SOURCE: PIMCO Commercial Mortgage Securities Trust, Inc.

March 02, 2007 12:26 ET

PIMCO Commercial Mortgage Securities Trust, Inc.

Reissue From February 27, 2007

NEWPORT BEACH, CA -- (MARKET WIRE) -- March 2, 2007 -- PIMCO Commercial Mortgage Securities Trust, Inc. (NYSE: PCM) (the "Fund") announced today that the Fund's Board of Directors approved changes to the Fund's name, certain non-fundamental investment policies and its dividend policy, each as more fully described below.

Name Change

The Board of Directors of the Fund has approved a change in the Fund's name to PCM Fund, Inc. The change in the Fund's name is consistent with the investment changes described below regarding minimum investment in commercial mortgage-backed securities ("CMBS") and with Securities and Exchange Commission rules governing the names of investment companies. This change will be effective upon 60 days' notice to shareholders.

Investment Changes

The Board of Directors of the Fund also approved certain changes to the Fund's investment policies, as more fully described below.

The Fund is eliminating its non-fundamental policy of investing at least 80% of its net assets and amounts borrowed for investment purposes in CMBS. Instead, the Fund is adopting a non-fundamental policy requiring the Fund to invest at least 65% of its total assets in CMBS. Reducing the required investment in CMBS will expand the Fund's available universe of permitted investments. This change will be effective upon 60 days' notice to shareholders.

Also, the Fund is changing its investment policies to permit investment in credit derivatives. This change will permit the use of credit derivatives, such as credit default swaps, and other derivative instruments for gaining synthetic exposures. This expands the Fund's available universe of permitted investments within the corporate and asset backed securities (ABS) sectors. This change is effective immediately.

Additionally, the Fund has changed its policies so that it will now be permitted to use Fitch Ratings as a rating agency for purposes of credit quality investment restrictions. The Fund currently uses Moody's and S&P ratings, or, if an issue is unrated, PIMCO's assessment of the issue's credit quality. PIMCO believes that this change will increase flexibility in managing the Fund without adding significant risks. This change is also effective immediately.

Dividend Change

The Board of Directors of the Fund also has changed the Fund's monthly per share common dividend from 9.375 cents per common share to 7.00 cents per common share, effective with the next dividend declaration. The decision to reduce the Fund's dividend is due to certain factors including: the dramatic increase in short-term interest rates and prolonged inversion of the U.S. yield curve, which has increased borrowing costs for the Fund, and the narrowing of risk premiums offered by the bond market which has led to lower reinvestment yields.

The Fund is a closed-end investment company investing primarily in commercial mortgage-backed securities. Pacific Investment Management Company LLC ("PIMCO"), an investment adviser with approximately $667 billion of assets under management as of December 31, 2006, is responsible for managing the Fund's investment portfolio.

Contact Information