N-Q 1 d366255dnq.htm PIMCO MUNICIPAL INCOME FUND III PIMCO Municipal Income Fund III

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-Q

 

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

 

Investment Company Act File Number:    811-21187
Registrant Name:    PIMCO Municipal Income Fund III
Address of Principal Executive Offices:    1633 Broadway
   New York, NY 10019
Name and Address of Agent for Service:    William G. Galipeau
   650 Newport Center Drive
   Newport Beach, CA 92660
Registrant’s telephone number, including area code:    (844) 337-4626
Date of Fiscal Year End:    December 31
Date of Reporting Period:   

March 31, 2017

 

Item 1. Schedule of Investments

 

Schedule of Investments

PIMCO Municipal Income Fund III

March 31, 2017 (Unaudited)

 

                                         
    PRINCIPAL
AMOUNT
(000S)		     MARKET
VALUE
(000S)		  

INVESTMENTS IN SECURITIES 163.0%

    

MUNICIPAL BONDS & NOTES 162.7%

    

ALABAMA 16.3%

    

Alabama Special Care Facilities Financing Authority-Birmingham, Alabama Revenue Bonds, (AGC Insured), Series 2009

    

6.000% due 06/01/2039

   $ 500     $ 551  

Alabama State Docks Department Revenue Bonds, Series 2010

    

6.000% due 10/01/2040

     1,000       1,156  

Jefferson County, Alabama Sewer Revenue Bonds, Series 2013

    

0.000% due 10/01/2050 (c)

     48,000       36,259  

6.500% due 10/01/2053

       15,000         17,628  

Lower Alabama Gas District Revenue Bonds, Series 2016

    

5.000% due 09/01/2046

     2,000       2,356  
   

 

 

  
      57,950  
   

 

 

  

ARIZONA 10.5%

    

Arizona Health Facilities Authority Revenue Bonds, Series 2007

    

5.200% due 10/01/2037

     2,250       2,214  

Arizona Health Facilities Authority Revenue Bonds, Series 2008

    

5.000% due 01/01/2035

     1,250       1,288  

5.500% due 01/01/2038

     900       931  

Pima County, Arizona Industrial Development Authority Revenue Bonds, Series 2008

    

5.000% due 09/01/2039 (d)

     13,000       13,396  

Pima County, Arizona Industrial Development Authority Revenue Bonds, Series 2010

    

5.250% due 10/01/2040

     750       781  

Salt River Project Agricultural Improvement & Power District, Arizona Revenue Bonds, Series 2009

    

5.000% due 01/01/2039 (d)

     5,000       5,308  

Salt Verde Financial Corp., Arizona Revenue Bonds, Series 2007

    

5.000% due 12/01/2037

     11,600       13,452  
   

 

 

  
      37,370  
   

 

 

  

CALIFORNIA 25.2%

    

Bay Area Toll Authority, California Revenue Bonds, Series 2008

    

5.000% due 04/01/2034

     500       520  

Bay Area Toll Authority, California Revenue Bonds, Series 2010

    

5.000% due 10/01/2029

     1,500       1,659  

5.000% due 10/01/2042

     3,260       3,566  

Bay Area Toll Authority, California Revenue Bonds, Series 2013

    

5.250% due 04/01/2053

     12,000       13,505  

California Health Facilities Financing Authority Revenue Bonds, Series 2009

    

6.000% due 07/01/2039

     2,500       2,774  

California Health Facilities Financing Authority Revenue Bonds, Series 2011

    

6.000% due 08/15/2042

     1,500       1,703  

California Health Facilities Financing Authority Revenue Bonds, Series 2013

    

5.000% due 08/15/2052

     2,015       2,175  

California Municipal Finance Authority Revenue Bonds, Series 2011

    

7.750% due 04/01/2031

     1,325       1,584  

California State General Obligation Bonds, Series 2007

    

5.000% due 06/01/2037

     5,000       5,033  

5.000% due 12/01/2037

     5,300       5,446  

California State General Obligation Bonds, Series 2008

    

5.250% due 03/01/2038

     1,350       1,401  

California State General Obligation Bonds, Series 2009

    

5.750% due 04/01/2031

     2,500       2,731  

6.000% due 04/01/2038

     5,000       5,471  

California State General Obligation Bonds, Series 2010

    

5.250% due 11/01/2040

     1,300       1,459  

5.500% due 03/01/2040

     3,200       3,554  

California Statewide Communities Development Authority Revenue Bonds, (FHA Insured), Series 2009

    

6.625% due 08/01/2029

     2,580       2,907  

6.750% due 02/01/2038

     9,200       10,391  

California Statewide Communities Development Authority Revenue Bonds, Series 2010

    

6.250% due 10/01/2039

     1,000       1,085  

California Statewide Communities Development Authority Revenue Bonds, Series 2011

    

5.000% due 12/01/2041

     3,000       3,262  

California Statewide Communities Development Authority Revenue Notes, Series 2007

    

5.750% due 11/01/2017

     405       412  

Golden State, California Tobacco Securitization Corp. Revenue Bonds, Series 2007

    

5.125% due 06/01/2047

     3,600       3,559  

5.750% due 06/01/2047

     1,120       1,120  

Los Angeles Community College District, California General Obligation Bonds, Series 2009

    

9.830% due 08/01/2033 (e)

     1,675       1,937  

M-S-R Energy Authority, California Revenue Bonds, Series 2009

    

6.500% due 11/01/2039

     2,000       2,742  

                                         

Palomar Health, California Certificates of Participation Bonds, Series 2009

    

6.750% due 11/01/2039

     1,250       1,427  

San Marcos Unified School District, California General Obligation Bonds, Series 2011

    

5.000% due 08/01/2038

     1,600       1,802  

Tobacco Securitization Authority of Southern California Revenue Bonds, Series 2006

    

5.000% due 06/01/2037

     6,200       6,200  
   

 

 

  
      89,425  
   

 

 

  

COLORADO 0.9%

    

Colorado Health Facilities Authority Revenue Bonds, Series 2010

    

5.000% due 01/01/2040

     2,000       2,137  

Public Authority for Colorado Energy Revenue Bonds, Series 2008

    

6.500% due 11/15/2038

     500       667  

Regional Transportation District, Colorado Revenue Bonds, Series 2010

    

6.000% due 01/15/2034

     500       554  
   

 

 

  
      3,358  
   

 

 

  

CONNECTICUT 0.4%

    

Harbor Point Infrastructure Improvement District, Connecticut Tax Allocation Bonds, Series 2010

    

7.875% due 04/01/2039

     1,250       1,379  
   

 

 

  

DISTRICT OF COLUMBIA 3.0%

    

District of Columbia Water & Sewer Authority Revenue Bonds, Series 2009

    

5.500% due 10/01/2039 (d)

       10,000       10,671  
   

 

 

  

FLORIDA 5.6%

    

Broward County, Florida Airport System Revenue Bonds, Series 2009

    

5.375% due 10/01/2029

     500       543  

Broward County, Florida Water & Sewer Utility Revenue Bonds, Series 2009

    

5.250% due 10/01/2034 (d)

     4,500       4,782  

Cape Coral, Florida Water & Sewer Revenue Bonds, (AGM Insured), Series 2011

    

5.000% due 10/01/2041

     3,000       3,321  

Florida Development Finance Corp. Revenue Notes, Series 2011

    

6.500% due 06/15/2021

     235       258  

Florida State General Obligation Bonds, Series 2009

    

5.000% due 06/01/2038 (d)

     4,200       4,415  

Greater Orlando Aviation Authority, Florida Revenue Bonds, Series 2010

    

7.073% due 10/01/2039 (e)

     5,000       5,919  

Miami-Dade County, Florida Revenue Bonds, Series 2016

    

0.000% due 10/01/2033 (a)

     1,000       490  
   

 

 

  
        19,728  
   

 

 

  

GEORGIA 3.8%

    

Medical Center Hospital Authority, Georgia Revenue Bonds, Series 2007

    

5.250% due 07/01/2037

     400       401  

Municipal Electric Authority of Georgia Revenue Bonds, Series 2015

    

5.000% due 07/01/2060

     10,000       10,534  

Private Colleges & Universities Authority of Georgia Revenue Bonds, Series 2016

    

4.000% due 10/01/2038 (d)

     2,500       2,614  
   

 

 

  
      13,549  
   

 

 

  

HAWAII 1.7%

    

Hawaii Pacific Health Revenue Bonds, Series 2010

    

5.500% due 07/01/2040

     1,500       1,613  

Hawaii State General Obligation Bonds, Series 2016

    

4.000% due 10/01/2035 (d)

     2,135       2,396  

4.000% due 10/01/2036 (d)

     1,755       1, 963  
   

 

 

  
      5,972  
   

 

 

  

ILLINOIS 8.1%

    

Chicago, Illinois General Obligation Bonds, Series 2007

    

5.500% due 01/01/2035

     400       397  

5.500% due 01/01/2042

     1,000       977  

Chicago, Illinois General Obligation Bonds, Series 2015

    

5.375% due 01/01/2029

     7,200       7,220  

5.500% due 01/01/2034

     2,665       2,659  

Chicago, Illinois General Obligation Bonds, Series 2017

    

6.000% due 01/01/2038

     3,000       3,118  

Chicago, Illinois Revenue Bonds, Series 2002

    

5.000% due 01/01/2027

     1,750       1,901  

Illinois Finance Authority Revenue Bonds, Series 2007

    

5.875% due 03/01/2027 ^

     1,000       265  

6.000% due 03/01/2037 ^

     625       166  

Illinois Finance Authority Revenue Bonds, Series 2009

    

5.500% due 07/01/2037 (d)

     5,000       5,279  

7.125% due 11/15/2037

     400       449  

Illinois Finance Authority Revenue Bonds, Series 2010

    

6.000% due 08/15/2038

     1,000       1,130  

Illinois State Toll Highway Authority Revenue Bonds, Series 2008

    

5.500% due 01/01/2033

     5,000       5,170  
   

 

 

  
      28,731  
   

 

 

  

                                         

INDIANA 0.7%

    

Vigo County, Indiana Hospital Authority Revenue Bonds, Series 2011

    

7.500% due 09/01/2022

     2,275       2,634  
   

 

 

  

IOWA 0.1%

    

Iowa Finance Authority Revenue Bonds, Series 2014

    

2.000% due 05/15/2056 ^

     76       1  

5.400% due 11/15/2046 ^

     403       386  
   

 

 

  
      387  
   

 

 

  

KENTUCKY 0.6%

    

Kentucky Economic Development Finance Authority Revenue Bonds, Series 2010

    

6.375% due 06/01/2040

     2,000       2,158  
   

 

 

  

LOUISIANA 2.1%

    

Louisiana Local Government Environmental Facilities & Community Development Authority Revenue Bonds, Series 2010

    

5.875% due 10/01/2040

     1,500       1,646  

6.000% due 10/01/2044

     1,000       1,100  

6.500% due 11/01/2035

     400       456  

Louisiana Public Facilities Authority Revenue Bonds, Series 2007

    

5.500% due 05/15/2047

     1,700       1,707  

Louisiana Public Facilities Authority Revenue Bonds, Series 2011

    

6.500% due 05/15/2037

     2,000       2,397  
   

 

 

  
      7,306  
   

 

 

  

MARYLAND 0.9%

    

Maryland Economic Development Corp. Revenue Bonds, Series 2010

    

5.750% due 06/01/2035

     1,000       1,074  

Maryland Health & Higher Educational Facilities Authority Revenue Bonds, Series 2010

    

6.250% due 01/01/2041

     700       822  

Maryland Health & Higher Educational Facilities Authority Revenue Bonds, Series 2011

    

6.000% due 07/01/2041

     1,000       1,185  
   

 

 

  
      3,081  
   

 

 

  

MASSACHUSETTS 2.6%

    

Massachusetts Development Finance Agency Revenue Bonds, Series 2010

    

7.625% due 10/15/2037

     280       302  

Massachusetts Development Finance Agency Revenue Bonds, Series 2011

    

0.000% due 11/15/2056 (a)(f)

     140       1  

6.250% due 11/15/2039

     529       543  

Massachusetts Development Finance Agency Revenue Bonds, Series 2016

    

4.000% due 10/01/2046 (d)

     2,500       2,530  

5.000% due 01/01/2047

     1,000       1,073  

Massachusetts Housing Finance Agency Revenue Bonds, Series 2003

    

5.125% due 06/01/2043

     3,185       3,188  

Massachusetts State College Building Authority Revenue Bonds, Series 2009

    

5.500% due 05/01/2039

     1,600       1,746  
   

 

 

  
      9,383  
   

 

 

  

MICHIGAN 4.1%

    

Michigan Finance Authority Revenue Bonds, Series 2017

    

5.000% due 12/01/2031 (d)

     1,200       1,386  

5.000% due 12/01/2046 (d)

     2,500       2,768  

Michigan State Building Authority Revenue Bonds, Series 2016

    

5.000% due 10/15/2046 (d)

     1,500       1,657  

5.000% due 10/15/2051 (d)

     1,500       1,650  

Michigan State Hospital Finance Authority Revenue Bonds, Series 2016

    

4.000% due 11/15/2047 (d)

     5,000       5,016  

Michigan Tobacco Settlement Finance Authority Revenue Bonds, Series 2008

    

0.000% due 06/01/2058 (a)

       12,500       298  

Royal Oak Hospital Finance Authority, Michigan Revenue Bonds, Series 2009

    

8.250% due 09/01/2039

     1,500       1,650  
   

 

 

  
        14,425  
   

 

 

  

                                         

MISSOURI 0.2%

    

Jennings, Missouri Revenue Bonds, Series 2006

    

5.000% due 11/01/2023

     230       214  

Manchester, Missouri Tax Allocation Bonds, Series 2010

    

6.875% due 11/01/2039

     500       512  
   

 

 

  
      726  
   

 

 

  

NEW HAMPSHIRE 0.6%

    

New Hampshire Business Finance Authority Revenue Bonds, Series 2009

    

6.125% due 10/01/2039

     2,000       2,240  
   

 

 

  

NEW JERSEY 8.4%

    

New Jersey Economic Development Authority Revenue Bonds, Series 2016

    

5.000% due 06/15/2041

     5,000       5,007  

New Jersey Economic Development Authority Special Assessment Bonds, Series 2002

    

6.500% due 04/01/2028

     4,500       5,284  

New Jersey Health Care Facilities Financing Authority Revenue Bonds, Series 2007

    

5.750% due 07/01/2037

     1,000       1,033  

New Jersey Health Care Facilities Financing Authority Revenue Bonds, Series 2013

    

5.500% due 07/01/2043

     2,000       2,231  

New Jersey Transportation Trust Fund Authority Revenue Bonds, (AGM Insured), Series 2006

    

0.000% due 12/15/2034 (a)

     3,200       1,397  

Tobacco Settlement Financing Corp., New Jersey Revenue Bonds, Series 2007

    

4.750% due 06/01/2034

     1,600       1,545  

5.000% due 06/01/2041

       13,745       13,405  
   

 

 

  
        29,902  
   

 

 

  

NEW MEXICO 0.3%

    

Farmington, New Mexico Revenue Bonds, Series 2010

    

5.900% due 06/01/2040

     1,000       1,095  
   

 

 

  

NEW YORK 14.3%

    

Brooklyn Arena Local Development Corp., New York Revenue Bonds, Series 2009

    

6.250% due 07/15/2040

     9,800       11,151  

Hudson Yards Infrastructure Corp., New York Revenue Bonds, Series 2011

    

5.750% due 02/15/2047

     5,000       5,665  

Metropolitan Transportation Authority, New York Revenue Bonds, Series 2011

    

5.000% due 11/15/2036

     3,000       3,381  

Nassau County, New York Industrial Development Agency Revenue Bonds, Series 2014

    

2.000% due 01/01/2049 ^

     311       53  

6.700% due 01/01/2049

     863       856  

New York City Industrial Development Agency, New York Revenue Bonds, (AGC Insured), Series 2009

    

7.000% due 03/01/2049

     10,450       11,565  

New York City Water & Sewer System, New York Revenue Bonds, Series 2009

    

4.750% due 06/15/2017 (d)

     3,421       3,447  

4.750% due 06/15/2035 (d)

     579       583  

New York Liberty Development Corp. Revenue Bonds, Series 2007

    

5.500% due 10/01/2037

     1,700       2,065  

New York Liberty Development Corp. Revenue Bonds, Series 2011

    

5.000% due 11/15/2044

     11,000       12,095  
   

 

 

  
      50,861  
   

 

 

  

NORTH CAROLINA 3.2%

    

New Hanover County, North Carolina Revenue Bonds, Series 2011

    

5.000% due 10/01/2028

     6,000       6,655  

University of North Carolina Hospitals at Chapel Hill Revenue Bonds, Series 2016

    

4.000% due 02/01/2046

     4,500       4,559  
   

 

 

  
      11,214  
   

 

 

  

OHIO 14.6%

    

Allen County, Ohio Revenue Bonds, Series 2010

    

5.000% due 06/01/2038

     500       529  

Buckeye Tobacco Settlement Financing Authority, Ohio Revenue Bonds, Series 2007

    

5.125% due 06/01/2024

     1,000       946  

5.875% due 06/01/2047

     8,400       8,051  

6.250% due 06/01/2037

     5,000       4,983  

6.500% due 06/01/2047

     30,350       30,345  

Hamilton County, Ohio Revenue Bonds, Series 2012

    

5.000% due 06/01/2042

     1,500       1,624  

Ohio State Turnpike Commission Revenue Bonds, Series 2013

    

5.000% due 02/15/2048

     5,000       5,461  
   

 

 

  
      51,939  
   

 

 

  

PENNSYLVANIA 6.6%

    

Allegheny County, Pennsylvania Hospital Development Authority Revenue Bonds, Series 2009

    

5.625% due 08/15/2039

     1,000       1,077  

Berks County, Pennsylvania Municipal Authority Revenue Bonds, Series 2012

    

5.000% due 11/01/2044

     6,600       7,142  

Capital Region Water, Pennsylvania Revenue Bonds, Series 2007

    

6.000% due 09/01/2036 ^

     1,200       1,137  

Cumberland County, Pennsylvania Municipal Authority Revenue Bonds, Series 2008

    

5.625% due 07/01/2028

     1,000       1,038  

6.000% due 07/01/2035

     670       698  

                                         

Dauphin County, Pennsylvania General Authority Revenue Bonds, Series 2009

    

6.000% due 06/01/2036

     1,000       1,100  

Luzerne County, Pennsylvania Industrial Development Authority Revenue Bonds, Series 2009

    

5.500% due 12/01/2039

     100       110  

Pennsylvania Turnpike Commission Revenue Bonds, Series 2009

    

5.125% due 12/01/2040

     3,000       3,237  

Pennsylvania Turnpike Commission Revenue Bonds, Series 2013

    

5.000% due 12/01/2043

     5,000       5,473  

Philadelphia Hospitals & Higher Education Facilities Authority, Pennsylvania Revenue Bonds, Series 2012

    

5.625% due 07/01/2042

     1,645       1,719  

Philadelphia, Pennsylvania Water & Wastewater Revenue Bonds, Series 2009

    

5.250% due 01/01/2036

     500       536  
   

 

 

  
        23,267  
   

 

 

  

SOUTH CAROLINA 6.5%

    

Greenwood County, South Carolina Revenue Bonds, Series 2009

    

5.375% due 10/01/2039

     1,000       1,070  

South Carolina Ports Authority Revenue Bonds, Series 2010

    

5.250% due 07/01/2040

     800       880  

South Carolina State Public Service Authority Revenue Bonds, Series 2013

    

5.125% due 12/01/2043

     5,000       5,222  

5.500% due 12/01/2053

       15,000       16,032  
   

 

 

  
      23,204  
   

 

 

  

TENNESSEE 1.7%

    

Bristol Industrial Development Board, Tennessee Revenue Bonds, Series 2016

    

5.125% due 12/01/2042

     2,500       2,382  

Bristol Industrial Development Board, Tennessee Revenue Notes, Series 2016

    

0.000% due 12/01/2025 (a)

     1,000       645  

0.000% due 12/01/2026 (a)

     1,000       607  

Claiborne County, Tennessee Industrial Development Board Revenue Bonds, Series 2009

    

6.625% due 10/01/2039

     1,250       1,331  

Johnson City Health & Educational Facilities Board, Tennessee Revenue Bonds, Series 2010

    

6.000% due 07/01/2038

     1,000       1,083  
   

 

 

  
      6,048  
   

 

 

  

TEXAS 16.0%

    

Dallas, Texas Civic Center Revenue Bonds, (AGC Insured), Series 2009

    

5.250% due 08/15/2038

     1,300       1,402  

Grand Parkway Transportation Corp., Texas Revenue Bonds, Series 2013

    

5.000% due 04/01/2053

     4,500       4,974  

North Harris County, Texas Regional Water Authority Revenue Bonds, Series 2008

    

5.250% due 12/15/2033

     5,500       5,889  

5.500% due 12/15/2038

     5,500       5,912  

North Texas Tollway Authority Revenue Bonds, Series 2008

    

5.625% due 01/01/2033

     10,800       11,170  

5.750% due 01/01/2033

     700       725  

North Texas Tollway Authority Revenue Bonds, Series 2011

    

5.000% due 01/01/2038

     3,000       3,214  

5.500% due 09/01/2041

     600       691  

Tarrant County, Texas Cultural Education Facilities Finance Corp. Revenue Bonds, Series 2009

    

6.250% due 11/15/2029

     3,000       3,246  

Tender Option Bond Trust Receipts/Certificates, Texas General Obligation Bonds, Series 2009

    

7.120% due 08/01/2039 (e)

     6,500       7,547  

Texas Municipal Gas Acquisition & Supply Corp. Revenue Bonds, Series 2006

    

5.250% due 12/15/2026

     150       170  

Texas Municipal Gas Acquisition & Supply Corp. Revenue Bonds, Series 2008

    

6.250% due 12/15/2026

     9,600       11,363  

Wise County, Texas Revenue Bonds, Series 2011

    

8.000% due 08/15/2034

     500       554  
   

 

 

  
      56,857  
   

 

 

  

U.S. VIRGIN ISLANDS 0.8%

    

Virgin Islands Public Finance Authority, U.S. Virgin Islands Revenue Bonds, Series 2009

    

6.625% due 10/01/2029

     1,335       1,108  

6.750% due 10/01/2037

     1,165       935  

Virgin Islands Public Finance Authority, U.S. Virgin Islands Revenue Bonds, Series 2010

    

5.250% due 10/01/2029

     1,000       780  
   

 

 

  
      2,823  
   

 

 

  

VIRGINIA 0.5%

    

Fairfax County, Virginia Industrial Development Authority Revenue Bonds, Series 2009

    

5.500% due 05/15/2035

     1,000       1,083  

James City County, Virginia Economic Development Authority Revenue Bonds, Series 2013

    

2.000% due 10/01/2048 ^

     201       15  

6.000% due 06/01/2043

     621       592  
   

 

 

  
      1,690  
   

 

 

  

                                         

WASHINGTON 0.5%

    

Washington Health Care Facilities Authority Revenue Bonds, Series 2009

    

7.375% due 03/01/2038

     1,000       1,116  

Washington Health Care Facilities Authority Revenue Bonds, Series 2010

    

5.500% due 12/01/2039

     500       573  
   

 

 

  
      1,689  
   

 

 

  

WEST VIRGINIA 0.2%

    

West Virginia Hospital Finance Authority Revenue Bonds, Series 2011

    

9.125% due 10/01/2041 ^

     955       854  
   

 

 

  

WISCONSIN 1.7%

    

University of Wisconsin Hospitals & Clinics Authority Revenue Bonds, Series 2013

    

5.000% due 04/01/2038

     3,500       3,839  

Wisconsin Health & Educational Facilities Authority Revenue Bonds, Series 2009

    

6.625% due 02/15/2039

     1,000       1,101  

Wisconsin Health & Educational Facilities Authority Revenue Bonds, Series 2010

    

5.625% due 04/15/2039

         1,000       1,089  
   

 

 

  
      6,029  
   

 

 

  

Total Municipal Bonds & Notes

(Cost $520,070)

       577,945  
   

 

 

  

SHORT-TERM INSTRUMENTS 0.3%

    

SHORT-TERM NOTES 0.3%

    

Federal Home Loan Bank

    

0.527% due 04/04/2017 (a)(b)

     800       800  

0.538% due 04/17/2017 (a)(b)

     200       200  
   

 

 

  
      1,000  
   

 

 

  

Total Short-Term Instruments

(Cost $1,000)

       1,000  
   

 

 

  

Total Investments in Securities

(Cost $521,070)

       578,945  
   

 

 

  

Total Investments 163.0%

(Cost $521,070)

     $ 578,945  
Preferred Shares (53.2)%       (189,000 ) 
Other Assets and Liabilities, net (9.8)%       (34,723 ) 
   

 

 

  
Net Assets Applicable to Common Shareholders 100.0%     $ 355,172  
   

 

 

  

Notes to Schedule of Investments (amounts in thousands*):

 

* A zero balance may reflect actual amounts rounding to less than one thousand.

 

^ Security is in default.

 

(a) Zero coupon security.

 

(b) Coupon represents a yield to maturity.

 

(c) Security becomes interest bearing at a future date.

 

(d) Represents an underlying municipal bond transferred to a tender option bond trust established in a tender option bond transaction in which the Fund sold, or caused the sale of, the underlying municipal bond and purchased the residual interest certificate. The security serves as collateral in a financing transaction.

 

(e) Represents an investment in a tender option bond residual interest certificate purchased in a secondary market transaction. The interest rate shown bears an inverse relationship to the interest rate on a tender option bond floating rate certificate. The interest rate disclosed reflects the rate in effect on March 31, 2017.

 

(f) Restricted Securities:

 

Issuer Description      Coupon        Maturity
Date		        Acquisition Date        Cost        Market
Value		        Market Value
as Percentage
of Net Assets		  

Massachusetts Development Finance Agency Revenue Bonds, Series 2011

        0.000%          11/15/2056          07/20/2007        $   4        $   1          0.00%  
                   

 

 

       

 

 

       

 

 

  

Fair Value Measurements

The following is a summary of the fair valuations according to the inputs used as of March 31, 2017 in valuing the Fund’s assets and liabilities:

 

Category and Subcategory    Level 1        Level 2        Level 3        Fair Value
at 03/31/2017		  

Investments in Securities, at Value

 

Municipal Bonds & Notes

                  

Alabama

    $ 0        $ 57,950        $ 0        $ 57,950  

Arizona

      0          37,370          0          37,370  

California

      0          89,425          0          89,425  

Colorado

      0          3,358          0          3,358  

Connecticut

      0          1,379          0          1,379  

District of Columbia

      0          10,671          0          10,671  

Florida

      0          19,728          0          19,728  

Georgia

      0          13,549          0          13,549  

Hawaii

      0          5,679          0          5,679  

Illinois

      0          28,731          0          28,731  

Indiana

      0          2,634          0          2,634  

Iowa

      0          387          0          387  

Kentucky

      0          2,158          0          2,158  

Louisiana

      0          7,306          0          7,306  

Maryland

      0          3,081          0          3,081  

Massachusetts

      0          9,383          0          9,383  

Michigan

      0          14,425          0          14,425  

Missouri

      0          726          0          726  

New Hampshire

      0          2,240          0          2,240  

New Jersey

      0          29,902          0          29,902  

New Mexico

      0          1,095          0          1,095  

New York

      0          50,861          0          50,861  

North Carolina

      0          11,214          0          11,214  

Ohio

      0          51,939          0          51,939  

Pennsylvania

      0          23,267          0          23,267  

South Carolina

      0          23,203          0          23,203  

Tennessee

      0          6,048          0          6,048  

Texas

      0          56,857          0          56,857  

U.S. Virgin Islands

      0          2,823          0          2,823  

Virginia

      0          1,690          0          1,690  

Washington

      0          1,689          0          1,689  

West Virginia

      0          854          0          854  

Wisconsin

      0          6,029          0          6,029  

Short-Term Instruments

                  

Short-Term Notes

      0          1,000          0          1,000  

Total Investments

    $   0        $   578,651        $   0        $   578,651  

There were no significant transfers among Levels 1, 2, or 3 during the period ended March 31, 2017.

See Accompanying Notes

Notes to Financial Statements

1. INVESTMENT VALUATION AND FAIR VALUE MEASUREMENTS

(a) Investment Valuation Policies The net asset value (‘NAV”) of the Fund’s shares is determined by dividing the total value of portfolio investments and other assets, less any liabilities attributable to that Fund, by the total number of shares outstanding of that Fund.

On each day that the New York Stock Exchange (“NYSE”) is open, Fund shares are ordinarily valued as of the close of regular trading (“NYSE Close”). Information that becomes known to the Fund or its agents after the time as of which NAV has been calculated on a particular day will not generally be used to retroactively adjust the price of a security or the NAV determined earlier that day. The Fund reserves the right to change the time as of which its respective NAV is calculated if the Fund closes earlier, or as permitted by the U.S. Securities and Exchange Commission (the “SEC”).

For purposes of calculating NAV, portfolio securities and other assets for which market quotes are readily available are valued at market value. Market value is generally determined on the basis of official closing prices or the last reported sales prices, or if no sales are reported, based on quotes obtained from established market makers or prices (including evaluated prices) supplied by the Fund’s approved pricing services, quotation reporting systems and other third-party sources (together, “Pricing Services”). The Fund will normally use pricing data for domestic equity securities received shortly after the NYSE Close and do not normally take into account trading, clearances or settlements that take place after the NYSE Close. A foreign (non-U.S.) equity security traded on a foreign exchange or on more than one exchange is typically valued using pricing information from the exchange considered by Pacific Investment Management Company LLC (“PIMCO” or the “Manager”) to be the primary exchange. A foreign (non-U.S.) equity security will be valued as of the close of trading on the foreign exchange, or the NYSE Close, if the NYSE Close occurs before the end of trading on the foreign exchange. Domestic and foreign (non-U.S.) fixed income securities, non-exchange traded derivatives, and equity options are normally valued on the basis of quotes obtained from brokers and dealers or Pricing Services using data reflecting the earlier closing of the principal markets for those securities. Prices obtained from Pricing Services may be based on, among other things, information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Certain fixed income securities purchased on a delayed-delivery basis are marked to market daily until settlement at the forward settlement date. Exchange-traded options, except equity options, futures and options on futures are valued at the settlement price determined by the relevant exchange. Swap agreements are valued on the basis of bid quotes obtained from brokers and dealers or market-based prices supplied by Pricing Services or other pricing sources. The Fund’s investments in open-end management investment companies, other than exchange-traded funds (“ETFs”), are valued at the NAVs of such investments.

Investments for which market quotes or market based valuations are not readily available are valued at fair value as determined in good faith by the Board or persons acting at their direction. The Board has adopted methods for valuing securities and other assets in circumstances where market quotes are not readily available, and has delegated to PIMCO the responsibility for applying the fair valuation methods. In the event that market quotes or market based valuations are not readily available, and the security or asset cannot be valued pursuant to a Board approved valuation method, the value of the security or asset will be determined in good faith by the Valuation Oversight Committee of the Board (“Valuation Oversight Committee”), generally based on recommendations provided by the Manager. Market quotes are considered not readily available in circumstances where there is an absence of current or reliable market-based data (e.g., trade information, bid/ask information, indicative market quotations (“Broker Quotes”), Pricing Services’ prices), including where events occur after the close of the relevant market, but prior to the NYSE Close, that materially affect the values of the Fund’s securities or assets. In addition, market quotes are considered not readily available when, due to extraordinary circumstances, the exchanges or markets on which the securities trade do not open for trading for the entire day and no other market prices are available. The Board has delegated to the Manager the responsibility for monitoring significant events that may materially affect the values of the Fund’s securities or assets and for determining whether the value of the applicable securities or assets should be reevaluated in light of such significant events.

When the Fund uses fair valuation to determine the value of a portfolio security or other asset for purposes of calculating its NAV, such investments will not be priced on the basis of quotes from the primary market in which they are traded, but rather may be priced by another method that the Board or persons acting at their direction believe reflects fair value. Fair valuation may require subjective determinations about the value of a security. While the Fund’s policy is intended to result in a calculation of the Fund’s NAV that fairly reflects security values as of the time of pricing, the Fund cannot ensure that fair values determined by the Board or persons acting at their direction would accurately reflect the price that the Fund could obtain for a security if it were to dispose of that security as of the time of pricing (for instance, in a forced or distressed sale). The prices used by the Fund may differ from the value that would be realized if the securities were sold.

(b) Fair Value Hierarchy U.S. GAAP describes fair value as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. It establishes a fair value hierarchy that prioritizes inputs to valuation methods and requires disclosure of the fair value hierarchy, separately for each major category of assets and liabilities, that segregates fair value measurements into levels (Level 1, 2, or 3). The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Levels 1, 2, and 3 of the fair value hierarchy are defined as follows:

 

•   Level 1—Quoted prices in active markets or exchanges for identical assets and liabilities.

 

•   Level 2—Significant other observable inputs, which may include, but are not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs.

 

•   Level 3—Significant unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available, which may include assumptions made by the Board or persons acting at their direction that are used in determining the fair value of investments.

In accordance with the requirements of U.S. GAAP, the amounts of transfers between Levels 1 and 2 and transfers into and out of Level 3, if material, are disclosed in the Notes to Schedule of Investments for the Fund.

For fair valuations using significant unobservable inputs, U.S. GAAP requires a reconciliation of the beginning to ending balances for reported fair values that presents changes attributable to realized gain (loss), unrealized appreciation (depreciation), purchases and sales, accrued discounts (premiums), and transfers into and out of the Level 3 category during the period. The end of period value is used for the transfers between Levels of the Fund’s assets and liabilities. Additionally, U.S. GAAP requires quantitative information regarding the significant unobservable inputs used in the determination of fair value of assets or liabilities categorized as Level 3 in the fair value hierarchy. In accordance with the requirements of U.S. GAAP, a fair value hierarchy, and if material, a Level 3 reconciliation and details of significant unobservable inputs, have been included in the Notes to Schedule of Investments for the Fund.

(c) Valuation Techniques and the Fair Value Hierarchy

Level 1 and Level 2 trading assets and trading liabilities, at fair value The valuation methods (or “techniques”) and significant inputs used in determining the fair values of portfolio securities or other assets and liabilities categorized as Level 1 and Level 2 of the fair value hierarchy are as follows:

Fixed income securities including corporate, convertible and municipal bonds and notes, U.S. government agencies, U.S. treasury obligations, sovereign issues, bank loans, convertible preferred securities and non-U.S. bonds are normally valued on the basis of quotes obtained from brokers and dealers or Pricing Services that use broker-dealer quotations, reported trades or valuation estimates from their internal pricing models. The Pricing Services’ internal models use inputs that are observable such as issuer details, interest rates, yield curves, prepayment speeds, credit risks/spreads, default rates and quoted prices for similar assets. Securities that use similar valuation techniques and inputs as described above are categorized as Level 2 of the fair value hierarchy.

Fixed income securities purchased on a delayed-delivery basis or as a repurchase commitment in a sale-buyback transaction are marked to market daily until settlement at the forward settlement date and are categorized as Level 2 of the fair value hierarchy.

Level 3 trading assets and trading liabilities, at fair value When a fair valuation method is applied by the Adviser that uses significant unobservable inputs, investments will be priced by a method that the Board or persons acting at their direction believe reflects fair value and are categorized as Level 3 of the fair value hierarchy.

Short-term debt instruments (such as commercial paper) having a remaining maturity of 60 days or less may be valued at amortized cost, so long as the amortized cost of such short-term debt instrument is approximately the same as the fair value of the instrument as determined without the use of amortized cost valuation. Short-term debt instruments having a remaining maturity of 60 days or less are categorized as Level 3 of the fair value hierarchy.

The validity of the fair value is reviewed by the Manager on a periodic basis and may be amended in accordance with the Fund’s valuation procedures.

2. FEDERAL INCOME TAX MATTERS

The Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code (the “Code”) and distribute all of its taxable income and net realized gains, if applicable, to shareholders. Accordingly, no provision for Federal income taxes has been made.

The Fund may be subject to local withholding taxes, including those imposed on realized capital gains. Any applicable foreign capital gains tax is accrued daily based upon net unrealized gains, and may be payable following the sale of any applicable investments.

In accordance with U.S. GAAP, the Manager has reviewed the Fund’s tax positions for all open tax years. As of March 31, 2017, the Fund has recorded no liability for net unrecognized tax benefits relating to uncertain income tax positions they have taken or expect to take in future tax returns.

The Fund files U.S. tax returns. While the statute of limitations remains open to examine the Fund’s U.S. tax returns filed for the fiscal years from 2014-2016, no examinations are in progress or anticipated at this time. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.

As of March 31, 2017, the aggregate cost and the net unrealized appreciation (depreciation) of investments for Federal income tax purposes are as follows (amounts in thousands):

 

                                                              

Federal

Tax Cost

  

Aggregate Gross

Unrealized

Appreciation

    

Aggregate Gross

Unrealized

(Depreciation)

    

Net Unrealized

Appreciation

(Depreciation) (1)

  
$  521,070   $   61,484     $   (3,609 )    $   57,875  

 

(1) Primary differences, if any, between book and tax net unrealized appreciation (depreciation) are attributable to wash sale loss deferrals for federal income tax purposes.

GLOSSARY: (abbreviations that may be used in the preceding statements)    (Unaudited)
Currency Abbreviations:         
USD (or $)    United States Dollar          
Municipal Bond or Agency Abbreviations:         
AGC    Assured Guaranty Corp.   AGM    Assured Guaranty Municipal   FHA    Federal Housing Administration

Item 2. Controls and Procedures

 

  (a) The principal executive officer and principal financial & accounting 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 (the “1940 Act”) (17 CFR 270.30a-3(c))), are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.

 

  (b) There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d))) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3. Exhibits

A separate certification for each principal executive officer and principal financial & accounting officer of the registrant as required by Rule 30a-2 under the 1940 Act is attached as Exhibit 99.CERT.

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.

PIMCO Municipal Income Fund III

 

By:  

/s/ Peter G. Strelow

   
Peter G. Strelow   
President (Principal Executive Officer)   
Date: May 26, 2017   
By:  

/s/ William G. Galipeau

   
William G. Galipeau   
Treasurer (Principal Financial & Accounting Officer)   
Date: May 26, 2017   
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/ Peter G. Strelow

   
Peter G. Strelow   
President (Principal Executive Officer)   
Date: May 26, 2017   
By:  

/s/ William G. Galipeau

   
William G. Galipeau   
Treasurer (Principal Financial & Accounting Officer)   
Date: May 26, 2017