NEWPORT BEACH, Calif., Oct. 31, 2001 (PRIMEZONE) -- PIMCO Commercial Mortgage Securities Trust, Inc. (NYSE:PCM) today released its investment performance results and statistical portfolio information for the period July 1, 2001, through September 30, 2001 (third 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 $234.9 billion of assets under management as of September 30, 2001, 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
09/30/01 NYSE Share Price Net Asset Value
Third quarter 3.90% 5.10%
One year 29.00% 16.07%
Three years (annualized) 11.63% 8.03%
Five years (annualized) 12.30% 9.64%
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 4.61%, 12.95%, 6.39% and 8.06% for the three months, one year, three years and five years ended September 30, 2001, respectively (3- and 5-year numbers are annualized).
Price Information
Pricing Date NYSE Share Price Net Asset Value
September 30, 2001 $14.0000 $13.46
June 30, 2001 $13.7500 $13.08
September 30, 2000 $12.0000 $12.82
Premium/(Discount) to Net Asset Value
September 30, 2001 4.01%
June 30, 2001 5.12%
September 30, 2000 (6.40)%
Dividend Information
Regular monthly
dividend per share: $ 0.09375
Total dividends declared
in the quarter: $ 0.28125
Annualized dividend yield
at 09/30/01 based on
NYSE share price: 8.04%
Annualized dividend yield
at 09/30/01 based on
net asset value: 8.36%
Portfolio Statistics
The Fund's investment portfolio had the following characteristics
as of December 31, 1997:
Net Assets: $148.4mm
Average Duration: 4.46 years
Average Maturity: 5.58 years
Quality Ratings: 18.5% AAA, 6.7% AA, 11.0% A, 34.1% BBB,
23.1% BB, 6.3% B, 0.3% less than B
Average Quality: BBB+
Sector Weightings: 22% Multi-family (apartment buildings),
10% Healthcare (hospitals and nursing care
facilities), 12% Hospitality (hotels and
motels), 35% Multi-class (a mix of all
commercial property types, including
office buildings and industrial
properties), 11% Real Estate ABS, 2%
Corporate, 3% Commercial Paper, 5% Other
Market Commentary and Outlook
The U.S. economy showed few signs of recovery even before the terrorist attacks against the U.S. on September 11. Major indicators pointed to continued retrenchment by debt-laden businesses and consumers after several years of over-indulgence. Investment spending and profits at U.S. companies were falling; unemployment and layoffs across a wide range of industries were on the rise; consumer confidence, long the bulwark of U.S. growth, fell to an eight-year low as consumers spent just enough to keep the economy from contracting.
The picture was no brighter outside the U.S. Growth in the Eurozone slowed to almost zero in the second quarter. Japan's economy shrank as business spending fell and exports plunged. The Federal Reserve and the European Central Bank each responded with 0.25% rate cuts in August to prop up the ailing economies.
The attacks made these weaknesses more acute by heightening risk aversion among consumers, businesses and investors. Layoffs mounted, especially in the airline and aerospace industries, with more on the way. Already-weak stock markets fell sharply, as did prices of corporate and emerging market bonds. Trading volume and liquidity in bond markets fell well below normal levels after the attacks, although they returned close to normal by quarter end. Injections of liquidity by the Fed and rate cuts by central banks worldwide helped to bolster confidence in financial markets. The Fed eased 0.50% on September 17 and then another 0.50% just after the close of the quarter. In Japan, where interest rates are near zero, the central bank tried to boost the economy by intervening in currency markets to hold down the yen's value.
High-quality assets such as Treasuries and mortgages outperformed other fixed-income securities, as well as stocks, for the quarter, as investors sought safety amid market turmoil. Short and intermediate maturities fared especially well as yield curves steepened worldwide. Two-year Treasury yields, already falling before the attacks in expectation of more Fed easing, plunged a total of 1.39% over the quarter to close at 2.85%. Ten and 30-year Treasury yields fell by 0.82% and 0.34% to close at 4.59% and 5.42%, respectively.
In this turbulent market environment, the Fund's portfolio of commercial mortgage-backed securities ("CMBS") posted a 5.10% return for the third quarter based on net asset value and a 3.90% 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 4.61% for the same period. NYSE share price return lagged the Fund's return based on net asset value due to a narrowing of the Fund's trading premium over the quarter from 5.12% to 4.01%. Longer term performance continues to be strong with the Fund posting an annualized return based on net asset value of 8.03% for the three-year period and 9.64% for the five-year period ended June 30, 2001, outperforming the Index returns of 6.39% and 8.06% 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 8.04% based on the Fund's NYSE trading price as of September 30, 2001.
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.