NEWPORT BEACH, Calif., July 31, 2001 (PRIMEZONE) -- PIMCO Commercial Mortgage Securities Trust, Inc. (NYSE:PCM) today released its investment performance results and statistical portfolio information for the period April 1, 2001, through June 30, 2001 (second quarter).
PIMCO Commercial Mortgage Securities Trust, Inc. (the "Fund") is a closed-end bond fund that invests principally in investment grade commercial mortgage-backed securities ("CMBS"). The primary investment objective of the Fund is to achieve high current income, with capital gain from the disposition of investments as a secondary objective. Pacific Investment Management Company LLC ("PIMCO"), an investment adviser with more than $221.7 billion of assets under management as of June 30, 2001, is responsible for managing the Fund's investment portfolio.
Investment Performance, Price and Dividend Information
The Fund's valuation and investment performance information
are as follows:
Total Return Investment Performance
Periods Ended Based on Based on
06/30/01 NYSE Share Price Net Asset Value
-------- ---------------- ---------------
Second quarter 4.36% 1.77%
One year 25.75% 13.23%
Three years (annualized) 10.80% 6.93%
Five years (annualized) 12.71% 9.36%
The Fund's total return investment performance is net of all fees and expenses and assumes the reinvestment of dividends. For comparison purposes, the Lehman Brothers Aggregate Bond Index, a broad market measure of domestic fixed income performance, rose 0.56%, 11.23%, 6.26% and 7.48% for the three months, one year, three years and five years ended June 30, 2001, respectively (3 and 5 year numbers are annualized).
Price Information
Pricing Date NYSE Share Price Net Asset Value
------------ ---------------- ---------------
June 30, 2001 $13.7500 $13.08
March 31, 2001 $13.4500 $13.13
June 30, 2000 $12.1250 $12.78
Premium/(Discount) to Net Asset Value
-------------------------------------
June 30, 2001 5.12%
March 31, 2001 2.44%
June 30, 2000 (5.13)%
Dividend Information
--------------------
Regular monthly dividend per share: $ 0.09375
Total dividends declared in the quarter: $ 0.28125
Annualized dividend yield at 03/31/01
based on NYSE share price: 8.18%
Annualized dividend yield at 03/31/01
based on net asset value: 8.60%
Portfolio Statistics
The Fund's investment portfolio had the following characteristics
as of December 31, 1997:
Net Assets: $144.0mm
Average Duration: 4.70 years
Average Maturity: 5.77 years
Quality Ratings: 22.3% AAA, 6.8% AA, 8.6% A, 32.5% BBB,
23.5% BB, 6.0% B, 0.3% less than B
Average Quality: BBB+
Sector Weightings: 24% Multi-family (apartment buildings), 10%
Healthcare (hospitals and nursing care
facilities), 10% Hospitality (hotels and motels),
35% Multi-class (a mix of all commercial property
types, including office buildings and industrial
properties), 12% Real Estate ABS, 3% Corporate,
1% Commercial Paper, 5% Other
Market Commentary
While the U.S. economy remained weak during the first half of 2001, some investors expected that aggressive easing by the Federal Reserve would spark a recovery in the near future. This optimism, bolstered by resilient consumer confidence and a strong housing sector, was reflected in a sharp steepening of the U.S. Treasury yield curve and outperformance by credit-sensitive bonds.
By the end of the second quarter, the market began to anticipate that the Fed's current easing cycle, which produced rate reductions of 2.75% since the beginning of the year, was nearing an end. Two-year Treasury yields edged up 0.06% during the quarter, closing at 4.24%. The benchmark 10-year Treasury yield climbed 0.50% and ended the quarter at 5.41%. The yield differential between 30-year Treasuries and their 3-month counterparts increased from 1.16% to 2.11% over the quarter.
Signs of longer-term weakness continued to plague the economy despite a supportive Fed. Sharply reduced investment spending and a corporate profits recession threatened to dash hopes for a quick recovery. Late in the second quarter, stocks gave back some of their earlier gains after a series of profit warnings, especially in the computer and telecom sectors. Corporate bond markets also reacted negatively as swap spreads widened in June after narrowing earlier in the quarter. A decline in first quarter productivity, the first in six years, and a corresponding rise in unit labor costs, pinched profits as slower growth and weak demand constrained pricing power.
While short maturity Treasuries performed relatively well, the Treasury sector overall did not keep pace with investment-grade corporates and mortgages for the quarter and year-to-date. High-grade corporates far outpaced Treasuries and mortgages amid heightened optimism about a relatively fast recovery in growth and profits. By contrast, high yield posted a negative quarterly return due to anxiety about rising defaults. Mortgages gained, especially higher coupon issues, as rising long-term rates mitigated concern about prepayment risk.
In this environment, the Fund's portfolio of commercial mortgage backed securities ("CMBS") posted a 1.77% return for the second quarter based on net asset value and a favorable 4.36% return based on its NYSE share price. These returns bettered the 0.56% return of the Lehman Brothers Aggregate Bond Index (which includes Treasury, investment-grade corporate and residential mortgage-backed securities) over the three-month period. NYSE share price return was boosted substantially for the quarter by a widening of the Fund's trading premium. Longer term performance continues to be strong with the Fund posting an annualized return based on net asset value of 6.93% for the three-year period and 9.36% for the five-year period ended June 30, 2001, outperforming the Index returns of 6.26% and 7.48% over the same periods. The Fund maintained an uninterrupted and constant dividend throughout the quarter, holding the monthly per share rate steady at $0.09375. These dividend payouts equate to an annualized dividend yield of 8.18% based on the Fund's NYSE trading price as of June 30, 2001.
For further information, please contact Jeff Sargent, PIMCO Commercial Mortgage Securities Trust, Inc., at (949) 720-4712.
Past performance is no guarantee of future results. Investment return, dividend rate and share price will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.