NEWPORT BEACH, Calif., April 30, 2002 (PRIMEZONE) -- PIMCO Commercial Mortgage Securities Trust, Inc. (NYSE:PCM) today released its investment performance results and statistical portfolio information for the period January 1, 2002, through March 31, 2002 (first 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 $253.7 billion of assets under management as of March 31, 2002, 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
3/31/02 NYSE Share Price Net Asset Value
First quarter 0.28% 0.70%
One year 13.86% 6.85%
Three years (annualized) 12.50% 7.64%
Five years (annualized) 11.36% 8.39%
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 0.09%, 5.35%, 6.49% and 7.57% for the three months, one year, three years and five years ended March 31, 2002, respectively (3 and 5 year numbers are annualized).
Price Information
Pricing Date NYSE Share Price Net Asset Value
March 31, 2002 $13.91 $12.66
December 31, 2001 $14.15 $12.85
March 31, 2001 $13.45 $13.13
Premium/(Discount) to Net Asset Value
March 31, 2002 9.87%
December 31, 2001 10.12%
March 31, 2001 2.44%
Dividend Information
Regular monthly dividend per share: $ 0.09375
Total dividends declared in the quarter: $ 0.28125
Annualized dividend yield at 3/31/02 based
on NYSE share price: 8.09%
Annualized dividend yield at 3/31/02 based
on net asset value: 8.89%
Portfolio Statistics
The Fund's investment portfolio had the following characteristics as of March 31, 2002:
Net Assets: $140.0mm
Average Duration: 4.22 years
Average Maturity: 5.23 years
Quality Ratings: 25.5% AAA, 5.5% AA, 9.0% A, 31.5% BBB, 19.5%
BB, 8.9% B, 0.1% less than B
Average Quality: A
Sector Weightings: 27% Multi-family (apartment buildings), 8%
Healthcare (hospitals and nursing care
facilities), 12% Hospitality (hotels and
motels), 37% Multi-class (a mix of all
commercial property types, including office
buildings and industrial properties), 9% Real
Estate ABS, 1% Corporate, 2% Commercial Paper,
4% Other
Market Commentary
Signs of a rebound in the U. S. economy and expectations of Federal Reserve tightening drove interest rates higher in the first quarter, depressing bond market returns. Treasury yields rose across all maturities, led by the two- and the five- year, which climbed 0.70% and 0.54%, respectively. Yields fell earlier in the quarter but reversed course sharply in late February and March after positive economic reports suggested that a cyclical turning point was at hand.
Industrial production rose in February for the second straight month. This increase signaled that battered manufacturers were gearing up to meet demand after businesses slashed inventories at a record pace during the fourth quarter of 2001. Consumer confidence rose in March in the largest monthly gain since the last recession ended in 1991. Housing starts climbed to their highest level in three years while growth in durable goods orders beat expectations. Government spending, particularly higher outlays on defense, homeland security and Medicare/Medicaid, provided stimulus.
Bonds received no support from the Federal Reserve during the first quarter, as the central bank remained on the sidelines after easing 11 times last year. In a shift from its previous stance, the Fed laid the groundwork for rate increases by declaring that risks in the economy were no longer tilted toward weakness.
Despite clear indications of a rebound, reduced capital spending continued to exert a drag on the economy during the first quarter. This ongoing corporate retrenchment, which also featured a reduction in equity buybacks, was designed to enhance free cash flow and rehabilitate credit quality that had been eroded by the borrowing and investment binge of the late 1990s. Credit rehab included restructuring of corporate balance sheets that in the eyes of investors and rating agencies had become too reliant on short-term financing such as commercial paper. New corporate bond issuance surged during the first quarter as companies refinanced much of their commercial paper with longer-term bonds.
Bonds with yield cushions, such as mortgages, non-investment-grade corporates and emerging market issues, posted positive absolute returns during the quarter despite the headwind of rising rates. Mortgages outperformed Treasuries and corporates on a duration-adjusted basis. The sector benefited from relatively low volatility, high yields and demand from investors worried about corporate credit and accounting issues.
The Fund's portfolio of commercial mortgage backed securities ("CMBS") posted a 0.70% return for the first quarter based on net asset value and a 0.28% return based on its NYSE share price. In comparison, the Lehman Brothers Aggregate Bond Index (which includes Treasury, investment-grade corporate and residential mortgage-backed securities) returned 0.09% for the same period. NYSE share price return lagged the Fund's return based on net asset value due to a slight narrowing of the Fund's trading premium over the quarter from 10.12% to 9.87%. Longer term performance continues to be strong with the Fund posting an annualized return based on net asset value of 7.64% for the three-year period and 8.39% for the five-year period ended March 31, 2002, outperforming the Index returns of 6.49% and 7.57% 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 8.09% based on the Fund's NYSE trading price as of March 31, 2002.
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 sold, may be worth more or less than their original cost.