-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Me+2rTlCg6viQFJDineAefF0KqVJi21bE1j+iOZLQmnTT55U66oP0q0t1Ppnummc 3W8jwsbNYucj6Ixe/Dwsow== 0001047469-03-023319.txt : 20030702 0001047469-03-023319.hdr.sgml : 20030702 20030702172444 ACCESSION NUMBER: 0001047469-03-023319 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030430 FILED AS OF DATE: 20030702 EFFECTIVENESS DATE: 20030702 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CREDIT SUISSE HIGH YIELD BOND FUND CENTRAL INDEX KEY: 0001061353 IRS NUMBER: 134009166 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-08777 FILM NUMBER: 03772979 BUSINESS ADDRESS: STREET 1: 277 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10172 BUSINESS PHONE: 2128926692 MAIL ADDRESS: STREET 1: 277 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10172 FORMER COMPANY: FORMER CONFORMED NAME: DLJ HIGH YIELD BOND FUND DATE OF NAME CHANGE: 19980508 N-CSR 1 a2114007zn-csr.txt N-CSR UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act File No. 811-08777 --------------------------------------------------------------------- CREDIT SUISSE HIGH YIELD BOND FUND ------------------------------------------------------------------------ (Exact Name of Registrant as Specified in Charter) 466 Lexington Avenue, New York, New York 10017-3140 ------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Hal Liebes, Esq. Credit Suisse High Yield Bond Fund 466 Lexington Avenue New York, New York 10017-3147 ------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code:(212) 875-3500 Date of fiscal year end: October 31, 2003 Date of reporting period: April 30, 2003 ITEM 1. REPORTS TO STOCKHOLDERS. CREDIT SUISSE HIGH YIELD BOND FUND SEMIANNUAL REPORT APRIL 30, 2003 (UNAUDITED) CREDIT SUISSE HIGH YIELD BOND FUND 466 LEXINGTON AVENUE NEW YORK, NY 10017 TRUSTEES ENRIQUE R. ARZAC LAWRENCE J. FOX JAMES S. PASMAN, JR. OFFICERS JOSEPH D. GALLAGHER CHAIRMAN OF THE FUND AND CHIEF EXECUTIVE OFFICER RICHARD J. LINDQUIST PRESIDENT AND CHIEF INVESTMENT OFFICER HAL LIEBES SENIOR VICE PRESIDENT MICHAEL A. PIGNATARO CHIEF FINANCIAL OFFICER, VICE PRESIDENT AND SECRETARY ROBERT M. RIZZA VICE PRESIDENT AND TREASURER INVESTMENT ADVISER CREDIT SUISSE ASSET MANAGEMENT, LLC 466 LEXINGTON AVENUE NEW YORK, NY 10017 ADMINISTRATOR STATE STREET BANK AND TRUST CO. 225 FRANKLIN STREET BOSTON, MA 02110 CUSTODIAN CUSTODIAL TRUST COMPANY 101 CARNEGIE CENTER PRINCETON, NJ 08540 SHAREHOLDER SERVICING AGENT PFPC, INC. 101 FEDERAL STREET BOSTON, MA 02110 LEGAL COUNSEL WILLKIE FARR & GALLAGHER 787 7TH AVENUE NEW YORK, NY 10019 INDEPENDENT ACCOUNTANTS PRICEWATERHOUSECOOPERS LLP TWO COMMERCE SQUARE PHILADELPHIA, PENNSYLVANIA 19103 Dear Shareholder: May 22, 2003 We are writing to report on the activities of Credit Suisse High Yield Bond Fund (NYSE: DHY) ("the Fund") for the fiscal half-year ended April 30, 2003 and to discuss our investment strategy. On April 30, 2003, the Fund's net asset value ("NAV") was $4.08, compared to an NAV of $3.53 at October 31, 2002. The Fund's total return (based on NAV and assuming reinvestment of dividends of $0.32 per share) for the period was 25.68%. On April 30, 2003, $294.2 million was invested in high yield debt securities; $9.6 million in investment-grade debt securities; and $0.5 million in equity securities. Of the debt securities, the largest concentration (69.7%) was invested in issues rated B through BBB. THE MARKET: HIGH YIELD TAKES OFF The broad high yield market (to which we refer generically as "high yield") rebounded with vigor in the fiscal half-year after faltering in much of 2002. Aggregate high yield prices moved upward uninterruptedly until the beginning of December, took a quick breather, and then kept rising through the end of the period. As measured by the Citigroup High-Yield Market Index (CHYMI)*, the market rose 25.71%. High yield was so strong, in fact, that it significantly outperformed most other leading fixed income sectors. There were two especially important underlying drivers of activity, in our view. The first, which materialized in late 2002, was investors' revived appetite for relatively risky financial assets. There was a generalized sense that the sting of accounting-based irregularities and corporate governance issues may have finally run its course. The second driver was a widespread search for yield at a time when interest rates--and, therefore, the returns available from money market funds--were historically low. An exclamation point of sorts in this regard occurred on November 6, just after the period began, when the Federal Reserve cut its nominal short-term interest rate by a half-point (I.E., to 1.25% from 1.75%) to the lowest such level since July 1961. Investors thus poured fresh cash into high yield mutual funds, which acted aggressively to put the cash to work. Perceptions about conflict with Iraq did not dampen demand for high yield securities. High yield's attractive yields made it seem more compelling than stocks, for example, which were especially volatile as war-related anxieties ebbed and flowed. Expectations that the war's resolution would be favorable, moreover, prompted optimism that sluggish U.S. economic growth would rebound, which augured well for the creditworthiness of corporate-bond issuers generally. A variety of other factors also helped to make high yield the "asset class of choice" during the half-year. Valuations early in the period remained near historically low levels by certain measures. The high yield default rate continued to decline, suggesting that overall credit quality was improving. And the bonds of "fallen angels" (I.E., investment-grade companies whose debt had been downgraded to high yield status), which had lost substantial value during much of 2002, enjoyed vigorous buying as investors appeared to conclude that their battered valuations had become unreasonably low. PERFORMANCE: IN LINE WITH THE MARKET The Fund performed in line with the broad high yield market (I.E., as represented by CHYMI) in the half-year, indicating the offsetting impact of different aspects of our investment approach. Given the market's overall buoyancy, the portfolio's leveraged nature served to enhance the degree of our successes. Key positives included good security selection in, and an above-market allocation to, several industry sectors: - - Satellite telecommunications outperformed the market as a whole. Our holdings benefited from the collapse of a long-lasting, controversial attempt by one of the industry's biggest players to acquire another. - - Cable television, which bounced back vigorously after selling off harshly in much of 2002, also outperformed the market as a whole. - - In health care facilities/supplies, our biggest position was in a maker of disposable medical products whose operating results were better than expected. - - Chemicals producers reaped the considerable fruits of sharply declining prices for oil and natural gas, which are among the industry's most widely used raw materials. The least favorable contributions to the Fund's return came from our decision to maintain below-market exposure to several sectors that had absorbed harsh selling in most of 2002, yet rallied in the year's fourth quarter and kept going up well into 2003. These sectors notably included utilities, energy trading companies and fixed-line telecommunications. Our stance in them was based on our ongoing belief that their underlying fundamentals were discouraging, as well as our sense that their valuations, in many cases, had been propelled to levels that we considered unrealistically high. Momentum-fuelled buying kept pushing prices higher, however, a pattern that was exacerbated by the persistent strength of cash inflows into high yield funds throughout the period. OUTLOOK: POSITIVE We believe that overall prospects for the high yield market are positive. Yield spreads for high yield versus comparable-maturity Treasury debt are still wide enough to offer potential upside even after several months of price appreciation, in our view. In addition, we expect fund inflows to remain strong as yield-hungry investors stay on the prowl. We see the economic environment as reasonably supportive. [Note: a positive economic environment bodes well for the high yield market via its favorable implications for both creditworthiness and companies' need to raise capital to fund expected growth.] There is plenty of monetary and fiscal stimulus already in the system to foster growth once, as we anticipate, the picture begins to brighten. We also find it encouraging in this context that the Federal Reserve's latest view on monetary policy--I.E., that the risks of deflation outweigh the risks of inflation--appears to signal that the Fed is unlikely to raise interest rates in the next few months. This, in turn, suggests to us that high yield may continue to attract yield-seekers who might otherwise invest in money market funds and investment-grade fixed income categories. Within the Fund, we have most recently begun to trim the degree of our above-market exposure to the gaming sector, whose potential upside we regard as lower than previously; and raise exposure to utilities, where we see improving capital structures that could help to boost creditworthiness and, accordingly, valuations. Our sector allocations reflect our preference to not take an overly aggressive stance just yet. The industries we like all have fairly stable growth characteristics that could help them hold up well in case the economy doesn't, which means their bond prices could be somewhat less volatile than the high yield market overall. Relative to broad market indices like CHYMI, we are thus overweighting gaming, energy, food/beverage/bottling, health care and selected industrials. We are either underweighting or completely avoiding telecom, airlines and energy traders. We appreciate your interest in the Fund and would be pleased to respond to your questions or comments. Any questions regarding net asset value, performance, dividends, portfolio management or allocations should be directed to Credit Suisse Asset Management at (800) 293-1232. All other inquiries regarding account information, requests for the latest financial information or other reports should be directed to the Fund's Shareholder Servicing Agent at (800) 331-1710. Sincerely yours, /s/ Richard J. Lindquist Richard J. Lindquist President and Chief Investment Officer** /s/ Joseph D. Gallagher Joseph D. Gallagher Chairman of the Fund and Chief Executive Officer*** HIGH YIELD BONDS ARE LOWER-QUALITY BONDS THAT ARE ALSO KNOWN AS "JUNK BONDS." SUCH BONDS ENTAIL GREATER RISK THAN THOSE FOUND IN HIGHER-RATED SECURITIES. IN ADDITION TO HISTORICAL INFORMATION, THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS, WHICH MAY CONCERN, AMONG OTHER THINGS, DOMESTIC AND FOREIGN MARKET, INDUSTRY AND ECONOMIC TRENDS AND DEVELOPMENTS AND GOVERNMENT REGULATION AND THEIR POTENTIAL IMPACT ON THE FUND'S INVESTMENT PORTFOLIO. THESE STATEMENTS ARE SUBJECT TO RISKS AND UNCERTAINTIES AND ACTUAL TRENDS, DEVELOPMENTS AND REGULATIONS IN THE FUTURE, AND THEIR IMPACT ON THE FUND COULD BE MATERIALLY DIFFERENT FROM THOSE PROJECTED, ANTICIPATED OR IMPLIED. THE FUND HAS NO OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS. * The Citigroup High-Yield Market Index is a broad-based, unmanaged index of high yield securities that is compiled by Citigroup Global Markets Inc. Its name was changed from the Salomon Smith Barney High-Yield Market Index effective April 7, 2003. Investors cannot invest directly in an index. ** Richard J. Lindquist, who is a Managing Director of CSAM, is primarily responsible for management of the Fund's assets. He has served in such capacity since December 8, 2000. Mr. Lindquist joined CSAM on May 1, 1995 as a result of CSAM's acquisition of CS First Boston Investment Management Corporation ("CSFBIM"). Prior to joining CSAM and beginning in July, 1989, he held various offices at CSFBIM. Mr. Lindquist also is President and Chief Investment Officer of Credit Suisse Asset Management Income Fund, Inc. (NYSE: CIK). *** Joseph D. Gallagher, Managing Director, is Chief Executive Officer of CSAM Americas and the firm's global Chief Financial Officer. He has served as the Fund's Chief Executive Officer since March 1, 2003. Prior to assuming his current role at CSAM in 2003, he was the Firm's global CFO and Chief Executive Officer, Europe. Mr. Gallagher joined Credit Suisse Group in 1985 as an investment banker with Credit Suisse First Boston, where he worked for 14 years in New York, Singapore and Hong Kong in mergers and acquisitions and financial services. He is a Director and/or Chairman of other investment companies advised by CSAM. CREDIT SUISSE HIGH YIELD BOND FUND (UNAUDITED) TOP TEN HOLDINGS (AS A % OF NET ASSETS AS OF 04/30/2003) SECURITY DESCRIPTION 1. Alaris Medical, Inc. 2.50% 11.125% 08/01/08 2. Triton PCS, Inc. 2.48% 11.000% 05/01/08 3. AMC Entertainment, Inc. 2.37% 9.500% 03/15/09 4. Paxson Communications Corp. 2.04% 12.250% 01/15/06 5. Packaging Corp. of America 1.89% 9.625% 04/01/09 6. Luigino's, Inc. 1.85% 10.000% 02/01/06 7. Huntsman International Holdings LLC 1.75% 0.000% 12/31/09 8. Pegasus Communications Corp. 1.74% 9.625% 10/15/05 9. Allied Waste North America, Inc. 1.71% 10.000% 08/01/09 10. Rent-A-Center, Inc. 1.64% 11.000% 08/15/08
CREDIT QUALITY BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 04/30/2003) A/A 1.1% BBB/Baa 1.7 BB/Ba 12.3 B/B 55.7 CCC/Caa 20.2 CC/Ca 2.0 C/C 1.2 D 0.4 NR 3.7 ----- Subtotal 98.3 Equities and Other 1.7 ----- Total 100.0% =====
1 CREDIT SUISSE HIGH YIELD BOND FUND--SCHEDULE OF INVESTMENTS APRIL 30, 2003 (UNAUDITED)
PRINCIPAL AMOUNT VALUE --------------- --------------- CORPORATE BONDS--132.9% AEROSPACE--1.4% Condor Systems, Inc., Series B, Company Guaranteed Notes (Callable 05/01/04 @ $105.94) 11.875%, 05/01/09 ~ $ 2,097,000 $ 474,446 TransDigm, Inc., Company Guaranteed Notes (Callable 12/01/03 @ $105.19) 10.375%, 12/01/08 2,250,000 2,407,500 --------------- 2,881,946 --------------- AIRLINES--0.8% American Airlines, Inc., Series 01-2, Pass Thru Certificates 7.800%, 10/01/06 1,000,000 404,733 ATA Holdings Corp., Company Guaranteed Notes (Callable 12/15/03 @ $104.81) 9.625%, 12/15/05 3,500,000 1,242,500 --------------- 1,647,233 --------------- AUTOMOBILE MANUFACTURING/VEHICLE PARTS--4.5% Advanced Accessory Systems, Series B, Company Guaranteed Notes (Callable 10/01/03 @ $103.25) 9.750%, 10/01/07 800,000 845,000 American Axle & Manufacturing, Inc., Company Guaranteed Notes (Callable 03/01/04 @ $104.88) 9.750%, 03/01/09 ^ 1,547,000 1,693,965 Collins & Aikman Products Corp., Company Guaranteed Notes (Callable 04/15/04 @ $100.00) 11.500%, 04/15/06 1,500,000 1,410,000 Collins & Aikman Products Corp., Global Company Guaranteed Notes (Callable 12/31/06 @ $105.38) 10.750%, 12/31/11 1,000,000 1,030,000 J. L. French Automotive Castings, Inc., Series B, Company Guaranteed Notes (Callable 06/01/04 @ $105.75) 11.500%, 06/01/09 ^ 3,547,000 2,225,742 Key Plastics Holdings, Inc., Series B, Company Guaranteed Notes (Callable 03/15/04 @ $101.71) 10.250%, 03/15/07 ~ 250,000 1,875 Metaldyne Corp., Global Company Guaranteed Notes (Callable 06/15/07 @ 105.50) 11.000%, 06/15/12 ^ 1,200,000 1,050,000 Motor Coach Industries International, Inc., Company Guaranteed Notes (Callable 05/01/04 @ $105.62) 11.250%, 05/01/09 150,000 75,750 Roller Bearing Company of America, Inc., Series B, Company Guaranteed Notes (Callable 06/15/03 @ $103.21) 9.625%, 06/15/07 1,150,000 971,750 Venture Holdings Company LLC, Company Guaranteed Notes (Callable 06/01/03 @ $105.50) 11.000%, 06/01/07 ~ 1,250,000 375,000 --------------- 9,679,082 --------------- BROADBAND--0.3% Level 3 Communications, Inc., Senior Discount Notes (Callable 12/01/03 @ $105.25) 10.500%, 12/01/08 + $ 550,000 $ 398,750 Level 3 Communications, Inc., Senior Notes (Callable 05/01/03 @ $104.56) 9.125%, 05/01/08 ^ 350,000 285,250 --------------- 684,000 --------------- BROADCAST/OUTDOOR--2.7% Interep National Radio Sales, Inc., Series B, Company Guaranteed Notes (Callable 07/01/03 @ $105.00) 10.000%, 07/01/08 ^ 1,000,000 765,000 Paxson Communications Corp., Global Company Guaranteed Notes (Callable 01/15/06 @ $106.12) 12.250%, 01/15/06 + 5,150,000 4,351,750 Young Broadcasting, Inc., Global Company Guaranteed Notes (Callable 03/01/06 @ $105.00) 10.000%, 03/01/11 680,000 737,800 --------------- 5,854,550 --------------- BUILDING PRODUCTS--1.6% Atrium Companies, Inc., Series B, Company Guaranteed Notes (Callable 05/01/04 @ $105.25) 10.500%, 05/01/09 1,000,000 1,055,000 Building Materials Corp., Series B, Senior Notes 8.000%, 10/15/07 500,000 458,750 Building Materials Corp., Series B, Senior Notes (Callable 12/15/03 @ $101.44) 8.625%, 12/15/06 1,500,000 1,410,000 Dayton Superior Corp., Company Guaranteed Notes (Callable 06/15/07 @ $102.17) 13.000%, 06/15/09 600,000 513,000 --------------- 3,436,750 --------------- CABLE--7.1% @Entertainment, Inc., Series B, Senior Discount Notes (Callable 02/01/04 @ $108.75) 14.500%, 02/01/04 ~, + 2,200,000 539,000 Adelphia Communications Corp., Senior Notes 10.875%, 10/01/10 ~, ^ 3,000,000 1,500,000 Century Communications Corp., Senior Discount Notes 0.000%, 03/15/49 ~ 1,000,000 410,000 Charter Communications Holdings LLC, Senior Discount Notes (Callable 04/01/04 @ $104.96) 9.920%, 04/01/04 + 3,650,000 2,117,000 Charter Communications Holdings LLC, Senior Notes (Callable 04/01/04 @ $104.31) 8.625%, 04/01/09 2,600,000 1,722,500 Coaxial Communications/Phoenix, Company Guaranteed Notes (Callable 08/15/03 @ $103.33) 10.000%, 08/15/06 1,250,000 1,290,625
SEE NOTES TO FINANCIAL STATEMENTS. 2
PRINCIPAL AMOUNT VALUE --------------- --------------- CSC Holdings, Inc., Senior Notes 7.250%, 07/15/08 $ 400,000 $ 414,000 CSC Holdings, Inc., Senior Subordinated Debentures (Callable 02/15/04 @ $103.60) 9.875%, 02/15/13 ^ 1,000,000 1,052,500 CSC Holdings, Inc., Series B, Senior Notes 7.625%, 04/01/11 1,500,000 1,586,250 DIVA Systems Corp., Series B, Senior Discount Notes (Callable 03/01/04 @ $104.20) 12.625%, 03/01/08 ~ 1,750,000 61,250 Insight Communications Company, Inc., Senior Discount Notes (Callable 02/15/06 @ $106.12) 12.250%, 02/15/06 + 2,000,000 1,585,000 Insight Midwest/Insight Capital, Senior Notes (Callable 10/01/04 @ $104.88) 9.750%, 10/01/09 200,000 215,500 James Cable Partners LP, Series B, Senior Notes (Callable 08/15/03 @ $100.00) 10.750%, 08/15/04 ~ 850,000 450,500 Mediacom LLC Capital Corp., Senior Notes (Callable 01/15/06 @ $104.75) 9.500%, 01/15/13 ^ 2,000,000 2,160,000 --------------- 15,104,125 --------------- CAPITAL GOODS--0.3% International Wire Group, Inc., Senior Subordinated Notes (Callable 06/01/03 @ $100.00) 11.750%, 06/01/05 1,000,000 745,000 --------------- CHEMICALS--6.2% Applied Extrusion Technologies, Inc., Series B, Company Guaranteed Notes (Callable 07/01/06 @ $105.38) 10.750%, 07/01/11 ^ 1,000,000 745,000 Equistar Chemicals LP/ Equistar Funding Corp., Global Company Guaranteed Notes 10.125%, 09/01/08 1,000,000 1,055,000 Ferro Corp., Senior Notes 9.125%, 01/01/09 1,000,000 1,124,409 Huntsman International Holdings LLC, Senior Discount Notes (Callable 07/01/04 @ $106.69) 0.000%, 12/31/09 9,445,000 3,730,775 Lyondell Chemical Co., Global Company Guaranteed Notes (Callable 12/15/05 @ $104.75) 9.500%, 12/15/08 1,400,000 1,435,000 Millennium America, Inc., Global Company Guaranteed Notes 9.250%, 06/15/08 ^ 800,000 884,000 Mississippi Chemical Corp., Bonds 7.250%, 11/15/17 1,300,000 110,500 Radnor Holdings Corp., Rule 144A, Senior Notes (Callable 03/15/07 @ $105.50) 11.000%, 03/15/10 ++ 1,000,000 1,005,000 Resolution Performance Products LLC, Global Senior Subordinated Notes (Callable 11/15/05 @ $106.75) 13.500%, 11/15/10 $ 1,000,000 $ 1,077,500 Terra Industries, Inc., Series B, Senior Notes (Callable 06/15/03 @ $100.00) 10.500%, 06/15/05 ^ 1,500,000 1,485,000 United Industries Corp., Senior Subordinated Notes (Callable 04/01/04 @ $104.94) 9.875%, 04/01/09 425,000 452,625 --------------- 13,104,809 --------------- COMPETITIVE LOCAL EXCHANGE CARRIER (CLEC)--1.6% Quest Corp., Notes 5.625%, 11/15/08 900,000 841,500 RCN Corp., Senior Discount Notes (Callable 10/15/03 @ $103.71) 11.125%, 10/15/07 +, ^ 6,235,000 2,244,600 RCN Corp., Senior Notes (Callable 10/15/03 @ $103.33) 10.000%, 10/15/07 1,000,000 335,000 --------------- 3,421,100 --------------- CONGLOMERATE/DIVERSIFIED MANUFACTURING--0.7% Amtrol, Inc., Senior Subordinated Notes (Callable 12/31/03 @ $100.00) 10.625%, 12/31/06 450,000 234,000 Jordan Industries, Inc., Series D, Senior Notes (Callable 08/01/03 @ $102.59) 10.375%, 08/01/07 3,425,000 1,301,500 --------------- 1,535,500 --------------- CONSUMER PRODUCTS/TOBACCO--3.5% American Greetings Corp., Global Senior Subordinated Notes (Callable 07/15/05 @ $105.88) 11.750%, 07/15/08 ^ 1,000,000 1,150,000 Diamond Brands Operating Corp., Company Guaranteed Notes (Callable 04/15/04 @ $103.38) 10.125%, 04/15/08 ~ 3,097,000 310 General Binding Corp., Company Guaranteed Notes (Callable 06/01/03 @ $104.69) 9.375%, 06/01/08 400,000 384,000 Packaged Ice, Inc., Series B, Company Guaranteed Notes (Callable 02/01/04 @ $100.00) 9.750%, 02/01/05 ^ 1,000,000 965,000 PCA LLC/PCA Finance Corp., Global Senior Notes 11.875%, 08/01/09 1,000,000 1,060,000 Revlon Consumer Products Corp., Global Company Guaranteed Notes 12.000%, 12/01/05 ^ 1,750,000 1,662,500 Samsonite Corp., Senior Subordinated Notes (Callable 06/15/03 @ $105.38) 10.750%, 06/15/08 1,138,000 1,081,100 Scotts Co., Company Guaranteed Notes (Callable 01/15/04 @ $104.31) 8.625%, 01/15/09 1,000,000 1,065,000
3
PRINCIPAL AMOUNT VALUE --------------- --------------- Styling Technology Corp., Company Guaranteed Notes (Callable 07/01/03 @ $105.44) 10.875%, 07/01/08 ~ $ 1,500,000 $ 90,000 --------------- 7,457,910 --------------- CONTAINERS--2.1% Berry Plastics Corp., Global Company Guaranteed Notes (Callable 07/15/07 @ $105.38) 10.750%, 07/15/12 1,100,000 1,204,500 Constar International, Inc., Senior Subordinated Notes (Callable 12/01/07 @ $105.50) 11.000%, 12/01/12 750,000 791,250 Owens Brockway Glass Containers, Rule 144A, Senior Notes (Callable 05/15/08 @ $104.12) 8.250%, 05/15/13 ++ 750,000 750,000 Owens-Brockway Glass Containers, Global Company Guaranteed Notes (Callable 02/15/06 @ $104.44) 8.875%, 02/15/09 1,000,000 1,077,500 Pliant Corp., Company Guaranteed Notes (Callable 06/01/05 @ $106.50) 13.000%, 06/01/10 250,000 232,500 Tekni-Plex, Inc., Series B, Company Guaranteed Notes (Callable 06/15/05 @ $106.38) 12.750%, 06/15/10 500,000 491,250 --------------- 4,547,000 --------------- DIVERSIFIED TELECOMMUNICATIONS--1.0% Gray Television, Inc., Global Company Guaranteed Notes (Callable 12/15/06 @ $104.62) 9.250%, 12/15/11 1,000,000 1,105,000 Primus Telecommunications Group, Inc., Senior Notes (Callable 01/15/04 @ $105.62) 11.250%, 01/15/09 1,097,000 937,935 --------------- 2,042,935 --------------- ELECTRONICS/INFORMATION/DATA TECHNOLOGY--0.1% Ampex Corp., Secured Notes (Callable 05/28/03 @ $100.00) 12.000%, 08/15/08 1,678,508 251,776 --------------- ENERGY - OTHER --2.3% Amerigas Partners LP Eagle Finance Corp., Series B, Global Senior Notes (Callable 05/20/06 @ $104.44) 8.875%, 05/20/11 1,110,000 1,204,350 El Paso Corp., Senior Notes 7.000%, 05/15/11 ^ 800,000 700,000 Trico Marine Services, Inc., Global Company Guaranteed Notes (Callable 05/15/07 @ $104.44) 8.875%, 05/15/12 ^ 1,500,000 1,320,000 Williams Companies, Inc., Global Notes 9.250%, 03/15/04 1,250,000 1,265,625 Williams Companies, Inc., Notes 6.500%, 12/01/08 500,000 467,500 --------------- 4,957,475 --------------- ENVIRONMENTAL SERVICES--2.5% Allied Waste North America, Inc., Series B, Company Guaranteed Notes (Callable 08/01/04 @ $105.00) 10.000%, 08/01/09 ^ $ 3,400,000 $ 3,650,750 IMC Global, Inc., Rule 144A, Company Guaranteed Notes (Callable 06/01/06 @ 105.62) 11.250%, 06/01/11 ++ 1,450,000 1,653,000 --------------- 5,303,750 --------------- FINANCE--2.0% Asat Finance LLC, Company Guaranteed Notes (Callable 11/01/03 @ $106.25) 12.500%, 11/01/06 2,925,000 2,354,625 Ocwen Financial Corp., Notes 11.875%, 10/01/03 1,795,000 1,830,900 --------------- 4,185,525 --------------- FOOD PROCESSORS/BEVERAGE/BOTTLING--3.9% Archibald Candy Corp., Company Guaranteed Notes (Callable 05/28/03 @ $100.00) 10.000%, 11/01/07 ~ 258,455 232,609 Aurora Foods, Inc., Series B, Senior Subordinated Notes (Callable 07/01/03 @ $106.38) 8.750%, 07/01/08 ^ 1,500,000 667,500 B&G Foods, Inc., Series D, Global Company Guaranteed Notes (Callable 08/01/03 @ $103.21) 9.625%, 08/01/07 300,000 310,875 Curtice Burns Food, Inc., Company Guaranteed Notes (Callable 11/01/03 @ $105.94) 11.875%, 11/01/08 ^ 1,000,000 1,087,500 Fleming Companies, Inc., Series D, Global Company Guaranteed Notes (Callable 07/31/03 @ $103.54) 10.625%, 07/31/07 ~, ^ 3,870,000 38,700 Land O' Lakes, Inc., Global Senior Notes (Callable 11/15/06 @ $104.38) 8.750%, 11/15/11 ^ 1,150,000 741,750 Luigino's, Inc., Senior Subordinated Notes (Callable 02/01/04 @ $102.50) 10.000%, 02/01/06 3,800,000 3,952,000 Roundy's, Inc., Series B, Global Company Guaranteed Notes (Callable 06/15/07 @ $104.44) 8.875%, 06/15/12 ^ 500,000 517,500 Swift & Company, Rule 144A, Senior Subordinated Notes (Callable 10/01/06 @ $106.25) 12.500%, 01/01/10 ++ 850,000 862,750 --------------- 8,411,184 --------------- GAMING--13.2% Ameristar Casinos, Inc., Global Company Guaranteed Notes (Callable 02/15/06 @ $105.38) 10.750%, 02/15/09 1,500,000 1,687,500
SEE NOTES TO FINANCIAL STATEMENTS. 4
PRINCIPAL AMOUNT VALUE --------------- --------------- Argosy Gaming Co., Company Guaranteed Notes (Callable 06/01/04 @ $105.38) 10.750%, 06/01/09 $ 3,000,000 $ 3,330,000 Aztar Corp., Global Senior Subordinated Notes (Callable 08/15/06 @ $104.50) 9.000%, 08/15/11 ^ 1,350,000 1,434,375 Boyd Gaming Corp., Global Company Guaranteed Notes (Callable 08/01/05 @ $104.62) 9.250%, 08/01/09 1,200,000 1,329,000 Chukchansi Economic Development Authority, Rule 144A, Senior Notes (Callable 10/01/06 @ $113.00) 14.500%, 06/15/09 ++ 2,000,000 2,105,000 Circus Circus & Eldorado, Global First Mortgage (Callable 03/01/07 @ $105.06) 10.125%, 03/01/12 1,000,000 967,500 Hard Rock Hotel, Inc., Series B, Senior Subordinated Notes (Callable 04/01/04 @ $100.00) 9.250%, 04/01/05 2,145,000 2,198,625 Hollywood Casino Corp., Company Guaranteed Notes (Callable 05/01/03 @ $107.00) 11.250%, 05/01/07 2,252,000 2,409,640 Hollywood Casino Corp., Company Guaranteed Notes (Callable 08/01/03 @ $106.50) 13.000%, 08/01/06 # 2,000,000 1,580,000 Isle of Capri Casinos, Inc., Company Guaranteed Notes (Callable 04/15/04 @ $104.38) 8.750%, 04/15/09 550,000 581,625 Majestic Investor Holdings, Company Guaranteed Notes (Callable 11/30/05 @ $105.83) 11.653%, 11/30/07 2,490,000 2,452,650 Mohegan Tribal Gaming, Global Senior Subordinated Notes (Callable 07/01/06 @ $104.19) 8.375%, 07/01/11 ^ 1,000,000 1,070,000 MTR Gaming Group, Inc., Rule 144A, Company Guaranteed Notes (Callable 04/01/07 @ $104.88) 9.750%, 04/01/10 ++ 250,000 261,250 Old Evangeline Downs LLC, Rule 144A (Callable 03/01/07 @ $106.50) 13.000%, 03/01/10 ++ 1,000,000 1,015,000 Peninsula Gaming LLC, Series B, Company Guaranteed Notes (Callable 07/01/03 @ $108.00) 12.250%, 07/01/06 594,000 620,730 Penn National Gaming, Inc., Series B, Global Company Guaranteed Notes (Callable 03/01/05 @ $105.56) 11.125%, 03/01/08 1,250,000 1,384,375 Riviera Holdings Corp., Global Company Guaranteed Notes (Callable 06/15/06 @ 105.50) 11.000%, 06/15/10 1,110,000 1,048,950 Station Casinos, Inc., Global Senior Notes (Callable 02/15/05 @ $103.33) 8.375%, 02/15/08 250,000 269,375 Windsor Woodmont Black Hawk, Series B, First Mortgage (Callable 03/15/04 @ $104.33) 13.000%, 03/15/05 ~ $ 2,456,000 $ 1,682,360 Wynn Las Vegas LLC, Second Mortgage Note (Callable 11/01/06 @ $112.00) 12.000%, 11/01/10 ^ 650,000 706,875 --------------- 28,134,830 --------------- HEALTHCARE FACILITIES/SUPPLIES--7.7% ALARIS Medical, Inc., Senior Discount Notes (Callable 08/01/03 @ $105.56) 11.125%, 08/01/08 +, ^ 5,088,000 5,316,960 DaVita, Inc., Rule 144A (Callable 11/15/03 @ $103.50) 7.000%, 05/15/09 ++, ^ 3,000,000 3,078,750 Extendicare Health Services, Inc., Company Guaranteed Notes (Callable 12/15/03 @ $103.12) 9.350%, 12/15/07 1,000,000 815,000 Fisher Scientific International, Inc., Global Senior Subordinated Notes (Callable 05/01/07 @ $104.06) 8.125%, 05/01/12 1,000,000 1,080,000 Kinetic Concepts, Inc., Series B, Company Guaranteed Notes (Callable 11/01/03 @ $103.21) 9.625%, 11/01/07 ^ 3,000,000 3,142,500 Magellan Health Services, Inc., Rule 144A, Senior Notes (Callable 11/15/05 @ $104.69) 9.375%, 11/15/07 ++, ~ 950,000 859,750 Magellan Health Services, Inc., Senior Subordinated Notes (Callable 02/15/04 @ $103.00) 9.000%, 02/15/08 ~ 1,150,000 310,500 Medquest, Inc., Series B, Global Company Guaranteed Notes (Callable 08/15/07 @ $105.94) 11.875%, 08/15/12 ^ 1,000,000 930,000 Senior Housing Properties Trust, Senior Notes 8.625%, 01/15/12 800,000 848,000 --------------- 16,381,460 --------------- HOME BUILDERS--2.3% KB Home, Senior Subordinated Notes 8.625%, 12/15/08 850,000 922,250 KB Home, Senior Subordinated Notes (Callable 02/15/06 @ $104.75) 9.500%, 02/15/11 1,000,000 1,107,500 Toll Corp., Senior Subordinated Notes (Callable 12/01/06 @ $104.12) 8.250%, 12/01/11 ^ 700,000 757,750 WCI Communities, Inc., Global Company Guaranteed Notes (Callable 05/01/07 @ $104.56) 9.125%, 05/01/12 1,000,000 1,015,000 William Lyon Homes, Inc., Company Guaranteed Notes (Callable 04/01/08 @ $105.38) 10.750%, 04/01/13 1,000,000 1,030,000 --------------- 4,832,500 ---------------
SEE NOTES TO FINANCIAL STATEMENTS. 5
PRINCIPAL AMOUNT VALUE --------------- --------------- INDUSTRIAL--1.7% Actuant Corp., Company Guaranteed Notes (Callable 05/01/07 @ $102.17) 13.000%, 05/01/09 ^ $ 1,868,000 $ 2,194,900 GSI Group, Inc., Company Guaranteed Notes (Callable 11/01/03 @ $103.46) 10.250%, 11/01/07 1,100,000 809,875 International Utility Structures, Inc., Yankee Senior Subordinated Notes (Callable 02/01/04 @ $103.58) 10.750%, 02/01/08 1,020,500 556,173 --------------- 3,560,948 --------------- LEISURE--4.9% AMC Entertainment, Inc., Senior Subordinated Notes (Callable 03/15/04 @ $102.38) 9.500%, 03/15/09 4,850,000 5,044,000 Bluegreen Corp., Series B, Company Guaranteed Notes (Callable 04/01/04 @ $103.50) 10.500%, 04/01/08 ^ 1,000,000 905,000 Booth Creek Ski Holdings, Inc., Series B, Company Guaranteed (Callable 03/15/04 @ $102.08) 12.500%, 03/15/07 1,150,000 1,132,750 Cinemark USA, Inc., Rule 144A, Senior Subordinated Notes (Callable 02/01/08 @ $104.50) 9.000%, 02/01/13 ++ 250,000 271,250 Icon Health & Fitness, Inc., Global Company Guaranteed Notes (Callable 04/01/07 @ 105.62) 11.250%, 04/01/12 ^ 1,000,000 1,045,000 Regal Cinemas, Inc., Series B, Global Company Guaranteed Notes (Callable 02/01/07 @ $104.69) 9.375%, 02/01/12 1,100,000 1,215,500 Six Flags, Inc., Global Senior Notes (Callable 02/01/06 @ $104.44) 8.875%, 02/01/10 ^ 850,000 854,250 --------------- 10,467,750 --------------- LODGING--2.0% Extended Stay America, Inc., Senior Subordinated Notes (Callable 03/15/04 @ $103.05) 9.150%, 03/15/08 2,750,000 2,794,688 Host Marriott Corp., Series A, Company Guaranteed Notes (Callable 08/01/03 @ $102.63) 7.875%, 08/01/05 500,000 507,500 John Q. Hammons Hotels, Series B, Global Notes, First Mortgage (Callable 05/15/07 @ $104.44) 8.875%, 05/15/12 890,000 925,600 --------------- 4,227,788 --------------- METALS & MINING--3.1% AK Steel Corp., Global Company Guaranteed Notes (Callable 06/15/07 @ $103.88) 7.750%, 06/15/12 ^ 800,000 703,000 Great Lakes Carbon Corp., Series B, Company Guaranteed Notes (Callable 05/15/03 @ $105.13) 11.750%, 05/15/08 $ 4,210,000 $ 3,473,250 Metallurg, Inc., Series B, Company Guaranteed Notes (Callable 12/01/03 @ $103.67) 11.000%, 12/01/07 700,000 416,500 Oregon Steel Mills Inc., Global Company Guaranteed Notes (Callable 07/15/06 @ 105.00) 10.000%, 07/15/09 ^ 500,000 477,500 Ormet Corp., Rule 144A, Company Guaranteed Notes (Callable 08/15/03 @ $105.50) 11.000%, 08/15/08 ++ 1,035,000 367,425 UCAR Finance, Inc., Global Company Guaranteed Notes (Callable 02/15/07 @ $105.12) 10.250%, 02/15/12 1,000,000 940,000 WCI Steel, Inc., Series B, Senior Secured Notes (Callable 12/01/03 @ $101.00) 10.000%, 12/01/04 500,000 157,500 --------------- 6,535,175 --------------- OIL EQUIPMENT--1.2% Grey Wolf, Inc., Senior Notes (Callable 07/01/03 @ $102.96) 8.875%, 07/01/07 1,500,000 1,554,375 Grey Wolf, Inc., Series C, Company Guaranteed Notes (Callable 07/01/03 @ $102.96) 8.875%, 07/01/07 ^ 1,000,000 1,032,500 --------------- 2,586,875 --------------- PAPER & FOREST PRODUCTS--6.9% Appleton Papers, Inc., Series B, Global Company Guaranteed Notes (Callable 12/15/05 @ $106.25) 12.500%, 12/15/08 ^ 1,250,000 1,425,000 Box USA Holdings, Series B, Senior Notes (Callable 06/01/03 @ $102.00) 12.000%, 06/01/06 1,250,000 1,281,250 Buckeye Technologies, Inc., Senior Subordinated Notes (Callable 12/15/03 @ $100.00) 8.500%, 12/15/05 ^ 1,000,000 990,000 Caraustar Industries, Inc., Global Company Guaranteed Notes (Callable 04/01/06 @ $105.25) 9.875%, 04/01/11 500,000 515,000 Fonda Group, Inc., Series B, Senior Subordinated Notes (Callable 03/01/04 @ $101.58) 9.500%, 03/01/07 700,000 353,500 Georgia-Pacific Corp., Rule 144A, Senior Notes 8.875%, 02/01/10 ++ 1,200,000 1,299,000 Georgia-Pacific Corp., Rule 144A, Senior Notes (Callable 02/01/08 @ 104.69) 9.375%, 02/01/13 ++, ^ 1,300,000 1,436,500
SEE NOTES TO FINANCIAL STATEMENTS. 6
PRINCIPAL AMOUNT VALUE --------------- --------------- Packaging Corp. of America, Company Guaranteed Notes (Callable 04/01/04 @ $104.81) 9.625%, 04/01/09 $ 3,700,000 $ 4,033,000 Riverwood International Corp., Company Guaranteed Notes (Callable 04/01/04 @ $101.36) 10.875%, 04/01/08 ^ 3,300,000 3,423,750 --------------- 14,757,000 --------------- PHARMACEUTICALS--0.4% aaiPharma, Inc., Global Company Guaranteed Notes (Callable 04/01/06 @ 105.50) 11.000%, 04/01/10 750,000 806,250 --------------- PUBLISHING--3.2% Houghton Mifflin Co., Rule 144A, Senior Notes (Callable 02/01/07 @ 104.12) 8.250%, 02/01/11 ++ 350,000 373,625 Liberty Group Operating, Inc., Company Guaranteed Notes (Callable 02/01/04 @ 103.13) 9.375%, 02/01/08 2,700,000 2,693,250 Liberty Group Publishing, Inc., Debentures (Callable 02/01/04 @ $103.88) 11.625%, 02/01/09 + 1,774,000 1,605,470 Phoenix Color Corp., Company Guaranteed Notes (Callable 02/01/04 @ 105.19) 10.375%, 02/01/09 2,267,000 2,051,635 --------------- 6,723,980 --------------- RESTAURANTS--2.1% American Restaurant Group, Inc., Series D, Company Guaranteed Notes (Callable 11/01/04 @ $105.75) 11.500%, 11/01/06 1,329,000 857,205 Buffets, Inc., Global Senior Subordinated Notes (Callable 07/15/06 @ 105.62) 11.250%, 07/15/10 850,000 837,250 CKE Restaurants, Inc., Company Guaranteed Notes (Callable 05/01/04 @ $104.56) 9.125%, 05/01/09 967,500 904,613 Denny's Corp., Senior Notes (Callable 01/15/04 @ $103.75) 11.250%, 01/15/08 ^ 1,850,000 1,470,750 Romacorp, Inc., Company Guaranteed Notes (Callable 07/01/03 @ $106.00) 12.000%, 07/01/06 870,000 500,250 --------------- 4,570,068 --------------- RETAIL - FOOD & DRUG--1.4% Herbalife International, Inc., Global Company Guaranteed Notes (Callable 07/15/06 @ $105.88) 11.750%, 07/15/10 1,000,000 1,115,000 Pathmark Stores, Inc., Global Company Guaranteed Notes (Callable 02/01/07 @ $104.38) 8.750%, 02/01/12 ^ 1,100,000 1,111,000 Stater Brothers Holdings, Inc., Senior Notes (Callable 08/15/03 @ $105.38) 10.750%, 08/15/06 $ 750,000 $ 800,625 --------------- 3,026,625 --------------- RETAIL STORES--4.7% Big 5 Corp., Series B, Senior Notes (Callable 11/15/03 @ $103.65) 10.875%, 11/15/07 2,822,000 2,973,682 J. Crew Operating Corp., Senior Subordinated Notes (Callable 10/15/03 @ $103.46) 10.375%, 10/15/07 ^ 2,000,000 1,810,000 Leslie's Poolmart, Senior Notes (Callable 07/15/03 @ $100.00) 10.375%, 07/15/04 1,200,000 1,207,500 Michaels Stores, Inc., Senior Notes (Callable 07/01/05 @ $104.62) 9.250%, 07/01/09 900,000 981,000 Office Depot, Inc., Global Senior Subordinated Notes 10.000%, 07/15/08 1,000,000 1,165,000 Pep Boys - Manny, Moe & Jack, Series MTNB, Notes 6.920%, 07/07/06 ^ 1,150,000 1,085,313 United Auto Group, Inc., Global Company Guaranteed Notes (Callable 03/15/07 @ $104.81) 9.625%, 03/15/12 750,000 795,000 --------------- 10,017,495 --------------- SATELLITE--4.4% EchoStar DBS Corp., Senior Notes (Callable 02/01/04 @ $104.69) 9.375%, 02/01/09 ^ 3,100,000 3,359,625 PanAmSat Corp., Global Company Guaranteed Notes (Callable 02/01/07 @ $104.25) 8.500%, 02/01/12 ^ 500,000 543,750 Pegasus Communications Corp., Series B, Senior Notes (Callable 10/15/03 @ $100.00) 9.625%, 10/15/05 4,000,000 3,700,000 Pegasus Communications Corp., Series B, Senior Notes (Callable 12/01/03 @ $103.25) 9.750%, 12/01/06 2,000,000 1,850,000 --------------- 9,453,375 --------------- SECONDARY OIL & GAS PRODUCERS--6.9% Chesapeake Energy Corp., Global Company Guaranteed Notes (Callable 04/01/06 @ $104.06) 8.125%, 04/01/11 2,290,000 2,484,650 Continental Global Group, Inc., Series B, Senior Notes (Callable 04/01/04 @ $101.83) 11.000%, 04/01/07 2,000,000 922,500 Continental Resources, Inc., Company Guaranteed Notes (Callable 08/01/03 @ $105.12) 10.250%, 08/01/08 1,200,000 1,194,000 El Paso CGP Co., Notes 6.375%, 02/01/09 500,000 422,500
SEE NOTES TO FINANCIAL STATEMENTS. 7
PRINCIPAL AMOUNT VALUE --------------- --------------- El Paso CGP Co., Notes 7.750%, 06/15/10 $ 750,000 $ 663,750 Magnum Hunter Resources, Inc., Global Company Guaranteed Notes (Callable 03/15/07 @ $104.80) 9.600%, 03/15/12 750,000 813,750 Mariner Energy LLC, Series B, Senior Subordinated Notes (Callable 08/01/03 @ $100.00) 10.500%, 08/01/06 3,100,000 3,123,250 Southwest Royalties, Inc., Company Guaranteed Notes (Callable 06/02/03 @ $100.00) 10.500%, 06/30/04 + 1,021,000 1,021,000 Swift Energy Co., Senior Subordinated Notes (Callable 08/01/04 @ $105.12) 10.250%, 08/01/09 2,000,000 2,140,000 Wiser Oil Co., Company Guaranteed Notes (Callable 05/15/03 @ $103.17) 9.500%, 05/15/07 2,297,000 2,009,875 --------------- 14,795,275 --------------- SERVICES--8.0% Diamond Triumph Auto Glass, Inc., Company Guaranteed Notes (Callable 04/01/04 @ $103.08) 9.250%, 04/01/08 400,000 322,000 Great Lakes Dredge & Dock Corp., Company Guaranteed Notes (Callable 08/15/03 @ $105.62) 11.250%, 08/15/08 2,000,000 2,122,500 IESI Corp., Global Company Guaranteed Notes (Callable 06/15/07 @ $105.12) 10.250%, 06/15/12 1,500,000 1,560,000 Iron Mountain, Inc., Company Guaranteed Notes (Callable 04/01/06 @ $104.31) 8.625%, 04/01/13 1,000,000 1,095,000 La Petite Academy, Inc., Series B, Company Guaranteed Notes (Callable 05/15/03 @ $105.00) 10.000%, 05/15/08 1,650,000 973,500 Muzak LLC/Muzak Finance Corp., Company Guaranteed Notes (Callable 03/15/04 @ $104.94) 9.875%, 03/15/09 450,000 420,750 Neff Corp., Company Guaranteed Notes (Callable 06/01/03 @ $105.12) 10.250%, 06/01/08 2,000,000 1,110,000 Rent-A-Center, Inc., Series D, Global Company Guaranteed Notes (Callable 08/15/03 @ $105.50) 11.000%, 08/15/08 ^ 3,250,000 3,501,875 Salton, Inc., Global Senior Subordinated Notes (Callable 04/15/05 @ $106.12) 12.250%, 04/15/08 ^ 1,200,000 1,254,000 Standard Parking Corp., Company Guaranteed Notes (Callable 03/15/04 @ $103.08) 9.250%, 03/15/08 700,000 248,500 Volume Services America, Inc., Company Guaranteed Notes (Callable 03/01/04 @ $105.62) 11.250%, 03/01/09 $ 1,750,000 $ 1,723,750 Wesco Distribution, Inc., Global Company Guaranteed Notes (Callable 06/01/03 @ $104.56) 9.125%, 06/01/08 550,000 497,750 Worldwide Flight Services, Series B, Company Guaranteed Notes (Callable 08/15/03 @ $106.12) 12.250%, 08/15/07 2,000,000 2,190,000 --------------- 17,019,625 --------------- TECHNOLOGY--2.4% AMI Semiconductor, Inc., Rule 144A, Senior Subordinated Notes (Callable 02/01/08 @ 105.38) 10.750%, 02/01/13 ++ 400,000 442,000 Lucent Technologies, Inc., Notes 5.500%, 11/15/08 800,000 682,000 Lucent Technologies, Inc., Notes 7.250%, 07/15/06 ^ 1,000,000 955,000 Sanmina-SCI Corp., Rule 144A, Secured Notes (Callable 01/15/07 @ 105.19) 10.375%, 01/15/10 ++, ^ 1,000,000 1,145,000 SCG Holding & Semiconductor Co., Company Guaranteed Notes (Callable 08/01/04 @ $106.00) 12.000%, 08/01/09 2,575,000 1,892,625 --------------- 5,116,625 --------------- TEXTILE/APPAREL/SHOE MANUFACTURING--1.7% BGF Industries, Inc., Series B, Senior Subordinated Notes (Callable 01/15/04 @ $105.25) 10.250%, 01/15/09 3,347,000 1,556,355 Levi Strauss & Co., Global Senior Notes (Callable 01/15/05 @ $105.81) 11.625%, 01/15/08 ^ 550,000 467,500 Levi Strauss & Co., Rule 144A, Senior Notes (Callable 12/15/07 @ 106.12) 12.250%, 12/15/12 ++ 1,250,000 1,043,750 USI American Holdings Inc., Series B, Company Guaranteed Notes 7.250%, 12/01/06 500,000 482,500 --------------- 3,550,105 --------------- TRANSPORTATION--1.4% North American Van Lines, Inc., Global Company Guaranteed Notes (Callable 12/01/04 @ $106.69) 13.375%, 12/01/09 2,000,000 2,150,000 Ultrapetrol (Bahamas), Ltd., First Mortgage (Callable 04/01/04 @ $103.50) 10.500%, 04/01/08 994,000 775,320 --------------- 2,925,320 --------------- UTILITIES--1.9% Calpine Corp., Senior Notes 8.500%, 02/15/11 1,000,000 735,000 CMS Energy Corp., Senior Notes 8.900%, 07/15/08 ^ 1,000,000 1,010,000
SEE NOTES TO FINANCIAL STATEMENTS. 8
PRINCIPAL AMOUNT VALUE --------------- --------------- Mirant Corp., Rule 144A, Senior Notes 7.400%, 07/15/04 ++ $ 1,000,000 $ 885,000 Sierra Pacific Resources, Senior Unsecured Notes 8.750%, 05/15/05 1,000,000 975,000 TNP Enterprises, Inc., Series B, Senior Subordinated Notes (Callable 04/01/05 @ $105.12) 10.250%, 04/01/10 350,000 357,000 --------------- 3,962,000 --------------- WIRELESS--6.8% American Cellular Corp., Global Company Guaranteed Notes (Callable 10/15/05 @ $104.75) 9.500%, 10/15/09 1,550,000 410,750 Crown Castle International Corp., Senior Notes (Callable 08/01/04 @ $104.75) 9.500%, 08/01/11 ^ 1,500,000 1,477,500 Nextel Communications, Inc., Global Senior Notes (Callable 02/01/06 @ $104.75) 9.500%, 02/01/11 ^ 1,050,000 1,152,375 Nextel Partners, Inc., Senior Discount Notes (Callable 02/01/04 @ $107.00) 14.000%, 02/01/04 +, ^ 900,000 918,000 Nextel Partners, Inc., Senior Notes (Callable 03/15/05 @ $105.50) 11.000%, 03/15/10 750,000 791,250 Rural Cellular Corp., Global Senior Subordinated Notes (Callable 01/15/06 @ $104.88) 9.750%, 01/15/10 500,000 437,500 TeleCorp PCS, Inc., Company Guaranteed Notes (Callable 04/15/04 @ $105.81) 11.625%, 04/15/09 + 3,275,000 3,373,250 Tritel PCS, Inc., Global Company Guaranteed Notes (Callable 01/15/06 @ $105.19) 10.375%, 01/15/11 487,000 584,400 Triton PCS, Inc., Company Guaranteed Notes (Callable 05/01/03 @ $105.50) 11.000%, 05/01/08 +, ^ 5,250,000 5,289,375 --------------- 14,434,400 --------------- TOTAL CORPORATE BONDS (COST $306,586,293) 283,137,119 --------------- FOREIGN CORPORATE BONDS--9.7% BROADBAND--0.0% Ono Finance PLC, Subordinated Debentures (United Kingdom) 0.000%, 05/31/09 5,980 60 --------------- BUILDING PRODUCTS--0.7% Ainsworth Lumber Company, Ltd., Global Secured Notes (Callable 01/15/05 @ $106.94) (Canada) 13.875%, 07/15/07 1,300,000 1,456,000 --------------- CHEMICALS--1.7% Acetex Corp., Global Senior Notes (Callable 08/01/05 @ $105.44) (Canada) 10.875%, 08/01/09 ^ $ 1,000,000 $ 1,105,000 Avecia Group PLC, Global Company Guaranteed Notes (Callable 07/01/04 @ $105.50) (United Kingdom) 11.000%, 07/01/09 2,700,000 2,470,500 --------------- 3,575,500 --------------- CONSUMER PRODUCTS/TOBACCO--0.5% Hockey Co. & Sports Maska, Inc., Global Notes (Callable 04/15/06 @ $105.62) (Canada) 11.250%, 04/15/09 1,000,000 1,097,500 --------------- CONTAINERS--0.6% Crown European Holdings SA, Rule 144A, Secured Notes (Callable 03/01/07 @ $104.75) (France) 9.500%, 03/01/11 ++ 1,250,000 1,337,500 --------------- DIVERSIFIED TELECOMMUNICATIONS--0.9% Filtronic PLC, Senior Notes (Callable 12/01/03 @ $102.50) (United Kingdom) 10.000%, 12/01/05 ^ 2,000,000 2,020,000 --------------- FOOD PROCESSORS/BEVERAGE/BOTTLING--0.6% Burns Phillip Capital Property, Ltd., Rule 144A, Company Guaranteed Notes (Callable 07/15/07 @ $104.88) (Australia) 9.750%, 07/15/12 ++ 1,000,000 1,005,000 Premier International Foods, Yankee Senior Notes (Callable 09/01/04 @ $106.00) (United Kingdom) 12.000%, 09/01/09 250,000 276,250 --------------- 1,281,250 --------------- GAMING--0.4% Kerzner International, Ltd., Global Company Guaranteed Notes (Callable 08/15/06 @ $104.44) (Bahamas) 8.875%, 08/15/11 750,000 798,750 --------------- LEISURE--0.7% Imax Corp., Yankee Senior Unsecured Notes (Callable 12/01/03 @ $101.97) (Canada) 7.875%, 12/01/05 ^ 1,500,000 1,350,000 Intrawest Corp., Global Company Guaranteed Notes (Callable 02/01/05 @ $105.25) (Canada) 10.500%, 02/01/10 200,000 218,000 --------------- 1,568,000 --------------- OIL EQUIPMENT--1.6% Transocean, Inc., Global Notes (Cayman Island) 9.500%, 12/15/08 ^ 2,750,000 3,494,331 ---------------
SEE NOTES TO FINANCIAL STATEMENTS. 9
PRINCIPAL AMOUNT VALUE --------------- --------------- PAPER & FOREST PRODUCTS--0.8% MDP Acquisitions PLC, Rule 144A, Senior Notes (Callable 10/01/07 @ $104.81) (Ireland) 9.625%, 10/01/12 ++ $ 750,000 $ 817,500 Tembec Industries, Inc., Rule 144A, Senior Notes (Callable 06/30/04 @ $104.31) (Canada) 8.625%, 06/30/09 ++ 750,000 783,750 --------------- 1,601,250 --------------- PUBLISHING--0.5% Hollinger, Inc., Rule 144A, Senior Secured Notes (Callable 03/01/07 @ $105.94) (Canada) 11.875%, 03/01/11 ++ 1,000,000 1,070,000 --------------- WIRELESS--0.7% Polska Telefonica Cyfrowa International Finance II SA, Yankee Company Guaranteed Notes (Callable 12/01/04 @ $105.62) (Luxembourg) 11.250%, 12/01/09 1,250,000 1,400,000 --------------- TOTAL FOREIGN CORPORATE BONDS (COST $19,230,806) 20,700,141 --------------- SHARES --------------- COMMON STOCKS--0.2% AUTOMOBILE MANUFACTURING/VEHICLE PARTS--0.0% Cambridge Industries Liquidating Trust * 774,557 3,873 --------------- DIVERSIFIED TELECOMMUNICATIONS--0.1% Versatel Telecom International NV * 233,772 216,538 --------------- RETAIL - FOOD & DRUG--0.0% Archibald Candy Corp. *, !! 1,291 32,275 --------------- SECONDARY OIL & GAS PRODUCERS--0.1% Southwest Royalties, Inc. *, !! 15,324 231,852 --------------- TOTAL COMMON STOCKS (COST $1,371,445) 484,538 --------------- PREFERRED STOCK--0.0% TECHNOLOGY--0.0% Viasystems Group, Inc. * (Cost $3,772,614) 274,548 0 --------------- WARRANTS--0.0% AIRLINES--0.0% Worldwide Flight Services, Rule 144A (expires 08/15/07) *, ++, !! 4,000 40 --------------- BROADBAND--0.0% GT Group Telecom, Inc., Rule 144A (expires 02/01/10) *, ++ 6,750 5,063 --------------- SHARES VALUE --------------- --------------- DIVERSIFIED TELECOMMUNICATIONS--0.0% Versatel Telecom International NV (expires 05/15/2008) * 3,000 $ 30 --------------- FINANCE--0.0% Asat Finance LLC, Rule 144A (expires 11/01/06) *, ++ 5,000 6,250 --------------- GAMING--0.0% Windsor Woodmont Black Hawk (expires 03/15/10) * 106 0 --------------- RESTAURANTS--0.0% New World Restaurant Group, Inc., (expires 06/15/06) * 103 1 --------------- TOTAL WARRANTS (COST $530) 11,384 --------------- SHORT-TERM INVESTMENTS--14.1% Dreyfus Cash Management, Class A, Institutional shares, ^^ 15,000,000 15,000,000 Dreyfus Cash Management Plus, Inc., Institutional shares, ^^ 15,000,000 15,000,000 --------------- TOTAL SHORT-TERM INVESTMENTS (COST $30,000,000) 30,000,000 --------------- PRINCIPAL AMOUNT --------------- REPURCHASE AGREEMENTS--19.4% Bear Stearns & Co., 1.03%, Dated 4/30/03, due 5/1/03, proceeds at maturity $1,836,195 (fully collaterized by U.S. Treasury Bonds, due 11/15/21. Market Value of collateral is $1,890,890) ^^ $ 1,836,195 1,836,195 Bear Stearns & Co., 1.27%, Dated 4/30/03, due 5/1/03, proceeds at maturity $4,539,525 (fully collaterized by U.S. Treasury Bonds, due 11/15/21. Market Value of collateral is $4,671,384) ^^ 4,539,525 4,539,525 Bear Stearns & Co., 1.50%, Dated 4/30/03, due 5/1/03, proceeds at maturity $34,813,550 (fully collaterized by U.S. Treasury Bonds, due 11/15/21. Market Value of collateral is $35,824,858) ^^ 34,813,550 34,813,550 --------------- TOTAL REPURCHASE AGREEMENTS (COST $41,189,270) 41,189,270 --------------- TOTAL INVESTMENTSAT VALUE--176.3% (COST $402,150,958) 375,522,452 LIABILITIES IN EXCESS OF OTHER ASSETS--(76.3)% (162,464,104) --------------- NET ASSETS--(100.0%) $ 213,058,348 ===============
SEE NOTES TO FINANCIAL STATEMENTS. 10 NOTES: ++ Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At April 30, 2003, these securities amounted to $23,879,153 or 11.21% of net assets. + Step Bond--Coupon rate is low or zero for an initial period and then increases to a higher coupon rate thereafter. ~ Security in default. # Variable rate obligations--The interest rate shown is the rate as of April 30, 2003. * Non-income producing security. !! Not readily marketable; security is valued at fair value as determined in good faith by the Board of Trustees. ^ Security or portion thereof is out on loan. ^^ Represents security purchased with cash collateral received for securities on loan. SEE NOTES TO FINANCIAL STATEMENTS. 11 CREDIT SUISSE HIGH YIELD BOND FUND--STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 2003 (UNAUDITED) ASSETS: Investments in securities at value, including collateral for securities on loan of $71,189,270 (Cost $402,150,958) (Notes 1 & 7) $ 375,522,452(1) Cash 4,539,525 Interest receivable 8,441,674 Prepaid expenses and other assets 70,452 --------------- Total Assets 388,574,103 --------------- LIABILITIES: Investment advisory fees (Note 2) 247,757 Administrative fees (Note 2) 20,314 Trustees' fees (Note 2) 12,645 Loan payable (Note 5) 100,000,000 Payable upon return of securities loaned (Note 7) 71,189,270 Payable for investments purchased 3,790,862 Interest payable 126,521 Other accrued expenses payable 128,386 --------------- Total Liabilities 175,515,755 =============== NET ASSETS Applicable to 52,177,269 shares outstanding $ 213,058,348 =============== NET ASSETS CONSIST OF: Capital stock, $0.001 par value (Note 4) $ 52,177 Paid-in capital (Note 4) 476,233,935 Distributions in excess of net investment income (2,284,146) Accumulated net realized loss on investments (234,315,112) Net unrealized depreciation from investments (26,628,506) --------------- Net Assets $ 213,058,348 =============== NET ASSET VALUE PER SHARE ($213,058,348 DIVIDED BY 52,177,269 ) $ 4.08 =============== MARKET PRICE PER SHARE $ 4.81 ===============
(1) Including $62,711,991 of securities on loan. SEE NOTES TO FINANCIAL STATEMENTS. 12 CREDIT SUISSE HIGH YIELD BOND FUND--STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED) INVESTMENT INCOME: (Note 1) Interest $ 17,021,966 Securities Lending 98,267 --------------- Total investment income 17,120,233 =============== EXPENSES: Investment advisory fees (Note 2) 1,410,714 Administrative fees (Note 2) 84,059 Interest and leveraging fees 881,619 Legal fees 50,390 Printing fees (Note 2) 45,708 Trustees' fees 25,539 Audit fees 22,451 Transfer agent fees 18,944 Registration fees 14,497 Custodian fees 14,184 Amortization of organization costs 12,770 Insurance expense 7,030 Miscellaneous expense 3,158 --------------- Total expenses 2,591,063 --------------- NET INVESTMENT INCOME 14,529,170 --------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investments (5,693,347) Net change in unrealized appreciation (depreciation) on investments 36,257,713 --------------- Net realized and unrealized gain on investments 30,564,366 --------------- NET INCREASE IN NET ASSETS FROM OPERATIONS $ 45,093,536 ===============
SEE NOTES TO FINANCIAL STATEMENTS. 13 CREDIT SUISSE HIGH YIELD BOND FUND--STATEMENTS OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED 04/30/2003 YEAR ENDED (UNAUDITED) 10/31/2002 ------------------ --------------- OPERATIONS: Net investment income $ 14,529,170 $ 32,320,446 Net realized loss on investments (5,693,347) (75,223,745) Net change in unrealized appreciation (depreciation) on investments 36,257,713 34,775,558 --------------- --------------- Net increase (decrease) in net assets resulting from operations 45,093,536 (8,127,741) --------------- --------------- DIVIDENDS TO SHAREHOLDERS: From net investment income (16,521,933) (35,310,754) Return of capital -- (5,125,403) --------------- --------------- Net decrease in net assets resulting from dividends (16,521,933) (40,436,157) --------------- --------------- CAPITAL SHARE TRANSACTIONS: (Note 4) Reinvestment of dividends 3,597,555 10,012,798 --------------- --------------- Net increase in net assets from capital share transactions 3,597,555 10,012,798 --------------- --------------- Net increase (decrease) in net assets 32,169,158 (38,551,100) NET ASSETS: Beginning of period 180,889,190 219,440,290 --------------- --------------- End of period $ 213,058,348 $ 180,889,190 =============== ===============
SEE NOTES TO FINANCIAL STATEMENTS. 14 CREDIT SUISSE HIGH YIELD BOND FUND--STATEMENT OF CASH FLOWS FOR THE SIX MONTHS ENDED APRIL 30, 2003 (UNAUDITED) CASH FLOWS FROM OPERATING ACTIVITIES: Interest and dividends received $ 14,105,787 Operating expenses paid (2,621,226) Purchases of long-term securities (48,832,302) Proceeds from sales of long-term securities 39,462,528 --------------- Net cash provided by operating activities $ 2,114,787 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings 14,750,000 Cash dividends paid (12,924,378) --------------- Net cash provided by financing activities 1,825,622 --------------- Net increase in cash 3,940,409 Cash--beginning of period 599,116 --------------- Cash--end of period $ 4,539,525 =============== RECONCILIATION OF NET INCREASE IN NET ASSETS FROM OPERATION TO NET CASH USED IN OPERATING ACTIVITIES: Net increase in net assets resulting from operations $ 45,093,536 ADJUSTMENTS TO RECONCILE NET INCREASE IN NET ASSETS FROM OPERATIONS TO NET CASH USED IN OPERATING ACTIVITIES: Increase in dividends and interest receivable $ (296,810) Decrease in accrued expenses (6,707) Decrease in interest payable (22,255) Increase in prepaid expenses and other assets (22,044) Increase in advisory fees payable 20,843 Net amortization of discount on investments (2,717,636) Purchases of long-term securities (48,832,302) Proceeds from sales of long-term securities 39,462,528 Net change in unrealized appreciation on investments (36,257,713) Net realized loss on investments 5,693,347 --------------- Total adjustments (42,978,749) --------------- Net cash provided by operating activities $ 2,114,787 ===============
SEE NOTES TO FINANCIAL STATEMENTS. 15 CREDIT SUISSE HIGH YIELD BOND FUND--FINANCIAL HIGHLIGHTS The table below sets forth financial data for a share of beneficial interest outstanding throughout the periods presented. This information has been derived from the Fund's financial statements.
FOR THE SIX MONTHS ENDED YEAR ENDED 4/30/2003 ------------------------------------------------------------ PERIOD ENDED (UNAUDITED) 10/31/2002 10/31/2001 10/31/2000 10/31/1999 10/31/1998(1) ------------ ------------ ------------ ------------ ------------ ------------- Net asset value, beginning of period $ 3.53 $ 4.49 $ 6.16 $ 7.98 $ 8.36 $ 10.00 ------------ ------------ ------------ ------------ ------------ ------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.28 0.65(2) 0.84 0.96(2) 0.98 0.24 Net realized and unrealized gain (loss) on investments 0.59 (0.80) (1.63) (1.80) (0.38) (1.62) ------------ ------------ ------------ ------------ ------------ ------------- Total from investment operations 0.87 (0.15) (0.79) (0.84) 0.60 (1.38) ------------ ------------ ------------ ------------ ------------ ------------- LESS DIVIDENDS From net investment income (0.32) (0.71) (0.86) (0.98) (0.98) (0.24) Return of capital -- (0.10) (0.02) -- -- -- ------------ ------------ ------------ ------------ ------------ ------------- Total dividends to shareholders (0.32) (0.81) (0.88) (0.98) (0.98) (0.24) Offering costs charged to paid-in-capital -- -- -- -- 0.00(3) (0.02) ------------ ------------ ------------ ------------ ------------ ------------- Net asset value, end of period $ 4.08 $ 3.53 $ 4.49 $ 6.16 $ 7.98 $ 8.36 ============ ============ ============ ============ ============ ============= Market value, end of period $ 4.81 $ 4.10 $ 5.07 $ 6.19 $ 8.06 $ 9.56 ============ ============ ============ ============ ============ ============= Total return (market value)(4) 27.57% (2.15)% (3.21)% (12.15)% (5.71)% (1.74)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s omitted) $ 213,058 $ 180,889 $ 219,440 $ 286,838 $ 358,679 $ 359,956 Average debt per share $ 1.72 $ 1.99 $ 2.49 $ 3.47 $ 3.18 $ 1.02 Ratio of operating expenses to average net assets 2.67%(5) 2.91% 4.29% 4.81% 3.62% 1.81%(5) Ratio of operating expense to average net assets, excluding interest and leveraging expenses 1.76%(5) 1.78% 1.73% 1.61% 1.53% 1.16%(5) Ratio of net investment income to average net assets 14.97%(5) 15.17% 15.22% 12.90% 11.24% 10.48%(5) Portfolio turnover rate 14.24% 33.22% 46.11% 31.29% 60.23% 15.26%
(1) The Fund commenced operations on July 28, 1998. (2) Based on average shares outstanding. (3) Amount rounds to less than $0.01. (4) Total return is based on the change in market price of a share during the period and assumes reinvestment of dividends and distributions at actual prices pursant to the Fund's Dividend Reinvestment Plan. Total return based on market value, which can be significantly greater or lesser than the net asset value, may result in substantially different returns. Total return for periods of less than one year are not annualized. (5) Annualized. SEE NOTES TO FINANCIAL STATEMENTS. 16 CREDIT SUISSE HIGH YIELD BOND FUND--NOTES TO FINANCIAL STATEMENTS APRIL 30, 2003 (UNAUDITED) 1. SIGNIFICANT ACCOUNTING POLICIES Credit Suisse High Yield Bond Fund (the "Fund") is a business trust organized under the laws of the State of Delaware on April 30, 1998. The Fund is registered with the Securities and Exchange Commission under the Investment Company Act of 1940, as amended (the "1940 Act"), as a non-diversified, closed-end management investment company. The Fund's shares trade on the New York Stock Exchange under the ticker symbol DHY. The Fund's primary objective is to seek high current income. The following is a summary of significant accounting policies consistently followed by the Fund in its operations and in connection with the preparation of its financial statements. PORTFOLIO VALUATION: Fixed-income securities (other than short-term obligations, but including listed issues) are valued based on prices obtained by one or more independent pricing services approved by the Board of Trustees. Pricing services use a matrix, formula or other objective method that takes into consideration market indices, yield curves and other specific adjustments. Securities (other than fixed-income securities) for which the principal market is one or more securities exchanges are valued at market value, which is generally determined using the closing price on the exchange or market on which the security is primarily traded. If a securities exchange is not the principal market for a security, such security will, if market quotations are readily available, be valued at the closing bid price in the over-the-counter market (or the last sale price in the case of securities reported on the NASDAQ national market system for which any sales occurred during the day). Securities and other assets for which market quotations are not readily available are valued at fair value as determined in good faith by the Board of Trustees under procedures established by the Board of Trustees in the absence of readily ascertainable market values. Debt obligations that will mature in 60 days or less are valued on the basis of amortized cost, which approximates market value, unless the Board determines that using this method would not reflect an investment's fair value. SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are recorded as of the trade date. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income is earned on the accrual basis. Accretion of discount and amortization of premium is recognized using effective interest method. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Fund declares and pays dividends on a monthly basis. Each dividend is recorded on the ex-dividend date. Capital gains, if any, net of capital losses, are distributed annually. Income distributions and capital gain distributions are determined in accordance with income tax regulations, which may differ from accounting principles generally accepted in the United States of America ("GAAP"). These differences are primarily due to differing treatments of income and gains on various investment securities held by the Fund, timing differences and differing characterization of distributions made by the Fund. The Fund's dividend policy is to distribute substantially all of its net investment income to its shareholders on a monthly basis. However, in order to provide shareholders with a more consistent yield to the current trading price of shares of Common Stock of the Fund, the Fund may at times pay out less than the entire amount of net investment income earned in any particular month and may at times in any month pay out such accumulated but undistributed income in addition to net investment income earned in that month. As a result, the dividends paid by the Fund for any particular month may be more or less than the amount of net investment income earned by the Fund during such month. 17 FEDERAL INCOME TAXES: No provision is made for federal taxes as it is the Fund's intention to continue to qualify for and elect the tax treatment applicable to regulated investment companies under the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from federal income and excise taxes. CASH FLOW INFORMATION: Cash, as used in the Statement of Cash Flows, is the amount reported in the Statement of Assets and Liabilities. The Fund invests in securities and distributes dividends from net investment income and net realized gains, if any (which are either paid in cash or reinvested at the discretion of shareholders). These activities are reported in the Statement of Changes in Net Assets. Information on cash payments is presented in the Statement of Cash Flows. Accounting practices that do not affect reporting activities on a cash basis include unrealized gain or loss on investment securities and accretion or amortization income recognized on investment securities. USE OF ESTIMATES: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Actual results could differ from those estimates. 2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER RELATED PARTY TRANSACTIONS The Fund has entered into an Investment Advisory Agreement (the "Advisory Agreement") with Credit Suisse Asset Management, LLC ("CSAM"). The Advisory Agreement provides for a fee at the annual rate of 1% of the average weekly value of the Fund's total assets minus the sum of liabilities (other than aggregate indebtedness constituting leverage). Under the Advisory Agreement with the Fund, CSAM provides investment advisory services and order placement facilities for the Fund and pays all compensation of Trustees of the Fund who are affiliated persons of CSAM. For the six months ended April 30, 2003, investment advisory fees earned were $1,410,714. State Street Bank and Trust Company ("SSB") serves as Accounting and Administrative Agent for the Fund. For its administrative services, SSB receives a fee, exclusive of out-of-pocket expenses, based upon the following fee structure calculated in total for all the Credit Suisse Funds/Portfolios administered by SSB and allocated based upon relative average net assets of each fund/portfolio.
AVERAGE DAILY NET ASSETS ANNUAL RATE ------------------------ ----------- First $5 billion .050% of average daily net assets Next $5 billion .035% of average daily net assets Over $10 billion .020% of average daily net assets
For the six months ended April 30, 2003, administrative service fees earned by SSB (including out-of-pocket expenses) were $84,059. The Fund pays each Trustee not affiliated with CSAM $1,000 per regular quarterly board meeting attended and an annual retainer fee of $12,500. In addition, the Fund reimburses each Trustee for travel and out-of-pocket expenses relating to his attendance at such meetings. 18 Merrill Corporation ("Merrill"), an affiliate of CSAM, has been engaged by the Fund to provide certain financial printing services. For the six months ended April 30, 2003, Merrill was paid $19,475 for its services to the Fund. 3. INVESTMENTS Cost of purchases and proceeds from sales of investment securities, excluding short-term investments, during the six months ended April 30, 2003, amounted to $52,521,158 and $39,462,528, respectively. At April 30, 2003, the identified cost for federal income tax purposes, as well as the gross unrealized appreciation from investments for those securities having an excess of value over cost, gross unrealized depreciation from investments for those securities having an excess of cost over value and the net unrealized appreciation (depreciation) from investments were $402,150,958, $17,179,847, $(43,808,353) and $(26,628,506), respectively. 4. FUND SHARES The Fund has one class of shares of beneficial interest, par value $0.001 per share; an unlimited number of shares are authorized. Transactions in shares of beneficial interest were as follows:
FOR THE SIX MONTHS ENDED APRIL 30, 2003 FOR THE YEAR ENDED (UNAUDITED) OCTOBER 31, 2002 ------------------ ------------------ Shares issued through reinvestment of dividends 951,479 2,362,917 ======= =========
5. NOTES PAYABLE The Fund has a $150 million line of credit provided by Citibank North America, Inc., under a Revolving Credit and Security Agreement (the "Agreement") dated April 12, 2002, primarily to leverage its investment portfolio. Under this Agreement, the Fund may borrow the lesser of $150 million or 33 1/3% of its gross assets. Interest is payable at the Bank's Base Rate plus a commission of 0.05%. The Fund is charged a structuring fee of $19,000 per quarter until July 2003, a program fee of 0.20% of the average daily amount leveraged, an administration fee of 0.02% of the average daily amount leveraged and a liquidity fee of 0.13% of the maximum borrowing limit (currently $150 million). The Agreement requires, among other provisions, that the percentage obtained by dividing total indebtedness for money borrowed by total assets of the Fund shall not exceed 33 1/3%. At April 30, 2003 the Fund had loans outstanding under the Agreement. During the six months ended April 30, 2003, the Fund had borrowings under the Agreement as follows:
AVERAGE DAILY WEIGHTED AVERAGE MAXIMUM DAILY LOAN BALANCE INTEREST RATE LOAN OUTSTANDING ------------- ---------------- ---------------- $ 88,719,613 1.431% $ 100,000,000
6. CONCENTRATION OF RISK The Fund invests in securities offering high current income, which generally will be in the lower rating categories of recognized ratings agencies (commonly known as "junk bonds"). 19 These securities generally involve more credit risk than securities in the higher rating categories. In addition, the trading market for high yield securities may be relatively less liquid than the market for higher-rated securities. The Fund's use of leverage also increases exposure to capital risk. 7. SECURITIES LENDING The Fund loaned securities during the six months ended April 30, 2003 to certain brokers, with the Fund's custodian acting as lending agent. Upon such loans, the Fund receives collateral, which is maintained by the custodian and earns income, in the form of negotiated lender's fees. On a daily basis, the Fund monitors the market value of securities loaned and maintains collateral against the securities loaned in an amount not less than the value of the securities loaned. The Fund may receive collateral in the form of cash or other eligible securities. Risks may arise upon entering into securities lending to the extent that the value of the collateral is less than the value of the securities loaned due to changes in the value of the collateral or the loaned securities. Cash collateral received by the Fund in connection with securities lending activity is invested in Repurchase Agreements with Bear Stearns & Co. and also invested in the Dreyfus Cash Management Fund and Dreyfus Cash Management Plus, Inc. The market value of securities on loan to brokers and the value of collateral held by the Fund with respect to such loans at April 30, 2003 was as follows:
MARKET VALUE OF VALUE OF SECURITIES LOANED COLLATERAL RECEIVED ----------------- ------------------- $ 62,711,991 $ 71,189,270
20 CREDIT SUISSE HIGH YIELD BOND FUND--SHAREHOLDER MEETING RESULTS(UNAUDITED) On February 20, 2003, the Annual Meeting of Shareholders of Credit Suisse High Yield Bond Fund ("the Fund") was held and the following matter was approved: (1) To elect one Trustee to the Board of Trustees of the Fund.
NAME OF TRUSTEE FOR WITHHELD --------------- --- -------- James S. Pasman, Jr. 47,308,215 851,473
In addition to the Trustee elected at the meeting, Enrique R. Arzac and Lawrence J. Fox continued as Trustees of the Fund. Effective February 13, 2003, Laurence R. Smith resigned as Chairman of the Fund and Joseph D. Gallagher was elected as Chairman of the Fund. Effective March 1, 2003, Mr. Smith resigned his position as the Fund's Chief Executive Officer and Mr. Gallagher became the Fund's Chief Executive Officer. 21 CREDIT SUISSE HIGH YIELD BOND FUND--ADDITIONAL INFORMATION (UNAUDITED) DIVIDEND REINVESTMENT PLAN Referenced below are policies related to the Fund's Automatic Dividend Reinvestment Plan (the "Plan"). These policies apply to shareholders whose shares are registered directly with the Fund in their own name. Shareholders whose shares are purchased through a broker-dealer or nominee should contact such broker-dealer or nominee regarding questions related to the reinvestment of the Fund's dividends. Pursuant to the Fund's Plan, unless a shareholder otherwise elects, all dividends and capital gain distributions will be automatically reinvested by PFPC, Inc. as agent for Shareholders in administering the Plan (the "Plan Agent"), in additional shares of the Fund. Shareholders who elect not to participate in the Plan will receive all dividends and other distributions in cash paid by check mailed directly to the shareholder of record (or, if the shares are held in street or other nominee name, then to such nominee) by PFPC, Inc. as the Dividend Disbursing Agent. Such participants may elect not to participate in the Plan and to receive all dividends and capital gain distributions in cash by sending written instructions to PFPC, Inc. as the Dividend Disbursing Agent, at the address set forth below. Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by written notice if received by the Plan Agent not less than ten days prior to any dividend record date; otherwise such termination will be effective with respect to any subsequently declared dividend or other distribution. Whenever the Fund declares an income dividend or a capital gain distribution (collectively referred to as "dividends") payable either in shares or in cash, non-participants in the Plan will receive cash and participants in the Plan will receive the equivalent in shares. The shares will be acquired by the Plan Agent for the participants' accounts, depending upon the circumstances described below, either (i) through receipt of additional unissued but authorized shares from the Fund ("newly issued shares") or (ii) by purchase of outstanding shares on the open market ("open-market purchases") on the NYSE or elsewhere. If on the record date for the dividend, the net asset value per share is equal to or less than the market price per share plus estimated brokerage commissions (such condition being referred to herein as "market premium"), the Plan Agent will invest the dividend amount in newly issued shares on behalf of the participants. The number of newly issued shares to be credited to each participant's account will be determined by dividing the dollar amount of the dividend by the net asset value per share on the date the shares are issued. If on the dividend record date the net asset value per share is greater than the market value (such condition being referred to herein as "market discount"), the Plan Agent will invest the dividend amount in shares acquired on behalf of the participants in open-market purchases. In the event of a market discount on the dividend record date, the Plan Agent will have until the last business day before the next date on which the shares trade on an "ex-dividend" basis or in no event more than 30 days after the dividend record date (the "last purchase date") to invest the dividend amount in shares acquired in open-market purchases. It is contemplated that the Fund will pay monthly income dividends. Therefore, the period during which open-market purchases can be made will exist only from the record date of the dividend through the date before the next "ex-dividend" date. If, before the Plan Agent has completed its open-market purchases, the market price of a share exceeds the net asset value per share, the average per share purchase price paid by the Plan Agent may exceed the net asset value of the shares, resulting in the acquisition of fewer shares than if the dividend had been paid in newly issued shares on the dividend record date. Because of the foregoing difficulty with respect to open market purchases, the Plan provides that if the Plan Agent in unable to invest the full dividend amount in open market purchases during the purchase period or if the market discount shifts to a market premium during the purchase period, the Plan Agent may cease making open-market purchases and may invest the uninvested portion of the dividend amount in newly issued shares at the net asset value per share at the close of business on the last purchase date. 22 The Plan Agent maintains all shareholders' accounts in the Plan and furnishes written confirmation of all transactions in the accounts, including information needed by shareholders for tax records. Shares in the account of each Plan participant will be held by the Plan Agent on behalf of the Plan participant, and each shareholder proxy will include those shares purchased or received pursuant to the Plan. The Plan Agent will forward all proxy solicitation materials to participants and vote proxies for shares held pursuant to the Plan in accordance with the instructions of the participants. In the case of shareholders such as banks, brokers or nominees that hold shares for others who are the beneficial owners, the Plan Agent will administer the Plan on the basis of the number of shares certified from time to time by the record shareholder and held for the account of beneficial owners who participate in the Plan. There will be no brokerage charges with respect to shares issued directly by the Fund as a result of dividends or capital gains distributions payable either in shares or in cash. However, each participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent's open-market purchases in connection with the reinvestment of dividends. The automatic reinvestment of dividends will not relieve participants of any Federal, state or local income tax that may be payable (or required to be withheld) on such dividends. Shareholders participating in the Plan may receive benefits not available to shareholders not participating in the Plan. If the market price (plus commissions) of the shares is above their net asset value, participants in the Plan will receive shares of the Fund at less than they could otherwise purchase them and will have shares with a cash value greater than the value of any cash distribution they would have received on their shares. If the market price plus commissions is below the net asset value, participants will receive distributions in shares with a net asset value greater than the value of any cash distribution they would have received on their shares. However, there may be insufficient shares available in the market to make distributions in shares at prices below the net asset value. Also, since the Fund does not redeem shares, the price on resale may be more or less than the net asset value. Experience under the Plan may indicate that changes are desirable. Accordingly, the Fund reserves the right to amend or terminate the Plan. There is no direct service charge to participants in the Plan; however, the Fund reserves the right to amend the Plan to include a service charge payable by the participants. All correspondence concerning the Plan should be directed to the Plan Agent at P.O. Box 8030, Boston, MA 02266-8030, 1-800-331-1710. LEVERAGE--BENEFITS AND RISKS The use of leverage by the Fund creates an opportunity for increased net income and capital appreciation for the Fund, but, at the same time, creates special risks, and there can be no assurance that a leveraging strategy will be successful during any period in which it is employed. The Fund intends to utilize leverage to provide the Shareholders with a potentially higher return. Leverage creates risks for Shareholders including the likelihood of greater volatility of net asset value and market price of the Fund's shares and the risk that fluctuations in interest rates on borrowings and short-term debt may affect the return to Shareholders. To the extent the income or capital appreciation derived from securities purchased with funds received from leverage exceeds the cost of leverage, the Fund's return will be greater than if leverage had not been used. Conversely, if the income or capital appreciation from the securities purchased with such funds is not sufficient to cover the cost of leverage, the return to the Fund will be less than if leverage had not been used, and therefore the amount available for distribution to Shareholders as dividends and other distributions will be reduced. In the latter case, CSAM in its best judgment nevertheless may determine to maintain the Fund's leveraged position if it deems such action to be appropriate under the circumstances. During periods in which the Fund is utilizing leverage, the Investment Advisory Fee will be 23 higher than if the Fund did not utilize a leveraged capital structure because the fee is calculated as a percentage of the Managed Assets including those purchased with leverage. Certain types of borrowings by the Fund may result in the Fund's being subject to covenants in credit agreements, including those relating to asset coverage and portfolio composition requirements. The Fund's lenders may establish guidelines for borrowing which may impose asset coverage or portfolio composition requirements that are more stringent than those imposed by the 1940 Act. It is not anticipated that these covenants or guidelines will impede CSAM in managing the Fund's portfolio in accordance with the Fund's investment objectives and policies. 24 CREDIT SUISSE HIGH YIELD BOND FUND--PRIVACY POLICY NOTICE PRIVACY POLICY NOTICE We are committed to maintaining the privacy of every current and prospective customer. We recognize that you entrust important personal information to us, and we wish to assure you that we take seriously our responsibilities in protecting and safeguarding this information. In connection with making available investment products and services to current and potential customers, we may obtain nonpublic personal information about you. This information may include your name, address, e-mail address, social security number, account number, assets, income, financial situation, transaction history and other personal information. We may collect nonpublic information about you from the following sources: - Information we receive on applications, forms, questionnaires, web sites, agreements or in the course of establishing or maintaining a customer relationship; and - Information about your transactions with us, our affiliates, or others. We do not disclose any nonpublic personal information about our customers or former customers to anyone, except with your consent or as otherwise permitted by law. In cases where we believe that additional products and services may be of interest to you, we may share the information described above with our affiliates. We may also disclose this information to firms that perform services on our behalf. These agents and service providers are required to treat the information confidentially and use it only for the purpose for which it is provided. We restrict access to nonpublic personal information about you to those employees, agents or other parties who need to know that information to provide products or services to you or in connection with your investments with or through us. We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information. NOTE: THIS NOTICE IS PROVIDED TO CLIENTS AND PROSPECTIVE CLIENTS OF CREDIT SUISSE ASSET MANAGEMENT, LLC ("CSAM"), CSAM CAPITAL INC., AND CREDIT SUISSE ASSET MANAGEMENT SECURITIES, INC., AND SHAREHOLDERS AND PROSPECTIVE SHAREHOLDERS IN CSAM SPONSORED AND ADVISED INVESTMENT COMPANIES, INCLUDING CREDIT SUISSE FUNDS, AND OTHER CONSUMERS AND CUSTOMERS, AS APPLICABLE. THIS NOTICE IS NOT INTENDED TO BE INCORPORATED IN ANY OFFERING MATERIALS BUT IS MERELY A STATEMENT OF OUR CURRENT PRIVACY POLICY, AND MAY BE AMENDED FROM TIME TO TIME UPON NOTICE TO YOU. THIS NOTICE IS DATED AS OF MAY 20, 2003. 25 [CREDIT SUISSE ASSET MANAGEMENT LOGO] 800-293-1232 - http://cef.csam-americas.com CSHYF-3-0403 ITEM 2. CODE OF ETHICS. Form N-CSR disclosure requirement not yet effective with respect to the Registrant. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Form N-CSR disclosure requirement not yet effective with respect to the Registrant. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Form N-CSR disclosure requirement not yet effective with respect to the Registrant. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Form N-CSR disclosure requirement not yet effective with respect to the Registrant. ITEM 6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Form N-CSR disclosure requirement not yet effective with respect to the Registrant. ITEM 8. [RESERVED] ITEM 9. CONTROLS AND PROCEDURES. (a) The Principal Executive Officer and Principal Financial Officer concluded that the Registrant's Disclosure Controls and Procedures are effective based on their evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report. (b) There were no significant changes in Registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. ITEM 10. EXHIBITS. (a) Form N-CSR disclosure requirement not yet effective with respect to the Registrant. (b) The certifications of the Registrant as required by Rule 30a-2 under the Act are exhibits to this report. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Credit Suisse High Yield Bond Fund /s/ Joseph D. Gallagher Name: Joseph D. Gallagher Title: Chief Executive Officer Date: July 2, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. /s/ Joseph D. Gallagher Name: Joseph D. Gallagher Title: Chief Executive Officer Date: July 2, 2003 /s/ Michael A. Pignataro Name: Michael A. Pignataro Title: Chief Financial Officer Date: July 2, 2003 EX-99.CERT 3 a2114007zex-99_cert.txt EXHIBIT 99.CERT EX-99.CERT CERTIFICATIONS I, Michael A. Pignataro, certify that: 1. I have reviewed this report on Form N-CSR of Credit Suisse High Yield Bond Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and (c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weakness in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: July 2, 2003 /s/ Michael A. Pignataro - ------------------------ Michael A. Pignataro Chief Financial Officer I, Joseph D. Gallagher, certify that: 1. I have reviewed this report on Form N-CSR of Credit Suisse High Yield Bond Fund; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: (a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and (c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weakness in internal controls; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: July 2, 2003 /s/ Joseph D. Gallagher - ----------------------- Joseph D. Gallagher Chief Executive Officer EX-99.606CERT 4 a2114007zex-99_606cert.txt EXHIBIT 99.606CERT EX-99.906CERT SECTION 906 CERTIFICATIONS SECTION 906 CERTIFICATION Joseph D. Gallagher, Chief Executive Officer, and Michael A. Pignataro, Chief Financial Officer, of Credit Suisse High Yield Bond Fund (the "Fund"), each certify to the best of his knowledge that: (1) The Fund's periodic report on Form N-CSR for the period ended April 30, 2003 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. /s/ Joseph D. Gallagher /s/ Michael A. Pignataro Joseph D. Gallagher Michael A. Pignataro ------------------- -------------------- Chief Executive Officer Chief Financial Officer July 2, 2003 July 2, 2003 A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 has been provided to the Fund and will be retained by the Fund and furnished to the Securities and Exchange Commission (the "Commission") or its staff upon request. This certification is being furnished to the Commission solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Form N-CSR with the Commission. -----END PRIVACY-ENHANCED MESSAGE-----