PIMCO Strategic Global Government Fund, Inc. Announces Changes to Investment Policies

PIMCO Strategic Global Government Fund, Inc. (NYSE:RCS) (the “Fund”) announced that its Board of Trustees has approved an investment policy pursuant to which the Fund may invest up to 15% of its total assets in any combination of interest-only (“IOs”) or inverse floating rate obligations (“inverse floaters”) and residual interests of real estate mortgage investment conduits (“REMICS”). The new policy takes effect immediately.

Previously, the Fund observed policies that prevented it from investing in IOs or inverse floaters of collateralized mortgage obligations or in residual interests of REMICS. Those policies have been rescinded in favor of the new policy noted above.

The Fund’s management team believes that increasing the Fund’s flexibility to invest in IOs, inverse floaters and residual interests of REMICs may better permit the Fund to react to changes in interest rates and to capitalize on the management team’s views on the housing and mortgage markets.

IOs are a class of debt security, typically representing an interest in a pool of mortgage-related or other asset-backed securities, which receives all of the interest from the asset pool, while another class receives all of the principal (a principal-only, or “PO” class). The yield to maturity on an IO class is extremely sensitive to the rate of principal payments (including prepayments) on the related underlying mortgage or other assets, and a rapid rate of principal payments may have a material adverse effect on the Fund’s yield to maturity from investing in these securities. If the underlying mortgage or other assets experience greater than anticipated prepayments of principal, the Fund may fail to recoup some or all of its initial investment in IOs even if the security is in one of the highest rating categories.

An inverse floater is a type of debt instrument that bears a floating or variable interest rate that moves in the opposite direction to interest rates generally or the interest rate on another security or index. Changes in interest rates generally, or the interest rate of the other security or index, inversely affect the interest rate paid on the inverse floater, with the result that the inverse floater’s price will be considerably more volatile than that of a fixed-rate instrument of similar credit quality. The market prices of inverse floaters may be highly sensitive to changes in interest rates and prepayment rates on the underlying securities, and may decrease significantly when interest rates increase or prepayment rates change.

REMICs are entities that qualify and elect treatment as such under provisions of the Internal Revenue Code and issue multiple-class of real estate mortgage-related securities. REMICs may take several forms, such as trusts, partnerships, corporations, associations or segregated pools of assets. To qualify as a REMIC, substantially all of the assets of the entity must be invested in assets directly or indirectly secured principally by an interest in real property and certain other permitted investments. Once REMIC status is elected and obtained, the entity is generally not subject to federal income taxation. Instead, income is passed through the entity and is taxed to the person or persons who hold interests in the REMIC. A REMIC interest must consist of one or more classes of "regular interests," some which may offer adjustable rates, and a single class of "residual interests." The residual interest in a REMIC generally represents the interest in any excess cash flow remaining after making required payments of principal or interest to the regular interest holders as well as administrative and other expenses. As in the case of IOs as described above, the yield to maturity on REMIC residuals is extremely sensitive to pre-payments on the related underlying mortgage assets. In addition, if one or more classes of regular interests in a REMIC pay interest at adjustable rates, the yield to maturity on the related REMIC residual will also be extremely sensitive to changes in the level of the index or other reference instrument upon which interest rate adjustments are based. Like IOs, in certain circumstances, the Fund may fail to recoup some or all of its initial investment in a REMIC residual.

Each of IOs, inverse floaters and residual interests in REMICS may be illiquid investments and subject the Fund to related risks.

The Fund’s primary investment objective is to generate, over time, a level of income higher than that generated by high quality, intermediate-term U.S. debt securities. As a secondary objective, the Fund seeks to maintain volatility in the net asset value of the shares of the Fund comparable to that of high-quality, intermediate-term U.S. debt securities.

As investment manager, Allianz Global Investors Fund Management LLC (“AGIFM”) is responsible for managing the investment activities of the Fund and the Fund’s business affairs and other administrative matters. AGIFM is an indirect, wholly-owned subsidiary of Allianz Asset Management of America L.P. and is a member of Munich-based Allianz Group. Pacific Investment Management Company LLC (“PIMCO”), an AGIFM affiliate, is the Fund’s sub-adviser, responsible for managing the Fund’s portfolio investments.

The Fund’s New York Stock Exchange closing prices of its common shares, net asset value per common share, as well as other information, including updated portfolio statistics and performance, is available at http://www.allianzinvestors.com or by calling the Fund’s shareholder servicing agent at (800) 254-5197.

Statements made in this release that look forward in time involve risks and uncertainties and are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such risks and uncertainties include, without limitation, the adverse effect from further declines in the securities markets and in the Fund’s performance, a general downturn in the economy, competition from other companies, changes in government policy or regulation, inability to attract or retain key employees, inability to implement their operating strategy and/or acquisition strategy, and unforeseen costs and other effects related to legal proceedings or investigations of governmental and self-regulatory organizations. The Fund’s ability to pay dividends to common shareholders is subject to the restrictions in its registration statement and other governing documents as well as the Investment Company Act of 1940.

Contacts:

For information on PIMCO Closed-End Funds:
Financial Advisors: 800-628-1237
Shareholders: 800-254-5197
Media Relations: 212-739-3501
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