<DOCUMENT>
<TYPE>EX-99.77E LEGAL
<SEQUENCE>2
<FILENAME>r77e.txt
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77e.  Legal Proceedings

Regulatory and Litigation Matters

On June 1, 2004, the Attorney General of the State of New Jersey announced
that it had dismissed PIMCO from a complaint filed by the New Jersey Attorney
General on February 17, 2004, and that it had entered into a settlement
agreement (the "New Jersey Settlement") with PIMCO's parent company, Allianz
Global Investors ("AGI") (formerly known as Allianz Dresdner Asset Management
of America L.P.), PEA Capital LLC (an entity affiliated with PIMCO through
common ownership) ("PEA") and Allianz Global Investors Distributors LLC
("AGID"), in connection with the same matter. In the New Jersey Settlement,
AGI, PEA and AGID neither admitted nor denied the allegations or conclusions
of law, but did agree to pay New Jersey a civil fine of $15 million and $3
million for investigative costs and further potential enforcement initiatives
against unrelated parties. They also undertook to implement certain
governance changes. The complaint relating to the New Jersey Settlement
alleged, among other things, that AGI, PEA and AGID had failed to disclose
that they improperly allowed certain hedge funds to engage in "market timing"
in certain funds. The complaint sought injunctive relief, civil monetary
penalties, restitution and disgorgement of profits.

Since February 2004, PIMCO, AGI, PEA, AGID, and certain of their affiliates,
PIMCO Funds, and Allianz Funds (formerly known as PIMCO Funds: Multi-Manager
Series), have been named as defendants in 14 lawsuits filed in U.S. District
Court in the Southern District of New York, the Central District of California
and the Districts of New Jersey and Connecticut. Ten of those lawsuits
concern "market timing," and they have been transferred to and consolidated
for pre-trial proceedings in the U.S. District Court for the District of
Maryland; four of those lawsuits concern "revenue sharing" and have been
consolidated into a single action in the U.S. District Court for the District
of Connecticut. The lawsuits have been commenced as putative class actions on
behalf of investors who purchased, held or redeemed shares of the various
series of the PIMCO Funds and the Allianz Funds during specified periods, or
as derivative actions on behalf of the PIMCO Funds and the Allianz Funds.

The market timing actions in the District of Maryland generally allege that
certain hedge funds were allowed to engage in "market timing" in certain of
the PIMCO Funds and the Allianz Funds and this alleged activity was not
disclosed. Pursuant to tolling agreements entered into with the derivative
and class action plaintiffs, PIMCO, the Trustees of the PIMCO Funds, and
certain employees of PIMCO who were previously named as defendants have all
been dropped as defendants in the market timing actions; the plaintiffs
continue to assert claims on behalf of the shareholders of the PIMCO Funds or
on behalf of the PIMCO Funds themselves against other defendants. The revenue
sharing action in the District of Connecticut generally alleges that fund
assets were inappropriately used to pay brokers to promote the PIMCO Funds or
the Allianz Funds, including directing fund brokerage transactions to such
brokers, and that such alleged arrangements were not fully disclosed to
shareholders. The market timing and revenue sharing lawsuits seek, among other
things, unspecified compensatory damages plus interest and, in some cases,
punitive damages, the rescission of investment advisory contracts, the return
of fees paid under those contracts and restitution. On April 11, 2005, the
Attorney General of the State of West Virginia filed a complaint in the
Circuit Court of Marshall County, West Virginia (the "West Virginia Complaint")
against Allianz Global Investors Fund Management LLC (formerly PA Fund
Management LLC) ("AGIF"), PEA and AGID alleging, among other things, that
they improperly allowed broker-dealers, hedge funds and investment advisers
to engage in frequent trading of various open-end funds advised or
distributed by AGIF and certain of its affiliates in violation of the funds'
stated restrictions on "market timing." On May 31, 2005, AGIF, PEA and AGID,
along with the other mutual fund defendants in the action, removed the action
to the U.S. District Court for the District of West Virginia. The West
Virginia Complaint also names numerous other defendants unaffiliated with
AGIF in separate claims alleging improper market timing and/or late trading of
open-end management investment companies advised or distributed by such other
defendants. The West Virginia Complaint seeks injunctive relief, civil
monetary penalties, investigative costs and attorney's fees.

Under Section 9(a) of the Act, if the New Jersey Settlement or any of the
lawsuits described above were to result in a court injunction against AGI,
PEA, AGID and/or their affiliates, PIMCO could, in the absence of exemptive
relief granted by the SEC, be barred from serving as an investment adviser to
any registered investment company, including the Fund. In connection with an
inquiry from the SEC concerning the status of the New Jersey Settlement under
Section 9(a), PEA, AGID, AGI and certain of their affiliates (including PIMCO)
(together, the "Applicants") have sought exemptive relief from the SEC under
Section 9(c) of the Act. The SEC has granted the Applicants a temporary
exemption from the provisions of Section 9(a) with respect to the New Jersey
Settlement until the earlier of (i) September 13, 2006 and (ii) the date on
which the SEC takes final action on their application for a permanent order.
There is no assurance that the SEC will issue a permanent order. If the West
Virginia Complaint were to result in a court injunction against AGIF, PEA or
AGID, the Applicants would, in turn, seek exemptive relief under Section 9(c)
with respect to that matter, although there is no assurance that such
exemptive relief would be granted.

The foregoing speaks only as of the date of this report. None of the
aforementioned complaints alleges that any improper activity took place in
the Fund. PIMCO believes that these developments will not have a material
adverse effect on the Fund or on PIMCO's ability to perform its investment
advisory services on behalf of the Fund.
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