-----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, Q4kJ+qstacXgcvFarMxv9FjcQ/tc4S80hQoLq68fZnIbTe+uvMTMmqA08YLgLNAC Esi5WvioKI6COTMSVgihKQ== 0001047469-05-000370.txt : 20050107 0001047469-05-000370.hdr.sgml : 20050107 20050107163953 ACCESSION NUMBER: 0001047469-05-000370 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20041031 FILED AS OF DATE: 20050107 DATE AS OF CHANGE: 20050107 EFFECTIVENESS DATE: 20050107 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: 05518664 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 a2149418zn-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. 811-8777 ------------------------------------------------------ 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) J. Kevin Gao, Esq. Credit Suisse High Yield Bond Fund 466 Lexington Avenue New York, New York 10017-3140 Registrant's telephone number, including area code: (212) 875-3500 Date of fiscal year end: October 31 Date of reporting period: November 1, 2003 to October 31, 2004 ITEM 1. REPORTS TO STOCKHOLDERS. CREDIT SUISSE HIGH YIELD BOND FUND ANNUAL REPORT OCTOBER 31, 2004 CREDIT SUISSE HIGH YIELD BOND FUND (the "Fund") Dear Shareholder: PERFORMANCE SUMMARY 11/01/03--10/31/04
FUND & BENCHMARKS PERFORMANCE Fund NAV (as of 10/31/04) $ 4.53 Total Return (based on NAV) 18.98% Total Return (based on market value) 25.49% Citigroup High-Yield Market Index (CHYMI) 12.28%
MARKET OVERVIEW: POSITIVE HIGH YIELD ENVIRONMENT In our view, a quickening economic recovery, robust corporate earnings growth and low nominal interest rates supported a positive environment for high yield in the Fund's fiscal year. While inflation stayed in check, solid economic growth and several unexpectedly strong job reports earlier in the year stoked fears of potentially aggressive tightening by the Fed. But nominal short term rates remained at a 45-year low of 1.00% for much for the year, rising only toward summer and into the fall to close the fiscal year period at 1.75%. In this environment, corporate managements took advantage of strong cashflow and low interest rates to repair their balance sheets: They earmarked 70% of the new high yield issuance (which was on a par with 2003's levels) for the replacement of high-interest debt. Moody's Investor Services' 12-month global trailing default rate declined from approximately 6.0% at the end of October 2003 to 2.4%, its lowest level since the late 1990s, to close the fiscal year. The end result was a significant tightening of high yield spreads relative to Treasuries across the credit quality spectrum. STRATEGIC REVIEW: SELECTIVE SECTOR POSITIONING The Fund outperformed its CHYMI benchmark primarily due to its relative positioning in outperforming industry sectors. The Fund's highest relative weightings versus the CHYMI benchmark (in chemicals, gaming and cable) accounted for the largest relative contribution versus the benchmark. Within those industries, security selection often overcame weaker overall sector performance. For example, exposure in the portfolio to the gaming industry consisted mainly of regionally based casinos that operate outside of Las Vegas and Atlantic City. These smaller operations, which are not as dependent on income from travel and lodging, experienced superior performance relative to the larger casinos over the past three years. We also increased our weighting to chemicals anticipating that profitability might go up in line with the economic cycle. This strategy worked well for us, as company earnings rose and commodity prices (which can directly affect chemical companies' pricing flexibility) surged. Finally, cable television is one of our longstanding above-market allocations, based not only on our view of its growth potential, but also its stable cash flows. We owned securities of two of the biggest high yield cable issuers, each of which generated strong returns. 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, LLC 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) 730-6001. Sincerely yours, /s/ Richard J. Lindquist Richard J. Lindquist President and Chief Investment Officer* /s/ Michael E Kenneally Michael E Kenneally Chief Executive Officer** HIGH YIELD BONDS ARE LOWER-QUALITY BONDS THAT ARE ALSO KNOWN AS "JUNK BONDS." SUCH BONDS ENTAIL GREATER RISKS 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. FROM CREDIT SUISSE ASSET MANAGEMENT, LLC ("CSAM"): We wish to remind shareholders whose shares are registered in their own name that they automatically participate in the Fund's dividend reinvestment program known as the InvestlinkSM Program (the "Program"). The Program can be of value to shareholders in maintaining their proportional ownership interest in the Fund in an easy and convenient way. A shareholder whose shares are held in the name of a broker/dealer or nominee should contact the Fund's Transfer Agent for details about participating in the Program. * 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). ** Michael E. Kenneally is the Chairman and Global Chief Executive Officer of CSAM. He has served in these capacities since April 2003. Previously, he was the Chairman and Chief Investment Officer of Banc of America Capital Management from 1998 to March 2003. Mr. Kenneally is also 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 10/31/2004) SECURITY DESCRIPTION 1. Huntsman International Holdings LLC 2.09% 0.000% 12/31/09 2. Allied Waste North America, Inc. 1.26% 7.375% 04/15/14 3. Charter Communications Holdings LLC 1.21% 9.920% 04/01/11 4. El Paso Production Holding Company 1.20% 7.750% 06/01/13 5. Chukchansi Economic Development Authority 1.19% 14.500% 06/15/09 6. Liberty Group Operating, Inc. 1.12% 9.375% 02/01/08 7. BGF Industries, Inc. 1.09% 10.250% 01/15/09 8. Adelphia Communications Corp. 1.08% 10.875% 10/01/10 9. Charter Communications Holdings LLC 1.01% 8.625% 04/01/09 10. Mediacomm LLC Capital Corp. 1.01% 9.500% 01/15/13
CREDIT QUALITY BREAKDOWN (AS A % OF TOTAL INVESTMENTS AS OF 10/31/2004) BBB/Baa 0.4% BB/Ba 10.7 B/B 52.9 CCC/Caa 28.8 CC/Ca 1.1 D 0.2 NR 5.3 ----- Subtotal 99.4 Equities and Other 0.6 ----- Total 100.0% =====
1 CREDIT SUISSE HIGH YIELD BOND FUND--SCHEDULE OF INVESTMENTS OCTOBER 31, 2004
PRINCIPAL AMOUNT VALUE --------------- --------------- U.S. CORPORATE BONDS--131.5% AEROSPACE--0.8% BE Aerospace, Inc., Series B, Senior Subordinated Notes (Callable 03/01/05 @ $100.00) 8.000%, 03/01/08 ~ $ 1,000,000 $ 1,015,000 Sequa Corp., Series B, Senior Notes 8.875%, 04/01/08 850,000 932,875 --------------- 1,947,875 --------------- AIRLINES--0.3% American Airlines, Inc., Series 01-2, Pass Thru Certificates 7.800%, 10/01/06 1,000,000 836,974 --------------- AUTOMOBILE MANUFACTURING/VEHICLE PARTS--3.2% Autocam Corp., Rule 144A, Senior Subordinated Notes (Callable 06/15/09 @ $105.44) 10.875%, 06/15/14 ++ 1,000,000 980,000 Collins & Aikman Products Corp., Global Company Guaranteed Notes (Callable 12/31/06 @ $105.38) 10.750%, 12/31/11 1,250,000 1,253,125 Collins & Aikman Products Corp., Rule 144A, Senior Subordinated Notes 12.875%, 08/15/12 ++ ~ 1,825,000 1,587,750 Dura Operating Corp, Series D, Company Guaranteed Notes (Callable 05/01/05 @ $103.00) 9.000%, 05/01/09 1,000,000 962,500 Key Plastics Holdings, Inc., Series B, Company Guaranteed Notes (Callable 03/15/05 @ $100.00) 10.250%, 03/15/07 ** ^ 250,000 25,000 Metaldyne Corp., Global Company Guaranteed Notes (Callable 06/15/07 @ $105.50) 11.000%, 06/15/12 ~ 1,200,000 1,014,000 Motor Coach Industries International, Inc., Company Guaranteed Notes (Callable 05/01/05 @ $103.75) 11.250%, 05/01/09 150,000 83,250 Stanadyne Corp., Rule 144A, Senior Subordinated Notes (Callable 08/15/09 @ $105.00) 10.000%, 08/15/14 ++ 900,000 949,500 Tenneco Automotive, Inc., Series B, Global Secured Notes (Callable 07/15/08 @ $105.12) 10.250%, 07/15/13 800,000 936,000 --------------- 7,791,125 --------------- BROADBAND--1.2% Level 3 Communications, Inc., Senior Discount Notes (Callable 12/1/05 @ $101.75) 10.500%, 12/01/08 + ~ 1,175,000 942,938 Level 3 Communications, Inc., Senior Notes (Callable 05/01/05 @ $101.52) 9.125%, 05/01/08 ~ $ 350,000 $ 280,875 Level 3 Financing, Inc., Rule 144A, Senior Notes (Callable 10/15/07 @ $105.38) 10.750%, 10/15/11 ++ 750,000 648,750 Primus Telecommunications Group, Inc., Global Senior Notes (Callable 01/15/09 @ $104.00) 8.000%, 01/15/14 ~ 1,500,000 1,083,750 --------------- 2,956,313 --------------- BROADCAST/OUTDOOR--1.9% Emmis Operating Co., Global Senior Subordinated Notes (Callable 05/15/08 @ $103.44) 6.875%, 05/15/12 ~ 500,000 527,500 Gray Television, Inc., Global Company Guaranteed Notes (Callable 12/15/06 @ $104.62) 9.250%, 12/15/11 1,000,000 1,131,250 Interep National Radio Sales, Inc., Series B, Company Guaranteed Notes (Callable 07/01/05 @ $101.67) 10.000%, 07/01/08 800,000 622,000 Paxson Communications Corp., Global Company Guaranteed Notes (Callable 01/15/06 @ $106.12) 0.000%, 01/15/09 + 2,000,000 1,750,000 Young Broadcasting, Inc., Global Company Guaranteed Notes (Callable 03/01/06 @ $105.00) 10.000%, 03/01/11 ~ 490,000 516,950 --------------- 4,547,700 --------------- BUILDING PRODUCTS--4.6% Associated Materials, Inc., Rule 144A, Senior Discount Notes (Callable 03/1/09 @ $105.63) 0.000%, 03/01/14 ++ + ~ 1,000,000 750,000 Atrium Companies, Inc., Series B, Company Guaranteed Notes (Callable 05/01/05 @ $103.50) 10.500%, 05/01/09 1,000,000 1,055,000 Building Materials Corp., Rule 144A, Senior Notes (Callable 08/01/09 @ $103.88) 7.750%, 08/01/14 ++ 1,500,000 1,496,250 Building Materials Corp., Series B, Senior Notes 8.000%, 10/15/07 500,000 517,500 Dayton Superior Corp., Company Guaranteed Notes (Callable 06/15/07 @ $102.17) 13.000%, 06/15/09 ~ 600,000 597,000
SEE NOTES TO FINANCIAL STATEMENTS. 2
PRINCIPAL AMOUNT VALUE --------------- --------------- Dayton Superior Corp., Global Secured Notes (Callable 6/15/06 @ $105.62) 10.750%, 09/15/08 $ 500,000 $ 535,000 Interface, Inc., Global Senior Subordinated Notes (Callable 02/01/09 @ $104.75) 9.500%, 02/01/14 ~ 1,250,000 1,359,375 Norcraft Holdings LP, Rule 144A, Senior Discount Notes (Callable 09/01/08 @ $104.88) 0.000%, 09/01/12 ++ + 750,000 555,000 Ply Gem Industries, Inc., Rule 144A, Senior Subordinated Notes (Callable 02/15/08 @ $104.50) 9.000%, 02/15/12 ++ 1,000,000 1,002,500 RMCC Acquisition Co., Rule 144A, Senior Subordinated Notes (Callable 11/01/08 @ $104.75) 9.500%, 11/01/12 ++ 1,250,000 1,250,000 Texas Industries, Inc., Global Senior Notes (Callable 06/15/07 @ $105.12) 10.250%, 06/15/11 750,000 866,250 Werner Holding Co., Inc., Series A, Company Guaranteed Notes (Callable 11/15/04 @ $101.67) 10.000%, 11/15/07 ~ 1,350,000 1,255,500 --------------- 11,239,375 --------------- CABLE--9.1% Adelphia Communications Corp., Rule 144A, Secured Notes (Callable 02/15/08 @ $105.38) 10.875%, 10/01/10 ++ ** 3,000,000 2,632,500 Atlantic Broadband Finance LLC, Rule 144A, Senior Subordinated Notes (Callable 01/15/09 @ $104.69) 9.375%, 01/15/14 ++ ~ 1,600,000 1,506,000 Cablevision Systems Corp., Rule 144A, Senior Notes 8.000%, 04/15/12 ++ 1,500,000 1,620,000 CCO Holdings LLC, Global Senior Notes (Callable 11/15/08 @ 104.38) 8.750%, 11/15/13 2,100,000 2,105,250 Century Communications Corp., Senior Discount Notes 0.000%, 12/31/49 ** 1,000,000 935,000 Charter Communications Holdings LLC, Senior Discount Notes (Callable 04/01/05 @ $102.88) 9.920%, 04/01/11 + ~ 3,650,000 2,947,375 Charter Communications Holdings LLC, Senior Notes (Callable 04/01/05 @ $102.88) 8.625%, 04/01/09 3,050,000 2,470,500 CSC Holdings, Inc., Senior Notes 7.250%, 07/15/08 85,000 90,631 CSC Holdings, Inc., Series B, Senior Notes 7.625%, 04/01/11 ~ $ 1,500,000 $ 1,638,750 DIVA Systems Corp., Series B, Senior Discount Notes (Callable 03/01/05 @ $102.10) 12.625%, 03/01/08 ** ^ 1,750,000 4,375 Insight Communications Company, Inc., Senior Discount Notes (Callable 02/15/06 @ $106.12) 0.000%, 02/15/11 + ~ 2,000,000 1,965,000 Insight Midwest/Insight Capital, Senior Notes (Callable 10/01/05 @ $103.25) 9.750%, 10/01/09 200,000 211,250 Insight Midwest/Insight Capital Corp., Global Senior Notes (Callable 11/01/05 @ $105.25) 10.500%, 11/01/10 500,000 556,250 Kabel Deutschland Gmbh, Rule 144A, Senior Notes (Callable 07/01/09 @ $105.31) 10.625%, 07/01/14 ++ 1,000,000 1,125,000 Mediacom LLC Capital Corp., Senior Notes (Callable 01/15/06 @ $104.75) 9.500%, 01/15/13 ~ 2,500,000 2,462,500 --------------- 22,270,381 --------------- CAPITAL GOODS--1.8% Blount, Inc., Senior Subordinated Notes (Callable 08/01/08 @ $104.44) 8.875%, 08/01/12 1,000,000 1,093,750 Case New Holland Inc, Rule 144A, Senior Notes 9.250%, 08/01/11 ++ 850,000 973,250 JII Holdings LLC, Global Secured Notes (Callable 01/01/05 @ $106.50) 13.000%, 04/01/07 1,802,500 1,649,288 Terex Corp., Global Company Guaranteed Notes (Callable 01/15/09 @ $103.69) 7.375%, 01/15/14 650,000 698,750 --------------- 4,415,038 --------------- CHEMICALS--8.8% Crompton Corp., Rule 144A, Senior Notes (Callable 08/01/08 @ $104.94) 9.875%, 08/01/12 ++ ~ 1,000,000 1,107,500 Crystal US Holdings, Rule 144A, Senior Discount Notes (Callable 10/01/09 @ $105.25) 0.000%, 10/01/14 ++ + 1,350,000 857,250 Equistar Chemicals LP/ Equistar Funding Corp., Global Company Guaranteed Notes 10.125%, 09/01/08 1,000,000 1,153,750 HMP Equity Holdings Corp., Global Senior Discount Notes (Callable 11/15/04 @ $64.79) 0.000%, 05/15/08 1,100,000 715,000
SEE NOTES TO FINANCIAL STATEMENTS. 3
PRINCIPAL AMOUNT VALUE --------------- --------------- Huntsman Company LLC, Global Company Guaranteed Notes (Callable 10/15/07 @ $105.81) 11.625%, 10/15/10 $ 350,000 $ 414,313 Huntsman Company LLC, Rule 144A, Company Guaranteed Notes (Callable 07/15/08 @ $105.75) 11.500%, 07/15/12 ++ 1,200,000 1,356,000 Huntsman International Holdings LLC, Senior Discount Notes (Callable 07/01/05 @ $58.33) 0.000%, 12/31/09 9,345,000 5,116,387 IMC Global, Inc., Series B, Global Company Guaranteed Notes (Callable 06/01/06 @ $105.63) 11.250%, 06/01/11 1,450,000 1,711,000 Invista, Rule 144A, Notes (Callable 05/01/08 @ $104.63) 9.250%, 05/01/12 ++ 500,000 552,500 Lyondell Chemical Co., Global Company Guaranteed Notes (Callable 06/01/08 @ $105.25) 10.500%, 06/01/13 1,000,000 1,185,000 Lyondell Chemical Co., Global Company Guaranteed Notes (Callable 12/15/05 @ $104.75) 9.500%, 12/15/08 1,400,000 1,533,000 Millennium America, Inc., Global Company Guaranteed Notes 9.250%, 06/15/08 ~ 800,000 896,000 Nalco Co., Global Senior Subordinated Notes (Callable 11/15/08 @ $104.44) 8.875%, 11/15/13 ~ 1,000,000 1,101,250 PolyOne Corp., Global Company Guaranteed Notes (Callable 05/15/07 @ $105.31) 10.625%, 05/15/10 ~ 750,000 836,250 Radnor Holdings Corp., Global Senior Notes (Callable 03/15/07 @ $105.50) 11.000%, 03/15/10 ~ 1,000,000 775,000 Resolution Performance Products LLC, Global Senior Subordinated Notes (Callable 11/15/05 @ $106.75) 13.500%, 11/15/10 ~ 1,000,000 995,000 Terra Capital, Inc., Global Secured Notes (Callable 06/01/07 @ $105.75) 11.500%, 06/01/10 ~ 1,000,000 1,135,000 --------------- 21,440,200 --------------- COMPETITIVE LOCAL EXCHANGE CARRIER (CLEC)--0.4% FairPoint Communications, Inc., Series B, Senior Subordinated Notes (Callable 05/01/05 @ $101.58) 9.500%, 05/01/08 900,000 877,500 --------------- CONSUMER PRODUCTS/TOBACCO--5.1% Ames True Temper, Inc., Rule 144A, Senior Subordinated Notes (Callable 07/15/08 @ $105.00) 10.000%, 07/15/12 ++ $ 1,450,000 $ 1,558,750 Amscan Holdings, Inc., Rule 144A, Senior Subordinated Notes (Callable 05/01/09 @ $104.38) 8.750%, 05/01/14 ++ 1,050,000 1,060,500 Diamond Brands Operating Corp., Company Guaranteed Notes (Callable 04/15/05 @ $101.69) 10.125%, 04/15/08 ** 3,097,000 77,425 General Binding Corp., Company Guaranteed Notes (Callable 06/01/05 @ $101.56) 9.375%, 06/01/08 ~ 1,050,000 1,076,250 Johnsondiversey Holdings, Inc., Global Discount Notes (Callable 05/15/07 @ $105.34) 0.000%, 05/15/13 + ~ 1,500,000 1,290,000 PCA LLC/PCA Finance Corp., Global Senior Notes 11.875%, 08/01/09 1,000,000 955,000 Playtex Products, Inc., Global Company Guaranteed Notes (Callable 06/01/06 @ $104.69) 9.375%, 06/01/11 ~ 1,300,000 1,374,750 Prestige Brands, Inc., Rule 144A, Senior Subordinated Notes (Callable 04/15/08 @ $104.63) 9.250%, 04/15/12 ++ 1,000,000 1,015,000 Rayovac Corp., Global Senior Subordinated Notes (Callable 10/01/08 @ $104.25) 8.500%, 10/01/13 500,000 551,250 Remington Arms Company, Inc., Global Company Guaranteed Notes (Callable 02/01/07 @ $105.25) 10.500%, 02/01/11 ~ 750,000 667,500 Samsonite Corp., Global Senior Subordinated Notes (Callable 06/01/08 @ $104.44) 8.875%, 06/01/11 ~ 1,000,000 1,070,000 Sealy Mattress Co., Global Senior Subordinated Notes (Callable 06/15/09 @ $104.13) 8.250%, 06/15/14 1,250,000 1,328,125 United Industries Corp., Series D, Global Company Guaranteed Notes (Callable 04/01/05 @ $103.29) 9.875%, 04/01/09 425,000 448,375 --------------- 12,472,925 --------------- CONTAINERS--3.8% Berry Plastics Corp., Global Company Guaranteed Notes (Callable 07/15/07 @ $105.38) 10.750%, 07/15/12 ~ 1,100,000 1,270,500 Constar International, Inc., Senior Subordinated Notes (Callable 12/01/07 @ $105.50) 11.000%, 12/01/12 ~ 1,200,000 1,152,000
SEE NOTES TO FINANCIAL STATEMENTS. 4
PRINCIPAL AMOUNT VALUE --------------- --------------- Graham Packaging Company, Inc., Rule 144A, Senior Subordinated Notes (Callable 10/15/09 @ $104.94) 9.875%, 10/15/14 ++ ~ $ 650,000 $ 692,250 Graphic Packaging Inernational, Corp., Global Senior Subordinated Notes (Callable 08/15/08 @ 104.75) 9.500%, 08/15/13 ~ 750,000 868,125 Intertape Polymer US, Inc., Rule 144A, Senior Subordinated Notes (Callable 08/01/09 @ $104.25) 8.500%, 08/01/14 ++ 1,000,000 998,750 Owens-Brockway Glass Containers, Global Company Guaranteed Notes (Callable 02/15/06 @ $104.44) 8.875%, 02/15/09 1,000,000 1,102,500 Owens-Brockway Glass Containers, Global Company Guaranteed Notes (Callable 05/15/08 @ $104.12) 8.250%, 05/15/13 ~ 750,000 828,750 Pliant Corp., Company Guaranteed Notes (Callable 06/01/05 @ $106.50) 13.000%, 06/01/10 ~ 500,000 468,750 Pliant Corp., Global Secured Notes (Callable 06/15/07 @ $105.56) 0.000%, 06/15/09 + 500,000 447,500 Tekni-Plex, Inc., Series B, Company Guaranteed Notes (Callable 06/15/05 @ $106.38) 12.750%, 06/15/10 ~ 500,000 377,500 U.S. Can Corporation, Global Company Guaranteed Notes (Callable 07/15/07 @ $105.44) 10.875%, 07/15/10 1,000,000 1,020,000 --------------- 9,226,625 --------------- DIVERSIFIED TELECOMMUNICATIONS--1.2% Qwest Communications International, Inc., Rule 144A, Senior Notes (Callable 02/15/09 @ $103.75) 7.500%, 02/15/14 ++ ~ 1,000,000 970,000 Qwest Corp., Notes 5.625%, 11/15/08 ~ 900,000 904,500 Qwest Corp., Rule 144A, Senior Notes 7.875%, 09/01/11 ++ 900,000 963,000 --------------- 2,837,500 --------------- ENERGY - OTHER--5.0% Amerigas Partners LP Eagle Finance Corp., Series B, Global Senior Notes (Callable 05/20/06 @ $104.44) 8.875%, 05/20/11 1,060,000 1,166,000 Dynegy Holdings, Inc., Rule 144A, Secured Notes (Callable 07/15/08 @ $105.06) 10.125%, 07/15/13 ++ 1,550,000 1,813,500 Dynegy Holdings, Inc., Senior Notes 6.875%, 04/01/11 $ 250,000 $ 243,125 El Paso CGP Co., Notes 6.375%, 02/01/09 500,000 496,250 El Paso CGP Co., Notes 7.750%, 06/15/10 750,000 780,000 El Paso Corp., Senior Notes 7.000%, 05/15/11 ~ 1,000,000 1,010,000 El Paso Natural Gas, Series A, Global Senior Notes (Callable 08/01/07 @ $103.81) 7.625%, 08/01/10 1,000,000 1,086,250 El Paso Production Holding Company, Global Company Guaranteed Notes (Callable 06/01/08 @ $103.88) 7.750%, 06/01/13 2,800,000 2,933,000 Giant Industries, Inc., Global Company Guaranteed Notes (Callable 05/15/07 @ $105.50) 11.000%, 05/15/12 850,000 1,005,125 Giant Industries, Inc., Senior Subordinated Notes (Callable 05/15/09 @ 104.00) 8.000%, 05/15/14 450,000 471,375 Reliant Resources, Inc., Global Secured Notes (Callable 07/15/08 @ $104.75) 9.500%, 07/15/13 ~ 1,050,000 1,186,500 --------------- 12,191,125 --------------- ENVIRONMENTAL SERVICES--1.6% Allied Waste North America, Inc., Series B, Global Senior Notes (Callable 04/15/09 @ $103.69) 7.375%, 04/15/14 ~ 3,325,000 3,092,250 Waste Services, Inc., Rule 144A, Senior Subordinated Notes (Callable 04/15/09 @ $104.75) 9.500%, 04/15/14 ++ ~ 1,000,000 945,000 --------------- 4,037,250 --------------- FINANCE--1.5% Corrections Corporation of America, Senior Notes, (Callable 05/01/07 @ $103.75) 7.500%, 05/01/11 500,000 543,125 E*Trade Financial Corp., Rule 144A, Senior Notes (Callable 06/15/08 @ $104.00) 8.000%, 06/15/11 ++ 1,150,000 1,219,000 Rainbow National Services LLC, Rule 144A, Senior Notes (Callable 09/01/08 @ $104.38) 8.750%, 09/01/12 ++ 900,000 967,500 Senior Housing Properties Trust, Senior Notes 8.625%, 01/15/12 800,000 906,000 --------------- 3,635,625 --------------- FOOD PROCESSORS/BEVERAGE/BOTTLING--2.2% Birds Eye Foods, Inc., Company Guaranteed Notes (Callable 11/01/04 @ $103.96) 11.875%, 11/01/08 250,000 261,875
SEE NOTES TO FINANCIAL STATEMENTS. 5
PRINCIPAL AMOUNT VALUE --------------- --------------- Burns Philp Capital Property, Ltd., Global Company Guaranteed Notes (Callable 07/15/07 @ $104.88) 9.750%, 07/15/12 $ 1,000,000 $ 1,105,000 Land O' Lakes, Inc., Global Senior Notes (Callable 11/15/06 @ $104.38) 8.750%, 11/15/11 ~ 1,250,000 1,162,500 Le-Natures, Inc., Rule 144A, Senior Subordinated Notes (Callable 06/15/08 @ $104.50) 10.000%, 06/15/13 ++ # 600,000 666,000 Pinnacle Foods Holding Corp., Rule 144A, Senior Subordinated Notes (Callable 12/01/08 @ $104.13) 8.250%, 12/01/13 ++ 500,000 473,750 Swift & Co., Global Senior Subordinated Notes (Callable 10/01/06 @ $106.25) 12.500%, 01/01/10 850,000 949,875 Wornick Co., Rule 144A, Secured Notes (Callable 07/15/08 @ $105.44) 10.875%, 07/15/11 ++ 800,000 868,000 --------------- 5,487,000 --------------- GAMING--10.9% Ameristar Casinos, Inc., Global Company Guaranteed Notes (Callable 02/15/06 @ $105.38) 10.750%, 02/15/09 1,350,000 1,545,750 Argosy Gaming Co., Global Senior Subordinated Notes (Callable 01/15/09 @ $103.50) 7.000%, 01/15/14 1,500,000 1,605,000 Aztar Corp., Global Senior Subordinated Notes (Callable 08/15/06 @ $104.50) 9.000%, 08/15/11 1,350,000 1,518,750 Boyd Gaming Corp., Global Company Guaranteed Notes (Callable 08/01/05 @ $104.63) 9.250%, 08/01/09 1,200,000 1,314,000 Chukchansi Economic Development Authority, Rule 144A, Senior Notes (Callable 10/01/06 @ $113.00) 14.500%, 06/15/09 ++ 2,300,000 2,909,500 Circus Circus & Eldorado, Global First Mortgage (Callable 03/01/07 @ $105.06) 10.125%, 03/01/12 ~ 1,350,000 1,471,500 Hard Rock Hotel, Inc., Global Notes (Callable 06/01/08 @ $104.44) 8.875%, 06/01/13 2,200,000 2,409,000 Herbst Gaming, Inc., Rule 144A, Senior Subordinated Notes (Callable 06/01/08 @ $104.06) 8.125%, 06/01/12 ++ ~ 1,000,000 1,052,500 Inn of The Mountain Gods, Global Senior Notes (Callable 11/15/07 @ $106.00) 12.000%, 11/15/10 1,250,000 1,456,250 Isle of Capri Casinos Inc., Global Senior Subordinated Notes (Callable 03/01/09 @ $103.50) 7.000%, 03/01/14 ~ $ 900,000 $ 936,000 Majestic Star Casino LLC, Company Guaranteed Notes (Callable 10/15/07 @ $104.75) 9.500%, 10/15/10 1,600,000 1,660,000 MGM Mirage, Rule 144A, Senior Notes 6.750%, 09/01/12 ++ 1,000,000 1,065,000 MTR Gaming Group, Inc., Series B, Global Company Guaranteed Notes (Callable 04/01/07 @ $104.88) 9.750%, 04/01/10 250,000 271,250 Oed Corporation / Diamond Jo, Rule 144A, Company Guaranteed Notes (Callable 04/15/08 @ 104.38) 8.750%, 04/15/12 ++ 1,350,000 1,275,750 Penn National Gaming, Inc., Series B, Global Company Guaranteed Notes (Callable 03/01/05 @ $105.56) 11.125%, 03/01/08 1,250,000 1,357,812 Riviera Holdings Corp., Global Company Guaranteed Notes (Callable 06/15/06 @ $105.50) 11.000%, 06/15/10 1,110,000 1,237,650 Waterford Gaming LLC, Rule 144A, Senior Notes (Callable 09/15/08 @ $103.55) 8.625%, 09/15/12 ++ 364,000 389,025 Wheeling Island Gaming, Inc., Global Company Guaranteed Notes (Callable 12/15/05 @ $105.06) 10.125%, 12/15/09 250,000 267,500 Windsor Woodmont Black Hawk, Series B, First Mortgage Notes 13.000%, 03/15/05 ** 2,456,000 2,462,140 Wynn Las Vegas LLC, Second Mortgage Notes (Callable 11/01/06 @ $112.00) 12.000%, 11/01/10 435,000 545,925 --------------- 26,750,302 --------------- HEALTHCARE FACILITIES/SUPPLIES--5.8% Ardent Health Services, Inc., Global Senior Subordinated Notes (Callable 08/15/08 @ $105.00) 10.000%, 08/15/13 750,000 770,625 Concentra Operating Corp., Global Company Guaranteed Notes (Callable 08/15/07 @ $104.75) 9.500%, 08/15/10 1,000,000 1,115,000 Extendicare Health Services, Inc., Senior Subordinated Notes (Callable 05/01/09 @ $103.44) 6.875%, 05/01/14 1,000,000 1,032,500 Fisher Scientific International, Inc., Global Senior Subordinated Notes (Callable 05/01/07 @ $104.06) 8.125%, 05/01/12 885,000 991,200
SEE NOTES TO FINANCIAL STATEMENTS. 6
PRINCIPAL AMOUNT VALUE --------------- --------------- Hanger Orthopedic Group, Inc., Company Guaranteed Global Notes (Callable 02/15/06 @ $105.19) 10.375%, 02/15/09 ~ $ 500,000 $ 505,000 Magellan Health Services, Inc., Series A, Senior Notes (Callable 11/15/05 @ $104.69) 9.375%, 11/15/08 717,276 780,038 Medquest, Inc., Series B, Global Company Guaranteed Notes (Callable 08/15/07 @ $105.94) 11.875%, 08/15/12 ~ 1,000,000 1,165,000 MQ Associates, Inc., Rule 144A, Senior Discount Notes (Callable 08/15/08 @ $109.00) 0.000%, 08/15/12 ++ + 2,000,000 1,315,000 Select Medical Corp., Global Senior Subordinated Notes (Callable 08/01/08 @ $103.75) 7.500%, 08/01/13 900,000 1,037,250 Tenet Healthcare Corp., Rule 144A, Senior Notes 9.875%, 07/01/14 ++ ~ 750,000 789,375 Triad Hospitals, Inc., Senior Notes (Callable 5/15/08 @ $103.50) 7.000%, 05/15/12 1,800,000 1,935,000 Triad Hospitals, Inc., Senior Subordinated Notes (Callable 11/15/08 @ $103.50) 7.000%, 11/15/13 1,000,000 1,030,000 Universal Hospital Services, Inc., Global Senior Notes (Callable 11/01/07 @ $105.06) 10.125%, 11/01/11 750,000 768,750 Vanguard Health Holding Co., Rule 144A, Senior Subordinated Notes (Callable 10/01/09 @ $104.50) 9.000%, 10/01/14 ++ 1,000,000 1,050,000 --------------- 14,284,738 --------------- HOME BUILDERS--2.0% KB Home, Senior Subordinated Notes 8.625%, 12/15/08 650,000 739,375 KB Home, Senior Subordinated Notes (Callable 02/15/06 @ $104.75) 9.500%, 02/15/11 ~ 1,000,000 1,115,000 Toll Corp., Senior Subordinated Notes (Callable 12/01/06 @ $104.12) 8.250%, 12/01/11 700,000 787,500 WCI Communities, Inc., Global Company Guaranteed Notes (Callable 05/01/07 @ $104.56) 9.125%, 05/01/12 ~ 1,000,000 1,115,000 William Lyon Homes, Inc., Company Guaranteed Notes (Callable 04/01/08 @ $105.38) 10.750%, 04/01/13 1,000,000 1,142,500 --------------- 4,899,375 --------------- INDUSTRIAL--1.5% Amsted Industries, Inc., Rule 144A, Senior Notes (Callable 10/15/07 @ $105.12) 10.250%, 10/15/11 ++ $ 1,000,000 $ 1,105,000 Amtrol, Inc., Senior Subordinated Notes 10.625%, 12/31/06 ~ 450,000 400,500 Polypore, Inc., Rule 144A, Senior Subordinated Notes (Callable 05/15/08 @ $104.38) 8.750%, 05/15/12 ++ 1,000,000 1,050,000 Transportation Technologies Industries, Inc., Rule 144A, Senior Subordinated Notes (Callable 03/31/06 @ $102.00) 12.500%, 03/31/10 ++ 1,000,000 1,031,250 --------------- 3,586,750 --------------- LEISURE--3.2% AMC Entertainment, Inc., Rule 144A, Senior Subordinated Notes (Callable 3/01/09 @ 104.00) 8.000%, 03/01/14 ++ ~ 2,000,000 1,930,000 Bally Total Fitness Holding Corp., Global Senior Notes (Callable 7/15/07 @ $105.25) 10.500%, 07/15/11 ~ 300,000 293,250 Bluegreen Corp., Series B, Company Guaranteed Notes (Callable 04/01/05 @ $101.75) 10.500%, 04/01/08 1,150,000 1,185,937 Booth Creek Ski Holdings, Inc., Series B, Company Guaranteed Notes (Callable 03/15/05 @ $100.00) 12.500%, 03/15/07 1,300,000 1,309,750 Cinemark, Inc., Senior Discount Notes (Callable 03/15/09 @ $104.88) 0.000%, 03/15/14 + 1,150,000 819,375 Icon Health & Fitness, Inc., Global Company Guaranteed Notes (Callable 04/01/07 @ $105.62) 11.250%, 04/01/12 1,000,000 835,000 Six Flags, Inc., Global Senior Notes (Callable 02/01/06 @ $104.44) 8.875%, 02/01/10 ~ 950,000 914,375 Six Flags, Inc., Global Senior Notes (Callable 06/01/09 @ $104.81) 9.625%, 06/01/14 ~ 550,000 528,000 --------------- 7,815,687 --------------- LODGING--0.6% Host Marriott LP, Global Senior Notes (Callable 11/1/08 @ 103.56) 7.125%, 11/01/13 500,000 542,500 John Q. Hammons Hotels, Series B, Global Notes, First Mortgage (Callable 05/15/07 @ $104.44) 8.875%, 05/15/12 ~ 890,000 1,027,950 --------------- 1,570,450 ---------------
SEE NOTES TO FINANCIAL STATEMENTS. 7
PRINCIPAL AMOUNT VALUE --------------- --------------- METALS & MINING--2.2% AK Steel Corp., Global Company Guaranteed Notes (Callable 06/15/07 @ $103.88) 7.750%, 06/15/12 ~ $ 1,000,000 $ 1,017,500 Alpha Natural Resources LLC,, Rule 144A, Senior Notes (Callable 06/01/08 @ $105.00) 10.000%, 06/01/12 ++ 1,600,000 1,784,000 Metallurg, Inc., Series B, Company Guaranteed Notes (Callable 12/1/05 @ $100.00) 11.000%, 12/01/07 700,000 535,500 UCAR Finance, Inc., Global Company Guaranteed Notes (Callable 02/15/07 @ $105.12) 10.250%, 02/15/12 ~ 1,000,000 1,145,000 WCI Steel, Inc., Series B, Senior Secured Notes 10.000%, 12/01/04 ** 750,000 483,750 Wise Metals Group LLC, Rule 144A, Secured Notes (Callable 05/15/08 @ $105.13) 10.250%, 05/15/12 ++ 500,000 500,000 --------------- 5,465,750 --------------- PAPER & FOREST PRODUCTS--4.1% Appleton Papers, Inc., Series B, Senior Subordinated Notes (Callable 06/15/09 @ $104.88) 9.750%, 06/15/14 ~ 1,000,000 1,050,000 Caraustar Industries, Inc., Global Company Guaranteed Notes (Callable 04/01/06 @ $105.25) 9.875%, 04/01/11 ~ 1,000,000 1,090,000 Cellu Tissue Holdings, Rule 144A, Secured Notes (Callable 03/15/07 @ $107.31) 9.750%, 03/15/10 ++ 750,000 787,500 Georgia-Pacific Corp., Global Company Guaranteed Notes 8.875%, 02/01/10 1,200,000 1,419,000 Georgia-Pacific Corp., Global Company Guaranteed Notes (Callable 02/01/08 @ $104.69) 9.375%, 02/01/13 1,300,000 1,537,250 Georgia-Pacific Corp., Global Senior Notes 8.000%, 01/15/24 750,000 871,875 Newark Group, Inc., Rule 144A, Subordinated Notes (Callable 03/15/09 @ $104.88) 9.750%, 03/15/14 ++ 2,000,000 2,090,000 Riverside Forest Products, Global Senior Notes (Callable 03/01/09 @ $103.94) 7.875%, 03/01/14 1,000,000 1,070,000 --------------- 9,915,625 --------------- PUBLISHING--5.9% CBD Media Holdings, Rule 144A, Senior Notes (Callable 07/15/08 @ $104.63) 9.250%, 07/15/12 ++ 1,250,000 1,262,500 Dex Media, Inc., Global Discount Notes (Callable 11/15/08 @ $104.50) 0.000%, 11/15/13 + $ 1,500,000 $ 1,147,500 Dex Media, Inc., Global Discount Notes (Callable 11/15/08 @ $104.50) 0.000%, 11/15/13 + ~ 500,000 382,500 Dex Media, Inc., Global Notes (Callable 11/15/08 @ $104.00) 8.000%, 11/15/13 ~ 400,000 430,000 Haights Cross Operating Co., Global Company Guaranteed Notes (Callable 08/15/08 @ $105.88) 11.750%, 08/15/11 1,200,000 1,327,500 Houghton Mifflin Co., Global Senior Discount Notes (Callable 10/15/08 @ $105.75) 0.000%, 10/15/13 + ~ 1,000,000 658,750 Houghton Mifflin Co., Global Senior Notes (Callable 02/01/07 @ $104.12) 8.250%, 02/01/11 350,000 374,062 Liberty Group Operating, Inc., Company Guaranteed Notes (Callable 02/01/05 @ $101.56) 9.375%, 02/01/08 2,700,000 2,733,750 Liberty Group Publishing, Inc., Debentures (Callable 02/01/05 @ $101.94) 11.625%, 02/01/09 + 1,774,000 1,765,130 Morris Publishing Group LLC, Global Company Guaranteed Notes (Callable 08/01/08 @ $103.50) 7.000%, 08/01/13 500,000 512,500 Phoenix Color Corp., Company Guaranteed Notes (Callable 02/01/05 @ $103.46) 10.375%, 02/01/09 2,222,000 2,122,010 Primedia, Inc., Rule 144A, Senior Notes (Callable 05/15/08 @ $104.00) 8.000%, 05/15/13 ++ 500,000 503,750 Sheridan Acquisition Corp., Rule 144A, Secured Notes (Callable 08/15/07 @ $105.12) 10.250%, 08/15/11 ++ 1,000,000 1,090,000 --------------- 14,309,952 --------------- RESTAURANTS--2.0% Buffets, Inc., Global Senior Subordinated Notes (Callable 07/15/06 @ $105.62) 11.250%, 07/15/10 850,000 909,500 Denny's Corp., Rule 144A, Senior Notes (Callable 10/01/08 @ $105.00) 10.000%, 10/01/12 ++ 1,350,000 1,407,375 El Pollo Loco, Inc., Global Secured Notes (Callable 12/15/06 @ $104.63) 9.250%, 12/15/09 750,000 791,250
SEE NOTES TO FINANCIAL STATEMENTS. 8
PRINCIPAL AMOUNT VALUE --------------- --------------- O'Charleys, Inc., Global Senior Subordinated Notes (Callable 11/01/08 @ $104.50) 9.000%, 11/01/13 ~ $ 1,000,000 $ 1,060,000 Romacorp Inc 10.500%, 12/31/08 1,007,088 659,643 --------------- 4,827,768 --------------- RETAIL - FOOD & DRUG--2.7% Duane Reade, Inc., Rule 144A, Senior Subordinated Notes (Callable 08/01/08 @ $104.88) 9.750%, 08/01/11 ++ ~ 1,750,000 1,688,750 Great Atlantic & Pacific Tea Co., Inc., Senior Notes (Callable 12/15/06 @ $104.56) 9.125%, 12/15/11 ~ 1,250,000 1,081,250 Herbalife International, Inc., Global Company Guaranteed Notes (Callable 07/15/06 @ $105.88) 11.750%, 07/15/10 1,000,000 1,155,000 Nutritional Sourcing Corp., Notes (Callable 06/05/05 @ $101.00) 10.125%, 08/01/09 500,000 342,500 Pathmark Stores, Inc., Global Company Guaranteed Notes (Callable 02/01/07 @ $104.38) 8.750%, 02/01/12 ~ 1,000,000 915,000 Roundy's, Inc., Series B, Global Company Guaranteed Notes (Callable 06/15/07 @ $104.44) 8.875%, 06/15/12 ~ 500,000 546,250 Stater Brothers Holdings, Inc., Global Senior Notes (Callable 06/15/08 @ $104.06) 8.125%, 06/15/12 450,000 479,250 Winn-Dixie Stores, Inc., Company Guaranteed Notes (Callable 04/01/05 @ $104.44) 8.875%, 04/01/08 ~ 450,000 387,000 --------------- 6,595,000 --------------- RETAIL STORES--4.6% Asbury Automotive Group Inc., Global Company Guaranteed Notes (Callable 06/15/07 @ $104.50) 9.000%, 06/15/12 ~ 700,000 742,000 Big 5 Corp., Series B, Senior Notes (Callable 11/15/04 @ $101.83) 10.875%, 11/15/07 1,125,000 1,153,125 J. Crew Operating Corp., Senior Subordinated Notes (Callable 10/15/05 @ $100.00) 10.375%, 10/15/07 ~ 2,000,000 2,065,000 Leslie's Poolmart, Inc., Series B, Senior Notes (Callable 07/15/05 @ $102.59) 10.375%, 07/15/08 1,200,000 1,230,000 Michaels Stores, Inc., Senior Notes (Callable 07/01/05 @ $104.62) 9.250%, 07/01/09 900,000 975,375 Nebraska Book Company, Inc., Global Senior Subordinated Notes (Callable 03/15/08 @ $104.31) 8.625%, 03/15/12 $ 500,000 $ 508,750 Office Depot, Inc., Global Senior Subordinated Notes 10.000%, 07/15/08 ~ 1,000,000 1,180,000 Pep Boys--Manny, Moe & Jack, Series MTNB, Notes 6.920%, 07/07/06 1,150,000 1,178,750 Southern States Cooperative, Inc., Rule 144A, Senior Notes (Callable 11/01/07 @ $108.00) 10.500%, 11/01/10 ++ 1,350,000 1,356,750 United Auto Group, Inc., Global Company Guaranteed Notes (Callable 03/15/07 @ $104.81) 9.625%, 03/15/12 ~ 750,000 838,125 --------------- 11,227,875 --------------- SATELLITE--1.6% EchoStar DBS Corp., Rule 144A, Company Guaranteed Notes 6.625%, 10/01/14 ++ 1,000,000 1,027,500 PanAmSat Corp., Rule 144A, Company Guaranteed Senior Notes (Callable 08/15/09 @ $104.50) 9.000%, 08/15/14 ++ ~ 1,000,000 1,065,000 Pegasus Communications Corp., Series B, Senior Notes 9.625%, 10/15/05 ** 2,850,000 1,767,000 --------------- 3,859,500 --------------- SECONDARY OIL & GAS PRODUCERS--1.9% Chesapeake Energy Corp., Global Senior Notes (Callable 08/15/09 @ $103.50) 7.000%, 08/15/14 1,000,000 1,090,000 Chesapeake Energy Corp., Senior Notes (Callable 01/15/09 @ $103.44) 6.875%, 01/15/16 ~ 1,093,000 1,174,975 Continental Resources, Inc., Company Guaranteed Notes (Callable 08/01/05 @ $101.71) 10.250%, 08/01/08 1,200,000 1,248,600 Magnum Hunter Resources, Inc., Global Company Guaranteed Notes (Callable 03/15/07 @ $104.80) 9.600%, 03/15/12 423,000 485,393 Whiting Petroleum Corp., Global Senior Subordinated Notes (Callable 05/01/08 @ $103.63) 7.250%, 05/01/12 600,000 633,000 --------------- 4,631,968 --------------- SERVICES--8.9% Advanstar Communications, Inc, Global Secured Note (Callable 02/15/08 @ $105.38) 10.750%, 08/15/10 1,500,000 1,680,000
SEE NOTES TO FINANCIAL STATEMENTS. 9
PRINCIPAL AMOUNT VALUE --------------- --------------- Allied Security Escrow Corp., Rule 144A, Senior Subordinated Notes (Callable 07/15/08 @ $105.69) 11.375%, 07/15/11 ++ $ 1,250,000 $ 1,318,750 American Color Graphics, Global Notes (Callable 06/15/07 @ $105.00) 10.000%, 06/15/10 1,200,000 924,000 Diamond Triumph Auto Glass, Inc., Company Guaranteed Notes (Callable 04/01/05 @ $101.54) 9.250%, 04/01/08 400,000 386,000 Equinox Holdings, Inc., Senior Notes (Callable 12/15/06 @ $104.50) 9.000%, 12/15/09 ~ 450,000 479,250 Great Lakes Dredge & Dock Corp., Global Senior Subordinated Notes (Callable 12/15/08 @ $103.88) 7.750%, 12/15/13 1,250,000 1,125,000 IESI Corp., Global Company Guaranteed Notes (Callable 06/15/07 @ $105.12) 10.250%, 06/15/12 1,500,000 1,627,500 Iron Mountain, Inc., Company Guaranteed Notes (Callable 04/01/06 @ $104.31) 8.625%, 04/01/13 1,000,000 1,087,500 La Petite Academy, Inc., Series B, Company Guaranteed Notes (Callable 05/15/05 @ $101.67) 10.000%, 05/15/08 1,650,000 1,402,500 Language Line Holdings, Inc., Rule 144A, Senior Subordinated Notes (Callable 06/15/08 @ $105.56) 11.125%, 06/15/12 ++ 750,000 806,250 Mortons Restaurant Group, Inc., Global Secured Notes (Callable 07/01/07 @ $105.30) 7.500%, 07/01/10 ~ 1,000,000 965,000 Muzak LLC/Muzak Finance Corp., Company Guaranteed Notes (Callable 03/15/05 @ $103.29) 9.875%, 03/15/09 ~ 450,000 312,750 Muzak LLC/Muzak Finance Corp., Global Senior Notes (Callable 02/15/06 @ $105.00) 10.000%, 02/15/09 1,000,000 900,000 National Beef Packing Company LLC, Global Senior Notes (Callable 08/01/07 @ $105.25) 10.500%, 08/01/11 1,000,000 1,030,000 Neff Corp., Company Guaranteed Notes (Callable 06/01/05 @ $101.71) 10.250%, 06/01/08 2,000,000 1,900,000 Rent-A-Center, Inc., Series B, Global Company Guaranteed Notes (Callable 05/01/06 @ $103.75) 7.500%, 05/01/10 500,000 520,625 Salton, Inc., Global Senior Subordinated Notes (Callable 04/15/05 @ $106.12) 12.250%, 04/15/08 ~ $ 1,500,000 $ 1,222,500 Standard Parking Corp., Company Guaranteed Notes (Callable 03/15/05 @ $101.54) 9.250%, 03/15/08 700,000 626,500 United Rentals North America Inc., Global Senior Subordinated Notes (Callable 11/15/08 @ $103.88) 7.750%, 11/15/13 ~ 2,000,000 1,945,000 United Rentals North America, Inc., Global Senior Subordinated Notes (Callable 02/15/09 @ $103.50) 7.000%, 02/15/14 ~ 1,000,000 927,500 Wesco Distribution, Inc., Global Company Guaranteed Notes (Callable 06/01/05 @ $101.52) 9.125%, 06/01/08 550,000 572,000 --------------- 21,758,625 --------------- TECHNOLOGY--4.3% Advanced Micro Devices, Inc., Rule 144A, Senior Notes (Callable 11/1/08 @ $103.88) 7.750%, 11/01/12 ++ 1,000,000 1,007,500 AMI Semiconductor, Inc., Global Company Guaranteed Notes (Callable 02/01/08 @ $105.37) 10.750%, 02/01/13 260,000 306,150 Amkor Technology, Inc., Global Senior Notes (Callable 05/15/08 @ $103.88) 7.750%, 05/15/13 ~ 1,400,000 1,214,500 Ampex Corp., Secured Notes 12.000%, 08/15/08 1,999,129 679,704 Avaya, Inc., Secured Notes (Callable 04/01/06 @ $105.56) 11.125%, 04/01/09 ~ 325,000 375,375 Celestica, Inc., Senior Subordinated Notes (Callable 07/01/08 @ $103.94) 7.875%, 07/01/11 ~ 250,000 268,750 Danka Business Systems, Senior Notes (Callable 06/15/07 @ $105.50) 11.000%, 06/15/10 750,000 791,250 Itron, Inc., Rule 144A, Senior Subordinated Notes (Callable 05/15/08 @ $103.88) 7.750%, 05/15/12 ++ 1,000,000 1,017,500 Lucent Technologies, Inc., Notes 7.250%, 07/15/06 1,000,000 1,065,000 Lucent Technologies, Inc., Notes 5.500%, 11/15/08 ~ 800,000 824,000 Sanmina-SCI Corp., Global Company Guaranteed Notes (Callable 01/15/07 @ $105.19) 10.375%, 01/15/10 1,000,000 1,177,500 Viasystems, Inc., Global Senior Subordinated Notes (Callable 01/15/08 @ $105.25) 10.500%, 01/15/11 750,000 746,250
SEE NOTES TO FINANCIAL STATEMENTS. 10
PRINCIPAL AMOUNT VALUE --------------- --------------- Xerox Corp., Senior Notes (Callable 06/15/08 @ $103.81) 7.625%, 06/15/13 $ 1,000,000 $ 1,105,000 --------------- 10,578,479 --------------- TEXTILE/APPAREL/SHOE MANUFACTURING--1.8% BGF Industries, Inc., Series B, Senior Subordinated Notes (Callable 01/15/05 @ $103.50) 10.250%, 01/15/09 2,797,000 2,671,135 Levi Strauss & Co., Global Senior Notes (Callable 01/15/05 @ $105.81) 11.625%, 01/15/08 550,000 563,750 Levi Strauss & Co., Global Senior Notes (Callable 12/15/07 @ $106.12) 12.250%, 12/15/12 ~ 1,200,000 1,245,000 --------------- 4,479,885 --------------- TOWER--0.7% American Tower Corp., Rule 144A, Senior Notes (Callable 10/15/05 @ $100.00) 7.125%, 10/15/12 ++ 500,000 511,250 American Tower, Inc., Company Guaranteed Global Notes (Callable 12/01/07 @ $103.62) 7.250%, 12/01/11 500,000 533,750 SBA Telecommunications, Inc., Global Senior Discount Notes (Callable 12/15/07 @ $104.88) 0.000%, 12/15/11 + 850,000 720,375 --------------- 1,765,375 --------------- UTILITIES--6.7% AES Corp., Rule 144A, Secured Notes (Callable 05/15/08 @ $104.50) 9.000%, 05/15/15 ++ 1,000,000 1,170,000 Allegheny Energy Supply Company LLC, Global Notes 7.800%, 03/15/11 ~ 1,000,000 1,107,500 Aquila, Inc., Senior Notes 7.625%, 11/15/09 ~ 1,100,000 1,149,500 Calpine Corp., Rule 144A, Secured Notes (Callable 07/15/08 @ $104.38) 8.750%, 07/15/13 ++ ~ 2,250,000 1,642,500 Calpine Corp., Senior Notes 8.500%, 02/15/11 ~ 1,000,000 577,500 Calpine Generating Co., Rule 144A, Secured Notes (Callable 04/01/08 @ $103.50) 7.756%, 04/01/10 ++ # 2,500,000 2,400,000 CMS Energy Corp., Global Senior Notes 8.900%, 07/15/08 1,000,000 1,120,000 CMS Energy Corp., Global Senior Notes 7.750%, 08/01/10 1,000,000 1,100,000 Edison Mission Energy, Senior Notes 7.730%, 06/15/09 1,300,000 1,391,000 Midwest Generation LLC, Global Secured Notes (Callable 05/01/09 @ $104.38) 8.750%, 05/01/34 $ 1,000,000 $ 1,137,500 Mirant Corp., Rule 144A, Senior Notes 7.400%, 07/15/49 ++ ** ~ 1,100,000 731,500 NRG Energy, Inc., Rule 144A, Secured Notes (Callable 12/15/08 @ $104.00) 8.000%, 12/15/13 ++ 300,000 331,875 PG&E Corp., Global Secured Notes (Callable 07/15/06 @ $103.44) 6.875%, 07/15/08 850,000 924,375 Sierra Pacific Resources, Global Senior Notes (Callable 03/15/09 @ $104.31) 8.625%, 03/15/14 ~ 500,000 570,000 TNP Enterprises, Inc., Series B, Senior Subordinated Notes (Callable 04/01/05 @ $105.12) 10.250%, 04/01/10 850,000 918,000 --------------- 16,271,250 --------------- WIRELESS--7.6% AirGate PCS, Inc., Rule 144A, Secured Notes (Callable 01/01/06 @ $104.69) 9.375%, 09/01/09 ++ ~ 449,900 472,395 AirGate PCS, Inc., Secured Note (Callable 01/01/06 @ $104.69) 9.375%, 09/01/09 ~ 600,000 630,000 Alamosa Delaware, Inc., Global Senior Notes (Callable 01/31/08 @ $104.25) 8.500%, 01/31/12 1,250,000 1,331,250 Alamosa Holdings, Inc., Company Guaranteed Notes (Callable 02/15/05 @ $106.44) 0.000%, 02/15/10 + 1,300,000 1,386,125 American Cellular Corp., Series B, Global Senior Notes (Callable 08/01/07 @ $105.00) 10.000%, 08/01/11 ~ 1,100,000 929,500 Centennial Communications Corp., Global Company Guaranteed Notes (Callable 06/15/08 @ $105.06) 10.125%, 06/15/13 650,000 708,500 Centennial Communications Corp., Rule 144A, Senior Notes (Callable 02/01/09 @ $104.06) 8.625%, 02/01/14 ++ # 1,950,000 1,979,250 Dobson Communications Corp., Global Senior Notes (Callable 10/01/08 @ $104.44) 8.875%, 10/01/13 ~ 1,000,000 677,500 Horizon PCS, Inc., Rule 144A, Senior Notes (Callable 07/15/08 @ $105.69) 11.375%, 07/15/12 ++ 750,000 798,750 Ipcs Escrow Co., Rule 144A, Senior Notes (Callable 05/1/08 @ $105.75) 11.500%, 05/01/12 ++ ~ 850,000 930,750
SEE NOTES TO FINANCIAL STATEMENTS. 11
PRINCIPAL AMOUNT VALUE --------------- --------------- Nextel Communications, Inc., Global Senior Notes (Callable 02/01/06 @ $104.75) 9.500%, 02/01/11 $ 1,045,000 $ 1,189,994 Nextel Communications, Inc., Senior Notes (Callable 08/01/08 @ $103.69) 7.375%, 08/01/15 250,000 278,750 Nextel Partners, Inc., Global Senior Notes (Callable 07/01/07 @ $104.06) 8.125%, 07/01/11 1,100,000 1,210,000 Rural Cellular Corp., Global Senior Subordinated Notes (Callable 01/15/06 @ $104.88) 9.750%, 01/15/10 ~ 1,000,000 865,000 Triton PCS, Inc., Global Company Guaranteed Notes (Callable 06/01/08 @ $104.25) 8.500%, 06/01/13 ~ 2,000,000 1,845,000 Ubiquitel Operating Co., Global Senior Notes (Callable 03/01/07 @ $107.41) 9.875%, 03/01/11 1,000,000 1,087,500 Ubiquitel Operating Co., Rule 144A, Senior Notes (Callable 03/01/07 @ $107.41) 9.875%, 03/01/11 ++ ~ 1,150,000 1,250,625 Western Wireless Corp., Global Senior Notes (Callable 07/15/08 @ $104.62) 9.250%, 07/15/13 1,000,000 1,070,000 --------------- 18,640,889 --------------- TOTAL U.S. CORPORATE BONDS (COST $310,393,661) 321,445,774 --------------- FOREIGN CORPORATE BONDS--9.8% AUTOMOBILE MANUFACTURING/VEHICLE PARTS--0.4% Bombardier Recreational Products, Rule 144A, Senior Subordinated Notes (Callable 12/15/08 @ $104.19) (Canada) 8.375%, 12/15/13 ++ ~ 800,000 864,000 --------------- BROADBAND--0.4% Call-Net Enterprises, Inc., Yankee Company Guaranteed Notes (Callable 01/01/06 @ $105.31) (Canada) 10.625%, 12/31/08 ~ 1,000,000 955,000 --------------- CABLE--0.4% Telenet Group Holding NV, Rule 144A, Senior Notes (Callable 12/15/08 @ $105.75) (Belgium) 0.000%, 06/15/14 ++ + ~ 1,350,000 1,032,750 --------------- CHEMICALS--2.4% 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 07/01/05 @ $103.67) (United Kingdom) 11.000%, 07/01/09 ~ $ 2,535,000 $ 2,395,575 BCP Caylux Holdings Luxembourg SCA, Rule 144A, Senior Subordinated Notes (Callable 06/15/09 @ $104.81) (Luxembourg) 9.625%, 06/15/14 ++ 1,000,000 1,125,000 Rhodia SA, Global Senior Notes (France) 10.250%, 06/01/10 ~ 1,250,000 1,362,500 --------------- 5,988,075 --------------- CONTAINERS--0.6% Crown European Holdings SA, Global Secured Notes (Callable 03/01/07 @ $104.75) (France) 9.500%, 03/01/11 1,250,000 1,431,250 --------------- GAMING--0.3% Kerzner International, Ltd., Global Company Guaranteed Notes (Callable 08/15/06 @ $104.44) (Bahamas) 8.875%, 08/15/11 750,000 830,625 --------------- INDUSTRIAL--0.1% International Utility Structures, Inc., Yankee Senior Subordinated Notes (Callable 02/01/05 @ $101.79) (Canada) 10.750%, 02/01/08 ** 1,020,500 216,856 --------------- LEISURE--0.4% NCL Corporation Ltd., Rule 144A, Senior Notes (Callable 07/15/09 @ $105.31) (Bermuda) 10.625%, 07/15/14 ++ 1,000,000 1,045,000 --------------- METALS & MINING--1.0% Gerdau Ameristeel Corp., Global Senior Notes (Callable 07/15/07 @ $105.38) (Canada) 10.375%, 07/15/11 ~ 1,000,000 1,160,000 Ispat Inland ULC, Global Secured Notes (Callable 4/01/09 @ $104.88) (Canada) 9.750%, 04/01/14 1,000,000 1,220,000 --------------- 2,380,000 --------------- PAPER & FOREST PRODUCTS--1.1% Abitibi Consolidated, Inc., Global Notes (Canada) 7.750%, 06/15/11 600,000 639,000 JSG Funding PLC, Global Senior Notes (Callable 10/01/07 @ $104.81) (Ireland) 9.625%, 10/01/12 750,000 858,750
SEE NOTES TO FINANCIAL STATEMENTS. 12
PRINCIPAL AMOUNT VALUE --------------- --------------- Tembec Industries, Inc., Yankee Company Guaranteed Notes (Callable 06/30/05 @ $102.88) (Canada) 8.625%, 06/30/09 ~ $ 1,200,000 $ 1,227,000 --------------- 2,724,750 --------------- RETAIL - FOOD & DRUG--0.4% Jean Coutu Group (PJC), Inc., Rule 144A, Senior Subordinated Notes (Callable 08/01/09 @ $104.25) (Canada) 8.500%, 08/01/14 ++ 1,000,000 1,025,000 --------------- SATELLITE--0.6% New Asat Finance, Ltd., Rule 144A, Senior Notes (Callable 02/01/08 @ $104.62) (Cayman Islands) 9.250%, 02/01/11 ++ ~ 1,700,000 1,496,000 --------------- TRANSPORTATION--0.8% Sea Containers, Ltd., Series B, Yankee Senior Notes (Callable 02/15/05 @ $100.00) (Bermuda) 7.875%, 02/15/08 ~ 445,000 438,881 Ship Finance International Ltd., Global Senior Notes (Callable 12/15/08 @ $104.25) (Bermuda) 8.500%, 12/15/13 1,500,000 1,530,000 --------------- 1,968,881 --------------- WIRELESS--0.9% Millicom International Cellular SA, Rule 144A, Senior Notes (Callable 12/01/08 @ $105.00) (Luxembourg) 10.000%, 12/01/13 ++ 750,000 761,250 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 1,331,250 --------------- 2,092,500 --------------- TOTAL FOREIGN CORPORATE BONDS (COST $23,267,232) 24,050,687 --------------- SHARES --------------- COMMON STOCKS--0.7% AUTOMOBILE MANUFACTURING/VEHICLE PARTS--0.0% Cambridge Industries Liquidating Trust * 774,557 7,745 --------------- DIVERSIFIED TELECOMMUNICATIONS--0.2% Versatel Telecom International NV * 233,772 487,686 --------------- FOOD PROCESSORS/BEVERAGE/BOTTLING--0.0% Archibald Candy Corp. * ^ 1,291 $ 0 --------------- INDUSTRIAL--0.5% Crunch Equity Holdings, Class A * 845 1,140,707 --------------- WIRELESS--0.0% Dobson Communications Corp., Class A * 99,764 132,686 --------------- TOTAL COMMON STOCKS (COST $2,914,557) 1,768,824 --------------- PREFERRED STOCK--0.0% WIRELESS--0.0% Dobson Communications Corp., Rule 144A ++ (Cost $265,050) 1,550 80,980 --------------- WARRANTS--0.0% BROADBAND--0.0% GT Group Telecom, Inc., Rule 144A, strike $0.00 expires 02/01/10 * ++ 6,750 1 Ono Finance PLC, Subordinated Debentures, expires 05/31/09 * 5,980 6 --------------- 7 --------------- CHEMICALS--0.0% Huntsman Company LLC, Rule 144A, strike $0.01, expires 05/15/11 ++ 250 75,125 --------------- DIVERSIFIED TELECOMMUNICATIONS--0.0% Versatel Telecom International NV, strike $2.81 expires 05/15/08 * ^ 3,000 630 --------------- GAMING--0.0% Windsor Woodmont Black Hawk, strike $0.01 expires 03/15/10 * ^ 106 0 --------------- RESTAURANTS--0.0% New World Restaurant Group, Inc., strike $13.00, expires 06/20/06 * 336 0 --------------- SATELLITE--0.0% Asat Finance LLC, Rule 144A, strike $18.60, expires 11/01/06, * ++ 5,000 625 --------------- TECHNOLOGY--0.0% Viasystems, Inc., expires 01/31/10 * ^ 204,293 0 --------------- TOTAL WARRANTS (COST $3,972,603) 76,387 ---------------
SEE NOTES TO FINANCIAL STATEMENTS. 13
SHARES VALUE --------------- --------------- SHORT-TERM INVESTMENTS--12.3% Dreyfus Cash Management Fund, Class A, Institutional Shares, ~~ 15,000,000 $ 15,000,000 Dreyfus Cash Management Plus Fund, Inc., Institutional Shares, ~~ 15,000,000 15,000,000 --------------- TOTAL SHORT-TERM INVESTMENTS (COST $30,000,000) 30,000,000 --------------- PRINCIPAL AMOUNT --------------- REPURCHASE AGREEMENTS--29.4% Bear Stearns & Co., 1.41%, Dated 10/31/04, due 11/1/04, proceeds at maturity $3,060,299, (fully collateralized by FHLMC, due 01/15/33 and FNMA, due 09/25/22., Market Value of collateral is $3,158,064) ~~ $ 3,059,941 3,059,941 Bear Stearns & Co., 1.80%, Dated 10/31/04, due 11/1/04, proceeds at maturity $163,395, (fully collateralized by FNMA, due 09/25/22. Market Value of collateral is $168,757) ~~ 163,370 163,370 PRINCIPAL AMOUNT VALUE --------------- --------------- Bear Stearns & Co., 1.80%, Dated 10/31/04, due 11/1/04, proceeds at maturity $3,699,688, (fully collateralized by U.S. Treasury Strips, due 11/15/15 and U.S. Treasury Bonds, due 02/15/20. Market Value of collateral is $3,808,478) ~~ $ 3,699,133 $ 3,699,133 Bear Stearns & Co., 1.88%, Dated 10/31/04, due 11/1/04, proceeds at maturity $64,911,121 (fully collateralized by FNMA, due 09/25/22, FHLMC, due 09/15/31, FHLMC, due 12/15/32, FNMA, due 04/25/18, FHLMC, due 02/15/33, FHLMC, due 12/15/23, GNMA, due 01/20/33, FNMA, due 03/25/16, and GNMA, due 09/20/30. Market Value of collateral is $66,783,134) ~~ 64,900,980 64,900,980 --------------- TOTAL REPURCHASE AGREEMENTS (COST $71,823,424) 71,823,424 --------------- TOTAL INVESTMENTS--183.7% (COST $442,636,527) 449,246,076 LIABILITIES IN EXCESS OF OTHER ASSETS--(83.7%) (204,723,050) --------------- NET ASSETS--(100.0%) $ 244,523,026 ===============
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 October31, 2004, these securities amounted to $88,560,901 or 36.22% of net assets. + Step Bond--The interest stated is as of October 31, 2004 and will reset at a future date. ** Bond in default. * Non-income producing security. ^ Not readily marketable; security is valued at fair value as determined in good faith by, or under the direction of, the Board of Trustees. ~ Security or portion thereof is out on loan. ~~ Represents security purchased with cash collateral received for securities on loan. # Variable rate obligations--The interest rate shown is the rate as of October 31, 2004. SEE NOTES TO FINANCIAL STATEMENTS. 14 CREDIT SUISSE HIGH YIELD BOND FUND--STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 2004 ASSETS: Investments in securities at value, including collateral for securities on loan of $101,823,424 (Cost $442,636,527) (Note 1, 7) $ 449,246,076(1) Cash 3,699,146 Interest receivable 8,441,574 Receivable for investments sold 487,400 Prepaid expenses and other assets 25,681 ------------- Total Assets 461,899,877 ------------- LIABILITIES: Investment advisory fees (Note 2) 298,279 Administrative fees (Note 2) 49,152 Loan payable (Note 5) 113,000,000 Payable upon return of securities loaned (Note 7) 101,823,424 Payable for investments purchased 1,881,500 Interest payable 215,181 Trustees' fees (Note 2) 12,750 Other accrued expenses payable 96,565 ------------- Total Liabilities 217,376,851 ============= NET ASSETS Applicable to 53,977,630 shares outstanding $ 244,523,026 ============= NET ASSETS CONSIST OF: Capital stock, $0.001 par value (Note 4) $ 53,978 Paid-in capital (Note 4) 483,932,526 Distributions in excess of net investment income (3,067,445) Accumulated net realized loss on investments (243,005,582) Net unrealized appreciation from investments 6,609,549 ------------- Net Assets $ 244,523,026 ============= NET ASSET VALUE PER SHARE ($244,523,026 DIVIDED BY 53,977,630) $ 4.53 ============= MARKET PRICE PER SHARE $ 5.24 =============
(1) Including $93,361,626 of securities on loan. SEE NOTES TO FINANCIAL STATEMENTS. 15 CREDIT SUISSE HIGH YIELD BOND FUND--STATEMENT OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 2004 INVESTMENT INCOME: (NOTE 1) Interest $ 33,690,213 Dividends 39,345 Securities lending 424,732 ------------- Total investment income 34,154,290 ============= EXPENSES: Investment advisory fees (Note 2) 3,462,791 Administrative fees (Note 2) 191,723 Interest and leveraging fees (Note 5) 1,897,127 Legal fees 67,991 Trustees' fees (Note 2) 53,698 Registration fees 49,128 Printing fees (Note 2) 46,971 Audit fees 40,801 Custodian fees 38,398 Insurance expense 30,268 Transfer agent fees 23,032 Miscellaneous expense 5,796 ------------- Total expenses 5,907,724 ------------- NET INVESTMENT INCOME 28,246,566 ------------- REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS: Net realized loss on investments (4,053,958) Net change in unrealized appreciation (depreciation) on investments 17,042,720 ------------- Net realized and unrealized gain on investments 12,988,762 ------------- NET INCREASE IN NET ASSETS FROM OPERATIONS $ 41,235,328 =============
SEE NOTES TO FINANCIAL STATEMENTS. 16 CREDIT SUISSE HIGH YIELD BOND FUND--STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED 10/31/2004 10/31/2003 ------------- ------------- OPERATIONS: Net investment income $ 28,246,566 $ 28,766,087 Net realized loss on investments (4,053,958) (7,773,838) Net change in unrealized appreciation (depreciation) on investments 17,042,720 52,453,048 ------------- ------------- Net increase in net assets resulting from operations 41,235,328 73,445,297 ------------- ------------- DIVIDENDS TO SHAREHOLDERS: From net investment income (30,957,053) (31,473,607) ------------- ------------- Net decrease in net assets resulting from dividends (30,957,053) (31,473,607) ------------- ------------- CAPITAL SHARE TRANSACTIONS: (Note 4) Reinvestment of dividends 4,990,024 6,393,847 ------------- ------------- Net increase in net assets from capital share transactions 4,990,024 6,393,847 ------------- ------------- Net increase in net assets 15,268,299 48,365,537 NET ASSETS: Beginning of year 229,254,727 180,889,190 ------------- ------------- End of year $ 244,523,026 $ 229,254,727 ============= ============= Distributions in excess of net investment income $ (3,067,445) $ (2,486,406) ============= =============
SEE NOTES TO FINANCIAL STATEMENTS. 17 CREDIT SUISSE HIGH YIELD BOND FUND--STATEMENT OF CASH FLOWS FOR THE YEAR ENDED OCTOBER 31, 2004 CASH FLOWS FROM OPERATING ACTIVITIES: Interest, dividends and securities lending income received $ 30,570,318 Operating expenses paid (5,802,240) Purchases of long-term securities (237,844,835) Proceeds from sales of long-term securities 225,396,647 --------------- Net cash provided by operating activities $ 12,319,890 CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings 113,000,000 Repayment of borrowings (105,500,000) Cash dividends paid (25,967,029) --------------- Net cash used in financing activities (18,467,029) --------------- Net decrease in cash (6,147,139) Cash--beginning of year 9,846,285 --------------- Cash--end of year $ 3,699,146 =============== RECONCILIATION OF NET INCREASE IN NET ASSETS FROM OPERATION TO NET CASH USED IN OPERATING ACTIVITIES: Net increase in net assets resulting from operations $ 41,235,328 ADJUSTMENTS TO RECONCILE NET INCREASE IN NET ASSETS FROM OPERATIONS TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Increase in dividends and interest receivable $ (15,201) Decrease in accrued expenses (12,395) Increase in interest payable 77,013 Increase in prepaid expenses and other assets (2,266) Increase in advisory fees payable 43,132 Net amortization of discount on investments (3,568,771) Purchases of long-term securities (237,844,835) Proceeds from sales of long-term securities 225,396,647 Net change in unrealized appreciation on investments (17,042,720) Net realized loss on investments 4,053,958 --------------- Total adjustments (28,915,438) --------------- Net cash provided by operating activities $ 12,319,890 =============== NON-CASH ACTIVITY: Dividend reinvestments $ 4,990,024 ===============
SEE NOTES TO FINANCIAL STATEMENTS. 18 CREDIT SUISSE HIGH YIELD BOND FUND--FINANCIAL HIGHLIGHTS The table below sets forth financial data for a share of beneficial interest outstanding throughout the years presented. This information has been derived from the Fund's financial statements.
YEAR ENDED --------------------------------------------------------------------------------- 10/31/2004 10/31/2003 10/31/2002 10/31/2001 --------------- --------------- --------------- --------------- Net asset value, beginning of period $ 4.34 $ 3.53 $ 4.49 $ 6.16 --------------- --------------- --------------- --------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.53 0.55 0.65(2) 0.84 Net realized and unrealized gain (loss) on investments 0.24 0.87 (0.80) (1.63) --------------- --------------- --------------- --------------- Total from investment operations 0.77 1.42 (0.15) (0.79) --------------- --------------- --------------- --------------- LESS DIVIDENDS: From net investment income (0.58) (0.61) (0.71) (0.86) Distributions from net realized gains -- -- -- -- Return of capital -- -- (0.10) (0.02) --------------- --------------- --------------- --------------- Total dividends to shareholders (0.58) (0.61) (0.81) (0.88) --------------- --------------- --------------- --------------- Offering costs charged to paid-in-capital -- -- -- -- --------------- --------------- --------------- --------------- Net asset value, end of period $ 4.53 $ 4.34 $ 3.53 $ 4.49 =============== =============== =============== =============== Market value, end of period $ 5.24 $ 4.76 $ 4.10 $ 5.07 =============== =============== =============== =============== Total return (market value)(4) 25.49% 35.07% (2.15)% (3.21)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s omitted) $ 244,523 $ 229,255 $ 180,889 $ 219,440 Average debt per share $ 2.05 $ 1.81 $ 1.99 $ 2.49 Ratio of operating expenses to average net assets 2.51% 2.57% 2.91% 4.29% Ratio of operating expense to average net assets, excluding interest and leveraging expenses 1.70% 1.73% 1.78% 1.73% Ratio of net investment income to average net assets 11.99% 13.85% 15.17% 15.22% Portfolio turnover rate 12.10% 15.96% 33.22% 46.11% YEAR ENDED ------------------------------------- PERIOD ENDED 10/31/2000 10/31/1999 10/31/1998(1) --------------- --------------- --------------- Net asset value, beginning of period $ 7.98 $ 8.36 $ 10.00 --------------- --------------- --------------- INCOME FROM INVESTMENT OPERATIONS: Net investment income 0.96(2) 0.98 0.24 Net realized and unrealized gain (loss) on investments (1.80) (0.38) (1.62) --------------- --------------- --------------- Total from investment operations (0.84) 0.60 (1.38) --------------- --------------- --------------- LESS DIVIDENDS: From net investment income (0.98) (0.98) (0.24) Distributions from net realized gains -- -- -- Return of capital -- -- -- --------------- --------------- --------------- Total dividends to shareholders (0.98) (0.98) (0.24) --------------- --------------- --------------- Offering costs charged to paid-in-capital -- 0.00(3) (0.02) --------------- --------------- --------------- Net asset value, end of period $ 6.16 $ 7.98 $ 8.36 =============== =============== =============== Market value, end of period $ 6.19 $ 8.06 $ 9.56 =============== =============== =============== Total return (market value)(4) (12.15)% (5.71)% (1.74)% RATIOS/SUPPLEMENTAL DATA: Net assets, end of period (000s omitted) $ 286,838 $ 358,679 $ 359,956 Average debt per share $ 3.47 $ 3.18 $ 1.02 Ratio of operating expenses to average net assets 4.81% 3.62% 1.81%(5) Ratio of operating expense to average net assets, excluding interest and leveraging expenses 1.61% 1.53% 1.16%(5) Ratio of net investment income to average net assets 12.90% 11.24% 10.48%(5) Portfolio turnover rate 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 pursuant 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. (5) Annualized. SEE NOTES TO FINANCIAL STATEMENTS. 19 CREDIT SUISSE HIGH YIELD BOND FUND--NOTES TO FINANCIAL STATEMENTS OCTOBER 31, 2004 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 ("Investment Company 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, or under the direction of, the Board of Trustees under procedures established by the Board of Trustees. Debt obligations that will mature in 60 days or less are valued on the basis of amortized cost, which approximates market value, unless it is determined 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. Interest income is earned on the accrual basis. Dividend income is recorded on the ex-dividend date. 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 dividends 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. 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 20 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 year ended October 31, 2004, investment advisory fees earned were $3,462,791. 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 schedule 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 subject to an annual minimum fee.
AVERAGE DAILY NET ASSETS ANNUAL RATE ------------------------ ----------- First $5 billion 0.050% of average daily net assets Next $5 billion 0.035% of average daily net assets Over $10 billion 0.020% of average daily net assets
For the year ended October 31, 2004, administrative service fees earned by SSB (including out-of-pocket expenses) were $191,723. 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. Merrill Corporation ("Merrill"), an affiliate of CSAM, has been engaged by the Fund to provide certain financial printing services. For the year ended October 31, 2004, Merrill was paid $33,256 for its services to the Fund. 21 3. INVESTMENTS Cost of purchases and proceeds from sales of investment securities, excluding short-term investments, during the year ended October 31, 2004, amounted to $142,419,503 and $40,788,605, 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 YEAR ENDED FOR THE YEAR ENDED OCTOBER 31, 2004 OCTOBER 31, 2003 ------------------ ------------------ Shares issued through reinvestment of dividends 1,132,804 1,619,036 ========= =========
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, as amended from time to time, 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 pays 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 0.15% of the maximum borrowing limit (currently $150 million). The Fund paid a structuring fee of $19,000 per quarter until July 2003. 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 October 31, 2004 the Fund had loans outstanding under the Agreement. During the year ended October 31, 2004, the Fund had borrowings under the Agreement as follows:
AVERAGE DAILY WEIGHTED AVERAGE MAXIMUM DAILY LOAN BALANCE INTEREST RATE LOAN OUTSTANDING --------------- ---------------- ---------------- $ 110,674,863 1.263% $ 115,000,000
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"). 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 year ended October 31, 2004 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 22 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. or in the Dreyfus Cash Management Fund and Dreyfus Cash Management Plus Fund, 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 October 31, 2004 was as follows:
MARKET VALUE OF VALUE OF SECURITIES LOANED COLLATERAL RECEIVED ----------------- ------------------- $ 93,361,626 $ 101,823,424
8. FEDERAL INCOME TAXES Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP. These differences are primarily due to differing treatments of losses deferred due to wash sales, interest accruals from defaulted bonds and income from investments in partnerships. The tax characteristics of dividends paid during the years ended October 31, 2004 and 2003 by the Fund were as follows:
ORDINARY INCOME --------------------------------- 2004 2003 -------------- -------------- $ 30,957,053 $ 31,473,607
At October 31, 2004, the components of distributable earnings on a tax basis for the Fund were as follows: Undistributed ordinary income $ 665,304 Accumulated net realized loss (242,968,341) Unrealized appreciation 2,839,559 -------------- $ (239,463,478) ==============
At October 31, 2004, the Fund had capital loss carryforwards of 242,968,341 available to offset possible future capital gains as follows:
EXPIRES OCTOBER 31, ------------------------------------------------------------------------------------------------------------------- 2006 2007 2008 2009 2010 2011 2012 -------------- -------------- -------------- -------------- -------------- ------------- ------------- $ 13,855,150 $ 30,606,551 $ 37,573,747 $ 68,628,620 $ 77,916,490 $ 8,291,239 $ 6,096,544
It is unlikely that the Fund will realize the full benefit of these losses prior to expiration. 23 At October 31, 2004, 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 from investments were as follows:
GROSS UNREALIZED GROSS UNREALIZED NET UNREALIZED IDENTIFIED COST APPRECIATION (DEPRECIATION) APPRECIATION ---------------- ---------------- ---------------- -------------- $ 446,406,517 $ 22,401,587 $ (19,562,028) $ 2,839,559
At October 31, 2004, the Fund reclassified $85,924 from paid in capital and $2,043,524 from accumulated net realized loss from investments to net investment loss, to adjust for current period permanent book/tax differences which arose principally from differing book/tax treatments of interest accruals from defaulted bonds and income from investments in partnerships. Net assets were not affected by these reclassifications. 9. CONTINGENCIES In the normal course of business, the Fund may provide general indemnifications pursuant to certain contracts and organizational documents. The Fund's maximum exposure under these arrangements is dependent on future claims that may be made against the Fund and, therefore, cannot be estimated; however, based on experience, the risk of loss from such claims is considered remote. 24 CREDIT SUISSE HIGH YIELD BOND FUND--REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Trustees and Shareholders of Credit Suisse High Yield Bond Fund: In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations, of changes in net assets and of cash flows and the financial highlights present fairly, in all material respects, the financial position of Credit Suisse High Yield Bond Fund (the "Fund") at October 31, 2004, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with the accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2004 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion. The financial highlights of the fund for the year ended October 31, 2000 were audited by other independent auditors, whose report dated December 20, 2000 expressed an unqualified opinion on these financial statements containing those financial highlights. PricewaterhouseCoopers LLP Philadelphia, Pennsylvania December 15, 2004 25 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 EquiServe 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 EquiServe 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 EquiServe 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. 26 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 43010, Providence, RI 02940-3010, 1-800-730-6001. 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 Management Fee will be 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 27 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 Investment Company 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. 28 CREDIT SUISSE HIGH YIELD BOND FUND INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED)
NUMBER OF PORTFOLIOS IN POSITION(S) TERM OF OFFICE FUND COMPLEX NAME, ADDRESS HELD AND LENGTH PRINCIPAL OCCUPATION(S) OVERSEEN BY OTHER DIRECTORSHIPS AND DATE OF BIRTH WITH FUND OF TIME SERVED DURING PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ INDEPENDENT TRUSTEES Enrique R. Arzac Trustee, Since 2001; Professor of Finance and 8 Director of The Adams Columbia University Nominating current term ends Economics, Graduate Express Company Graduate School of Committee at the 2005 annual School of Business, (a closed-end investment Business Chairman and meeting. Columbia University company); Director of New York, New York Audit since 1971. Petroleum and Resources 10027 Committee Corporation (a closed- Date of Birth: 02/10/41 Member end investment company) Lawrence J. Fox Trustee, Since 2001; Partner of Drinker Biddle & 3 Director, Winthrop Trust One Logan Square Nominating current term ends Reath (law firm) since 1972. Company 18th & Cherry Streets Committee at the 2007 Philadelphia, Member and annual meeting. Pennsylvania Audit 19103 Committee Date of Birth: 07/17/43 Chairman James S. Pasman, Jr. Trustee, Since 2001; Currently retired 43 Director of Education c/o Credit Suisse Asset Nominating current term ends Management Corp. Management, LLC and Audit at the 2006 annual 466 Lexington Avenue New Committee meeting. York, New York Member 10017-3140 Date of Birth: 12/20/30
29
POSITION(S) TERM OF NAME, ADDRESS HELD OFFICE AND LENGTH PRINCIPAL OCCUPATION(S) AND DATE OF BIRTH WITH FUND OF TIME SERVED DURING PAST FIVE YEARS - ------------------------------------------------------------------------------------------------------------------------ OFFICERS* Michel E. Kenneally Chairman of the Since 2004 Chairman and Global Chief Executive Officer of Credit Suisse Asset Fund and Chief CSAM since 2003; Chairman and Chief Investment Management, LLC Executive Officer Officer of Banc of America Capital Management 466 Lexington Avenue from 1998 to March 2003. New York, New York 10017-3140 Date of Birth: 3/30/54 Richard J. Lindquist President and Since 2000 Managing Director of CSAM. Associated with CSAM Credit Suisse Asset Chief Investment since 1995. Officer of other Credit Suisse Funds. Management, LLC Officer 466 Lexington Avenue New York, New York 10017-3140 Date of Birth: 06/22/60 Michael A. Pignataro Chief Financial Since 2000 Director and Director of Fund Administration of Credit Suisse Asset Officer, Vice CSAM; Associated with CSAM since 1984; Officer Management, LLC President and of other Credit Suisse Funds. 466 Lexington Avenue Secretary New York, New York 10017-3140 Date of Birth: 11/15/59 Emidio Morizio Chief Compliance Since 2004 Vice President and Global Head of Compliance of Credit Suisse Asset Officer CSAM; Associated with CSAM since July 2000; Vice Management, LLC President and Director of Compliance of 466 Lexington Avenue Forstmann-Leff Associates from 1998 to June New York, New York 2000; Officer of other Credit Suisse Funds 10017-3140 Date of Birth: 09/21/66 Ajay Mehra Chief Since 2004 Director and Deputy General Counsel of CSAM Credit Suisse Asset Legal Officer since September 2004; Senior Associate of Management, LLC Shearman & Sterling LLP from September 2000 to 466 Lexington Avenue September 2004; Senior Counsel of the SEC New York, New York Division of Investment Management from June 1997 10017-3140 to September 2000; Officer of other Credit Date of Birth: 08/14/70 Suisse Funds J. Kevin Gao Senior Vice Since 2004 Vice President and legal counsel of CSAM; Credit Suisse Asset President Associated with CSAM since July 2003; Associated Management, LLC with the law firm of Willkie Farr & Gallagher 466 Lexington Avenue LLP from 1998 to 2003; Officer of other Credit New York, New York Suisse Funds 10017-3140 Date of Birth: 10/13/67 Robert M. Rizza Treasurer Since 2001 Assistant Vice President of CSAM; Associated Credit Suisse Asset with CSAM since 1998; Officer of other Credit Management, LLC Suisse Funds. 466 Lexington Avenue New York, New York 10017-3140 Date of Birth: 12/09/65
* The officers of the Fund shown are officers that make policy decisions. 30 ANNUAL CERTIFICATIONS (UNAUDITED) The Fund's Chief Executive Officer has filed an annual certification with the NYSE that, as of the date of the certification, he was unaware of any violation by the Fund of the NYSE's corporate governance listing standards. The Fund's Chief Executive Officer and Chief Financial Officer have also filed certifications with the SEC as part of the Fund's Form N-CSR filings that cover certain public disclosure documents of the Fund, including its annual and semi-annual reports to stockholders. 31 CREDIT SUISSE HIGH YIELD BOND FUND TAX INFORMATION LETTER (UNAUDITED) OCTOBER 31, 2004 IMPORTANT TAX INFORMATION FOR CORPORATE SHAREHOLDERS Corporate shareholders should note for the year ended October 31, 2004, the percentage of the Fund's investment income (i.e., net investment income plus short-term capital gains) that qualified for the intercorporate dividends received deduction is 0.15%. For the fiscal year ended October 31, 2004, the Fund designates approximately $39,345, or up to the maximum amount of such dividends allowable pursuant to the Internal Revenue Code, as qualified dividend income eligible for reduced tax rates. These lower rates range from 5% to 15% depending on an individual's tax bracket. If the Fund pay a distribution during calendar year 2004, complete information will be reported in conjunction with Form 1099-DIV. 32 CREDIT SUISSE HIGH YIELD BOND FUND PROXY VOTING AND PORTFOLIO HOLDINGS INFORMATION (UNAUDITED) Information regarding how the Credit Suisse High Yield Bond Fund, Inc. (the "Fund") voted proxies related to its portfolio securities during the 12-month period ended June 30, 2004, as well as the policies and procedures that the Fund uses to determine how to vote proxies relating to its portfolio securities are available: - By calling 1-800-293-1232 - On the Fund's website, www.csam.com/us - On the website of the Securities and Exchange Commission, http://www.sec.gov. The Fund files a complete schedule of its portfolio holdings for the first and third quarters of its fiscal year with the SEC on Form N-Q. The Fund's Forms N-Q are available on the SEC's website at http://www.sec.gov and may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information on the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. 33 OTHER FUNDS MANAGED BY CREDIT SUISSE ASSET MANAGEMENT, LLC Credit Suisse Capital Appreciation Fund Credit Suisse Cash Reserve Fund Credit Suisse Emerging Markets Fund Credit Suisse Fixed Income Fund Credit Suisse Global Fixed Income Fund Credit Suisse Global Post-Venture Capital Fund Credit Suisse High Income Fund Credit Suisse International Focus Fund Credit Suisse Japan Equity Fund Credit Suisse Large Cap Value Fund Credit Suisse Mid-Cap Growth Fund Credit Suisse New York Municipal Fund Credit Suisse Select Equity Fund Credit Suisse Short Duration Bond Fund Credit Suisse Small Cap Growth Fund Credit Suisse Small Cap Value Fund Fund shares are not deposits or other obligations of Credit Suisse Asset Management, LLC or any affiliate, are not FDIC-insured and are not guaranteed by Credit Suisse Asset Management, LLC or any affiliate. Fund investments are subject to investment risks, including loss of your investment. There are special risk considerations associated with international, global, emerging-market, small-company, private equity, high-yield debt, single-industry, single-country and other special, aggressive or concentrated investment strategies. Past performance cannot guarantee future results. More complete information about a fund, including charges and expenses, is provided in the Prospectus, which should be read carefully before investing. You may obtain copies by calling Credit Suisse Funds at 800-927-2874. For up-to-date performance, please look in the mutual fund section of your newspaper under Credit Suisse. Credit Suisse Asset Management Securities, Inc., Distributor. 34 THE CSAM GROUP OF FUNDS LITERATURE REQUEST--Call today for free descriptive information on the closed-end funds listed below at 1-800-293-1232 or visit our website on the Internet: http://www.csam.com/us. CLOSED-END FUNDS SINGLE COUNTRY The Brazilian Equity Fund, Inc. (BZL) The Chile Fund, Inc. (CH) The Indonesia Fund, Inc. (IF) The First Israel Fund, Inc. (ISL) MULTIPLE COUNTRY The Emerging Markets Telecommunications Fund, Inc. (ETF) The Latin America Equity Fund, Inc. (LAQ) FIXED INCOME Credit Suisse Asset Management Income Fund, Inc. (CIK) 35 800-293-1232 - www.csam.com/us CSHYF-2-1004 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 Michael E. Kenneally CHAIRMAN OF THE FUND AND CHIEF EXECUTIVE OFFICER Richard J. Lindquist PRESIDENT AND CHIEF INVESTMENT OFFICER Michael A. Pignataro CHIEF FINANCIAL OFFICER, VICE PRESIDENT AND SECRETARY Emidio Morizio CHIEF COMPLIANCE OFFICER Ajay Mehra CHIEF LEGAL OFFICER J. Kevin Gao SENIOR VICE PRESIDENT Robert M. Rizza 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 Fleet National Bank (c/o EquiServe) P.O. Box 43010 Providence, RI 02940-3010 LEGAL COUNSEL Willkie Farr & Gallagher LLP 787 7th Avenue New York, NY 10019 INDEPENDANT REGISTERED PUBLIC ACCOUNTING FIRM PricewaterhouseCoopers LLP Two Commerce Square Philadelphia, Pennsylvania 19103 ITEM 2. CODE OF ETHICS. The registrant has adopted a code of ethics applicable to its Chief Executive Officer, President, Chief Financial Officer and Chief Accounting Officer, or persons performing similar functions. A copy of the code is filed as Exhibit 12(a)(1) to this Form. There were no amendments to the code during the fiscal year ended October 31, 2004. There were no waivers or implicit waivers from the code granted by the registrant during the fiscal year ended October 31, 2004. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's governing board has determined that it has two audit committee financial experts serving on its audit committee: Enrique R. Arzac and James S. Pasman, Jr. Each audit committee financial expert is "independent" for purposes of this item. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. (a) through (d). The information in the table below is provided for services rendered to the registrant by its independent registered public accounting firm, PricewaterhouseCoopers LLP ("PwC"), for its fiscal years ended October 31, 2003 and October 31, 2004.
2003 2004 --------- --------- Audit Fees $ 29,580 $ 29,580 Audit-Related Fees(1) $ 11,500 $ 4,500 Tax Fees(2) $ 2,284 $ 2,284 All Other Fees -- -- Total $ 43,364 $ 36,364
(1) Services include agreed-upon procedures in connection with the registrant's semi-annual financial statements($3,000 per year), the registrant's third quarter 2004 Form N-Q filing ($1,500), and the Fund's Debt Covenant Agreement for 2003 ($8,500). (2) Tax services in connection with the registrant's excise tax calculations and review of the registrant's applicable tax returns. The information in the table below is provided with respect to non-audit services that directly relate to the registrant's operations and financial reporting and that were rendered by PwC to the registrant's investment adviser, Credit Suisse Asset Management, LLC ("CSAM"), and any service provider to the registrant controlling, controlled by or under common control with CSAM that provided ongoing services to the registrant ("Covered Services Provider"), for the registrant's fiscal years ended October 31, 2003 and October 31, 2004.
2003 2004 ---- ---- Audit-Related Fees N/A N/A
2 Tax Fees N/A N/A All Other Fees N/A N/A Total N/A N/A
(e)(1) Pre-Approval Policies and Procedures. The Audit Committee ("Committee") of the registrant is responsible for pre-approving (i) all audit and permissible non-audit services to be provided by the independent registered public accounting firm to the registrant and (ii) all permissible non-audit services to be provided by the independent registered public accounting firm to CSAM and any Covered Services Provider if the engagement relates directly to the operations and financial reporting of the registrant. The Committee may delegate its responsibility to pre-approve any such audit and permissible non-audit services to the Chairperson of the Committee, and the Chairperson shall report to the Committee, at its next regularly scheduled meeting after the Chairperson's pre-approval of such services, his or her decision(s). The Committee may also establish detailed pre-approval policies and procedures for pre-approval of such services in accordance with applicable laws, including the delegation of some or all of the Committee's pre-approval responsibilities to other persons (other than CSAM or the registrant's officers). Pre-approval by the Committee of any permissible non-audit services shall not be required so long as: (i) the aggregate amount of all such permissible non-audit services provided to the registrant, CSAM and any Covered Services Provider constitutes not more than 5% of the total amount of revenues paid by the registrant to its independent registered public accounting firm during the fiscal year in which the permissible non-audit services are provided; (ii) the permissible non-audit services were not recognized by the registrant at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and approved by the Committee (or its delegate(s)) prior to the completion of the audit. (e)(2) The information in the table below sets forth the percentages of fees for services (other than audit, review or attest services) rendered by PwC to the registrant for which the pre-approval requirement was waived pursuant to Rule 2-01(c)(7)(i)(C) of Regulation S-X:
2003 2004 ---- ---- Audit-Related Fees N/A N/A Tax Fees N/A N/A All Other Fees N/A N/A Total N/A N/A
3 The information in the table below sets forth the percentages of fees for services (other than audit, review or attest services) rendered by PwC to CSAM and any Covered Services Provider required to be approved pursuant to Rule 2-01(c)(7)(ii)of Regulation S-X, for the registrant's fiscal years ended October 31, 2003 and October 31, 2004:
2003 2004 ---- ---- Audit-Related Fees N/A N/A Tax Fees N/A N/A All Other Fees N/A N/A Total N/A N/A
(f) Not Applicable. (g) The aggregate fees billed by PwC for non-audit services rendered to the registrant, CSAM and Covered Service Providers for the fiscal years ended October 31, 2003 and October 31, 2004 were $13,784 and $6,784, respectively. (h) Not Applicable. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. The registrant has a separately designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended. The members of the committee are Enrique R. Arzac, Laurence Fox and James S. Pasman, Jr. ITEM 6. SCHEDULE OF INVESTMENTS. Included as part of the report to shareholders filed under Item 1 of this Form. ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. 4 CREDIT SUISSE ASSET MANAGEMENT, LLC CREDIT SUISSE FUNDS CREDIT SUISSE INSTITUTIONAL FUNDS CSAM CLOSED-END FUNDS PROXY VOTING POLICY AND PROCEDURES Introduction Credit Suisse Asset Management, LLC ("CSAM") is a fiduciary that owes each of its clients duties of care and loyalty with respect to proxy voting. The duty of care requires CSAM to monitor corporate events and to vote proxies. To satisfy its duty of loyalty, CSAM must cast proxy votes in the best interests of each of its clients. The Credit Suisse Funds, Credit Suisse Institutional Funds, and CSAM Closed-End Funds (the "Funds"), which have engaged Credit Suisse Asset Management, LLC as their investment adviser, are of the belief that the proxy voting process is a means of addressing corporate governance issues and encouraging corporate actions both of which can enhance shareholder value. Policy The Proxy Voting Policy (the "Policy") set forth below is designed to ensure that proxies are voted in the best interests of CSAM's clients. The Policy addresses particular issues and gives a general indication of how CSAM will vote proxies. The Policy is not exhaustive and does not include all potential issues. Proxy Voting Committee The Proxy Voting Committee will consist of a member of the Portfolio Management Department, a member of the Legal and Compliance Department, and a member of the Operations Department (or their designees). The purpose of the Proxy Voting Committee is to administer the voting of all clients' proxies in accordance with the Policy. The Proxy Voting Committee will review the Policy annually to ensure that it is designed to promote the best interests of CSAM's clients. For the reasons disclosed below under "Conflicts," the Proxy Voting Committee has engaged the services of an independent third party (initially, Institutional Shareholder Services ("ISS")) to assist in issue analysis and vote recommendation for proxy proposals. Proxy proposals addressed by the Policy will be voted in accordance with the Policy. Proxy proposals addressed by the Policy that require a case-by-case analysis will be voted in accordance with the vote recommendation of ISS. Proxy proposals not addressed by the Policy will also be voted in accordance with the vote 5 recommendation of ISS. To the extent that the Proxy Voting Committee proposes to deviate from the Policy or the ISS vote recommendation, the Committee shall obtain client consent as described below. CSAM investment professionals may submit a written recommendation to the Proxy Voting Committee to vote in a manner inconsistent with the Policy and/or the recommendation of ISS. Such recommendation will set forth its basis and rationale. In addition, the investment professional must confirm in writing that he/she is not aware of any conflicts of interest concerning the proxy matter or provide a full and complete description of the conflict. Conflicts CSAM is the institutional and mutual fund asset management arm of Credit Suisse First Boston, which is part of Credit Suisse Group, one of the world's largest financial organizations. As part of a global, full service investment-bank, broker-dealer, and asset-management organization, CSAM and its affiliates and personnel may have multiple advisory, transactional, financial, and other interests in securities, instruments, and companies that may be purchased or sold by CSAM for its clients' accounts. The interests of CSAM and/or its affiliates and personnel may conflict with the interests of CSAM's clients in connection with any proxy issue. In addition, CSAM may not be able to identify all of the conflicts of interest relating to any proxy matter. Consent In each and every instance in which the Proxy Voting Committee favors voting in a manner that is inconsistent with the Policy or the vote recommendation of ISS (including proxy proposals addressed and not addressed by the Policy), it shall disclose to the client conflicts of interest information and obtain client consent to vote. Where the client is a Fund, disclosure shall be made to any one director who is not an "interested person," as that term is defined under the Investment Company Act of 1940, as amended, of the Fund. Recordkeeping CSAM is required to maintain in an easily accessible place for five years all records relating to proxy voting. These records include the following: - a copy of the Policy; - a copy of each proxy statement received on behalf of CSAM clients; 6 - a record of each vote cast on behalf of CSAM clients; - a copy of all documents created by CSAM personnel that were material to making a decision on a vote or that memorializes the basis for the decision; and - a copy of each written request by a client for information on how CSAM voted proxies, as well as a copy of any written response. CSAM reserves the right to maintain certain required proxy records with ISS in accordance with all applicable regulations. Disclosure CSAM will describe the Policy to each client. Upon request, CSAM will provide any client with a copy of the Policy. CSAM will also disclose to its clients how they can obtain information on their proxy votes. ISS will capture data necessary for Funds to file Form N-PX on an annual basis concerning their proxy voting record in accordance with applicable law. Procedures The Proxy Voting Committee will administer the voting of all client proxies. CSAM has engaged ISS as an independent third party proxy voting service to assist in the voting of client proxies. ISS will coordinate with each client's custodian to ensure that proxy materials reviewed by the custodians are processed in a timely fashion. ISS will provide CSAM with an analysis of proxy issues and a vote recommendation for proxy proposals. ISS will refer proxies to the Proxy Voting Committee for instructions when the application of the Policy is not clear. The Proxy Voting Committee will notify ISS of any changes to the Policy or deviating thereof. PROXY VOTING POLICY Operational Items Adjourn Meeting Proposals to provide management with the authority to adjourn an annual or special meeting will be determined on a case-by-case basis. Amend Quorum Requirements Proposals to reduce quorum requirements for shareholder meetings below a majority of the shares outstanding will be determined on a case-by-case basis. 7 Amend Minor Bylaws Generally vote for bylaw or charter changes that are of a housekeeping nature. Change Date, Time, or Location of Annual Meeting Generally vote for management proposals to change the date/time/location of the annual meeting unless the proposed change is unreasonable. Generally vote against shareholder proposals to change the date/time/location of the annual meeting unless the current scheduling or location is unreasonable. Ratify Auditors Generally vote for proposals to ratify auditors unless: (1) an auditor has a financial interest in or association with the company, and is therefore not independent; (2) fees for non-audit services are excessive, or (3) there is reason to believe that the independent auditor has rendered an opinion, which is neither accurate nor indicative of the company's financial position. Generally vote on a case-by-case basis on shareholder proposals asking companies to prohibit their auditors from engaging in non-audit services (or capping the level of non-audit services). Generally vote on a case-by-case basis on auditor rotation proposals taking into consideration: (1) tenure of audit firm; (2) establishment and disclosure of a renewal process whereby the auditor is regularly evaluated for both audit quality and competitive price; (3) length of the rotation period advocated in the proposal, and (4) significant audit related issues. Board of Directors Voting on Director Nominees in Uncontested Elections Generally votes on director nominees on a case-by-case basis. Votes may be withheld: (1) from directors who attended less than 75% of the board and committee meetings without a valid reason for the absences; (2) implemented or renewed a dead-hand poison pill; (3) ignored a shareholder proposal that was approved by a majority of the votes cast for two consecutive years; (4) ignored a shareholder proposal approved by a majority of the shares outstanding; (5) have failed to act on takeover offers where the majority of the shareholders have tendered their shares; (6) are inside directors or affiliated outside directors and sit on the audit, compensation, or nominating committee; (7) are inside directors or affiliated outside directors and the full board serves as the audit, compensation, or nominating committee or the company does not have one of these committees; or (8) are audit committee members and the non-audit fees paid to the auditor are excessive Cumulative Voting 8 Proposals to eliminate cumulative voting will be determined on a case-by-case basis. Proposals to restore or provide for cumulative voting in the absence of sufficient good governance provisions and/or poor relative shareholder returns will be determined on a case-by-case basis. Director and Officer Indemnification and Liability Protection Proposals on director and officer indemnification and liability protection generally evaluated on a case-by-case basis. Generally vote against proposals that would: (1) eliminate entirely directors' and officers' liability for monetary damages for violating the duty of care; or (2) expand coverage beyond just legal expenses to acts, such as negligence, that are more serious violations of fiduciary obligation than mere carelessness. Generally vote for only those proposals providing such expanded coverage in cases when a director's or officer's legal defense was unsuccessful if: (1) the director was found to have acted in good faith and in a manner that he reasonably believed was in the best interests of the company, and (2) only if the director's legal expenses would be covered. Filling Vacancies/Removal of Directors Generally vote against proposals that provide that directors may be removed only for cause. Generally vote for proposals to restore shareholder ability to remove directors with or without cause. Proposals that provide that only continuing directors may elect replacements to fill board vacancies will be determined on a case-by-case basis. Generally vote for proposals that permit shareholders to elect directors to fill board vacancies. Independent Chairman (Separate Chairman/CEO) Generally vote for shareholder proposals requiring the position of chairman be filled by an independent director unless there are compelling reasons to recommend against the proposal, including: (1) designated lead director, elected by and from the independent board members with clearly delineated duties; (2) 2/3 independent board; (3) all independent key committees; or (4) established governance guidelines. Majority of Independent Directors Generally vote for shareholder proposals requiring that the board consist of a majority or substantial majority (two-thirds) of independent directors unless the board composition already meets the adequate threshold. Generally vote for shareholder proposals requiring the board audit, compensation, and/or nominating committees be composed exclusively of independent directors if they currently do not meet that standard. Generally withhold votes from insiders and affiliated outsiders sitting on the audit, compensation, or nominating committees. Generally withhold votes from insiders and affiliated outsiders on boards that are 9 lacking any of these three panels. Generally withhold votes from insiders and affiliated outsiders on boards that are not at least majority independent. Term Limits Generally vote against shareholder proposals to limit the tenure of outside directors. Proxy Contests Voting on Director Nominees in Contested Elections Votes in a contested election of directors should be decided on a case-by-case basis, with shareholders determining which directors are best suited to add value for shareholders. The major decision factors are: (1) company performance relative to its peers; (2) strategy of the incumbents versus the dissidents; (3) independence of directors/nominees; (4) experience and skills of board candidates; (5) governance profile of the company; (6) evidence of management entrenchment; (7) responsiveness to shareholders; or (8) whether takeover offer has been rebuffed. Amend Bylaws without Shareholder Consent Proposals giving the board exclusive authority to amend the bylaws will be determined on a case-by-case basis. Proposals giving the board the ability to amend the bylaws in addition to shareholders will be determined on a case-by-case basis. Confidential Voting Generally vote for shareholder proposals requesting that corporations adopt confidential voting, use independent vote tabulators and use independent inspectors of election, as long as the proposal includes a provision for proxy contests as follows: In the case of a contested election, management should be permitted to request that the dissident group honor its confidential voting policy. If the dissidents agree, the policy may remain in place. If the dissidents will not agree, the confidential voting policy may be waived. Generally vote for management proposals to adopt confidential voting. Cumulative Voting Proposals to eliminate cumulative voting will be determined on a case-by-case basis. Proposals to restore or provide for cumulative voting in the absence of sufficient good governance provisions and/or poor relative shareholder returns will be determined on a case-by-case basis. 10 Antitakeover Defenses and Voting Related Issues Advance Notice Requirements for Shareholder Proposals/Nominations Votes on advance notice proposals are determined on a case-by-case basis. Amend Bylaws without Shareholder Consent Proposals giving the board exclusive authority to amend the bylaws will be determined on a case-by-case basis. Generally vote for proposals giving the board the ability to amend the bylaws in addition to shareholders. Poison Pills (Shareholder Rights Plans) Generally vote for shareholder proposals requesting that the company submit its poison pill to a shareholder vote or redeem it. Votes regarding management proposals to ratify a poison pill should be determined on a case-by-case basis. Plans should embody the following attributes: (1) 20% or higher flip-in or flip-over; (2) two to three year sunset provision; (3) no dead-hand or no-hand features; or (4) shareholder redemption feature Shareholders' Ability to Act by Written Consent Generally vote against proposals to restrict or prohibit shareholders' ability to take action by written consent. Generally vote for proposals to allow or make easier shareholder action by written consent. Shareholders' Ability to Call Special Meetings Proposals to restrict or prohibit shareholders' ability to call special meetings or that remove restrictions on the right of shareholders to act independently of management will be determined on a case-by-case basis. Supermajority Vote Requirements Proposals to require a supermajority shareholder vote will be determined on a case-by-case basis Proposals to lower supermajority vote requirements will be determined on a case-by-case basis. Merger and Corporate Restructuring Appraisal Rights Generally vote for proposals to restore, or provide shareholders with, rights of appraisal. 11 Asset Purchases Generally vote case-by-case on asset purchase proposals, taking into account: (1) purchase price, including earnout and contingent payments; (2) fairness opinion; (3) financial and strategic benefits; (4) how the deal was negotiated; (5) conflicts of interest; (6) other alternatives for the business; or (7) noncompletion risk (company's going concern prospects, possible bankruptcy). Asset Sales Votes on asset sales should be determined on a case-by-case basis after considering: (1) impact on the balance sheet/working capital; (2) potential elimination of diseconomies; (3) anticipated financial and operating benefits; (4) anticipated use of funds; (5) value received for the asset; fairness opinion (if any); (6) how the deal was negotiated; or (6) Conflicts of interest Conversion of Securities Votes on proposals regarding conversion of securities are determined on a case-by-case basis. When evaluating these proposals, should review (1) dilution to existing shareholders' position; (2) conversion price relative to market value; (3) financial issues: company's financial situation and degree of need for capital; effect of the transaction on the company's cost of capital; (4) control issues: change in management; change in control; standstill provisions and voting agreements; guaranteed contractual board and committee seats for investor; veto power over certain corporate actions; (5) termination penalties; (6) conflict of interest: arm's length transactions, managerial incentives. Generally vote for the conversion if it is expected that the company will be subject to onerous penalties or will be forced to file for bankruptcy if the transaction is not approved. Corporate Reorganization Votes on proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan are determined on a case-by-case basis, after evaluating: (1) dilution to existing shareholders' position; (2) terms of the offer; (3) financial issues; (4) management's efforts to pursue other alternatives; (5) control issues; (6) conflict of interest. Generally vote for the debt restructuring if it is expected that the company will file for bankruptcy if the transaction is not approved. Reverse Leveraged Buyouts Votes on proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan are determined on a case-by-case basis, after evaluating: (1) dilution to existing shareholders' position; (2) terms of the offer; (3) financial issues; (4) management's efforts to pursue other alternatives; (5) control issues; (6) conflict of interest. Generally vote 12 for the debt restructuring if it is expected that the company will file for bankruptcy if the transaction is not approved. Formation of Holding Company Votes on proposals regarding the formation of a holding company should be determined on a case-by-case basis taking into consideration: (1) the reasons for the change; (2) any financial or tax benefits; (3) regulatory benefits; (4) increases in capital structure; (5) changes to the articles of incorporation or bylaws of the company. Absent compelling financial reasons to recommend the transaction, generally vote against the formation of a holding company if the transaction would include either of the following: (1) increases in common or preferred stock in excess of the allowable maximum as calculated a model capital structure; (2) adverse changes in shareholder rights; (3) going private transactions; (4) votes going private transactions on a case-by-case basis, taking into account: (a) offer price/premium; (b) fairness opinion; (c) how the deal was negotiated; (d) conflicts of interest; (e) other alternatives/offers considered; (f) noncompletion risk. Joint Ventures Vote on a case-by-case basis on proposals to form joint ventures, taking into account: (1) percentage of assets/business contributed; (2) percentage ownership; (3) financial and strategic benefits; (4) governance structure; (5) conflicts of interest; (6) other alternatives; (7) noncompletion risk; (8) liquidations. Votes on liquidations should be determined on a case-by-case basis after reviewing: (1) management's efforts to pursue other alternatives such as mergers; (2) appraisal value of the assets (including any fairness opinions); (3) compensation plan for executives managing the liquidation. Generally vote for the liquidation if the company will file for bankruptcy if the proposal is not approved. Mergers and Acquisitions Votes on mergers and acquisitions should be considered on a case-by-case basis, determining whether the transaction enhances shareholder value by giving consideration to: (1) prospects of the combined companies; (2) anticipated financial and operating benefits; (3) offer price; (4) fairness opinion; (5) how the deal was negotiated; (6) changes in corporate governance and their impact on shareholder rights; (7) change in the capital structure; (8) conflicts of interest. Private Placements Votes on proposals regarding private placements should be determined on a case-by-case basis. When evaluating these proposals, should review: (1) dilution to existing shareholders' position; (2) terms of the offer; (3) financial issues; (4) management's efforts to pursue alternatives such as mergers; (5) control issues; (6) conflict of interest. Generally vote for the 13 private placement if it is expected that the company will file for bankruptcy if the transaction is not approved. Prepackaged Bankruptcy Plans Votes on proposals to increase common and/or preferred shares and to issue shares as part of a debt restructuring plan are determined on a case-by-case basis, after evaluating: (1) dilution to existing shareholders' position; (2) terms of the offer; (3) financial issues; (4) management's efforts to pursue other alternatives; (5) control issues; (6) conflict of interest. Generally vote for the debt restructuring if it is expected that the company will file for bankruptcy if the transaction is not approved. Recapitalization Votes case-by-case on recapitalizations (reclassifications of securities), taking into account: (1) more simplified capital structure; (2) enhanced liquidity; (3) fairness of conversion terms, including fairness opinion; (4) impact on voting power and dividends; (5) reasons for the reclassification; (6) conflicts of interest; (7) other alternatives considered. Reverse Stock Splits Generally vote for management proposals to implement a reverse stock split when the number of authorized shares will be proportionately reduced. Generally vote for management proposals to implement a reverse stock split to avoid delisting. Votes on proposals to implement a reverse stock split that do not proportionately reduce the number of shares authorized for issue should be determined on a case-by-case basis. Spinoffs Votes on spinoffs should be considered on a case-by-case basis depending on: (1) tax and regulatory advantages; (2) planned use of the sale proceeds; (3) valuation of spinoff; fairness opinion; (3) benefits that the spinoff may have on the parent company including improved market focus; (4) conflicts of interest; managerial incentives; (5) any changes in corporate governance and their impact on shareholder rights; (6) change in the capital structure Value Maximization Proposals Vote case-by-case on shareholder proposals seeking to maximize shareholder value. Capital Structure Adjustments to Par Value of Common Stock 14 Generally vote for management proposals to reduce the par value of common stock unless the action is being taken to facilitate an antitakeover device or some other negative corporate governance action. Generally vote for management proposals to eliminate par value. Common Stock Authorization Votes on proposals to increase the number of shares of common stock authorized for issuance are determined on a case-by-case basis. Generally vote against proposals at companies with dual-class capital structures to increase the number of authorized shares of the class of stock that has superior voting rights. Generally vote for proposals to approve increases beyond the allowable increase when a company's shares are in danger of being delisted or if a company's ability to continue to operate as a going concern is uncertain. Dual-class Stock Generally vote against proposals to create a new class of common stock with superior voting rights. Generally vote for proposals to create a new class of nonvoting or subvoting common stock if: (1) it is intended for financing purposes with minimal or no dilution to current shareholders; (2) it is not designed to preserve the voting power of an insider or significant shareholder. Issue Stock for Use with Rights Plan Generally vote against proposals that increase authorized common stock for the explicit purpose of implementing a shareholder rights plan. Preemptive Rights Votes regarding shareholder proposals seeking preemptive rights should be determined on a case-by-case basis after evaluating: (1) the size of the company; (2) the shareholder base; (3) the liquidity of the stock Preferred Stock Generally vote against proposals authorizing the creation of new classes of preferred stock with unspecified voting, conversion, dividend distribution, and other rights ("blank check" preferred stock). Generally vote for proposals to create "declawed" blank check preferred stock (stock that cannot be used as a takeover defense). Generally vote for proposals to authorize preferred stock in cases where the company specifies the voting, dividend, conversion, and other rights of such stock and the terms of the preferred stock appear reasonable. Generally vote against proposals to increase the number of blank check preferred stock authorized for issuance when no shares have been issued or reserved for a specific purpose. Generally vote case-by-case on proposals to increase the number of blank check 15 preferred shares after analyzing the number of preferred shares available for issue given a company's industry and performance in terms of shareholder returns. Recapitalization Vote case-by-case on recapitalizations (reclassifications of securities), taking into account: (1) more simplified capital structure; (2) enhanced liquidity; (3) fairness of conversion terms, including fairness opinion; (4) impact on voting power and dividends; (5) reasons for the reclassification; (6) conflicts of interest; (7) other alternatives considered. Reverse Stock Splits Generally vote for management proposals to implement a reverse stock split when the number of authorized shares will be proportionately reduced. Generally vote for management proposals to implement a reverse stock split to avoid delisting. Votes on proposals to implement a reverse stock split that do not proportionately reduce the number of shares authorized for issue should be determined on a case-by-case basis. Share Repurchase Programs Generally vote for management proposals to institute open-market share repurchase plans in which all shareholders may participate on equal terms. Stock Distributions: Splits and Dividends Generally vote for management proposals to increase the common share authorization for a stock split or share dividend, provided that the increase in authorized shares would not result in an excessive number of shares available for issuance. Tracking Stock Votes on the creation of tracking stock are determined on a case-by-case basis, weighing the strategic value of the transaction against such factors as: (1) adverse governance changes; (2) excessive increases in authorized capital stock; (3) unfair method of distribution; (4) diminution of voting rights; (5) adverse conversion features; (6) negative impact on stock option plans; (7) other alternatives such as a spinoff. Executive and Director Compensation Executive and Director Compensation Votes on compensation plans for directors are determined on a case-by-case basis. 16 Stock Plans in Lieu of Cash Votes for plans which provide participants with the option of taking all or a portion of their cash compensation in the form of stock are determined on a case-by-case basis. Generally vote for plans which provide a dollar-for-dollar cash for stock exchange. Votes for plans which do not provide a dollar-for-dollar cash for stock exchange should be determined on a case-by-case basis. Director Retirement Plans Generally vote against retirement plans for nonemployee directors. Generally vote for shareholder proposals to eliminate retirement plans for nonemployee directors. Management Proposals Seeking Approval to Reprice Options Votes on management proposals seeking approval to reprice options are evaluated on a case-by-case basis giving consideration to the following: (1) historic trading patterns; (2) rationale for the repricing; (3) value-for-value exchange; (4) option vesting; (5) term of the option; (6) exercise price; (7) participants; (8) employee stock purchase plans. Votes on employee stock purchase plans should be determined on a case-by-case basis. Generally vote for employee stock purchase plans where: (1) purchase price is at least 85 percent of fair market value; (2) offering period is 27 months or less, and (3) potential voting power dilution (VPD) is ten percent or less. Generally vote against employee stock purchase plans where either: (1) purchase price is less than 85 percent of fair market value; (2) Offering period is greater than 27 months, or (3) VPD is greater than ten percent Incentive Bonus Plans and Tax Deductibility Proposals Generally vote for proposals that simply amend shareholder-approved compensation plans to include administrative features or place a cap on the annual grants any one participant may receive. Generally vote for proposals to add performance goals to existing compensation plans. Votes to amend existing plans to increase shares reserved and to qualify for favorable tax treatment considered on a case-by-case basis. Generally vote for cash or cash and stock bonus plans that are submitted to shareholders for the purpose of exempting compensation from taxes if no increase in shares is requested. Employee Stock Ownership Plans (ESOPs) Generally vote for proposals to implement an ESOP or increase authorized shares for existing ESOPs, unless the number of shares allocated to the ESOP is excessive (more than five percent of outstanding shares.) 401(k) Employee Benefit Plans 17 Generally vote for proposals to implement a 401(k) savings plan for employees. Shareholder Proposals Regarding Executive and Director Pay Generally vote for shareholder proposals seeking additional disclosure of executive and director pay information, provided the information requested is relevant to shareholders' needs, would not put the company at a competitive disadvantage relative to its industry, and is not unduly burdensome to the company. Generally vote against shareholder proposals seeking to set absolute levels on compensation or otherwise dictate the amount or form of compensation. Generally vote against shareholder proposals requiring director fees be paid in stock only. Generally vote for shareholder proposals to put option repricings to a shareholder vote. Vote for shareholders proposals to exclude pension fund income in the calculation of earnings used in determining executive bonuses/compensation. Vote on a case-by-case basis for all other shareholder proposals regarding executive and director pay, taking into account company performance, pay level versus peers, pay level versus industry, and long term corporate outlook. Performance-Based Option Proposals Generally vote for shareholder proposals advocating the use of performance-based equity awards (indexed, premium-priced, and performance-vested options), unless: (1) the proposal is overly restrictive; or (2) the company demonstrates that it is using a substantial portion of performance-based awards for its top executives. Stock Option Expensing Generally vote for shareholder proposals asking the company to expense stock options unless the company has already publicly committed to start expensing by a specific date. Golden and Tin Parachutes Generally vote for shareholder proposals to require golden and tin parachutes to be submitted for shareholder ratification, unless the proposal requires shareholder approval prior to entering into employment contracts. Vote on a case-by-case basis on proposals to ratify or cancel golden or tin parachutes. May 19, 2004 ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Form N-CSR disclosure requirement is not yet effective with respect to the registrant. 18 ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. None. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors since the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(g) of Schedule 14A in its definitive proxy statement dated January 15, 2004. ITEM 11. CONTROLS AND PROCEDURES. (a) As of a date within 90 days from the filing date of this report, the principal executive officer and principal financial officer concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the "Act")) were effective based on their evaluation of the disclosure controls and procedures required by Rule 30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934. (b) There were no changes in registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. (a)(1) Registrant's Code of Ethics is an exhibit to this report. (a)(2) The certifications of the registrant as required by Rule 30a-2(a) under the Act are exhibits to this report. (a)(3) Not applicable. (b) The certifications of the registrant as required by Rule 30a-2(b) under the Act are an exhibit to this report. 19 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/ Michael E. Kenneally ------------------------ Name: Michael E. Kenneally Title: Chief Executive Officer Date: January 7, 2005 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/ Michael E. Kenneally ------------------------ Name: Michael E. Kenneally Title: Chief Executive Officer Date: January 7, 2005 /s/ Michael A. Pignataro ------------------------ Name: Michael A. Pignataro Title: Chief Financial Officer Date: January 7, 2005 20 EX-99.CODEETH 2 a2149418zex-99_codeeth.txt EX-99.CODEETH EXHIBIT 99.CODE ETHICS EXHIBIT 12(a)(1) CODE OF ETHICS CREDIT SUISSE FUNDS CREDIT SUISSE INSTITUTIONAL FUNDS CREDIT SUISSE CLOSED-END FUNDS CODE OF ETHICS FOR SENIOR OFFICERS PREAMBLE Section 406 of the Sarbanes-Oxley Act of 2002 directs that rules be adopted disclosing whether a company has a code of ethics for senior financial officers. The Securities and Exchange Commission (the "SEC") has adopted rules requiring annual disclosure of an investment company's code of ethics applicable to the company's principal executive as well as principal financial officers, if such a code has been adopted. In response, the above Funds (each a "Fund", and together the "Funds") have adopted this Code of Ethics. STATEMENT OF POLICY It is the obligation of the senior officers of the Funds to provide full, fair, timely and comprehensible disclosure--financial and otherwise--to Fund shareholders, regulatory authorities and the general public. In fulfilling that obligation, senior officers must act ethically, honestly and diligently. This Code is intended to enunciate guidelines to be followed by persons who serve the Funds in senior officerships. No Code can address every situation that a senior officer might face; however, as a guiding principle, senior officers should strive to implement the spirit as well as the 21 letter of applicable laws, rules and regulations, and to provide the type of clear and complete disclosure and information Fund shareholders have a right to expect. The purpose of this Code of Ethics is to promote high standards of ethical conduct by Covered Persons (as defined below) in their capacities as officers of the Funds, to instruct them as to what is considered to be inappropriate and unacceptable conduct or activities for officers and to prohibit such conduct or activities. This Code supplements other policies that the Funds and their adviser have adopted or may adopt in the future with which Fund officers are also required to comply (e.g., code of ethics relating to personal trading and conduct). COVERED PERSONS This Code of Ethics applies to those persons appointed by the Fund's Board of Directors as Chief Executive Officer, President, Chief Financial Officer and Chief Accounting Officer, or persons performing similar functions. It is recognized that each of such persons currently is a full-time employee of Credit Suisse Asset Management LLC ("CSAM"), each Fund's investment adviser. PROMOTION OF HONEST AND ETHICAL CONDUCT In serving as an officer of the Funds, each Covered Person must maintain high standards of honesty and ethical conduct and must encourage his colleagues who provide services to the Funds, whether directly or indirectly, to do the same. Each Covered Person understands that as an officer of a Fund, he has a duty to act in the best interests of the Fund and its shareholders. The interests of other CSAM clients or CSAM itself or the Covered Person's personal interests should not be allowed to compromise the Covered 22 Person's fulfilling his duties as an officer of the Fund. The governing Boards of the Funds recognize that the Covered Persons are also officers or employees of CSAM. Furthermore, the governing Boards of the Funds recognize that, subject to the Covered Person's fiduciary duties to the Funds, the Covered Persons will in the normal course of their duties (whether formally for the Funds or for CSAM, or for both) be involved in establishing policies and implementing decisions that will have different effects on CSAM and the Funds. The governing Boards of the Funds recognize that the participation of the Covered Persons in such activities is inherent in the contractual relationship between the Funds and CSAM and/or its affiliates, and is consistent with the expectation of the governing Boards of the performance by the Covered Persons of their duties as officers of the Funds. If a Covered Person believes that his responsibilities as an officer or employee of CSAM are likely to materially compromise his objectivity or his ability to perform the duties of his role as an officer of the Funds, he should consult with CSAM's general counsel, the Funds' chief legal officer or outside counsel, or counsel to the independent Directors/Trustees of the relevant Fund or Funds. Under appropriate circumstances, a Covered Person should also consider whether to present the matter to the Directors/Trustees of the relevant Fund or Funds or a committee thereof. No Covered Person shall suggest that any person providing, or soliciting to be retained to provide, services to a Fund give a gift or an economic benefit of any kind to him in connection with the person's retention or the provision of services. PROMOTION OF FULL, FAIR, ACCURATE, TIMELY AND UNDERSTANDABLE DISCLOSURE No Covered Person shall create or further the creation of false or misleading information in any SEC filing or report to Fund shareholders. No Covered Person shall conceal or fail 23 to disclose information within the Covered Person's possession legally required to be disclosed or necessary to make the disclosure made not misleading. If a Covered Person shall become aware that information filed with the SEC or made available to the public contains any false or misleading information or omits to disclose necessary information, he shall promptly report it to CSAM's general counsel or Fund counsel, who shall advise such Covered Person whether corrective action is necessary or appropriate. Each Covered Person, consistent with his responsibilities, shall exercise appropriate supervision over, and shall assist, relevant Fund service providers in developing financial information and other disclosure that complies with relevant law and presents information in a clear, comprehensible and complete manner. Each Covered Person shall use his best efforts within his area of expertise to assure that Fund reports reveal, rather than conceal, the relevant Fund's financial condition. Each Covered Person shall seek to obtain additional resources if he believes that available resources are inadequate to enable the Funds to provide full, fair and accurate financial information and other disclosure to regulators and Fund shareholders. Each Covered Person shall inquire of other Fund officers and service providers, as appropriate, to assure that information provided is accurate and complete and presented in an understandable format using comprehensible language. Each Covered Person shall diligently perform his services to the Funds, so that information can be gathered and assessed early enough to facilitate timely filings and issuance of reports and required certifications. 24 PROMOTION OF COMPLIANCE WITH APPLICABLE GOVERNMENT LAWS, RULES AND REGULATIONS Each Covered Person shall become and remain knowledgeable concerning the laws and regulations relating to the Funds and their operations and shall act with competence and due care in serving as an officer of the Funds. Each Covered Person with specific responsibility for financial statement disclosure will become and remain knowledgeable concerning relevant auditing standards, generally accepted accounting principles, FASB pronouncements and other accounting and tax literature and developments. Each Covered Person shall devote sufficient time to fulfilling his responsibilities to the Funds, recognizing that he will devote substantial time to providing services to other CSAM clients and will perform other activities as an employee of CSAM. Each Covered Person shall cooperate with a Fund's independent auditors, regulatory agencies and internal auditors in their review or inspection of the Fund and its operations. No Covered Person shall knowingly violate any law or regulation relating to the Funds or their operations or seek to illegally circumvent any such law or regulation. No Covered Person shall engage in any conduct involving dishonesty, fraud, deceit or misrepresentation involving the Funds or their operations. PROMOTING PROMPT INTERNAL REPORTING OF VIOLATIONS Each Covered Person shall promptly report his own violations of this Code and violations by other Covered Persons of which he is aware to the Chairman of the relevant Fund's Audit Committee. 25 Any requests for a waiver from or an amendment to this Code shall be made to the Chairman of the relevant Fund's Audit Committee. All waivers and amendments shall be disclosed as required by law. SANCTIONS Failure to comply with this Code will subject the violator to appropriate sanctions, which will vary based on the nature and severity of the violation. Such sanctions may include censure, suspension or termination of position as an officer of the Fund. Sanctions shall be imposed by the relevant Fund's Audit Committee, subject to review by the entire Board of Directors/Trustees of the Fund. Each Covered Person shall be required to certify annually whether he has complied with this Code. NO RIGHTS CREATED This Code of Ethics is a statement of certain fundamental principles, policies and procedures that govern the Funds' senior officers in the conduct of the Funds' business. It is not intended to and does not create any rights in any employee, investor, supplier, competitor, shareholder or any other person or entity. RECORDKEEPING The Funds will maintain and preserve for a period of not less than six (6) years from the date such action is taken, the first two (2) years in an easily accessible place, a copy of the information or materials supplied to the Board (1) that provided the basis for any amendment or 26 waiver to this Code and (2) relating to any violation of the Code and sanctions imposed for such violation, together with a written record of the approval or action taken by the relevant Board. AMENDMENTS The Directors/Trustees will make and approve such changes to this Code of Ethics as they deem necessary or appropriate to effectuate the purposes of this Code. Dated: May 19, 2004 27 CODE OF ETHICS FOR SENIOR OFFICERS: I HEREBY CERTIFY THAT: (1) I have read and I understand the Code of Ethics for Senior Officers adopted by the Credit Suisse Funds, the Credit Suisse Institutional Funds and the Credit Suisse Closed-End Funds (the "Code of Ethics"); (2) I recognize that I am subject to the Code of Ethics; (3) I have complied with the requirements of the Code of Ethics during the calendar year ending December 31, _______; and (4) I have reported all violations of the Code of Ethics required to be reported pursuant to the requirements of the Code during the calendar year ending December 31, _______. Set forth below exceptions to items (3) and (4), if any: ---------------------------------------- ---------------------------------------- ---------------------------------------- Name: --------------- Date: 28 EX-99.CERT 3 a2149418zex-99_cert.txt EX-99.CERT EXHIBIT 99.CERT EXHIBIT 12(a)(2) 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 officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): 29 (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 7, 2005 /s/ Michael A. Pignataro - ------------------------ Michael A. Pignataro Chief Financial Officer I, Michael E. Kenneally, 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 officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and 30 (c) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed 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 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial data information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 7, 2005 /s/ Michael E. Kenneally - ------------------------ Michael E. Kenneally Chief Executive Officer 31 EX-99.906CERT 4 a2149418zex-99_906cert.txt EX-99.906CERT EXHIBIT 99.906CERT EXHIBIT 12(b) SECTION 906 CERTIFICATIONS SECTION 906 CERTIFICATION Michael E. Kenneally, Chief Executive Officer, and Michael A. Pignataro, Chief Financial Officer, of Credit Suisse High Yield Bond Fund (the "Fund"), each certify to his knowledge that: (1) The Fund's periodic report on Form N-CSR for the period ended October 31, 2004 (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/ Michael E. Kenneally /s/ Michael A. Pignataro ------------------------ ------------------------ Michael E. Kenneally Michael A. Pignataro Chief Executive Officer Chief Financial Officer January 7, 2005 January 7, 2005 A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Fund and will be retained by the Fund and furnished to the Securities and Exchange Commission or its staff upon request. 32 -----END PRIVACY-ENHANCED MESSAGE-----