NEWPORT BEACH, Calif., Jan. 31, 2003 (PRIMEZONE) -- PIMCO Commercial Mortgage Securities Trust, Inc. (NYSE:PCM) today released its investment performance results and statistical portfolio information for the period October 1, 2002 through December 31, 2002 (fourth quarter).
PIMCO Commercial Mortgage Securities Trust, Inc. (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 $304 billion of assets under management as of December 31, 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:
Performance for the periods ended 12/31/02
3 6 1 3 5
Mos Mos Year Years(1) Years(1)
PCM Based on
Net Asset Value (%) 0.34 5.17 10.97 10.72 8.32
Based on NYSE
Share Price (%) 0.99 4.77 11.59 17.35 11.16
Lehman Aggregate
Index (%) 1.57 6.23 10.26 10.10 7.55
(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
12/31/2002 $14.32 $12.80
09/30/2002 $14.75 $13.32
12/31/2001 $14.15 $12.85
Premium/(Discount) to Net Asset Value
12/31/2002 11.88%
09/30/2002 10.74%
12/31/2001 10.12%
Dividend Information
Regular monthly dividend per share: $ 0.09375
Special dividend per share (declared December 13, 2002) $ 0.28200
Total dividends declared in the quarter: $ 0.56325
Total dividends declared for calendar 2002: $ 1.40700
Annualized dividend yield at 12/31/02 based on
NYSE share price: 7.86%*
Annualized dividend yield at 12/31/02 based on
net asset value: 8.79%*
* Excluding special dividend declared on 12/13/02.
Portfolio Statistics
The Fund's investment portfolio had the following characteristics as
of December 31, 2002:
Net Assets: $150.5 mm
Average Duration: 3.99 years
Average Maturity: 5.16 years
Quality Ratings: 32.2% AAA, 9.6% AA, 16.1% A, 18.7% BBB,
18.2% BB, 4.9% B, 0.3%(less than)B
Average Quality: A
Sector Weightings: 26.5% Multi-family (apartment buildings), 7.5%
Healthcare (hospitals and nursing care
facilities), 11.4% Hospitality (hotels and
motels), 34.4% Multi-class (a mix of all
commercial property types, including office
buildings and industrial properties), 7.7% Real
Estate ABS, 8.0% Commercial Paper, 4.3% Other,
0.2% Corporate
Market Commentary
Investors' risk appetites began to revive in the fourth quarter, calming the financial market turmoil that produced a flight to safe assets, especially Treasuries, in the previous two quarters. The return to normalcy came amid heightened confidence that U.S. and, to a lesser extent, European policymakers would protect the global economy against the risks of deflation.
The powerful Treasury rally stalled during the fourth quarter as investors regained interest in credit-sensitive fixed income assets as well as non-U.S. bonds. The 10-year Treasury yield ended 2002 at 3.81%, up 0.22% during the quarter, though still down 1.24% for the full year. While 2002 was a difficult period for financial assets, fixed income securities weathered the storm relatively well. The broad U.S. bond market, represented by the Lehman Brothers Aggregate Bond Index, gained 10.26% even as more volatile asset classes suffered double-digit percentage losses for the year.
Policy developments that soothed investor anxieties during the fourth quarter included: larger-than-expected 0.50% rate cuts by the Federal Reserve and the European Central Bank; statements by Fed officials that they were prepared to use tools other than the federal funds rate to forestall deflation; and prospects for a bigger dose of fiscal stimulus in the United States. As a consequence, buyers returned to bonds outside the Treasury sector where positive or improving fundamentals had been obscured by the wave of indiscriminate risk aversion earlier in the year. Among these securities were relatively high yielding BBB-rated corporate bonds that had been besmirched by accounting and corporate governance scandals, as well as emerging market issues such as Brazil.
While Treasuries and top quality assets generally outperformed in 2002, corporates and lower grade bonds regained some ground on a relative basis in the final quarter. Mortgages outpaced Treasuries on a like-duration basis for the quarter and the year. Mortgages held up well even though refinancings remained rapid with mortgage rates near 40-year lows. Risk-averse banks reluctant to own corporates were strong buyers of mortgages.
The Fund's portfolio of commercial mortgage backed securities ("CMBS") posted a 0.34% return for the fourth quarter based on net asset value and a 0.99% 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 1.57% for the same period. Longer term performance continues to be strong with the Fund posting an annualized return based on net asset value of 10.72% for the three-year period and 8.32% for the five-year period ended December 31, 2002, outperforming Index returns of 10.10% and 7.55% 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. In addition, a special dividend of $0.282 per share was declared towards the end of the quarter from ordinary income accumulated over the year in excess of the Fund's regular monthly distributions. These dividend payouts, excluding the special dividend, equate to an annualized dividend yield of 7.86% based on the Fund's NYSE trading price as of December 31, 2002.
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.