UNITED STATES
 

SECURITIES AND EXCHANGE COMMISSION
 

WASHINGTON. D.C. 20549
 

DIVISION OF 

INVESTMENT MANAGEMENT 

August 3, 2009 

Kenneth J. Berman 

Debevoise & Plimpton LLP 

555 13th Street N.W., Suite 1100E 

Washington, DC 20004 

Re:	 Allianz Funds
 

File No. 811-06161
 

Dear Mr. Berman: 

Your March 9, 2009 letter requests our assurance that we would not recommend that the 

Securities and Exchange Commission (the "Commission") take any enforcement action under 

Section 17(a) of the Investment Company Act of 1940 (the "Act"), and the rules thereunder, if 

Allianz Funds (the "Trust"), a registered investment company that consists of multiple series 

(each, a "Fund"), Allianz Global Investors Fund Management LLC (the "Adviser"), and Allianz 

Global Investors of America LLC ("AGI"), an affiliated person of the Adviser, enter into the 

transaction summarized below and more fully described in the letter without seeking an order 

under Section 17(b) ofthe Act. 

You state that the Funds hold certain securities through joint accounts (the "Joint 

Accounts") established on behalf ofthe Funds in order to invest the cash collateral the Funds 

received in connection with a securities lending program. You state that the Joint Accounts are 

designed to operate in light oftwo no-action letters issued by Commission staff granting noaction assurances to funds participating in joint accounts without obtaining an exemptive order 

from the Commission. 1 

See The Chase Manhattan Bank, SEC Staff No-Action Letter (July 24,2001); Investment 

Company Institute, SEC Staff No-Action Letter (Dec. 14,2005). We would like to clarifY certain 

matters regarding the condition contained in the Chase Manhattan Bank no-action letter that "[a]ll 

ofthe assets that are held by the joint accounts will be valued on an amortized cost basis to the 

extent permitted by applicable Commission or staff releases, rules, letters or orders." This 

condition was intended to signifY that the amortized cost method of valuation only may be used 

by open-end investment companies to value investments with a remaining maturity of 60 days or 

less in accordance with the Commission's interpretation set forth in Investment Company Act 

Release No. 9786 (May 31, 1977), unless the investments are held by a money market fund 

registered under the Act and operating in compliance with rule 2a-7 under the Act. We withdraw 

any statements contained in the letter that might suggest otherwise. The Joint Accounts that are 

the subject ofthis letter are not money market funds registered under the Act and operating in 

compliance with rule 2a-7 under the Act. 
You state that, in accordance with the conditions set forth in those letters, investments in 

the Joint Accounts were limited to, among other investments, short-term money market 

instruments that constituted "Eligible Securities" (as defined in rule 2a-7 under the Act). You 

state that these certain securities held by the Funds and more fully described in your letter are no 

longer Eligible Securities and the Adviser has determined that it would be in the best interests of 

the Funds to dispose ofthem. However, you state that because ofthe absence ofliquidity in the 

market for these securities, the Adviser and the Trust's Board ofTrustees believe that it would 

not be in the best interests of each Fund and each Fund's shareholders to dispose ofthese 

securities in the market. You state that AGI is prepared to purchase these securities from the 

Funds in exchange for cash consideration equal to the remaining unpaid principal amount of 

these securities plus accrued and unpaid interest, determined as set forth in your letter (the 

"Aggregate Consideration")? You state that the Aggregate Consideration will be greater than 

the market value (including accrued interest) of these securities at the time of the purchase. You 

state that this transaction would satisfy the requirements of rule 17a-9 under the Act except that 

the Funds are not "money market" funds. 

Based on the facts and representations contained in your letter, we will not recommend 

enforcement action to the Commission against the Trust or AGI under Section 17(a) ofthe Act, 

or the rules thereunder, if AGI purchases from the Funds the securities specified in your letter for 

the Aggregate Consideration? Because our position is based on the facts and representations in 

your letter, you should note that any different facts or representations may require a different 

conclusion. This response expresses our views on enforcement action only and does not express 

any legal conclusion on the issues presented.4 

Very truly yours, 

~*,ql~ Sarah G. ten Siethoff 

Senior Counsel 

2	 You state that these securities were valued at amortized cost and on the date of your letter were 

effectively carried at their remaining unpaid principal amount. 

This letter confirms oral no-action relief provided by the undersigned on March 9,2009. 

4 The Division of Investment Management generally permits third parties to rely on no-action or 

interpretive letters to the extent that the third party's facts and circumstances are substantially 

similar to those described in the underlying request for a no-action or interpretive letter. 

Investment Company Act Release No. 22587 (Mar. 27, 1997) n.20. In light of the very factspecific nature of the Fund's request, however, the position expressed in this letter applies only to 

the entities seeking relief, and no other entity may rely on this position. Other funds facing 

similar legal issues should contact the staff ofthe Division about the availability of no-action 

relief. 

2 
DEBEVOISE & PLIMPTON 555 13th Street, N.W: LLP ~~hington,D.C.20004

Tel 202 383 8000 

Fax 2023838118 

www.debevoise.com 

February 24, 2009 

Robert E. Plaze 

Associate Director 

Division of Investment Management 

U.S. Securities and Exchange Commission 

100 F Street, N.E. 

Washington, D.C. 20549 

Re:	 Request for No-Action Assurance under Section 17(a) 

ofthe Investment Company Act of 1940 

Dear Mr. Plaze: 

We are writing on behalf of Allianz Funds (the "Trust"), a registered investment 

company that consists of multiple series (each, a "Fund"), Allianz Global Investors Fund 

Management LLC (the "Adviser") and Allianz Global Investors ofAmerica LLC 

("AGI"), an affiliated person of the Adviser. The Adviser and AGI (referred to 

collectively as the "AGI Parties") are each indirect, wholly-owned subsidiaries ofAllianz 

SE. 

We seek assurance from the staff of the Division of Investment Management (the 

"Division") that it will not recommend enforcement action to the Securities and 

Exchange Commission (the "Commission") under Section 17(a) ofthe Investment 

Company Act of 1940, as amended, or the rules thereunder (the"1940 Act"), if AGI 

acquires from the Funds the securities listed on Schedule A hereto (the "Subject 

Securities") and, in connection with such acquisition, the Funds receive aggregate cash 

consideration equal to the remaining unpaid principal amount ofthe Subject Securities 

plus accrued and unpaid interest (determined as set forth below) (the "Aggregate 

Consideration"). 1 

Schedule A provides details regarding each Subject Security, including its (i) CUSIP 

number and (ii) originally scheduled final maturity. It also identifies the Funds that 

hold the Subject Securities. The Subject Securities issued by Gryphon Funding 

Limited ("Gryphon") and SIV Portfolio PLC (formerly Cheyne Finance LLC 

("Cheyne")) were received by the Funds in exchange for securities issued by Cheyne 

New York • ~ashington, D.C. • London • Paris • Frankfurt • Moscow • Hong Kong • Shanghai 
2 

Robert E. Plaze 2 February 24, 2009 

The Funds acquired the Subject Securities in connection with a securities lending 

program under which the Funds accepted cash collateral as security for loans of securities 

and invested such cash collateral in various securities, including the Subject Securities. 

Each Fund holds the Subject Securities through joint accounts (the "Joint Accounts") 

established on behalf ofthe Funds in order to invest the cash collateral that the Funds 

received in connection with the securities lending program. 

The Joint Accounts are designed to comply with no-action letters that permit such 

accounts to operate without obtaining an SEC order. 2 In accordance with the conditions 

set forth in those letters, investments in the Joint Accounts were limited to, among other 

investments, short-term money market instruments that constituted "Eligible Securities" 

(as defined in Rule 2a-7). The Subject Securities were at the time they were acquired 

Eligible Securities under Rule 2a-7. In addition, the Subject Securities were initially 

valued at their "amortized cost." 

The Subject Securities are no longer Eligible Securities and the Adviser has 

determined it would be in the best interests ofthe Funds to dispose ofthem.3 However, 

because of the absence of liquidity in the market for the Subject Securities, the Adviser 

believes and, based on information provided by the Adviser, the Trust's Board of Trustees 

has determined that it would not be in the best interests of each Fund and each Fund's 

shareholders to dispose ofthe Subject Securities in the market. Subject to obtaining the 

no-action assurance requested in this letter, AGI is prepared to acquire the Subject 

Securities in their entirety from the Funds for cash (the "Transaction"). The Funds will 

in connection with the restructuring of Cheyne. These Subject Securities are referred 

to as the "Cheyne Subject Securities." 

See The Chase Manhattan Bank, S.E.C. No - Action Letter, 2001 WL 826913 (July 

24,2001). See also Investment Company Institute, S.E.C. No-Action Letter, 2005 

WL 3695279 (Dec. 14,2005). 

The maturity dates of the Subject Securities have passed, although the issuers of the 

Subject Securities continue to make interest payments (in the case of the Subject 

Securities issued by AXON, at the original contract rate). The Subject Securities are 

currently effectively valued at their remaining principal amount in reliance on a letter 

of credit ("LaC") from a third party bank that is unaffiliated with the AGI Parties. 

The LaC is designed to provide financial support to the Funds with the result that 

the Funds are valuing each Subject Security at its full remaining principal amount 

(see fn. 4), taking into account the fair value being used for each such position 

together with a receivable to the Funds associated with the position under the LaC. 

The LaC was arranged for by an affiliate of the Adviser at no cost to the Trust or the 

Funds. The Trust will instruct that the LaC be cancelled contemporaneously with 

the transfer of the Securities in the Transaction. 

40107672v1 
4 

Robert E. Plaze 3 February 24, 2009 

receive the Aggregate Consideration in connection with the transfer ofthe Securities.4 

AGI has advised that the Aggregate Consideration will be greater than the market value 

(including accrued interest) of the Subject Securities at the time of the purchase. The 

Trust's Board of Trustees has authorized the Transaction as being in the best interests of 

each Fund and each Fund's shareholders. 

AGIFM is an "affiliated person" of the Trust and AGI is an "affiliated person" of 

an "affiliated person" ofthe Trust under Section 2(a)(3) ofthe 1940 Act.s As a result, the 

Transaction would fall within Section 17(a)(2) of the 1940 Act, which makes it unlawful 

for any affiliated person of a registered investment company, or any affiliated person of 

such person, acting as principal, to knowingly purchase any security or other property 

from the investment company. 

The Transaction would satisfy the requirements of Rule 17a-9 under the 1940 

Act, except that the Funds are not "money market" funds. 6 We believe, however, that the 

The Aggregate Consideration to be paid will be an amount equal to the sum of (i) the 

unpaid principal amount of each Subject Security, plus (ii) an amount equal to the 

aggregate interest that would have accrued through the date of the Transaction (the 

"Transaction Date") had the Subject Security continued to make regular interest 

payments in accordance with its terms through the Transaction Date, less (iii) the 

aggregate amount of interest payments received by the Funds through the 

Transaction Date with respect to the Subject Security. The issuers of the Subject 

Securities have periodically made payments of principal and interest. For purposes 

of calculating the interest component ofthe Aggregate Consideration, the principal 

amount of a Subj ect Security will be reduced to reflect the repayment of principal, 

and accrued interest after the date of the Funds' receipt of a principal repayment 

would be based on the lower principal amount. In the case of the Cheyne Subject 

Securities, the unpaid principal amount will be calculated by reference to the unpaid 

principal amount ofthe securities originally issued by Cheyne for which they were 

exchanged, rather than the notional principal amount of the Cheyne Subject 

Securities. Similarly, the accrued interest on the Cheyne Subject Securities will be 

determined by reference to the contractual rate of the securities originally issued by 

Cheyne. The Cheyne Subject Securities themselves do not have a stated interest rate. 

The Adviser will pay a portion ofthe Aggregate Consideration. 

The Adviser is an affiliated person of each Fund under Section 2(a)(3)(D) as a result 

of being its Investment Adviser. AGI is an affiliated person of the Adviser under 

Section 2(a)(3)(C). 

Rule 17a-9 permits an affiliated person of a registered investment company to 

purchase a security from such a fund if (i) the security is no longer an Eligible 

Security, (ii) the current holder of the security holds itself out as a "money market" 

fund, (iii) the purchase is paid in cash, and (iv) the purchase price is equal to the 

40107672v1 
Robert E. Plaze 4 February 24, 2009 

circumstances support the grant of no-action relief. The Joint Accounts were designed to 

have the risk characteristics of money market funds. The fact that the Subject Securities 

were valued at amortized cost and are currently effectively carried at their remaining 

unpaid principal amount further suggests that the conditions set forth in Rule 17a-9 

provide an appropriate basis for the proposed Transaction. 7 

The Trust and the Adviser believe that it would be in the best interests of each 

Fund and each Fund's shareholders if the Funds are permitted to transfer the Subject 

Securities as described above. On behalf ofthe Trust and the AGI Parties, we hereby 

request that the Division staff give its assurance that it will not recommend that the 

Commission take enforcement action against the Trust or the AGI Parties under Section 

17(a) ofthe 1940 Act, or the rules thereunder, if AGI acquires the Subject Securities from 

the Funds upon payment ofthe Aggregate Consideration by the AGI Parties as described 

above. 8 

Pursuant to 17 C.F.R. 200.81(b), we respectfully request on behalf of the Trust 

and the AGI Parties that this request and the response be accorded confidential treatment 

until June 23,2009 or such earlier date as the Division staff is advised that all of the 

information in this letter has been made public. This request for confidential treatment is 

made on behalf of the Trust and the AGI Parties for the reason that certain of the facts set 

forth in the letter have not been made public and premature disclosure might adversely 

affect such parties. 

greater of the amortized cost of the security and its market price (in each case, 

including accrued interest). We believe that the methodology for determining the 

Aggregate Consideration described in fn. 4 above will result in each Fund receiving 

an amount at least equal to the Subject Securities' amortized cost (including accrued 

interest). 

We note that the staff has granted similar relief to money market funds that did not 

meet the all of the conditions of Rule 17a-9. See, e.g., Investment Company 

Institute, S.E.C. No-Action Letter, 2008 WL 4476811 (September 25,2008) 

(allowing transactions where securities continued to be "Eligible Securities" as 

defined in Rule 2a-7). 

To the extent that the staff views the Transaction as constituting a "joint transaction," 

we also request that the Division staff give its assurance that it will not recommend 

that the Commission take enforcement action against the Trust or the AGI Parties 

under Section 17(d) and Rulel7d-l thereunder. 

40107672v1 
Robert E. Plaze 5 February 24, 2009 

If you have any questions or other communications concerning this matter, please 

call the undersigned at 202-383-8050. 

Sincerely, 

/fLf~
 Kenneth J. Berman 

40107672v1 
Schedule A: Subject Securities 

Fund 

CCM Capital 

Appreciation Fund 

CCM Mid Cap Fund 

OpCap Renaissance 

Fund 

OpCap Growth Fund 

OpCap Opportunity 

Fund 

OpCap Target Fund 

Securitl 

Cheyne 

Cheyne 

Axon 

Axon 

Cheyne 

Cheyne 

Axon 

Axon 

Cheyne 

Cheyne 

Axon 

Axon 

Axon 

Cheyne 

Axon 

Axon 

Axon 

CUSlp10 

16705RAYO 

16705EFDO 

05461FAP2 

05461FAW7 

16705RAYO 

16705EFDO 

05461FAP2 

05461FBCO 

16705RAYO 

16705EFDO 

05461FAW7 

05461FBCO 

05461FAP2 

16705RAYO 

05461FAP2 

05461FAW7 

05461FAP2 

Originally
 

Scheduled
 

Final
 

Maturity
 

5/13/08 

6/05/08 

5/06/08 

6/06/08 

5/13/08 

6/05/08 

5/06/08 

6/09/08 

5/13/08 

6/05/08 

6/06/08 

6/09/08 

5/06/08 

5/13/08 

5/06/08 

6/06/08 

5/06/08 

The Cheyne Subject Securities consist of notes issued by Gryphon Funding Limited 

and residual notes issued by SIV Portfolio PLC (formerly Cheyne Finance LLC) in 

exchange for the securities issued by Cheyne Finance LLC initially held by the 

Funds. 

10	 CUSlPs shown for the Cheyne Subject Securities represent the CUSlPs from the 

securities issued by Cheyne Finance LLC initially held by the Funds. 

40107672v1 

9 
Originally 

Scheduled 

Final 

Fund Securitl CUSlp10 Maturity 

Axon 05461FAW7 6/06/08 

NFJ Dividend Value 

Fund Cheyne 16705EFDO 6/05/08 

Axon 05461FAC1 2/25/08 

Axon 05461FAP2 5/06/08 

Axon 05461FAW7 6/06/08 

Axon 05461FBCO 6/09/08 

Axon 05461FAX5 6/18/08 

Axon 05461FBUO 7/25/08 

NFJ Small Cap Value 

Fund Cheyne 16705RAYO 5/13/08 

Cheyne 16705EFDO 6/05/08 

Axon 05461FAP2 5/06/08 

Axon 05461FAW7 6/06/08 

Axon 05461FBCO 6/09/08 

Axon 05461FAX5 6/18/08 

40107672v1