NEWPORT BEACH, Calif., Jan. 23, 2004 (PRIMEZONE) -- PIMCO Commercial Mortgage Securities Trust, Inc. (NYSE:PCM) today released its investment-performance results and statistical portfolio information for the period October 1, 2003 through December 31, 2003 (fourth quarter).
PIMCO Commercial Mortgage Securities Trust, Inc. ("PCM" or the "Fund") is a closed-end bond fund that invests principally in 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 $373 billion of assets under management as of December 31, 2003, 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:
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Performance for the periods ended 12/31/03
3 6 1 3 5 10
Mos Mos Year Years(1) Years(1) Years(1)
PCM Based on
Net Asset Value (%) 2.60 2.91 7.03 9.55 8.27 8.69
PCM Based on
NYSE Share Price (%) 3.84 6.45 9.76 15.01 11.13 10.49
Lehman Aggregate
Index (%) 0.32 0.17 4.10 7.57 6.62 6.95
1 Annualized
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The Fund's total return investment performance is net of all fees
and expenses and assumes the reinvestment of dividends.
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Price Information
Pricing Date NYSE Share Price Net Asset Value
------------ ---------------- ---------------
12/31/2003 $14.53 $12.53
9/30/2003 $14.27 $12.49
12/31/2002 $14.32 $12.80
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Date Premium/(Discount) to Net Asset Value
---- -------------------------------------
12/31/2003 15.96%
9/30/2003 14.25%
12/31/2002 11.88%
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Dividend Information
Regular monthly dividend per share: $0.09375
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Total dividends declared in the quarter: $0.28125
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Total dividends declared for calendar 2003: $1.1250 (see Note)
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Annualized dividend yield at 12/31/03
based on NYSE share price: 7.74%
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Annualized dividend yield at 12/31/03
based on net asset value: 8.98%
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Note: The Fund did not declare a special dividend in 2003.
Portfolio Statistics
The Fund's investment portfolio had the following characteristics
as of December 31, 2003:
Net Assets: $139.8 million
Average Duration: 4.4 years
Average Maturity: 5.3 years
Quality Ratings: 49% AAA, 6% AA, 8% A, 20% BBB, 14% BB,
2% B, 1% less than B
Average Quality: A-
Sector Weightings: 34.9% Multi-Family (apartment buildings),
1.9% Healthcare (hospitals and nursing
care facilities), 6.9% Hospitality (hotels
and motels), 37.2% Multi-Class (a mix of
all commercial property types, including
office buildings and industrial
properties), 9.8% Real Estate ABS, 3.5%
Commercial Paper, 5.8% Other, 0% Corporate
% Leverage (12/31/03): 33% (The Fund's use of leverage is subject
to change at any time.)
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Market Commentary
During the fourth quarter, the Fund's portfolio of commercial mortgage-backed securities ("CMBS") posted a 2.60% return based on net asset value and a 3.84% 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 0.32% for the same period. The Fund maintained an uninterrupted and constant dividend throughout 2003, holding the monthly per share rate steady at $0.09375. These dividend payouts equate to an annualized dividend yield of 7.74% based on the Fund's NYSE trading price as of December 31, 2003. The Fund did not declare a special dividend in 2003.
Most bonds posted positive returns in the fourth quarter, capping a year in which fixed income assets gained ground despite volatile interest rates. The Lehman Brothers Aggregate Bond Index returned 0.32% for the quarter and 4.10% for the year.
Although Treasury yields rose only 0.20% to 0.50% for the year, bond markets were far from calm. For instance, yields moved lower through the first half of the year as deflation risks dominated the news and the market's view of future Federal Reserve policy. The Fed cut the federal funds rate to 1% in June and the 10-year Treasury yield plunged to a 45-year low near 3%. Rates then reversed course dramatically, jumping more than 1.3% during June and July, and ending July 0.89% higher.
This reversal was prompted by technical factors in the Treasury market, and also by investors' growing confidence that growth would accelerate. Economic performance in the second half of the year met investors' expectations. Business investment revived, while massive fiscal stimulus and the lagged impact of the mortgage refinancing boom sustained consumption, which led to an 8.2% annualized growth in the third quarter, which was the fastest pace in almost two decades. The 10-year Treasury yield finished the year at 4.25%, up 0.43% for the whole year.
Commodity prices surged in 2003 as growth revived, while the dollar plunged against most major currencies amid concern about the U.S. trade deficit. Despite these trends, inflation was well behaved overall, which limited the rise in interest rates. In a global economy where human resources and innovation are more important than ever for boosting output, slack labor markets and gains in labor productivity allowed companies to absorb higher prices of physical inputs without raising prices.
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.