NEW YORK, NY—April 4, 2008— 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 April 24, 2008 to stockholders of record on April 15, 2008. The ex-dividend date is April 11, 2008. Based on the NYSE closing price of $8.83 on April 3, 2008, the Fund’s yield was 12.23%. Based on the net asset value per share of $9.01 on March 31, 2008, the Fund’s yield was 11.99%. As of March 31, 2008, the portfolio’s average duration, as measured on a net asset basis, was 5.3 years.
Portfolio of Investments as of March 31, 2008
Sector Allocation as a Percentage of Total Assets
| Non-Agency Residential Mortgage-Backed Securities ("MBS") |
20.2% |
| Commercial MBS |
23.5% |
| Agency MBS Pass-throughs |
40.4% |
| Asset-Backed Securities |
1.8% |
| U.S. Treasury Securities |
13.4% |
| Other |
0.7% |
Credit Allocation as a Percentage of Total Assets
| U.S. Government / Agency and AAA Rated |
63.3% |
| AA Rated |
2.2% |
| A Rated |
3.4% |
| BBB Rated |
18.0% |
| Below Investment Grade |
13.1% |
Market and Portfolio Update
In the first quarter of 2008, security prices continued to decline. While the current credit crisis began with the non-Agency residential MBS market, it was the commercial MBS sector that led the price decline in the first quarter of 2008, as investors fled this sector fearing that the sub-prime MBS crisis could spread to the commercial real estate market.
The outlook for commercial and residential real estate fundamentals remains challenged. However, the U.S. government has undertaken a number of measures to lay the foundation for a recovery. Specifically, the resolution of the Bear Stearns near-bankruptcy, broadened funding facilities offered by the U.S. government, increased capacity of Fannie Mae and Freddie Mac, and continued lowering of interest rates are strong foundations for a market recovery.
“The credit markets have recently exhibited some signs of stability, but it is too soon to determine whether this is the first sign of a market turnaround,” said Clifford Lai, the Fund’s Chairman. “In the meantime, we continue to monitor the Fund’s credit performance and remain confident in the recovery value of our assets over the longer term.”
To take advantage of the opportunities in the market, the Fund also increased its sub-prime residential MBS exposure to 4%. The securities purchased are AAA-rated, have a short weighted average life and were purchased at attractive yields.
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 $95 billion of assets under management.
Forward-Looking Information
This news release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements that are based on various assumptions (some of which are beyond our control) may be identified by reference to a future period or periods or by the use of forwardlooking terminology, such as "may," "will," "believe," "expect," "anticipate," "continue," “should,” “intend,” or similar terms or variations on those terms or the negative of those terms. Although we believe that the expectations contained in any forward-looking statement are based on reasonable assumptions, we can give no assurance that our expectations will be attained. Factors that could cause actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to, changes in interest rates, changes in the yield curve, changes in prepayment rates, the effectiveness of our hedging strategies, the availability of mortgage-backed securities and other targeted investments for purchase, the availability and cost of capital for financing future investments and, if available, the terms of any such financing, changes in the market value of our assets, future margin reductions and the availability of liquid assets to post additional collateral, changes in business conditions and the general economy, changes in government regulations affecting our business, and other risks disclosed from time to time in our filings with the Securities and Exchange Commission. We do not undertake, and specifically disclaim any obligation, to publicly release any update or supplement to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
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