NEWPORT BEACH, Calif., Oct. 21, 2004 (PRIMEZONE) -- PIMCO Commercial Mortgage Securities Trust, Inc. (NYSE: PCM) today released its investment performance results and statistical portfolio information for the period July 1, 2004 through September 30, 2004 (third 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 $415 billion of assets under management as of September 30, 2004, 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:
Performance for the
periods ended 9/30/04
3 6 1 3 5 10
Mos Mos Year Years(1) Years(1) Years(1)
PCM Based on
Net Asset Value (%) 4.97 2.20 9.51 7.93 9.30 9.54
PCM Based on NYSE
Share Price (%) 10.70 0.22 7.31 9.84 12.35 11.17
Lehman Aggregate
Index (%) 3.20 0.67 3.68 5.88 7.48 7.66
(1) Annualized
The Fund's total return investment performance is net of all fees
and expenses and assumes the reinvestment of dividends.
Price Information
Pricing Date NYSE Share Price Net Asset Value
------------ ---------------- ---------------
9/30/2004 $14.12 $12.50
6/30/2004 $13.02 $12.18
9/30/2003 $14.27 $12.49
Date Premium/(Discount) to Net Asset Value
---- -------------------------------------
9/30/2004 12.96%
6/30/2004 6.90%
9/30/2003 14.25%
Dividend Information
--------------------
Regular monthly dividend per share: $0.09375
Total dividends declared in the quarter: $0.28125
Annualized dividend yield at 9/30/2004
based on NYSE share price: 7.97%
Annualized dividend yield at 9/30/2004
based on net asset value: 9.00%
Portfolio Statistics
The Fund's investment portfolio had
the following characteristics as of September 30, 2004:
Net Assets: $140.1 million
Average Duration: 4.6 years
Average Maturity: 4.9 years
Quality Ratings: 19% AAA, 6% AA, 14% A, 33% BAA,
22% BA, 3% B, 3% less than B
Average Quality: BAA+
Sector Weightings
(See Note 1): 40.0% Multi-Class (a mix of all
commercial property types, including
office buildings and industrial
properties), 31.4% Multi-Family
(apartment buildings), 10.2% Real
Estate ABS, 6.8% Commercial Paper, 6.7%
Hospitality (hotels and motels), 1.7%
Healthcare (hospitals and nursing care
facilities), 0.1% Corporate, 3.3%
Other.
% Leverage (9/30/04): 32.9% (The Fund's use of leverage is
subject to change at any time.)
(Note 1) Total may exceed 100% due to rounding.
Market Commentary
During the third quarter, the Fund's portfolio of commercial mortgage-backed securities returned 4.97% based on net asset value and 10.70% based on the Fund's NYSE share price. In comparison, the Lehman Brothers Aggregate Bond Index (which includes Treasury, investment-grade corporate, and residential mortgage-backed securities) returned 3.20% during the quarter. The Fund maintained an uninterrupted and constant dividend throughout the third quarter, holding the monthly per share rate steady at $0.09375. These dividend payouts equate to an annualized dividend yield of 7.97% based on the Fund's September 30, 2004 NYSE share price.
Bonds rallied in the third quarter as the economy slowed, hitting what Federal Reserve Chairman Alan Greenspan called a "soft patch." Weak employment growth and expectations of lower inflation prompted a fall in interest rates that boosted all bond market sectors. The third quarter was essentially a reversal of the previous three months, when a stronger labor market and anticipation that the Federal Reserve would begin tightening caused rates to jump.
Bond market gains during the third quarter came despite two 0.25% rate hikes by the Fed that brought the federal funds rate to 1.75% by the close of the quarter. The central bank said it would raise rates in the future at a "measured" pace as it moves toward a neutral policy stance that neither restrains nor stimulates the economy.
The yield on the benchmark 10-year Treasury fell 0.46% during the quarter and ended the period at 4.12%. The yield on the 10-year Treasury moved just below 4% in September before the benchmark note gave back some gains at the end of the quarter. While all but the very shortest maturity yields fell during the quarter, 10-year yields fell the most, causing the 2-10 year portion of the yield curve to flatten. This flattening suggested that bond markets were not optimistic about the economy's growth prospects.
A major reason for bond investors' skepticism about future growth was higher oil prices, which topped $50 a barrel late in the period and rose by more than a third for the full quarter. Consumer confidence slipped in September for the second consecutive month amid concern that surging oil prices would continue to exert a drag on growth, hiring, and disposable incomes.
For further information, please contact Erik Velicer, PIMCO Commercial Mortgage Securities Trust, Inc., at (949) 720-4733.
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.