October 5, 2007—The Board of Directors of the Hyperion Brookfield Strategic Mortgage Income Fund, Inc. (the “Fund”) (NYSE: HSM) declared a monthly dividend of $0.090 per share, payable on October 25, 2007 to shareholders of record on October 16, 2007. The ex-dividend date is October 12, 2007. Based on the NYSE closing price of $10.92 on October 4, 2007, the Fund’s yield was 9.89%. Based on the net asset value per share of $12.30 on October 4, 2007, the yield of the Trust was 8.78%. As of September 30, 2007, the portfolio’s average duration, as measured on a net assets basis, was 5.4 years; the average duration of total assets was 3.4 years; and leverage equaled 19.0%. 96% of interest rate risk due to leverage is hedged using interest rate swaps and floating rate securities that have a weighted average life of 1.3 years.
Portfolio of Investments as of September 30, 2007
Sector Allocation as a Percentage of Total Assets
| Non-Agency Residential Mortgage-Backed Securities ("MBS") |
17.7% |
| Commercial MBS |
38.7% |
| Agency MBS Pass-throughs |
29.5% |
| Asset-Backed Securities |
4.7% |
| U.S. Treasury and Agency Securities |
9.4% |
Credit Allocation as a Percentage of Total Assets
| U.S. Government / Agency and AAA Rated |
41.9% |
| AA Rated |
1.5% |
| A Rated |
7.1% |
| BBB Rated |
34.2% |
| Below Investment Grade |
15.3% |
The Fund provided updated information on one of its sub-prime MBS holdings. In September, one of the
Fund's sub-prime MBS holdings (SAIL 2004-8 B1), which represented nearly 1% of the Fund's gross
assets, paid off in full, without experiencing any losses.
The Hyperion Brookfield Strategic Mortgage Income Fund, Inc. is managed by Hyperion Brookfield
Asset Management, Inc, a registered investment advisor located in New York City. The firm was founded
in 1989 to provide relative value driven fixed income investment strategies, such as core fixed income,
high yield, and specialized MBS. Hyperion Brookfield manages in excess of $22 billion for a client base
including pension funds, financial institutions, mutual funds, insurance companies, REITs and
foundations. Hyperion Brookfield is a subsidiary of Brookfield Asset Management Inc, a global asset
manager focused on property, power and other infrastructure assets with approximately US $70 billion of
assets under management. For more information, please contact:
The Hyperion Brookfield Strategic Mortgage Income Fund, Inc.
Three World Financial Center 200 Vesey Street, 10th Floor
New York, NY 10281-1010
1-800 HYPERION