Asset manager cuts monthly payouts on 9 muni closed-end funds Distribution cuts range from 20% to 45% as leverage costs soar.

Pacific Investment Management Co. cut monthly payouts on nine municipal bond closed-end funds by as much as 45% after a sharp jump in short-term rates increased borrowing costs.

The money manager cut the distributions on the $199 million Pimco California Municipal Income Fund to 3.6 cents per share from 6.5 cents per share, according to a statement Tuesday. Short term-borrowing costs on the fund surged as high as 8.25% in December. The fund trades at a 29% premium to its net asset value while the yield on the closed-end fund’s portfolio is about 4%, according to data compiled by Bloomberg.