Bond giant Pimco has begun buying the high-yield debt of battered energy company BP, Pimco Chief Investment Officer Bill Gross told CNBC.
Gross said Pimco owns small amounts of BP debt and is attracted to the 12-month notes that are yielding 10 percent.
He later told Reuters that the firm owns $100 million of BP debt, and also bought six- to 12-month paper of Anadarko Petroleum , which is 20 percent owner of BP.
"We think it's closer to double-A then triple-C," he said in evaluating the credit quality of the company has come under relentless criticism for its part in the Gulf of Mexico oil spill. "We think it's significant value and we've started to buy some."
In addition to the company's interest in BP's debt, Gross also discussed his firm's new foray into the equity markets.
The company, which has more than $1 trillion in assets under management, has expanded beyond the fixed-income markets and into stocks.
Gross said it's a long-term move for the company.
"There's an allocation diversification type of risk there," he said. "What we're suggesting is when Pimco moves into the equity filed that we'll be there for the next 10 to 20 to 30 years and ultimately this diversified menu will make a lot of sense for investors."