Pacific Investment Denies Trading Story

Pacific Investment Management Co.’s investment chief, Bill Gross, said Monday that a report the bond-fund giant sold $2 billion in Ginnie Mae mortgage bonds on Sept. 15--as he recommended the securities during a CNBC-TV interview--was untrue.

BondWeek, an industry newsletter, reported that Newport Beach-based Pimco sold the Ginnie Mae securities before, after and during Gross’ TV appearance, citing an anonymous Pimco portfolio manager and unnamed analysts and traders. “We stand by [the story] 100%,” said Tom Lamont, editor at BondWeek.

But Gross said in an interview that Pimco did no outright selling of Ginnie Mae securities on Sept. 15. What Pimco did effect was a “roll” transaction: It sold $19.5 billion of bonds as part of an agreement to buy them back later.

There was “no sale whatsoever of GNMAs on Sept. 15 other than paired-off ‘rolls’ of GNMA forwards which occurred and always occur simultaneously--i.e. buy and sell at the same time,” Gross wrote in an e-mail message.