Newport Beach-based bond manager Pacific Investment Management Co. is set to handle money for the Federal Reserve’s program to shore up corporate bonds.
The Federal Reserve said Tuesday that Pimco will manage a fund that will buy bonds to help companies with short-term financing. It also appointed Boston-based State Street Corp. to serve as its administrator.
The program, known as Commercial Paper Funding Facility, will buy only high-rated corporate bonds from eligible companies, which typically use the money for things like inventories and payrolls.
Pimco also is waiting to find out if its bid to help manage bank debt as part of the government’s $700 billion bailout plan will happen.
Pimco’s co-chief executive and co-chief investment officer, Mohamed El-Erian, said Tuesday on CNBC that the government’s planned $250 billion investment into banks was sufficient.
“The damage has been done so deep that it doesn’t turn on a dime, we are now in the healing process, but it will be bumpy,” he said.
Pimco manages $830 billion in assets and is part of Munich-based insurer Allianz SE.
