PTY: I'd Still Be Overpaying Even At $12

Despite recent price pull backs, the PIMCO Corporate and Income Opportunity Fund (PTY) still trades at a premium over NAV amid mounting macro headwinds. PTY's NII coverage has deteriorated sharply, with a three-month rolling coverage ratio of only 60.4%, raising dividend sustainability concerns. Even when PTY's yield includes a good portion of returned capital due to insufficient NII coverage, it is still not that attractive when benchmarked by risk-free rates.