11,700,000
5,500 Pac-West Telecommunications, Inc., 13.50%, 2/1/09 Ca/NR 4,510,000
10,000 Spectrasite Inc., 8.25%, 5/15/10 (a) B3/CCC+ 10,400,000
15,000 Time Warner Telecom, Inc., 9.75%-10.125%,
7/15/08-2/1/11 B3/CCC+ 14,175,000
13,495 Triton PCS, Inc., 9.375%, 2/1/11 B3/B- 13,899,850
------------
110,192,075
============
TEXTILES--0.5%
6,426 Interface, Inc., 9.50%, 11/15/05 B3/CCC+ 5,751,270
2,000 Interface, Inc., 10.375%, 2/01/10 B2/B 1,930,000
------------
7,681,270
============
UTILITIES--0.8%
12,500 AES Corp., 9.50%, 6/1/09 B3/B- 12,031,250
------------
WASTE DISPOSAL--0.9%
12,500 Allied Waste, Inc., 10.00%, 8/1/09, Ser. B B2/B+ 13,531,250
------------
Total Corporate Bonds & Notes (cost--$594,248,399) 613,009,584
============
----------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES--32.1%
----------------------------------------------------------------------------------------------------------
AEROSPACE--1.6%
8,568 GenCorp Inc., 5.75%, 4/15/07 B3/B+ 8,289,540
12,899 L-3 Communications Holdings, Inc., 5.25%, 6/1/09 Ba3/BB- 16,413,978
------------
24,703,518
============
AIRLINES--1.1%
20,572 Continental Airlines Inc., 4.50%, 2/1/07 Caa2/CCC+ 15,994,730
============
BUSINESS SERVICES--1.0%
12,618 Affiliated Computer Services, Inc., 3.50%, 2/15/06 Baa2/BBB- 15,046,965
============
COMMERCIAL SERVICES--1.0%
14,824 Quebecor World Color Press, Inc., 6.00%, 10/1/07 Baa3/BB+ 15,379,900
============
COMPUTERS--1.2%
5,485 Sandisk Corp., 4.50%, 11/15/06 NR/CCC+ 18,292,475
============
DIVERSIFIED MANUFACTURING--1.1%
14,436 Tyco International Group SA, 3.125%, 1/15/23 (a) Ba2/BBB- 16,258,545
============
ELECTRONICS--1.2%
15,923 Cymer, Inc., 3.50%, 2/15/09 NR/B- 17,714,338
============
ENERGY--1.0%
17,256 Calpine Corp., 4.00%, 12/26/06 B1/CCC+ 15,702,960
============
FOOD SERVICES--1.1%
12,141 Performance Food Group, Co., 5.50%, 10/16/08 NR/NR 15,904,710
============
| 8.31.03 | Nicholas-Applegate Convertible & Income Fund Semi-Annual Report 5
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND SCHEDULE OF INVESTMENTS
August 31, 2003 (unaudited)
Principal
Amount Credit Rating
(000) (Moody's/S&P) Value*
==========================================================================================================
HEALTHCARE--0.5%
$ 7,750 Advanced Medical Optics, Inc., 3.50%, 4/15/03 (a) NR/B $ 8,098,750
============
INTERNET--2.3%
18,000 E*Trade Group Inc., 6.00%, 2/1/07 NR/B- 17,505,000
10,055 Symantec Corp., 3.00%, 11/1/06 NR/B 17,483,131
------------
34,988,131
============
MINING--1.2%
8,757 Freeport-McMoRan Cooper & Gold, Inc., 8.25%, 1/31/06 NR/B- 19,013,636
============
MULTI-MEDIA--3.3%
22,489 Charter Communications, Inc., 5.75%, 10/15/05 Ca/CCC- 17,991,200
14,245 Echostar Communications Corp., 5.75%, 5/15/08 B2/B 15,259,956
16,796 Liberty Media Corp., 3.25%, 3/15/31 Baa3/BBB- 17,047,940
------------
50,299,096
============
OIL & GAS--0.6%
7,339 St. Mary Land & Exploration Corp., 5.75%, 3/15/22 NR/NR 9,641,611
============
PHARMACEUTICALS--1.9%
10,617 AmerisourceBergen Corp., 5.00%, 12/1/07 Ba3/BB- 13,138,538
5,529 Gilead Sciences, Inc., 5.00%, 12/15/07 NR/NR 15,107,992
------------
28,246,530
============
REAL ESTATE--1.0%
14,828 EOP Operating LP, 7.25%, 11/15/08 Baa1/BBB+ 15,662,075
============
RETAIL--2.8%
12,159 Gap, Inc., 5.75%, 3/15/09 Ba3/BB+ 17,372,171
7,600 Guitar Center, Inc., 4.00%, 7/15/13 B1/B+ 9,006,000
15,708 Sonic Automotive, Inc., 5.25%, 5/7/09 B3/B+ 16,081,065
------------
42,459,236
============
SEMI-CONDUCTORS--1.1%
17,742 Amkor Technology, Inc., 5.00%-5.75%, 6/1/06-3/15/07 B3/CCC+ 16,849,139
============
SOFTWARE--3.0%
12,100 Computer Associates International, Inc., 5.00%, 3/15/07 Baa2/BBB+ 15,230,875
14,043 HNC Software, Inc., 5.25%, 9/1/08 NR/NR 16,553,186
13,325 Network Associates, Inc., 5.25%, 8/15/06 NR/NR 14,124,500
------------
45,908,561
============
TELECOMMUNICATIONS--3.1%
17,000 American Tower Corp., 5.00%, 2/15/10 Caa1/CCC 15,023,750
13,240 Crown Castle International, Inc., 4.00%, 7/15/10 NR/CCC 16,583,100
18,730 Nortel Networks Corp., 4.25%, 9/1/08 B3/B 15,780,025
------------
47,386,875
============
WASTE DISPOSAL--1.0%
14,063 Waste Connections, Inc., 5.50%, 4/15/06 B2/B+ 15,469,300
------------
Total Convertible Bonds & Notes (cost-$452,480,009) 489,021,081
============
6 Nicholas-Applegate Convertible & Income Fund Semi-Annual Report | 8.31.03 |
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND SCHEDULE OF INVESTMENTS
August 31, 2003 (unaudited)
Shares Credit Rating
(000) (Moody's/S&P) Value*
==========================================================================================================
CONVERTIBLE PREFERRED STOCK--21.0%
----------------------------------------------------------------------------------------------------------
AEROSPACE--1.9%
137 Northrop Grumman Corp., 7.25%, 11/16/04 NR/NR $ 14,297,192
272 Raytheon, Co., 8.25%, 5/15/04 NR/BB 15,353,777
------------
29,650,969
============
AUTOMOTIVE--2.2%
334 Ford Motor Corp Capital Trust II., 6.50%, 1/15/32 Baa2/BB+ 14,994,265
728 General Motors Corp., 6.25%, 7/15/33, Ser. C Baa1/BBB 19,105,932
------------
34,100,197
============
BANKING--1.2%
339 Washington Mutual, Inc., 5.375%, 5/3/41 Baa1/BBB- 17,920,651
============
COMMERCIAL SERVICES--1.0%
412 United Rentals, Inc., 6.50%, 8/1/28 B3/B 15,244,000
============
CONSUMER SERVICES--1.1%
361 Cendant Corp., 7.75%, 8/17/04 Baa1/BBB 16,096,626
============
ELECTRONICS--1.3%
1,222 Solectron Corp., 7.25%, 11/15/04 B2/B 20,260,097
============
FINANCIAL SERVICES--2.1%
376 Capital One Financial Corp., 6.25%, 5/17/05 Baa3/BB+ 16,156,992
273 Prudential Financial, Inc., 6.75%, 11/15/04 A3/A- 16,017,138
------------
32,174,130
============
HEALTHCARE--0.9%
161 Anthem, Inc., 6.00%, 11/15/04 NR/BBB- 13,956,974
============
INSURANCE--1.0%
512 Platinum Underwriters Holdings, Ltd., 7.00%, 11/16/05 NR/NR 14,653,868
============
MULTI-MEDIA--1.0%
694 Equity Securities Trust I, 6.50%, 11/15/04 NR/NR 15,618,630
** Radio One, Inc., 6.50%, 7/15/05 B3/CCC+ 149,103
------------
15,767,733
============
OFFICE EQUIPMENT--1.2%
282 Xerox Corp., 7.50%, 11/27/21 (a) B3/B- 18,909,851
============
OIL & GAS--2.0%
260 Chesapeake Energy Corp., 6.00%, 12/31/49 (a) B3/B- 16,107,662
502 El Paso Corp., 9.00%, 8/16/05 Caa1/NR 14,285,883
------------
30,393,545
============
RAILROADS--1.0%
294 Union Pacific Capital Trust, 6.25%, 4/1/28 Ba1/BB+ 14,874,536
============
TELECOMMUNICATIONS--2.1%
34 Corning, Inc., 7.00%, 8/16/05 B1/BB- 14,852,718
1 Nortel Networks Corp., 7.00%, 8/15/05 NR/NR 59,723
2,434 Sprint Corp. (FON Group), 7.125%, 8/17/04 NR/NR 17,036,397
------------
31,948,838
============
UTILITIES--1.0%
25 AES Trust III, 6.75%, 10/15/29 Ca/CCC+ 761,950
260 FPL Group, Inc., 8.00%, 2/16/06 NR/A- 13,986,978
------------
14,748,928
============
Total Convertible Preferred Stock (cost-$299,377,305) 320,700,943
============
| 8.31.03 | Nicholas-Applegate Convertible & Income Fund Semi-Annual Report 7
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND SCHEDULE OF INVESTMENTS
August 31, 2003 (unaudited)
Principal
Amount
(000) Value*
=============================================================================================================
U.S. GOVERNMENT SECURITIES-6.7%
-------------------------------------------------------------------------------------------------------------
United States Treasury Notes,
$88,000 9.375%-10.75%, 8/15/05-2/15/06, (cost-$103,440,221) $ 102,905,747
--------------
TOTAL INVESTMENTS (cost-$1,449,545,934+)--100% $1,525,637,355
==============
=============================================================================================================
NOTES TO SCHEDULE OF INVESTMENTS:
* Long-Term debt securities are valued by an independent pricing service
authorized by the Board of Trustees.
** Less than 500 shares.
(a) Security exempt from registration under Rule 144a of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, typically to qualified institutional investors. At August 31,
2003, these securities amounted to $198,795,371 or 13.0% of investments.
+ The cost basis of portfolio securities for federal income tax purposes is
$1,449,545,934. Aggregate gross unrealized appreciation for securities in
which there is an excess of value over tax cost is $87,037,645; aggregate
gross unrealized depreciation for securities in which there is an excess of
tax over value is $10,946,224; net unrealized appreciation for federal
income tax purposes is $76,091,421.
GLOSSARY:
HYDI -- JP Morgan High Yield Debt Index
NR -- Not Rated
================================================================================
8 Nicholas-Applegate Convertible & Income Fund Semi-Annual Report
| 8.31.03 | SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND STATEMENT OF ASSETS AND LIABILITIES
August 31, 2003 (unaudited)
================================================================================
ASSETS:
Investments, at value (cost-$1,449,545,934) $1,525,637,355
------------------------------------------------------------ --------------
Cash 3,947,281
------------------------------------------------------------ --------------
Interest and dividends receivable 19,631,759
------------------------------------------------------------ --------------
Receivable for investments sold 8,657,013
------------------------------------------------------------ --------------
Prepaid expenses 69,481
------------------------------------------------------------ --------------
Total Assets 1,557,942,889
============================================================ ==============
LIABILITIES:
Payable for investments purchased 9,922,499
------------------------------------------------------------ --------------
Dividends payable to common and preferred shareholders 8,315,421
------------------------------------------------------------ --------------
Investment management fees payable 895,119
------------------------------------------------------------ --------------
Common stock and preferred shares offering costs payable 178,871
------------------------------------------------------------ --------------
Accrued expenses 163,111
------------------------------------------------------------ --------------
Total Liabilities 19,475,021
------------------------------------------------------------ --------------
PREFERRED SHARES ($0.00001 PAR VALUE; $25,000 NET ASSET
AND LIQUIDATION VALUE PER SHARE APPLICABLE TO 21,000
SHARES ISSUED AND OUTSTANDING) 525,000,000
------------------------------------------------------------ --------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS $1,013,467,868
============================================================ ==============
COMPOSITION OF NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Common Stock:
Par value ($0.00001 per share applicable to 65,853,512
shares issued and outstanding) $ 659
------------------------------------------------------------ --------------
Paid-in-capital in excess of par 936,324,739
------------------------------------------------------------ --------------
Dividends in excess of net investment income (870,181)
------------------------------------------------------------ --------------
Net realized gain on investments 1,921,230
------------------------------------------------------------ --------------
Net unrealized appreciation of investments 76,091,421
------------------------------------------------------------ --------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS $1,013,467,868
============================================================ ==============
NET ASSET VALUE PER COMMON SHARE $15.39
============================================================ ==============
Nicholas-Applegate Convertible & Income Fund Semi-Annual Report | 8.31.03 |
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 9
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND STATEMENT OF OPERATIONS
For the period March 31, 2003* through August 31, 2003 (unaudited)
================================================================================
INVESTMENT INCOME:
Interest $ 27,362,863
------------------------------------------------------------ --------------
Dividends 10,664,699
------------------------------------------------------------ --------------
Total Investment Income 38,027,562
------------------------------------------------------------ ==============
EXPENSES:
Investment management fees 3,846,365
------------------------------------------------------------ --------------
Auction agent fees and commissions 359,589
------------------------------------------------------------ --------------
Custodian and accounting agent fees 82,950
------------------------------------------------------------ --------------
Audit and tax services 31,066
------------------------------------------------------------ --------------
Shareholder reports 21,698
------------------------------------------------------------ --------------
Trustees' fees and expenses 15,400
------------------------------------------------------------ --------------
Investor relations 14,830
------------------------------------------------------------ --------------
Transfer agent fees 12,508
------------------------------------------------------------ --------------
Legal fees 12,492
------------------------------------------------------------ --------------
New York Stock Exchange listing fee 7,347
------------------------------------------------------------ --------------
Insurance expense 4,801
------------------------------------------------------------ --------------
Miscellaneous 4,557
------------------------------------------------------------ --------------
Total expenses 4,413,603
------------------------------------------------------------ --------------
NET INVESTMENT INCOME 33,613,959
============================================================ ==============
REALIZED AND UNREALIZED GAIN:
Net realized gain on investments 1,921,230
------------------------------------------------------------ --------------
Net unrealized appreciation of investments 76,091,421
------------------------------------------------------------ --------------
Net realized and unrealized gain on investments 78,012,651
------------------------------------------------------------ --------------
NET INCREASE IN NET ASSETS RESULTING FROM INVESTMENT OPERATIONS 111,626,610
============================================================ ==============
DIVIDENDS ON PREFERRED SHARES FROM NET INVESTMENT INCOME (1,680,444)
------------------------------------------------------------ --------------
NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS
RESULTING FROM INVESTMENT OPERATIONS $ 109,946,166
============================================================ ==============
* Commencement of operations
10 Nicholas-Applegate Convertible & Income Fund Semi-Annual Report | 8.31.03 |
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND STATEMENT OF CHANGES IN NET ASSETS
APPLICABLE TO COMMON SHAREHOLDERS
For the period March 31, 2003* through August 31, 2003 (unaudited)
================================================================================
INVESTMENT OPERATIONS:
Net investment income $ 33,613,959
------------------------------------------------------------ --------------
Net realized gain on investments 1,921,230
------------------------------------------------------------ --------------
Net unrealized appreciation on investments 76,091,421
------------------------------------------------------------ --------------
Net increase in net assets resulting from investment
operations 111,626,610
============================================================ ==============
DIVIDENDS ON PREFERRED SHARES FROM NET INVESTMENT INCOME (1,680,444)
------------------------------------------------------------ --------------
Net increase in net assets applicable to common shareholders
resulting from investment operations 109,946,166
------------------------------------------------------------ --------------
DIVIDENDS TO COMMON SHAREHOLDERS FROM NET INVESTMENT INCOME (32,803,696)
------------------------------------------------------------ --------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from the sale of common stock 936,067,125
------------------------------------------------------------ --------------
Preferred shares underwriting discount charged to paid-in
capital in excess of par (5,250,000)
------------------------------------------------------------ --------------
Common stock and preferred shares offering costs charged to
paid-in capital in excess of par (2,125,000)
------------------------------------------------------------ --------------
Reinvestment of dividends 7,533,270
------------------------------------------------------------ --------------
Net increase from capital share transactions 936,225,395
------------------------------------------------------------ --------------
Total increase in net assets applicable to common
shareholders 1,013,367,865
============================================================ ==============
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Beginning of period 100,003
------------------------------------------------------------ --------------
End of period (including dividends in excess of net
investment income of $870,181) $1,013,467,868
============================================================ ==============
COMMON SHARES ISSUED AND REINVESTED:
Issued 65,345,000
------------------------------------------------------------ --------------
Issued in reinvestment of dividends 501,531
------------------------------------------------------------ --------------
NET INCREASE 65,846,531
============================================================ ==============
* Commencement of operations
Nicholas-Applegate Convertible & Income Fund Semi-Annual Report | 8.31.03 |
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS 11
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND NOTES TO FINANCIAL STATEMENTS
August 31, 2003
(unaudited)
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Nicholas-Applegate Convertible & Income Fund (the "Fund") was organized as a
Massachusetts business trust on January 17, 2003. Prior to commencing operations
on March 31, 2003, the Fund had no operations other than matters relating to its
organization and registration as a diversified, closed-end management investment
company under the Investment Company Act of 1940, as amended, and the sale and
issuance of 6,981 shares of beneficial interest at an aggregate purchase price
of $100,003 to Allianz Dresdner Asset Management of America, L.P. ("ADAM").
PIMCO Advisors Fund Management LLC (the "Investment Manager") serves as the
Fund's investment manager and is an indirect wholly-owned subsidiary of ADAM
which is an indirect, majority-owned subsidiary of Allianz AG. The Fund has an
unlimited amount of $0.00001 par value common stock authorized.
The Fund's investment objective is to provide total return through a combination
of capital appreciation and high current income. The Fund attempts to achieve
this objective by investing in portfolio of convertible securities and
non-convertible income-producing securities.
The Fund issued 60,000,000 shares of common stock, in its initial public
offering. An additional 5,345,000 shares were issued in connection with the
exercise of the underwriters' over-allotment option. These shares were all
issued at $15.00 per share before an underwriting discount of $0.675 per share.
Offering costs of $1,600,000 (representing $0.024 per share) were offset against
the proceeds of the offering and have been charged to paid-in capital in excess
of par. The Investment Manager agreed to pay all common offering costs (other
than the sales load) exceeding $0.03 per share. In addition, the underwriters
commission and offering costs associated with the issuance of Preferred Shares
in the amounts of $5,250,000 and $525,000, respectively, have been charged to
paid-in-capital in excess of par.
The preparation of the financial statements in accordance with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
and disclosures in the financial statements. Actual results could differ from
these estimates. In the normal course of business, the Fund enters into
contracts that contain a variety of representations which provide general
indemnifications. The Fund's maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the Fund
that have not yet occurred. However, the Fund expects the risk of any loss to be
remote.
The following is a summary of significant accounting policies followed by the
Fund.
(a) VALUATION OF INVESTMENTS
Portfolio securities and other assets for which market quotations are readily
available are valued each day at market value. Market value is generally
determined on the basis of the last reported sales price, or if no sales are
reported, based on quotes obtained from a quotation reporting system,
established market makers, or independent pricing services approved by the Board
of Trustees. Any security or other asset for which market quotations are not
readily available is valued at fair value as determined in good faith under
procedures established by the Board of Trustees. Short-term debt securities
having a remaining maturity of sixty days or less are valued at amortized cost
or amortized value, which approximates market value.
(b) INVESTMENT TRANSACTIONS AND INVESTMENT INCOME
Investment transactions are accounted for on the trade date. Realized gains and
losses on investments are determined on the identified cost basis. Interest
income is recorded on an accrual basis. Discounts or premiums on debt securities
purchased are accreted or amortized to interest income over the lives of the
respective securities using the effective interest method.
(c) FEDERAL INCOME TAXES
The Fund intends to comply with the requirements of the Internal Revenue Code of
1986, as amended, applicable to regulated investment companies. Accordingly, no
provision for U.S. federal income taxes is required. In addition, by
distributing substantially all of its ordinary income and long-term capital
gains, if any, during each calendar year, the Fund intends not to be subject to
U. S. federal excise tax.
(d) DIVIDENDS AND DISTRIBUTIONS--COMMON STOCK
The Fund declares dividends from net investment income monthly to common
shareholders. Distributions of net realized capital gains, if any, are paid at
least annually. The Fund records dividends and distributions to its shareholders
on the ex-dividend date. The amount of dividends and distributions from net
investment income and net realized capital gains are determined in accordance
with federal income tax regulations, which may differ from generally accepted
accounting principles. These "book-tax" differences are either considered
temporary or permanent in nature. To the extent these differences are permanent
in nature, such amounts are reclassified within the capital accounts based on
their federal income tax treatment; temporary differences do not require
reclassification. To the extent these dividends and/or distributions exceed
current and accumulated earnings and profits for federal income tax purposes
they are reported as dividends and/or distributions of paid-in capital in excess
of par.
12 Nicholas-Applegate Convertible & Income Fund Semi-Annual Report | 8.31.03 |
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND NOTES TO FINANCIAL STATEMENTS
August 31, 2003
(unaudited)
(e) CONCENTRATION OF RISK
It is the Fund's policy to invest the majority of its assets in convertible
securities. Although convertible securities do derive part of their value from
that of the securities into which they are convertible, they are not considered
derivative financial instruments. However, certain of the Fund's investments
include features which render them more sensitive to price changes in their
underlying securities. Thus they expose the Fund to greater downside risk than
traditional convertible securities, but still less than that of the underlying
common stock.
2. INVESTMENT MANAGER AND SUB-ADVISER
Pursuant to the Investment Management Agreement, the Fund pays the Investment
Manager an annual management fee, payable monthly, at the annual rate of 0.70%
of the Fund's average daily total managed assets. Total managed assets refer to
the total assets of the Fund (including assets attributable to any Preferred
Shares or other forms of leverage that may be outstanding) minus accrued
liabilities (other than liabilities representing leverage). The Investment
Manager has retained its affiliate, Nicholas-Applegate Capital Management LLC
("NACM"), to manage the Fund's investments. For its services, the Investment
Manager (not the Fund) will pay NACM a monthly fee equal to (i) 50% of the
management fee payable by the Fund to the Investment Manager for such month with
respect to the first $300 million of the Fund's average daily total managed
assets and (ii) 75% of the management fee payable by the Fund to the Investment
Manager for such month with respect to the Fund's average daily total managed
assets in excess of $300 million; provided however, that the amounts payable
under (i) and (ii) above shall be reduced to reflect that NACM will bear 50% and
75%, respectively, of any "Service or Incentive Fees" payable by the Investment
Manager for such month with respect to the specified total managed assets. For
these purposes, "Service or Incentive Fees" for any period equals the sum of any
shareholder servicing fees payable by the Investment Manager to UBS Warburg LLC,
the lead underwriter of the Fund's shares, and any incentive fees payable by the
Investment Manager to other underwriters for such period.
3. INVESTMENT IN SECURITIES
For the period ended August 31, 2003, purchases and sales of investments, other
than short-term securities, were $1,886,185,579 and $417,165,218, respectively.
4. AUCTION PREFERRED SHARES
The Fund has issued 4,200 shares of Preferred Shares Series A, 4,200 shares of
Preferred Shares Series B, 4,200 shares of Preferred Shares Series C, 4,200
shares of Preferred Shares Series D, and 4,200 shares of Preferred Shares Series
E each with a net asset and liquidation value of $25,000 per share plus accrued
dividends.
Dividends are accumulated daily at an annual rate set through auction
procedures. Distributions of net realized capital gains, if any, are paid
annually.
For the period ended August 31, 2003, the annualized dividend rate ranged from:
High Low At 8/31/03
--------------------------------------------------------------------------------
Series A 1.32% 1.05% 1.12%
Series B 1.30% 1.03% 1.12%
Series C 1.35% 1.00% 1.12%
Series D 1.30% 1.00% 1.10%
Series E 1.30% 1.05% 1.12%
The Fund is subject to certain limitations and restrictions while preferred
shares are outstanding. Failure to comply with these limitations and
restrictions could preclude the Fund from declaring any dividends or
distributions to common shareholders or repurchasing common shares and/or could
trigger the mandatory redemption of Preferred Shares at their liquidation value.
Preferred Shares, which are entitled to one vote per share, generally vote with
the common stock but vote separately as a class to elect two Trustees and on any
matters affecting the rights of the Preferred Shares.
5. SUBSEQUENT DIVIDEND DECLARATIONS--COMMON SHAREHOLDERS
On September 2, 2003, a dividend of $0.125 per share was declared to common
shareholders payable October 1, 2003 to shareholders of record on September 12,
2003.
On October 1, 2003, a dividend of $0.125 per share was declared to common
shareholders payable November 3, 2003 to shareholders of record on October 10,
2003.
| 8.31.03 | Nicholas-Applegate Convertible & Income Fund Semi-Annual Report 13
NICHOLAS-APPLEGATE CONVERTIBLE & INCOME FUND FINANCIAL HIGHLIGHTS
For a share of common stock outstanding for the period March 31, 2003* through
August 31, 2003
(unaudited)
===============================================================================
Net asset value, beginning of period $14.33**
-------------------------------------------------------------------------------------------------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.51
-------------------------------------------------------------------------------------------------- ----------
Net realized and unrealized gain on investments 1.19
-------------------------------------------------------------------------------------------------- ----------
Total from investment operations 1.70
-------------------------------------------------------------------------------------------------- ----------
DIVIDENDS ON PREFERRED SHARES FROM NET INVESTMENT INCOME (0.03)
-------------------------------------------------------------------------------------------------- ----------
Net increase in net assets applicable to common shareholders resulting from
investment operations 1.67
-------------------------------------------------------------------------------------------------- ----------
DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM NET INVESTMENT INCOME (0.50)
-------------------------------------------------------------------------------------------------- ----------
CAPITAL SHARE TRANSACTIONS:
Common stock offering costs charged to paid-in capital in excess of par (0.02)
-------------------------------------------------------------------------------------------------- ----------
Preferred shares offering costs/underwriting discounts charged to paid-in
capital in excess of par (0.09)
-------------------------------------------------------------------------------------------------- ----------
Total capital share transactions (0.11)
-------------------------------------------------------------------------------------------------- ----------
Net asset value, end of period $15.39
-------------------------------------------------------------------------------------------------- ----------
Market price, end of period $14.71
-------------------------------------------------------------------------------------------------- ----------
TOTAL INVESTMENT RETURN (1) 1.39%
-------------------------------------------------------------------------------------------------- ----------
RATIOS/SUPPLEMENTAL DATA:
Net assets applicable to common shareholders, end of period (000) $1,013,468
-------------------------------------------------------------------------------------------------- ----------
Ratio of expenses to average net assets (2)(3) 1.09%
-------------------------------------------------------------------------------------------------- ----------
Ratio of net investment income to average net assets (2)(3) 8.29%
-------------------------------------------------------------------------------------------------- ----------
Preferred shares asset coverage per share $73,253
-------------------------------------------------------------------------------------------------- ----------
Portfolio turnover 38%
------------------------------------------------------------------------------------------------------------------
* Commencement of operations
** Initial public offering price of $15.00 per share less underwriting
discount of $0.675 per share.
(1) Total investment return is calculated assuming a purchase of common stock
at the current market price on the first day of the period and a sale at
the current market price on the last day of the period reported. Dividends
are assumed, for purposes of this calculation, to be reinvested at prices
obtained under the Fund's dividend reinvestment plan. Total investment
return does not reflect brokerage commissions or sales charges. Total
investment return for a period of less than one year is not annualized.
(2) Calculated on the basis of income and expenses applicable to both common
and preferred shares relative to the average net assets of common
shareholders.
(3) Annualized
14 Nicholas-Applegate Convertible & Income Fund Semi-Annual Report | 8.31.03 |
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
TRUSTEES AND PRINCIPAL OFFICERS
Stephen Treadway
Chairman
Paul Belica
Trustee
Robert E. Connor
Trustee
John J. Dalessandro II
Trustee
Brian S. Shlissel
President & Chief Executive Officer
Newton B. Schott, Jr.
Vice President & Secretary
Douglas Forsyth
Vice President
Lawrence G. Altadonna
Treasurer, Principal Financial & Accounting Officer
INVESTMENT MANAGER
PIMCO Advisors Fund Management LLC
1345 Avenue of the Americas
New York, NY 10105
SUB-ADVISER
Nicholas-Applegate Capital Management LLC
600 West Broadway, 30th Flr
San Diego, California 92101
TRANSFER AGENT, DIVIDEND PAYING AGENT AND REGISTRAR
PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809
INDEPENDENT AUDITORS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036
LEGAL COUNSEL
Ropes & Gray
One International Place
Boston, MA 02210-2624
This report, including the financial information herein, is transmitted to the
shareholders of Nicholas Applegate Convertible & Income Fund for their
information. It is not a prospectus, circular or representation intended for use
in the purchase of shares of the Funds or any securities mentioned in this
report.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940, as amended, that from time to time each Fund may purchase
shares of its common stock in the open market.
The financial information included herein is taken from the records of the Fund
without examination by independent auditors, who did not express an opinion
hereon.
Daily information on the Fund is available at www.pimcoadvisors.com or by
calling 1-800-331-1710.
[LOGO PIMCO ADVISORS]
ITEM 2. CODE OF ETHICS Not required in this filing
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT Not required in this filing
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES Not required in this filing
ITEM 5. [RESERVED]
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES Not required in this filing
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES
(a) The registrant's President and Chief Executive Officer and Principal
Financial Officer have concluded that the registrant's disclosure controls
and procedures (as defined in Rule 30a-3(c) under the Investment Company
Act of 1940, as amended are effective based on their evaluation of these
controls and procedures as of a date within 90 days of the filing date of
this document.
(b) There were no significant changes in the registrant's internal controls or
in factors that could affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.
ITEM 10. EXHIBITS
(a)(1) CODE OF ETHICS Not required in this filing
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule
30a-2(a) under the Act (17 CFR 270.30a-2). Attached as Exhibit 99.CERT.
(b) Certifications for each principal executive officer and principal
financial officer of the registrant as required by Rule 30a-2(b) under
the Act (17 CFR 270.30a-2). Furnished as Exhibit 99.906CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
Nicholas-Applegate Convertible & Income Fund
By /s/ Brian S. Shlissel
------------------------
Brian S. Shlissel, President & Chief Executive Officer
Date: October 28, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By /s/ Brian S. Shlissel
-------------------------
Brian S. Shlissel, President & Chief Executive Officer
Date: October 28, 2003
By /s/ Lawrence G. Altadonna
----------------------------
Lawrence G. Altadonna, Treasurer, Principal Financial & Accounting Officer
Date: October 28, 2003