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QE Monitor

“This Ain’t No Oneway

Street”

May 28, 2015

Ann-Katrin Petersen

Global Capital Markets & Thematic Research


“Are we seeing a temporary

correction or a persistent rise

in yields? In the US, the first rate hike

after seven years of zero interest rate policy

is imminent. Things are different in the

euro area. But recent weeks have shown

that the impact of QE is not a oneway

street. ”

Ann-Katrin Petersen, Global Investment Strategist,

Allianz Global Investors

2


Understand.

• The European Central Bank (ECB) has introduced quantitative easing (QE) in a major way which will last at least

until the ECB Council recognizes a sustainable improvement in inflation that is in line with its objective of achieving

inflation rates below, but close to, 2% over the medium term.*

• The ECB is acting within self-imposed constraints; PSPP-eligibility criteria include: 1. maturity range: 2 to (less

than) 31 years, 2. deposit rate restriction (only sovereign bonds with a yield above the deposit rate which currently

stands at -20 basis points are being purchased), 3. 25% issue and 33% issuer limits.**

• Some doubts have surfaced about whether the ECB will continue QE in its current form until September 2016,

seeing that #1 the supply of bonds might be depleted and #2 that the programme’s goals might be realised before

that date.

• #1 Scarcity scares: Is the ECB running out of sovereign bonds?

I. Acting within self-imposed constraints: For government bonds with high credit ratings, the ultra-loose

monetary policy seems to have the effect of making negative interest rates “the norm”. To date, one tenth of

PSPP-eligible*** government bonds have negative yields.

- More legroom of late: Even so, thanks to the recent rise in yields concerns about a shortage of available

government bonds which offer returns above the ECB deposit rate appear to have abated temporarily. In this

spirit, the recent correction in bond markets facilitates the technical implementation of the programme.

- But bottlenecks remain: The repo market is still reflecting the growing mismatch between low supply and high

demand for high-quality collateral, such as German Bunds. In fact, repo rates have recently become even

more negative. Even if the ECB has introduced securities lending* to mitigate this effect, these potential

shortages might dampen further yield increases on the market for euro area government bonds.

*) After the Covered Bond (CBPP3) and Asset-Backed Security (ABSPP) Purchase Programme, the Public Sector Purchase Programme (PSPP) was launched as third part of QE on

9 March 2015. **) Limits ensure that the application of collective action clauses (CACs) for a bondholder decision is not obstructed ***) Purchasable according to maturity range of >2

years, < 31 years. Source: AllianzGI Global Capital Markets & Thematic Research.


Understand.

II.

“Captive investors”: Who is willing to sell to the ECB? The ECB will likely face the challenge of purchasing

EUR 40-45bn in government bonds each month in increasingly illiquid markets that are potentially short of

willing sellers.

- PSPP encourages market players to buy or hold on to assets rather than selling them (e.g. asset liability

management of insurance companies).

- Also, the banks in particular, which are major holders of government debt, are likely to retain these assets in

portfolios either for regulatory purposes or out of liquidity considerations (e.g. Liquidity Coverage Ratio).

• #2 Is the ECB becoming a “victim of its own success”?

- A matter of effectiveness. Regarding the transmission of QE into the real economy, first effects are being felt:

#1 Tentative spring awakening of long-term inflation expectations, #2 weaker euro exchange rate, #3 portfolio

rebalancing, #4 bank lending is picking up from low levels.**

- Currently, the ECB sees no reason to tweak its program. Still, contingent on a better-than-expected inflation

outlook (stronger-than-expected economic recovery, normalized or even possibly overshooting inflation

expectations), the ECB Council is likely to discuss what adjustments may have to be undertaken – and might

consider reducing the monthly purchasing volume prematurely (“tapering”). The more we see a trend towards

positive inflation rates, the more the debate surrounding a possible tapering is likely to intensify on financial

markets over the course of this year.

- For the time being, this is ruled out by President Mario Draghi. At its June meeting the Council will likely

emphasize once more that the newly released ECB staff macroeconomic projections are based on the full

implementation of all the measures decided since June 2014.

*) As of April 2 nd 2015, sovereign, supranational and agency bonds will be made available for securities lending via reverse-repo transactions. ECB: “The aim of securities lending is to support bond and

repo market liquidity without unduly curtailing normal repo market activity.” **) However, the fact remains that the challenges in the Eurozone cannot be fixed with liquidity instruments alone, but will also

require economic policy reforms at country level. Source: AllianzGI Global Capital Markets & Thematic Research.


Act.

• Co-investing with the central bank is akin to the „musical chair“ game. It is therefore advisable to continue keeping

a close eye on trends in demand and supply of PSPP-eligible bonds* – so as to be able to identify actual shortage

problems – and on any hint of premature end or slowdown of purchased volumes (“tapering”) at an early stage.

• While fundamental bond market influences had largely been brushed aside for a while, the recent sell-off has

clearly shown that the impact of QE on bond markets, i.e. ever-lower yields, is not a one-way street.

• Are we seeing a temporary correction or a persistent rise in yields? That is the question which many investors are

likely to ask in view of the latest bond market movements.

- The large-scale purchase programme is undeniably distorting prices in the entire euro bond market. German

Bunds, in particular, are expensive from a fundamental perspective. The valuation problem government bonds

are now facing is primarily visible in low and sometimes negative term premia in money and bond markets.

- In the current environment, the demand overhang caused by the PSPP is counterbalanced by yield drivers such

as optimism about growth (rising real returns!), a bottoming of inflation data, stabilising inflation expectations and

the forthcoming Fed rate hike cycle.

• “It ain't over till it's over” – low yields are here to stay. While Eurozone sovereign bond markets look vulnerable and

prone to higher volatility going forward, lingering Financial Repression may impede a return of bond yields closer to

nominal growth rates for longer.

• The ECB may use its discretionary leeway – deviations within the programme rules do not indicate a change in the

QE programme itself. In this spirit, the announced frontloading strategy ahead of the illiquid summer months and

subsequent potential backloading in September is but taking account of seasonal patterns in market activity. In

view of that, the market reaction triggered by comments made by ECB board member Benoit Coeuré appear as an

overshooting caused by a misguided „Pavlovian reflex“ to monetary policy news.

*) That is on the expected purchase volume over the rest of the programme vs. the purchasable market volume of PSPP-eligible bonds currently outstanding. Sources: ECB, AllianzGI Global Capital

Markets & Thematic Research.

5


index

%

mn EUR

Flexibility within programme rules – but ECB’s Coeuré triggers

another “Pavlovian reflex” in financial markets

Severe financial market response to ECB comments...

...although mentioned frontloading of bond purchases is

no surprise

11900

0,66

18.000

11850

11800

0,64

16.000

14.000

11750

0,62

12.000

11700

11650

0,60

0,58

10.000

8.000

6.000

11600

11550

Publication of Coeuré‘s

11500

speech

16:00 8:00 10:00 12:00 14:00 16:00

May 18th

DAX

May 19th

German Bund 10y yield (rs)

0,56

0,54

4.000

2.000

0

13.3 20.3 27.3 3.4 10.4 17.4 24.4 1.5 8.5 15.5

ECB PSPP purchases (weekly) average

Past performance is not a reliable indicator of future results. Sources: Datastream, Allianz GI Global Economics & Strategy. Data as of May 19, 2015.


Non-EMU countries

European government bond yields have entered negative territory

Generic government bond rates, in %

3M 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y 15Y 20Y 30Y

Germany -0,33 -0,22 -0,23 -0,19 -0,09 0,02 0,07 0,17 0,30 0,41 0,52 0,80 0,99 1,16

France -0,19 -0,19 -0,17 -0,08 0,03 0,16 0,25 0,40 0,55 0,69 0,83 1,21 1,36 1,63

Netherlands -0,21 -0,18 -0,19 -0,11 -0,04 0,08 0,24 0,38 0,50 0,60 0,72 1,26

Belgium -0,19 -0,19 -0,17 -0,07 0,07 0,16 0,30 0,45 0,58 0,71 0,84 1,05 1,36 1,60

Austria -0,19 -0,16 -0,04 0,05 0,13 0,27 0,42 0,55 0,12 0,66 0,85 1,29

Finland -0,22 -0,20 -0,07 0,02 0,10 0,14 0,21 0,41 0,49 0,59 0,93 1,16

Switzerland -0,84 -0,85 -0,79 -0,63 -0,47 -0,36 -0,24 -0,18 -0,09 -0,01 0,29 0,42 0,58

Sweden -0,27 -0,37 -0,27 -0,15 -0,05 0,21 0,44 0,72

Denmark -0,93 -0,27 -0,33 0,02 0,26 0,69 1,16

Past performance is not a reliable indicator of future results. Sources: Bloomberg, AllianzGI Global Capital Markets & Thematic Research. Data as of May 28, 2015.

7


One fourth of total Eurozone government bonds have negative

yields with Germany and France standing out the crowd

Market volume of outstanding public debt* with negative yields and yields below the ECB’s deposit rate (in EUR bn)

2000

1800

1600

1400

1200

1000

800

600

400

200

0

< 0 % < -0.2 %

DE 49,6% 33,2%

FR 40,0% 11,7%

NL 36,9% 18,7%

AT 34,1% 0,0%

SK 32,5% 26,1%

FI 31,0% 18,2%

BE 26,3% 2,8%

IE 10,2% 0,0%

SL 7,5% 0,0%

IT 6,4% 1,3%

ES 2,4% 0,0%

PT 0,0% 0,0%

GR 0,0% 0,0%

LI 0,0% 0,0%

LT 0,0% 0,0%

LU 0,0% 0,0%

CY 0,0% 0,0%

MT 0,0% 0,0%

Eurozone 25,5% 10,6%

IT FR DE ES NL BE AT IE PT FI GR SK SL LU MT CY LI LT

Market value of outstanding govt. bonds with yields < -0.2% Market value of govt. bonds with negative yield Total market value

*) excl. T-Bills, incl. inflation-linked bonds**) incl. ECB and EIB holdings of GGBs. Past performance is not a reliable indicator of future results. Sources: Bloomberg, AllianzGI Global

Capital Markets & Thematic Research. Data as of May 28, 2015.

8


Considerable rise of Eurozone sovereign bond yields has

increased the PSPP-eligible* sovereign bond universe again of late

Enough purchasable “material”: Market volume of outstanding PSPP-eligible government bonds with negative yields

and yields below the ECB’s deposit rate (in EUR bn)

1600

1400

1200

1000

800

600

400

200

0%

DE 4% 24% 65%

FR 0% 14% 72%

IT 0% 0% 87%

ES 0% 0% 97%

NL 0% 24% 76%

BE 0% 16% 84%

AT 0% 16% 84%

PT 0% 0% 100%

FI 0% 16% 84%

IE 0% 6% 94%

SK 0% 0% 100%

SL 0% 0% 100%

LI 0% 0% 100%

LT 0% 0% 100%

LU 0% 0% 100%

MT 0% 0% 100%

Eurozone 1% 10% 81%

Table does not show percentage of inflation-linked bonds.

0

LT LI MT LU SL SK FI PT IE AT NL BE ES DE FR IT

Not eligible anymore: YTM 0% Eligible (3): Inflation linker (IL)

*) According to maturity range of >2 years, < 31 years. Past performance is not a reliable indicator of future results. Sources: Bloomberg, AllianzGI Global Capital Markets & Thematic

Research. Data as of May 28, 2015.

9


EUR bn

#1 Is the ECB running out of sovereign bonds? Volume of the

purchases will exceed expected net government bond issuance in 2015

ECB plans to expand its balance-sheet volume again,

back to the level seen at the beginning of 2012

Significant effect on demand: ECB bond purchases vs.

sovereign bond supply

1200 1140

1000

800

ECB’s Quantitative Easing

(estimated composition)

855

Eurozone government

bond supply (2015 estimate)

930

600

400

280

200

95

190

0

PSPP

Past performance is not a reliable indicator of future results. Sources: Datastream, ECB, AllianzGI Global Capital Markets & Thematic Research.

10


Acting within self-imposed constraints: To date, supply is

exceeding demand in all Eurozone countries

Eurozone: Eurosystem’s PSPP holdings, implied buying

and market volume of eligible bonds outstanding

1400

1200

1000

800

600

400

723,9

1372,7

Selected euro countries: NCBs’ PSPP holdings, implied

buying and market volume of eligible bonds outstanding

400

350

300

250

200

150

100

Will the Bundesbank miss its PSPP

target? Concerns about a lack of

supply have receded of late.

200

0

83,6

50

0

FI PT IE AT NL BE ES DE FR IT

Holdings as at April 30 (in EUR bn)

Holdings as at April 30 (in EUR bn)

Expected purchase volume until end of PSPP (in EUR bn)

Expected purchase volume until end of PSPP (in EUR bn)

Currently outstanding PSPP-eligible govt. bonds accord. to

maturity range, deposit rate restriction and issue limit (in EUR bn)

Currently outstanding PSPP-eligible govt. bonds accord. to

maturity range, deposit rate restriction and issue limit (in EUR bn)

Past performance is not a reliable indicator of future results. Sources: Bloomberg, AllianzGI Global Capital Markets & Thematic Research. Data as of May 19, 2015.

11


Bundesbank gasping of relief? Scarcity scares have receded of

late as majority of Bunds is purchasable again

German Bunds: Impact of QE is not a one-way street

Distribution of German Bunds eligible for PSPP* by yield

to maturity, market value in EUR bn

1000

900

800

700

600

500

400

300

200

100

0

6-Mar 20-Mar 3-Apr 17-Apr 1-May 15-May

-0.2%, 0.0% Inflation Linker (IL)

*) According to maturity range of >2 years, < 31 years. Past performance is not a reliable indicator of future results. Sources: Bloomberg, AllianzGI Global Capital Markets & Thematic

Research. Data as of May 21, 2015.

12


On the repo market, concerns regarding reduced availability of

collateral are still evident

German Repo curve (general collateral)…

%

-0,10

-0,15

-0,20

-0,25

-0,30

-0,35

Overnight 1W 1M 3M 6M 12M

…continues to indicate a bottleneck

• Repo interest rates have recently been drifting further

into negative territory, not least owing to the growing

volume of Eurozone sovereign government bonds on

the Eurosystem’s balance sheet and the high fees*

required by the ECB’s securities lending programme.

• As a matter of fact, borrowing a high-quality security

continues to be a pretty expensive business. By way

of example, the one-year German repo rate is

currently trading below the deposit facility at around -

30 basis points – which suggests that those holding

German government debt securities are not keen on

parting from their securities for longer than a few

months.

• The growing mismatch between low supply and high

demand for high-quality collateral, such as Bunds, will

probably ensure that the German repo curve continues

to remain well down in negative territory.

*) The securities lending arrangements are designed to allow eligible counterparties, any time, to borrow securities at a fixed fee of 40 basis points. The term is a fixed maturity of one

week. There is the possibility to roll over the transaction on a week-by-week basis for up to three times with the fee increasing by 10 basis points at each time.

Past performance is not a reliable indicator of future results. Sources: Bloomberg, ECB, AllianzGI Global Capital Markets & Thematic Research. Data as of May 20, 2015.

13


“Captive investors”: Who is willing to sell to the ECB?

Holders of Eurozone sovereign bonds

unwilling sellers (49%)

“Liquidity – The

Underestimated

Risk”

willing sellers (51%)

Apart from international central banks and reserve managers, domestic households and non-bank financial

institutions (e.g. dealers, investment funds) should be inclined to reduce their euro sovereign bond holdings in the

current environment.

Past performance is not a reliable indicator of future results. Sources: ECB, National Central Banks, DMOs, IMF, BIS, EBA, J.P. Morgan, AllianzGI Global Economics & Strategy, as of

March 2015.

14


#2 Victim of its own success? QE transmission channels – first

effects of PSPP are being felt

Inflation expectations: Tentative spring awakening?

Stabilized at low levels: inflation expectations of

professional forecasters (SPF*) for 1, 2 and 5 years

Spring awakening: market-based long-term inflation

expectations** vs. oil brent

*) Survey of Professional Forecasters **) Medium-term inflation expectations as measured by the five-year, five-year forward swap rate of inflation , i.e. the expectations for inflation

over five years in five years’ time.

Past performance is not a reliable indicator of future results. Sources: Datastream, Allianz GI Capital Markets & Thematic Research

15


QE transmission channels – first effects of PSPP are being felt

Bank lending: Picking up from low levels

Bank Lending Survey* raises hopes of more generous

lending conditions in the second quarter

Encouraging signs of a pick-up in actual lending of late

Bank Lending Survey

has improved for the

fourth time in a row.

*) Quarterly ECB survey on bank lending. Past performance is not a reliable indicator of future results. Sources: Datastream, Allianz GI Capital Markets & Thematic Research.

16


%

%

%

%

Temporary correction or persistent rise in yields?

Rising breakeven inflation rates – “canary in the coalmine”

In the US, the first rate hike after seven years of zero

interest rate policy is imminent

0,8

2,3

German breakeven inflation and 10y real interest rates

0,0

1,6

-0,2

1,4

0,6

2,1

-0,4

1,2

0,4

-0,6

1,0

1,9

-0,8

0,8

0,2

-1,0

0,6

0,0

-0,2

6/2014 9/2014 12/2014 3/2015

US 10y real interest rate

1,7

1,5

US 10y breakeven inflation (rs)

-1,2

-1,4

Rising breakeven inflation rates have

been the “canary in the coalmine” for

higher nominal interest rates in the US

and the Eurozone since mid-January.

Recent selloff has been primarily driven

by higher real rates, though, pointing to

higher risk premia and expectations of

improving macro fundamentals taking

over as main market drivers.

-1,6

6/2014 9/2014 12/2014 3/2015

Bund 10y real interest rate

0,4

0,2

0,0

Bund 10y breakeven inflation (rs)

Past performance is not a reliable indicator of future results. Sources: Bloomberg, AllianzGI Global Economics & Strategy. Data as of May 2015.

17


Appendix

18


Transmission

Features

Key facts about QE*: The ECB does it big and bold

Size and duration

Timeframe

Composition

60bn EUR per month (market value) for at least 19 months (March 2015 until Sept. 2016). Inclusion of

current covered bond (CBPP3) and ABS purchase programmes (ABSPP).** Total size: 1140bn

Open-ended programme. Purchasing will continue until „sustained adjustment to path of inflation“

consistent with 2% target is achieved

Purchase of sovereigns (est. EUR 40-45bn per month), agencies** (est. EUR 5-7.5bn), covered bonds

and ABS (est. EUR 10-12.5bn). Limit: 25% (issue), 33% (issuer)****. No CAC blocking majority

Country split

Maturity and rating

Risk sharing

Support of decision

Govt. bond and agency purchases will be based on the ECB‘s capital key (GER: 25.5%, FRA: 20.1%,

ITA: 17.5%, SPA: 12.6%), conducted by National Central Banks (NCBs) but coordinated by the ECB

Maturity range: 2 to (less than) 31 years. Rating floor: investment grade but purchase of subinvestment

grade sovereigns possible for countries under IMF/EU adjustment programme

Limited risk mutualisation: only 20% of purchases in sovereigns and institutions will be subject to loss

sharing. ECB „pari passu“ with private bondholders

Governing Council: Unanimity that asset purchases are legitimate monetary policy tool, large majority

(no vote required) supported decision, nobody disagreed on risk sharing mechanism

Inflation expectations

FX depreciation

Portfolio rebalancing

ECB inflation target: „maintain inflation rates below, but

close to 2% over the medium term“

Bank lending

*) Quantitative Easing (QE) = Expanded Asset Purchase Programme (EAPP). **) That is CBPP3 and ABSPP approved in September 2014 are continued with their conditions unchanged. ***)

Bonds issued by certain agencies established in the euro area and certain international or supranational institutions located in the euro area, for example EIB, EFSF, ESM. ****) Limits ensure

that the application of collective action clauses for a bondholder decision is not obstructed. Sources: ECB, AllianzGI Global Economics & Strategy, as of March 2015.

19


ECB capital key and implied monthly purchases by NCBs

ECB capital key (in %)

2,5

1,1

1,6

1,8

0,5

4,7

Theoretical monthly purchase volume based on ECB

capital key (in EUR bn)

0,5

0,7

0,8

1,1

0,2

2,0

2,8

25,6

1,2

10,9

3,5

1,5

5,7

2,4

12,6

5,4

20,1

8,5

17,5

7,4

DE FR IT ES NL BE AT PT FI IE SK SL Rest

DE FR IT ES NL BE AT PT FI IE SK SL Rest

Past performance is not a reliable indicator of future results. Sources: Bloomberg, ECB, AllianzGI Global Capital Markets & Thematic Research.

20


Implementing PSPP: How much progress?

EAPP: Composition and purchase volumes (in EUR bn)

1200

Targets easily met in April: Volumes purchased are

largely based on the ECB capital key

1000

Issuer

Holdings as at April

30

Weighted average

remaining maturity

in years

800

600

400

200

0

Total PSPP Covered/ABS

Programme purchase volumes (estimated)

Purchase volumes as at May 15

DE 22,21 7,90

FR 17,38 7,84

IT 15,19 8,41

ES 10,91 9,73

NL 5,01 6,97

BE 3,06 9,10

AT 2,42 7,99

PT 2,16 10,77

FI 1,56 7,15

IE 1,46 9,14

SK 1,03 9,26

SL 0,43 7,29

Supranationals 11,43 8,05

Rest 0,83 −

Total (incl. Supras) 95,06 8,25

As in March, the NCBs* seem to have considerable leeway regarding the average

residual maturity of the bonds purchased. Shorter maturities were preferred for Spain

and Italy in April, but comparatively longer maturities for Belgium and the Netherlands

(relative to actual average residual maturities of outstanding PSPP-eligible bonds).

*) National Central Banks. Past performance is not a reliable indicator of future results. Sources: ECB, AllianzGI Global Capital Markets & Thematic Research.

21


A number of policy options

In case of “scarcity scares”

• In order to increase the volume of potentially

purchasable bonds again, the ECB Council might

- either lower the deposit rate and/or

- close down or loosen ECB capital key rule for share

purchases in an NCB's home market,

- adjust the 25% issue limit (e.g. excluding bonds

without CACs*),

- broaden the eligible asset universe

In case that the programme’s goals might be realised

before September 2016

• Contingent on a better-than-expected inflation outlook

(stronger-than-expected economic recovery,

normalized or even possibly overshooting inflation

expectations), the ECB Council might consider to end

or to reduce the monthly purchasing volume

prematurely (“tapering”)

*) Collective action clauses. Source: AllianzGI Global Capital Markets & Thematic Research.

22


www.allianzglobalinvestors.de/capitalmarketanalysis

www.allianzglobalinvestors.de/newsletter

www.allianzglobalinvestors.de/podcast

https://twitter.com/AllianzGI_view

23


TAK

DANK U WEL

HVALA

TACK

GRAZIE

MERCI ARIGATÔ

SPASIBA

THANK YOU

CHOKRANE

BEDANKT

GRACIAS OBRIGADO

VIELEN DANK

ขอบคุณครับ

谢 谢 (xièxiè)

24


Disclaimer

Investing involves risk. The value of an investment and the income from it will fluctuate and investors may not get back the principal

invested. Past performance is not indicative of future performance. This is a marketing communication. It is for informational purposes

only. This document does not constitute investment advice or a recommendation to buy, sell or hold any security and shall not be

deemed an offer to sell or a solicitation of an offer to buy any security.

The views and opinions expressed herein, which are subject to change without notice, are those of the issuer or its affiliated companies

at the time of publication. Certain data used are derived from various sources believed to be reliable, but the accuracy or completeness

of the data is not guaranteed and no liability is assumed for any direct or consequential losses arising from their use. The duplication,

publication, extraction or transmission of the contents, irrespective of the form, is not permitted.

This material has not been reviewed by any regulatory authorities. In mainland China, it is used only as supporting material to the

offshore investment products offered by commercial banks under the Qualified Domestic Institutional Investors scheme pursuant to

applicable rules and regulations.

This document is being distributed by the following Allianz Global Investors companies: Allianz Global Investors U.S. LLC, an investment

adviser registered with the U.S. Securities and Exchange Commission (SEC); Allianz Global Investors GmbH, an investment company in

Germany, authorized by the German Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin); Effective June 1, 2015 Allianz Global

Investors Hong Kong Limited and RCM Asia Pacific Limited will amalgamate and continue as one company, renamed Allianz Global

Investors Asia Pacific Limited, licensed by the Hong Kong Securities and Futures Commission; Allianz Global Investors Singapore Ltd.,

regulated by the Monetary Authority of Singapore [Company Registration No. 199907169Z]; and Allianz Global Investors Japan Co., Ltd.,

registered in Japan as a Financial Instruments Business Operator; Allianz Global Investors Korea Ltd., licensed by the Korea Financial

Services Commission; and Allianz Global Investors Taiwan Ltd., licensed by Financial Supervisory Commission in Taiwan.

25

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