NEWPORT BEACH, Calif., July 31, 2002 (PRIMEZONE) -- PIMCO Commercial Mortgage Securities Trust, Inc. (NYSE:PCM) today released its investment performance results and statistical portfolio information for the period April 1, 2002 through June 30, 2002 (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 $274.4 billion of assets under management as of June 30, 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
6/30/02 NYSE Share Price Net Asset Value
Second quarter 6.21% 4.78%
One year 15.88% 10.00%
Three years (annualized) 12.57% 9.46%
Five years (annualized) 11.19% 8.43%
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 3.69%, 8.63%, 8.11% and 7.57% for the three months, one year, three years and five years ended June 30, 2002, respectively (3 and 5 year numbers are annualized).
Price Information
Pricing Date NYSE Share Price Net Asset Value
June 30, 2002 $14.49 $12.98
March 31, 2002 $13.91 $12.66
June 30, 2001 $13.75 $13.08
Premium/(Discount) to Net Asset Value
June 30, 2002 11.63%
March 31, 2002 9.87%
June 30, 2001 5.12%
Dividend Information
Regular monthly dividend per share: $ 0.09375
Total dividends declared in the quarter: $ 0.28125
Annualized dividend yield at 6/30/02
based on NYSE share price: 7.76%
Annualized dividend yield at 6/30/02
based on net asset value: 8.67%
Portfolio Statistics
The Fund's investment portfolio had the following characteristics as of June 30, 2002:
Net Assets: $143.7mm
Average Duration: 4.66 years
Average Maturity: 5.91 years
Quality Ratings: 31.3% AAA, 6.3% AA, 11.3% A, 25.6%
BBB, 18.8% BB, 6.6% B, 0.1% less than B
Average Quality: A
Sector Weightings: 32% Multi-family (apartment buildings),
8% Healthcare (hospitals and nursing care
facilities), 11% Hospitality (hotels and
motels), 32% Multi-class (a mix of all
commercial property types, including
office buildings and industrial
properties), 8% Real Estate ABS, 5%
Commercial Paper, 4% Other
Market Commentary
Most bond markets gained during the second quarter as investors sought safe haven amid turbulence in other financial markets. Interest rates fell worldwide with yields on Treasuries declining as much as 0.91% in the short/intermediate portion of the yield curve. The broad U.S. bond market performed well during the quarter even as global stock markets declined and the U.S. dollar fell sharply against the euro and the yen.
Financial markets were unsettled despite positive indicators about the health of the U.S. economy, the engine of global growth over the past several years. The U.S. continued to grow faster than Europe or Japan after emerging from a mild recession last year. Nevertheless, business investment remained weak, raising doubts about the staying power of the recovery. Still, rebounds in manufacturing, subdued inflation, continued productivity gains, an accommodative Federal Reserve and stimulative fiscal policy have provided grounds for optimism.
Any optimism about the direction of the real economy was thoroughly undermined, however, by the growing loss of confidence in financial markets and in the economic model that produced the New Age Economy. Outrage about the expanding list of companies caught up in accounting scandals and corporate governance abuses cast a pall over the stock market and hurt performance of corporate bonds, especially in the telecom and energy/utility sectors. Demand for U.S. assets declined among investors already nervous about lofty equity valuations, a potential slowing of the recovery later this year and a swelling U.S. current account deficit. This dramatic shift in investor sentiment helped drive the dollar down 12% against the euro and pushed it 10% lower versus the yen.
U.S. Treasuries performed the best during a quarter in which worried investors sought refuge in safe, stable and liquid assets. Mortgages trailed Treasuries nominally but outperformed modestly on a like-duration basis. Bolstered by strong credit quality and a yield advantage versus Treasuries, the mortgage sector brushed off the risk that lower mortgage rates will spark a new wave of prepayments. Evidence of this lack of concern was that discount (lower-coupon) mortgages remained a bargain versus fuller coupons despite the refinancing risk posed by lower rates.
The Fund's portfolio of commercial mortgage backed securities ("CMBS") posted a favorable 4.78% return for the second quarter based on net asset value and a 6.21% 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 3.69% for the same period. NYSE share price return was boosted as the Fund's trading premium to its net asset value widened over the quarter from 9.87% to 11.63%. Longer term performance continues to be strong with the Fund posting an annualized return based on net asset value of 9.46% for the three-year period and 8.43% for the five-year period ended June 30, 2002, outperforming Index returns of 8.11% 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 7.76% based on the Fund's NYSE trading price as of June 30, 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.