UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: | 811-22485 |
Exact name of registrant as specified in charter: | |
Address of principal executive offices: | 1900 Market Street, Suite 200 |
Philadelphia, PA 19103 | |
Name and address of agent for service: | Sharon Ferrari |
abrdn Inc. | |
1900 Market Street, Suite 200 | |
Philadelphia, PA 19103 | |
Registrant’s telephone number, including area code: | 800-522-5465 |
Date of fiscal year end: | October 31 |
Date of reporting period: |
Item 1 – | Reports to Stockholders – |
(a) A copy of the report transmitted to shareholders pursuant to Rule 30e-1 under the Investment Company Act of 1940 (the “1940 Act”) is filed herewith.
1 | Past performance is no guarantee of future results. Investment returns and principal value will fluctuate and shares, when sold, may be worth more or less than original cost. Current performance may be lower or higher than the performance quoted. Net asset value return data includes investment management fees, custodial charges and administrative fees (such as Trustee and legal fees) and assumes the reinvestment of all distributions. |
2 | Assuming the reinvestment of dividends and distributions. |
3 | The Fund’s total return is based on the reported NAV for each financial reporting period end and may differ from what is reported on the Financial Highlights due to financial statement rounding or adjustments. |
4 | The ICE BofAML Global High Yield Constrained (Hedged USD) Index tracks the performance of U.S. dollar-, Canadian dollar-, British pound- and euro-denominated below-investment-grade corporate debt publicly issued in the major domestic or eurobond markets. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index. |
abrdn Income Credit Strategies Fund | 1 |
2 | abrdn Income Credit Strategies Fund |
6 Months | 1 Year | 3 Years | 5 Years | 10 Years | |
Net Asset Value (NAV) | 12.85% | 14.13% | -2.90% | 0.99% | 2.34% |
Market Price | 23.69% | 16.20% | -6.06% | 1.10% | 2.85% |
ICE BofAML Global High Yield Constrained (Hedged USD) Index | 9.16% | 10.03% | 0.88% | 3.31% | 4.28% |
abrdn Income Credit Strategies Fund | 3 |
Date | AAA/Aaa % | A % | BBB/Baa % | BB/Ba % | B % | B or below % | NR % |
April 30, 2024 | 0.0 | 0.0 | 0.2 | 16.9 | 58.4 | 21.2 | 3.3 |
October 31, 2023 | 0.0 | 1.0 | 0.0 | 18.7 | 53.9 | 23.8 | 2.6 |
April 30, 2023 | 0.0 | 1.1 | 0.0 | 17.4 | 52.9 | 23.4 | 5.2 |
Date | United States % | Europe % | United Kingdom % | Other % |
April 30, 2024 | 34.4 | 27.4 | 22.0 | 16.2 |
October 31, 2023 | 35.2 | 40.7 | 14.2 | 9.9 |
April 30, 2023 | 40.7 | 36.0 | 12.3 | 11.0 |
Date | 0 to 5 Years % | 5 to 10 Years % | 10 Years & Over % |
April 30, 2024 | 84.5 | 12.2 | 3.3 |
October 31, 2023 | 58.6 | 37.6 | 3.8 |
April 30, 2023 | 58.9 | 39.0 | 2.1 |
* | Modified duration is a measure of the sensitivity of the price of a bond to the fluctuations in interest rates. |
(1) | For financial reporting purposes, credit quality ratings shown above reflect the lowest rating assigned by either S&P, Moody’s or Fitch if ratings differ. These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated NR are not rated by these rating agencies. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change. The Investment Manager evaluates the credit quality of unrated investments based upon, but not limited to, credit ratings for similar investments. |
(2) | % reflected in below table do not reflect exposure to derivatives. |
4 | abrdn Income Credit Strategies Fund |
abrdn Income Credit Strategies Fund | 5 |
6 | abrdn Income Credit Strategies Fund |
abrdn Income Credit Strategies Fund | 7 |
At April 30, 2024, the Fund held the following forward foreign currency contracts: |
Purchase Contracts Settlement Date | Counterparty | Currency Purchased | Amount Purchased | Currency Sold | Amount Sold | Fair Value | Unrealized Appreciation/ (Depreciation) | |
British Pound/United States Dollar | ||||||||
05/16/2024 | Citibank N.A. | GBP | 729,891 | USD | 917,330 | $912,097 | $(5,233) | |
05/16/2024 | HSBC Bank PLC | GBP | 3,072,000 | USD | 3,889,397 | 3,838,881 | (50,516) | |
05/16/2024 | Royal Bank of Canada | GBP | 341,359 | USD | 425,258 | 426,574 | 1,316 | |
Euro/United States Dollar | ||||||||
05/16/2024 | Citibank N.A. | EUR | 731,937 | USD | 787,652 | 781,525 | (6,127) | |
05/16/2024 | HSBC Bank PLC | EUR | 1,172,682 | USD | 1,248,491 | 1,252,129 | 3,638 | |
05/16/2024 | Morgan Stanley & Co. | EUR | 2,754,583 | USD | 2,951,654 | 2,941,200 | (10,454) | |
05/16/2024 | Royal Bank of Canada | EUR | 274,923 | USD | 293,668 | 293,548 | (120) | |
05/16/2024 | UBS AG | EUR | 5,720,727 | USD | 6,092,368 | 6,108,294 | 15,926 | |
05/16/2024 | UBS AG | EUR | 1,296,679 | USD | 1,388,296 | 1,384,526 | (3,770) | |
Hong Kong Dollar/United States Dollar | ||||||||
05/16/2024 | HSBC Bank PLC | HKD | 463,655 | USD | 59,254 | 59,296 | 42 | |
05/16/2024 | Morgan Stanley & Co. | HKD | 622,811 | USD | 79,588 | 79,650 | 62 | |
05/16/2024 | UBS AG | HKD | 740,727 | USD | 94,681 | 94,730 | 49 | |
$18,172,450 | $(55,187) |
Sale Contracts Settlement Date | Counterparty | Currency Purchased | Amount Purchased | Currency Sold | Amount Sold | Fair Value | Unrealized Appreciation/ (Depreciation) | |
United States Dollar/British Pound | ||||||||
05/16/2024 | Citibank N.A. | USD | 3,889,468 | GBP | 3,072,000 | $3,838,881 | $50,587 | |
05/16/2024 | HSBC Bank PLC | USD | 1,061,564 | GBP | 847,333 | 1,058,858 | 2,706 | |
05/16/2024 | Royal Bank of Canada | USD | 82,600,167 | GBP | 65,095,222 | 81,345,320 | 1,254,847 |
8 | abrdn Income Credit Strategies Fund |
Sale Contracts Settlement Date | Counterparty | Currency Purchased | Amount Purchased | Currency Sold | Amount Sold | Fair Value | Unrealized Appreciation/ (Depreciation) | |
United States Dollar/Euro | ||||||||
05/16/2024 | Citibank N.A. | USD | 3,419,395 | EUR | 3,186,686 | $3,402,578 | $16,817 | |
05/16/2024 | Citibank N.A. | USD | 6,451,247 | EUR | 6,046,973 | 6,456,643 | (5,396) | |
05/16/2024 | Morgan Stanley & Co. | USD | 3,369,763 | EUR | 3,133,000 | 3,345,254 | 24,509 | |
05/16/2024 | Morgan Stanley & Co. | USD | 2,410,314 | EUR | 2,259,000 | 2,412,042 | (1,728) | |
05/16/2024 | Royal Bank of Canada | USD | 1,149,499 | EUR | 1,074,912 | 1,147,735 | 1,764 | |
05/16/2024 | UBS AG | USD | 141,016,030 | EUR | 129,657,276 | 138,441,279 | 2,574,751 | |
United States Dollar/Hong Kong Dollar | ||||||||
05/16/2024 | HSBC Bank PLC | USD | 817,155 | HKD | 6,390,979 | 817,330 | (175) | |
05/16/2024 | Morgan Stanley & Co. | USD | 29,036 | HKD | 227,225 | 29,059 | (23) | |
05/16/2024 | Royal Bank of Canada | USD | 82,186 | HKD | 642,957 | 82,226 | (40) | |
05/16/2024 | UBS AG | USD | 61,874 | HKD | 483,689 | 61,858 | 16 | |
$242,439,063 | $3,918,635 | |||||||
Unrealized appreciation on forward foreign currency exchange contracts | $3,947,030 | |||||||
Unrealized depreciation on forward foreign currency exchange contracts | $(83,582) |
abrdn Income Credit Strategies Fund | 9 |
Assets | |
Investments, at value (cost $505,926,316) | $ 475,498,945 |
Short-term investments, at value (cost $25,469,738) | 25,469,738 |
Foreign currency, at value (cost $551,949) | 548,368 |
Cash | 367,015 |
Receivable for investments sold | 1,821,756 |
Interest and dividends receivable | 10,213,077 |
Unrealized appreciation on forward foreign currency exchange contracts | 3,947,030 |
Prepaid expenses in connection with at-the-market offering (Note 5) | 47,773 |
Prepaid expenses in connection with the shelf registration (Note 5) | 75,396 |
Prepaid expenses in connection with bank loan (Note 8) | 3,455 |
Prepaid expenses | 14,283 |
Total assets | 518,006,836 |
Liabilities | |
Revolving credit facility payable (Note 8) | 105,000,000 |
Payable for investments purchased | 22,587,511 |
Investment advisory fees payable (Note 3) | 458,173 |
Dividend payable on preferred shares | 175,002 |
Unrealized depreciation on forward foreign currency exchange contracts | 83,582 |
Administration fees payable (Note 3) | 51,310 |
Investor relations fees payable (Note 3) | 32,368 |
Other accrued expenses | 188,329 |
Total liabilities | 128,576,275 |
Cumulative Preferred Shares, $0.001 par value | |
Series A Preferred Shares (5.25%, $25.00 liquidation value per share, 1,600,000 shares outstanding) (Note 7) |
40,000,000 |
Net Assets Applicable to Common Shareholders | $349,430,561 |
Composition of Net Assets Attributable to Common Shareholders | |
Common stock (par value $0.001 per share) (Note 5) | $ 52,110 |
Paid-in capital in excess of par | 620,035,283 |
Accumulated loss | (270,656,832) |
Net Assets | $349,430,561 |
Net asset value per share based on |
$6.71 |
10 | abrdn Income Credit Strategies Fund |
Net Investment Income | |
Investment Income: | |
Interest income (net of foreign withholding taxes of $103,311) | $ 23,715,681 |
Total investment income | 23,715,681 |
Expenses: | |
Investment advisory fee (Note 3) | 3,141,349 |
Administration fee (Note 3) | 314,135 |
Trustees' fees and expenses | 144,110 |
Reports to shareholders and proxy solicitation | 54,803 |
Independent auditors’ fees and tax expenses | 51,710 |
Legal fees and expenses | 48,705 |
Investor relations fees and expenses (Note 3) | 46,400 |
Custodian’s fees and expenses | 26,885 |
Transfer agent’s fees and expenses | 15,162 |
Miscellaneous | 80,559 |
Total operating expenses, excluding interest expense | 3,923,818 |
Interest expense and commitment fee on credit facility (Note 8) | 3,853,551 |
Total operating expenses before reimbursed/waived expenses | 7,777,369 |
Investment advisor waiver | (334,459) |
Net expenses | 7,442,910 |
Net Investment Income | 16,272,771 |
Net Realized/Unrealized Gain/(Loss) from Investments and Foreign Currency Related Transactions: | |
Net realized gain/(loss) from: | |
Investments (Note 2j) | (7,093,414) |
Forward foreign currency exchange contracts | (5,260,245) |
Foreign currency transactions | 242,514 |
(12,111,145) | |
Net change in unrealized appreciation/(depreciation) on: | |
Investments (Note 2j) | 34,458,868 |
Forward foreign currency exchange contracts | 3,261,605 |
Foreign currency translation | 20,217 |
37,740,690 | |
Net realized and unrealized gain from investments, forward foreign currency exchange contracts and foreign currencies | 25,629,545 |
Change in Net Assets Resulting from Operations | $41,902,316 |
Total distributions to preferred shareholders | (1,050,000) |
Net Increase in Net Assets Attributable to Common Shareholders Resulting from Operations | $40,852,316 |
abrdn Income Credit Strategies Fund | 11 |
For the Six-Month Period Ended April 30, 2024 (unaudited) |
For the Year Ended October 31, 2023 |
|
Increase/(Decrease) in Net Assets: | ||
Operations: | ||
Net investment income | $16,272,771 | $24,270,505 |
Net realized loss from investments, forward foreign currency exchange contracts and foreign currency transactions | (12,111,145) | (57,259,020) |
Net change in unrealized appreciation on investments, forward foreign currency exchange contracts and foreign currency translation | 37,740,690 | 63,258,523 |
Net increase in net assets applicable to common shareholders resulting from operations | 41,902,316 | 30,270,008 |
Distributions to Preferred Shareholders from: | ||
Distributable earnings | (1,050,000) | (2,100,000) |
Net decrease in net assets from distributions to preferred shareholders | (1,050,000) | (2,100,000) |
Net decrease in net assets attributable to common shareholders resulting from operations | 40,852,316 | 28,170,008 |
Distributions to Common Shareholders from: | ||
Distributable earnings | (31,265,970) | (30,876,177) |
Return of capital | – | (20,763,307) |
Net decrease in net assets applicable to common shareholders from distributions | (31,265,970) | (51,639,484) |
Proceeds from at-the-market offering resulting in the issuance of 0 and 488,323 shares of common stock, respectively (Note 5) | – | 3,983,457 |
Proceeds from shares issued from the reorganization resulting in the issuance of 0 and 26,763,172 shares of common stock, respectively (Note 12) | – | 192,397,770 |
Expenses in connection with the at-the-market stock offering (Note 5) | – | (2,888) |
Reinvestment of dividends resulting in the issuance of 0 and 41,073 shares of common stock, respectively | – | 285,066 |
Change in net assets from capital transactions | – | 196,663,405 |
Change in net assets applicable to common shareholders | 9,586,346 | 173,193,929 |
Net Assets: | ||
Beginning of period | 339,844,215 | 166,650,286 |
End of period | $349,430,561 | $339,844,215 |
12 | abrdn Income Credit Strategies Fund |
Cash flows from operating activities: | |
Net increase/(decrease) in net assets resulting from operations | $ 41,902,316 |
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities: |
|
Investments purchased | (180,236,561) |
Investments sold and principal repayments | 217,471,278 |
Increase in short-term investments, excluding foreign government | (11,857,804) |
Net amortization/accretion of premium/(discount) | (3,293,433) |
Decrease in interest, dividends and other receivables | 174,532 |
Net change unrealized appreciation on forward foreign currency exchange contracts | (3,261,605) |
Decrease in prepaid expenses | 265 |
Increase in accrued investment advisory fees payable | 37,372 |
Decrease in other accrued expenses | (337,305) |
Net change in unrealized appreciation of investments | (34,458,868) |
Net change in unrealized appreciation on foreign currency translations | (20,217) |
Net realized loss on investments transactions | 7,093,414 |
Net cash provided by operating activities | 33,213,384 |
Cash flows from financing activities: | |
Distributions paid to shareholders | (32,315,970) |
Net cash used in financing activities | (32,315,970) |
Effect of exchange rate on cash | (3,537) |
Net change in cash | 893,877 |
Unrestricted and restricted cash and foreign currency, beginning of period | 21,506 |
Unrestricted and restricted cash and foreign currency, end of period | $915,383 |
Supplemental disclosure of cash flow information: | |
Cash paid for interest and fees on borrowing | $3,853,551 |
abrdn Income Credit Strategies Fund | 13 |
For the Six-Month Period Ended April 30, |
For the Fiscal Years Ended October 31, | |||||
2024 (unaudited) |
2023 | 2022 | 2021 | 2020 | 2019 | |
PER SHARE OPERATING PERFORMANCE(a): | ||||||
Net asset value per common share, beginning of period | $ |
$ |
$ |
$ |
$ |
$ |
Net investment income | 0.31 | 0.57 | 0.87 | 0.98 | 0.87 | 1.05 |
Net realized and unrealized gains/(losses) on investments, forward foreign currency exchange contracts and foreign currency transactions | 0.50 | 0.47 | (3.35) | 1.11 | (1.07) | (1.23) |
Total from investment operations applicable to common shareholders | 0.81 | 1.04 | (2.48) | 2.09 | (0.20) | (0.18) |
Distributions to preferred shareholders from: | ||||||
Net investment income | (0.02) | (0.05) | (0.09) | (0.05) | – | – |
Net increase/(decrease) in net assets attributable to common shareholders resulting from operations | 0.79 | 0.99 | (2.57) | 2.04 | – | – |
Distributions to common shareholders from: | ||||||
Net investment income | (0.60) | (0.72) | (1.20) | (1.13) | (0.77) | (1.41) |
Return of capital | – | (0.48) | – | (0.07) | (0.63) | (0.03) |
Total distributions | ( |
( |
( |
( |
( |
( |
Capital Share Transactions: | ||||||
Offering costs for preferred shares charged to paid-in-capital | – | – | – | (0.11) | – | – |
Impact of shelf offering | – | 0.01 | 0.04 | – | – | – |
Dilutive effect of rights offer (Note 5) | – | – | – | (0.43) | (0.71) | – |
Total capital share transactions | – | 0.01 | 0.04 | (0.54) | – | – |
Net asset value per common share, end of period | $ |
$ |
$ |
$ |
$ |
$ |
Market price, end of period | $ |
$ |
$ |
$ |
$ |
$ |
Total Investment Return Based on(b): | ||||||
Market price | 23.69% | 8.05% | (34.92%) | 37.13% | (6.16%) | (2.48%) |
Net asset value | 12.85% | 15.54%(c) | (25.76%)(c) | 14.69% | (5.65%) | (0.29%) |
Ratio to Average Net Assets Applicable to Common Shareholders/Supplementary Data: | ||||||
Net assets including liquidation value of preferred shares, end of year(000 omitted) | $389,431 | $379,844 | $206,650 | $283,077 | $– | $– |
Net assets applicable to common shareholders, end of period (000 omitted) | $349,431 | $339,844 | $166,650 | $243,077 | $176,871 | $162,939 |
Average net assets applicable to common shareholders (000 omitted) | $360,378 | $294,262 | $206,720 | $218,990 | $181,152 | $167,302 |
Net operating expenses, net of fee waivers/recoupments | 4.15%(d) | 4.56% | 3.70% | 2.86% | 3.06% | 3.89% |
Net operating expenses, excluding fee waivers/recoupments | 4.34%(d) | 4.80% | 3.95% | 3.01% | 3.24% | 4.05% See Accompanying Notes to Financial Statements. |
14 | abrdn Income Credit Strategies Fund |
For the Six-Month Period Ended April 30, |
For the Fiscal Years Ended October 31, | |||||
2024 (unaudited) |
2023 | 2022 | 2021 | 2020 | 2019 | |
Net operating expenses, net of fee waivers/recoupment, excluding interest expense, commitment fee and loan servicing fees | 2.00%(d) | 2.26% | 2.48% | 2.24% | 2.15% | 2.27% |
Net Investment income | 9.08%(d) | 8.25% | 10.10% | 8.75% | 8.26% | 8.19% |
Portfolio turnover | 40%(e) | 83% | 66% | 63% | 97% | 93% |
Senior securities (loan facility) outstanding (000 omitted) | $ |
$ |
$ |
$ |
$ |
$ |
Asset coverage ratio on senior securities period end(f) | 471% | 462% | 335% | 340% | 318% | 326% |
Perpetual preferred shares (000 omitted) | $40,000 | $40,000 | $40,000 | $40,000 | $– | $– |
Asset coverage per $1000 on senior securities period end | $ |
$ |
$ |
$ |
$ |
$ |
Asset coverage ratio on total leverage at period end(g) | 341% | 334% | 230% | 254% | 318% | 326% |
Asset coverage per $1,000 on total leverage at period end | $3,410 | $3,344 | $2,302 | $2,538 | $3,178 | $3,263 |
Involuntary Liquidating Preference Per Unit | $25.00 | $25.00 | $25.00 | $25.00 | $– | $– |
Average Market Value Per Unit(h) | $23.01 | $22.21 | $24.40 | $26.56 | $– | $– |
(a) | Based on average shares outstanding. |
(b) | Total investment return based on market value is calculated assuming that shares of the Fund’s common stock were purchased at the closing market price as of the beginning of the period, dividends, capital gains and other distributions were reinvested as provided for in the Fund’s dividend reinvestment plan and then sold at the closing market price per share on the last day of the period. The computation does not reflect any sales commission investors may incur in purchasing or selling shares of the Fund. The total investment return based on the net asset value is similarly computed except that the Fund’s net asset value is substituted for the closing market value. |
(c) | The total return shown above includes the impact of financial statement rounding of the NAV per share and/or financial statement adjustments. |
(d) | Annualized. |
(e) | Not annualized. |
(f) | Asset coverage ratio is calculated by dividing net assets as of each fiscal period plus the amount of any borrowings, including Series A Perpetual Preferred Shares, for investment purposes as of each fiscal period by the amount of any senior securities as of each fiscal period, which includes the revolving credit facility and then multiplying by $1,000. |
(g) | Asset coverage ratio is calculated by dividing net assets as of each fiscal period end plus the amount of any borrowings for investment purposes outstanding as of each fiscal period end by the amount of any borrowings as of each fiscal period end, and then multiplying by $1,000. |
(h) | Represents the average of the daily closing market price per share as reported on the NYSE during the respective period. |
abrdn Income Credit Strategies Fund | 15 |
Acquired Fund | ACP NAV per Share ($) March 10, 2023 |
Conversion Ratio | Shares Issued |
Delaware Ivy High Income Opportunities Fund ("IVH") |
7.1889 | 1.615135 | 26,763,172 |
16 | abrdn Income Credit Strategies Fund |
abrdn Income Credit Strategies Fund | 17 |
Security Type | Standard Inputs |
Debt and other fixed-income securities | Reported trade data, broker-dealer price quotations, benchmark yields, issuer spreads on comparable securities, credit quality, yield, and maturity. |
Forward foreign currency contracts | Forward exchange rate quotations. |
Investments, at Value | Level 1 – Quoted Prices |
Level 2 – Other Significant Observable Inputs |
Level 3 – Significant Unobservable Inputs |
Total |
Assets | ||||
Investments in Securities | ||||
Bank Loans | $– | $14,228,932 | $– | $14,228,932 |
Common Stocks | 2,102,693 | – | 4,642,332 | 6,745,025 |
Corporate Bonds | – | 445,464,955 | 8,737,986 | 454,202,941 |
Preferred Stocks | 3,372 | – | 318,675 | 322,047 |
Short-Term Investment | 25,469,738 | – | – | 25,469,738 |
Total Investments | $27,575,803 | $459,693,887 | $13,698,993 | $500,968,683 |
Other Financial Instruments | ||||
Foreign Currency Exchange Contracts | $– | $3,947,030 | $– | $3,947,030 |
Total Investment Assets | $27,575,803 | $463,640,917 | $13,698,993 | $504,915,713 |
Liabilities | ||||
Other Financial Instruments | ||||
Foreign Currency Exchange Contracts | $– | $(83,582) | $– | $(83,582) |
Total Investment Liabilities | $– | $(83,582) | $– | $(83,582) |
18 | abrdn Income Credit Strategies Fund |
Rollforward of Level 3 Fair Value Measurements For the Six Months Ended April 30, 2024 |
||||||
Investments in Securities |
Balance as of October 31, 2023 |
Accrued Discounts (Premiums) |
Net Realized Gain (Loss) and Change in Unrealized Appreciation (Depreciation) |
Net Purchases |
Balance as of April 30, 2024 |
Change in Unrealized Appreciation (Depreciation) from Investments Held at April 30, 2024 |
Corporate Bonds | ||||||
Canada | $- | $- | $- | $- | $- | $- |
United Kingdom | 4,825,022 | 15,735 | 295,105 | 413,106 | 5,548,968 | 295,105 |
United States | 2,098,880 | 5,031 | 1,056,910 | 28,197 | 3,189,018 | 1,056,910 |
Common Stocks | ||||||
Australia | - | - | - | - | - | - |
United States | 5,251,667 | - | (609,335) | - | 4,642,332 | (609,335) |
Preferred Stocks | ||||||
United States | 318,675 | - | - | - | 318,675 | - |
Total | $12,494,244 | $20,766 | $742,680 | $441,303 | $13,698,993 | $742,680 |
Description | Fair Value at 04/30/24 |
Valuation Technique (s) | Unobservable Inputs | Range | Weighted Average |
Relationship Between FairValue and Input; if input value increases then Fair Value: |
Common Stocks | $2,756,575 | Market Approach | EBITDA/Revenue multiple | 2.61x - 6.75x/0.44x - 0.79x | 4.12x/0.66x | Increase |
$775,856 | Market Approach | Broker Quote | N/A | N/A | Increase | |
$21,836 | Market Approach | Financial Statements | N/A | N/A | Increase | |
$1,088,065 | Market Approach | Financial Statements | N/A | N/A | Increase | |
Corporate Bonds | $5,548,968 | Income Method | Credit Spread | 6.81 | 6.81 | Increase |
$3,189,018 | Financial Statements | Market Approach | N/A | N/A | Increase | |
Preferred Stocks | $318,675 | Market Approach | EBITDA/Revenue multiple | 6.75x/0.44x | 6.75x/0.44x | Increase |
$13,698,993 |
abrdn Income Credit Strategies Fund | 19 |
20 | abrdn Income Credit Strategies Fund |
Risk Exposure Category | |||||||
Interest Rate Contracts |
Foreign Currency Contracts |
Credit Contracts |
Equity Contracts |
Commodity Contracts |
Other | Total | |
Assets: | |||||||
Unrealized appreciation on: | |||||||
Forward Foreign Currency Exchange Contracts | $– | $3,947,030 | $– | $– | $– | $– | $3,947,030 |
Total | $– | $3,947,030 | $– | $– | $– | $– | $3,947,030 |
Liabilities: | |||||||
Unrealized depreciation on: | |||||||
Forward Foreign Currency Exchange Contracts | $– | $83,582 | $– | $– | $– | $– | $83,582 |
Total | $– | $83,582 | $– | $– | $– | $– | $83,582 |
Gross Amounts Not Offset in the Statement of Assets and Liabilities |
Gross Amounts Not Offset in the Statement of Assets and Liabilities |
|||||||
Gross Amounts of Assets Presented in Statement of Assets and Liabilities |
Financial Instruments |
Collateral Received |
Net Amount |
Gross Amounts of Liabilities Presented in Statement of Assets and Liabilities |
Financial Instruments |
Collateral Pledged |
Net Amount |
|
Description | Assets | Liabilities | ||||||
Foreign Currency Exchange Contracts | ||||||||
Citibank N.A. | $67,404 | $(16,756) | $– | $50,648 | $16,756 | $(16,756) | $– | $– |
HSBC Bank PLC | 6,386 | (6,386) | – | – | 50,691 | (6,386) | – | 44,305 |
Morgan Stanley & Co. | 24,571 | (12,205) | – | 12,366 | 12,205 | (12,205) | – | – |
Royal Bank of Canada | 1,257,927 | (160) | – | 1,257,767 | 160 | (160) | – | – |
UBS AG | 2,590,742 | (3,770) | – | 2,586,972 | 3,770 | (3,770) | – | – |
abrdn Income Credit Strategies Fund | 21 |
Risk Exposure Category | ||||||
Interest Rate Contracts |
Foreign Currency Contracts |
Credit Contracts |
Equity Contracts |
Commodity Contracts |
Total | |
Realized Gain/(Loss) on Derivatives Recognized as a Result of Operations: |
||||||
Net realized gain/(loss) on: | ||||||
Forward Currency Contracts | $– | $(5,260,245) | $– | $– | $– | $(5,260,245) |
Total | $– | $(5,260,245) | $– | $– | $– | $(5,260,245) |
Net Change in Unrealized Appreciation/(Depreciation) on Derivatives Recognized as a Result of Operations: |
||||||
Net change in unrealized appreciation/(depreciation) of: | ||||||
Forward Currency Contracts | $– | $3,261,605 | $– | $– | $– | $3,261,605 |
Total | $– | $3,261,605 | $– | $– | $– | $3,261,605 |
22 | abrdn Income Credit Strategies Fund |
abrdn Income Credit Strategies Fund | 23 |
24 | abrdn Income Credit Strategies Fund |
abrdn Income Credit Strategies Fund | 25 |
26 | abrdn Income Credit Strategies Fund |
abrdn Income Credit Strategies Fund | 27 |
Tax Cost of Securities |
Unrealized Appreciation |
Unrealized Depreciation |
Net Unrealized Appreciation/ (Depreciation) |
$537,107,641 | $17,413,338 | $(53,552,296) | $(36,138,958) |
28 | abrdn Income Credit Strategies Fund |
Shares Outstanding |
Net Assets | Net Asset Value Per Share |
Net Unrealized Appreciation/ (Depreciation) |
Accumulated Net Realized Gain/(Loss) |
|
Before Reorganization | 16,570,235 | $192,397,770 | $11.61 | $(39,706,519) | $(83,124,103) |
Delaware Ivy High Income Opportunities Fund | 25,312,394 | 181,969,426 | 7.19 | (40,108,769) | (90,577,032) |
abrdn Income Credit Strategies Fund | |||||
Total | $374,367,196 | $(79,815,288) | $(173,701,135) |
Shares Outstanding |
Net Assets | Net Asset Value Per Share |
Net Unrealized Appreciation/ (Depreciation) |
Accumulated Net Realized Gain/(Loss) |
|
After Reorganization | |||||
abrdn Income Credit Strategies Fund | 52,075,566 | $374,367,196 | $7.19 | $(79,815,288) | $(173,701,135) |
abrdn Income Credit Strategies Fund | 29 |
30 | abrdn Income Credit Strategies Fund |
abrdn Income Credit Strategies Fund | 31 |
(b) Not applicable.
Item 2 – | Code of Ethics. |
This item is inapplicable to semi-annual report on Form N-CSR.
Item 3 – | Audit Committee Financial Expert. |
This item is inapplicable to semi-annual report on Form N-CSR.
Item 4 – | Principal Accountant Fees and Services. |
This item is inapplicable to semi-annual report on Form N-CSR.
Item 5 – | Audit Committee of Listed Registrants. |
This item is inapplicable to semi-annual report on Form N-CSR.
Item 6 – | Investments. |
(a) Schedule of Investments in securities of unaffiliated issuers as of close of the reporting period is included as part of the Report to Shareholders filed under Item 1 of this Form N-CSR.
(b) Not applicable.
Item 7 – | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
This item is inapplicable to semi-annual report on Form N-CSR.
Item 8 - | Portfolio Managers of Closed-End Management Investment Companies. |
(a) Not applicable to semi-annual report on Form N-CSR.
(b) There has been no change, as of the date of this filing, in any of the portfolio managers identified in response to paragraph (a)(1) of this Item in the registrant’s most recently filed annual report on Form N-CSR.
Item 9 – | Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers. |
Period | (a) Total No. of Shares Purchased |
(b) Average Price Paid per Share |
(c) Total No. of Shares Purchased as Part of Publicly Announced Plans or Programs(1) |
(d) Maximum No. of Shares that May Yet Be Purchased Under the Plans or Programs(1) |
||||||||
Month #1 (Nov. 1, 2023 — Nov. 30, 2023) | — | — | — | 1,307,407 | ||||||||
Month #2 (Dec. 1, 2023 — Dec. 31, 2023) | — | — | — | 1,307,407 | ||||||||
Month #3 (Jan. 1, 2024 — Jan. 31, 2024) | — | — | — | 1,307,407 | ||||||||
Month #4 (Feb. 1, 2024 — Feb. 29, 2024) | — | — | — | 1,307,407 | ||||||||
Month #5 (Mar. 1, 2024 — Mar. 31, 2024) | — | — | — | 1,307,407 | ||||||||
Month #5 (Apr. 1, 2024 — Apr. 30, 2024) | 1,307,407 | |||||||||||
Total | — | — | — |
(1) | On June 12, 2018, the Board approved an open market share repurchase program (the “Program”). The Program allows the Fund to purchase, in the open market, its outstanding common shares, with the amount and timing of any repurchase determined at the discretion of the Fund’s investment adviser. Such purchases may be made opportunistically at certain discounts to NAV per share in the reasonable judgment of management based on historical discount levels and current market conditions. On a quarterly basis, the Fund’s Board will receive information on any transactions made pursuant to this policy during the prior quarter and management will post the number of shares repurchased on the Fund's website on a monthly basis. Under the terms of the Program, the Fund is permitted to repurchase up to 10% of its outstanding shares of common stock in the open market during any 12 month period. For the six-month period ended April 30, 2024, the Fund did not repurchase any shares through this program. |
Item 10 – Submission of Matters to a Vote of Security Holders.
During the period ended April 30, 2024, there were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.
Item 11 – Controls and Procedures.
(a) | The Registrant’s principal executive and principal financial officers, or persons performing similar functions, have 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”) (17 CFR 270.30a-3(c)) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d15(b)). |
(b) | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during 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. |
Item 12 - | Disclosure of Securities Lending Activities for Closed-End Management Investment Companies |
Not applicable
Item 13. Recovery of Erroneously Awarded Compensation
Not appliable
Item 14 – Exhibits.
(a)(1) | Not applicable. |
(a)(2) | The certifications of the registrant as required by Rule 30a-2(a) under the Act are exhibits to this Form N-CSR. |
(a)(3) | Any written solicitation to purchase securities under Rule 23c-1 under the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable. | |
(a)(4) | Change in Registrant’s independent public accountant. Not applicable. |
(b) | The certifications of the registrant as required by Rule 30a-2(b) under the Act are exhibits to this Form N-CSR. |
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.
abrdn Income Credit Strategies Fund
By: | /s/ Alan Goodson | |
Alan Goodson, | ||
Principal Executive Officer of | ||
abrdn Income Credit Strategies Fund |
Date: July 8, 2024
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.
By: | /s/ Alan Goodson | |
Alan Goodson, | ||
Principal Executive Officer of | ||
abrdn Income Credit Strategies Fund |
Date: July 8, 2024
By: | /s/ Sharon Ferrari | |
Sharon Ferrari, | ||
Principal Financial Officer of | ||
abrdn Income Credit Strategies Fund |
Date: July 8, 2024