PIMCO Commercial Mortgage Securities Trust, Inc. -- Second Quarter Investment Performance Results And Statistical Portfolio Information

Newport Beach, California, UNITED STATES


NEWPORT BEACH, Calif., July 21, 2004 (PRIMEZONE) -- PIMCO Commercial Mortgage Securities Trust, Inc. (NYSE:PCM) today released its investment performance results and statistical portfolio information for the period April 1, 2004 through June 30, 2004 (second 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 $391.9 billion of assets under management as of June 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 6/30/04

                    3       6      1       3          5        10
                   Mos     Mos    Year   Years(1)  Years(1)  Years(1)
  PCM Based on
   Net Asset
   Value (%)      -2.65   1.67    4.63    7.97       8.46     9.13

  PCM Based
   on NYSE Share
   Price (%)      -9.46  -6.64   -0.62    7.55       8.90    10.63

  Lehman
   Aggregate
   Index (%)      -2.44   0.15    0.32    6.36       6.95     7.39

  (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
 ------------          ----------------            ---------------
   6/30/2004                $13.02                     $12.18
   3/31/2004                $14.70                     $12.80
   6/30/2003                $14.20                     $12.74


      Date                Premium/(Discount) to Net Asset Value
      ----                -------------------------------------
   6/30/2004                           6.90%
   3/31/2004                          14.84%
   6/30/2003                          11.46%


                         Dividend Information

  Regular monthly dividend per share:                   $0.09375
  Total dividends declared in the quarter:              $0.28125
  Annualized dividend yield at 6/30/2004 based
   on NYSE share price:                                 8.64%
  Annualized dividend yield at 6/30/2004 based on
   net asset value:                                     9.24%

                        Portfolio Statistics

         The Fund's investment portfolio had the following
              characteristics as of June 30, 2004:

 Net Assets:            $136.3 million
 Average Duration:      4.6 years
 Average Maturity:      5.0 years

 Quality Ratings:       18% AAA, 6% AA, 11% A, 39% BAA, 20% BA, 5% B,
                        1% less than B
 Average Quality:       BAA+

 Sector Weightings:     41.2% Multi-Class (a mix of all
                        commercial property types, including
                        office buildings and industrial
                        properties), 30.9% Multi-Family
                        (apartment buildings), 8.4% Real Estate
                        ABS, 6.5% Hospitality (hotels and motels),
                        4.9% Commercial Paper, 1.8% Healthcare
                        (hospitals and nursing care facilities),
                        0.1% Corporate, 6.2% Other.

 % Leverage (6/30/04):  33.3% (The Fund's use of leverage is subject
                        to change at any time.)

Market Commentary

During the second quarter, the Fund's portfolio of commercial mortgage-backed securities returned -2.65% based on net asset value and -9.46% 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 -2.44% during the quarter. It's important to note that the second quarter was an unusual period for closed-end funds, as the prospect of rising interest rates became imminent. As a result, share prices of closed-end funds were negatively impacted during the period. However, since the end of the quarter the Fund's share price has improved. The Fund maintained an uninterrupted and constant dividend throughout the second quarter, holding the monthly per share rate steady at $0.09375. These dividend payouts equate to an annualized dividend yield of 8.64% based on the Fund's June 30, 2004 NYSE share price.

Interest rates rose sharply during the second quarter, causing bonds to give back modest gains from earlier in the year. The Lehman Brothers Aggregate Bond Index, the widely used index for the high-grade bond market, was nearly flat during the first six months of 2004, returning 0.15% after a 2.44% loss for the second quarter. The yield on the benchmark 10-year Treasury ended the second quarter at 4.58%, which was up 0.75% for the quarter.

Rate increases for shorter maturities exceeded 1% during the quarter. Continued growth in employment convinced the markets that the Federal Reserve would soon begin a long anticipated tightening cycle. At quarter end, the Fed met market expectations with the announcement of a 0.25% increase in the federal funds rate. The central bank had held this rate at 1%, which had generated negative real short-term rates, since June of last year.

Investors that had profited handsomely from borrowing at low short-term rates and investing in higher yielding longer maturity bonds surrendered some of those profits in the second quarter. Concern that borrowing rates would rise led investors to liquidate long positions and unwind this trade, putting downward pressure on bond prices. Substantial leverage remained, however, among banks, hedge funds, and other types of investors, making bond markets vulnerable to aggressive Fed interest rate increases.

Signs of rising inflation fueled anxiety that central banks would need to move aggressively to combat it. In the U.S., 12-month headline consumer price inflation rose above 3% in May, though the core rate remained below 2%. Inflation concerns were driven by higher oil prices as well as slower productivity growth. Helping calm the markets were suggestions by the Fed that it would raise rates gradually. Fed Governor Bernanke, in a speech supporting the gradualist approach, noted that higher long-term rates during the quarter were a sign that much of the financial adjustment to increases in inflation had already occurred.

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.



        

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