All-American Term Trust Inc. -- Distribution Declaration and Commentary.NEW YORK--(BUSINESS WIRE)--June 8, 1999-- All-American Term Trust Inc. (NYSE NYSE See: New York Stock Exchange : AAT Alpha-1-antitrypsin (AAT) A blood component that breaks down infection-fighting enzymes such as elastase. Mentioned in: Chronic Obstructive Lung Disease ), a closed-end management investment company with an investment objective of providing a high level of current income, consistent with the preservation of capital Preservation of Capital An investment strategy whose primary goal is to prevent the loss of an investment's total value. Notes: For investors using the capital preservation strategy to achieve their goal, they must ensure their portfolio is producing a return that is at , today announced that the Trust's Board of Directors has declared a dividend from net investment income of $0.0700 per share. The dividend is payable on June 30, 1999 to shareholders of record as of June 21, 1999. The ex-dividend date Ex-dividend date The first day of trading when the buyer of a stock is no longer entitled to the most recently announced dividend payment ( i.e. the trade will settle the day after the record date, too late for the buyer to appear on the shareholder record and receive the dividend. is June 17, 1999. The June dividend represents a decrease from the $0.0800 per share that the Trust had previously paid. The decrease is consistent with the Trust's diminishing portfolio income as interest rates remain near historical lows. It may be prudent to de-emphasize principal risk as the Trust's life shortens. Accordingly, we reduced the Trust's holdings of high-yield bonds, seeking to reduce principal risk and to trim longer-maturity assets. The reduced high-yield exposure resulted in lower income, hence the lower dividend. -0-
Portfolio Statistics (% of total portfolio assets) as of May 31, 1999:
Composition Credit Quality
--------------------------------- -------------------------------
Corporates 57.26 AAA 42.73
ARMs/Mortgages 31.39 AA 2.02
Municipals 7.94 A 9.24
Cash & Cash Equivalents 1.55 BBB 20.54
Treasurys/Agencies 1.86 BB 9.09
--------------------------------- B 11.70
100.00 Non-Rated 4.42
Below B 0.26
Top Five Sectors -------------------------------
--------------------------------- 100.00
Finance/Banking 9.05
Municipals 7.94
Cable/Media 6.89 Weighted Avg Maturity 5.80 Yrs
Energy 6.76 Weighted Avg Duration 3.37 Yrs
Diversified Industrials 4.76 Leverage 31.00 %
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-0- Commentary The bond market benefited from positive trends year to date through April 30, 1999. Liquidity improved; credit quality spreads narrowed (the "spread" is the premium in yield or income over Treasurys that securities must pay to compensate for their additional risk); and the performance differences that had developed among sectors, following last fall's global financial crisis, began to diminish. The devaluation devaluation, decreasing the value of one nation's currency relative to gold or the currencies of other nations. It is usually undertaken as a means of correcting a deficit in the balance of payments. of the Brazilian real The real (IPA: [xe'aw] or [ʁe'aɫ], symbol: R$, ISO 4217 code: BRL, plural: reais) is the currency of Brazil. It is also the name of the earliest Brazilian currency (see from the Colonial period to 1942. in January did not lead to widespread turmoil in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . Rates trended higher across the Treasury yield curve, and the curve steepened as the spread between the two-year note and the 30-year bond reached its widest point in March since December 1998. The long bond yielded 5.65% on April 30, 1999. Investment-grade corporate bonds outperformed Treasurys and agency securities in the first four months of 1999. The return of liquidity and investor confidence to the market supported the high-grade sector. The Trust's year-to-date performance was helped by its emphasis on the cable/media and financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. sectors and the performance of certain holdings. The AT&T acquisition of TCI (Trustworthy Computing Initiative) An umbrella term from Microsoft for its efforts to improve security in Windows. TCI was announced in 2002 after viruses such as Code Red and Nimda had succeeded in attacking numerous Windows computers. culminated in the first quarter of 1999, leading to further spread tightening and an upgrade of TCI's debt to A1/AA-. (TCI has been a Trust holding since the Trust's inception, and represented 2.0% of portfolio assets as of April 30, 1999.) Within the financial services sector, the Trust moved away from fully valued Fully Valued A stock whose price analysts believe reflects the market's recognition of the company's underlying fundamental earnings power and therefore is unlikely to rise further in price. If the stock goes up from that price, it is called overvalued. money center banks Money center banks Banks that raise most of their funds from the domestic and international money markets , relying less on depositors for funds. and focused on broker dealer paper, insurance companies and secondary-market banking issues. The Trust increased its exposure to mortgage securities as interest rates rose in the Treasury market. The Trust's weighted average duration (a measure of interest-rate risk) is constrained at about three years since the Trust will terminate on or about January 31, 2003. As the year progresses, we expect gross domestic product growth to moderate, yet remain strong at about 3%. Treasury yields will likely remain within a trading range Trading Range The spread between the high and low prices traded during a period of time. Notes: When a stock breaks through or falls below its trading range after several days of trading in a range, it usually means there is momentum (positive or negative) building. of 5.5-6.0%. With inflation still low, monetary policy appears to be on hold in the near term. However, continued strong growth, full employment and less turbulent global financial market conditions caused the Federal Reserve to adopt a tightening bias. The commentary reflects our views at the time of this writing. These views may change in response to changing circumstances. |
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