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 number |
811-23014 | |||||
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Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc. |
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(Exact name of Registrant as specified in charter) |
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c/o The Dreyfus Corporation 200 Park Avenue New York, New York 10166 |
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(Address of principal executive offices) (Zip code) |
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Bennett A. MacDougall, Esq. 200 Park Avenue New York, New York 10166 |
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(Name and address of agent for service) |
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Registrant's telephone number, including area code: |
(212) 922-6400 | |||||
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Date of fiscal year end:
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08/31 |
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Date of reporting period: |
02/28/19 |
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FORM N-CSR
Item 1. Reports to Stockholders.
Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc.
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SEMIANNUAL REPORT February 28, 2019 |
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Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc. Protecting Your Privacy THE FUND IS COMMITTED TO YOUR PRIVACY. On this page, you will find the Fund’s policies and practices for collecting, disclosing, and safeguarding “nonpublic personal information,” which may include financial or other customer information. These policies apply to individuals who purchase Fund shares for personal, family, or household purposes, or have done so in the past. This notification replaces all previous statements of the Fund’s consumer privacy policy, and may be amended at any time. We’ll keep you informed of changes as required by law. YOUR ACCOUNT IS PROVIDED IN A SECURE ENVIRONMENT. The Fund maintains physical, electronic and procedural safeguards that comply with federal regulations to guard nonpublic personal information. The Fund’s agents and service providers have limited access to customer information based on their role in servicing your account. THE FUND COLLECTS INFORMATION IN ORDER TO SERVICE AND ADMINISTER YOUR ACCOUNT. The Fund collects a variety of nonpublic personal information, which may include: • Information we receive from you, such as your name, address, and social security number. • Information about your transactions with us, such as the purchase or sale of Fund shares. • Information we receive from agents and service providers, such as proxy voting information. THE FUND DOES NOT SHARE NONPUBLIC PERSONAL INFORMATION WITH ANYONE, EXCEPT AS PERMITTED BY LAW. Thank you for this opportunity to serve you. |
The views expressed in this report reflect those of the portfolio manager(s) only through the end of the period covered and do not necessarily represent the views of Dreyfus or any other person in the Dreyfus organization. Any such views are subject to change at any time based upon market or other conditions and Dreyfus disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Dreyfus fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Dreyfus fund. |
Not FDIC-Insured • Not Bank-Guaranteed • May Lose Value |
Contents
THE FUND
in Affiliated Issuers |
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Currency Exchange Contracts |
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of the Fund’s Management and |
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Sub-Investment Advisory Agreements |
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FOR MORE INFORMATION
Back Cover
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The Fund |
A LETTER FROM THE PRESIDENT OF DREYFUS
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc., covering the six-month period from September 1, 2018 through February 28, 2019. For information about how the fund performed during the reporting period, as well as general market perspectives, we provide a Discussion of Fund Performance on the pages that follow.
While the U.S. economy continued to grow at above-trend rates during the six months, other developed country economies remained moderated. Economic momentum and strong corporate earnings supported U.S. stocks early in the period, while stocks declined in other developed markets. In emerging countries, equities experienced pressure for much of the period as the currency crises in Turkey and Argentina led investors to fear that currency depreciation would spread to other markets in the developing world.
In October, equity markets experienced a sharp sell-off, triggered in part by interest rate increases, trade tensions and slowing global growth. The sell-off partially reduced prior gains on U.S. indexes while losses deepened in international markets. Global equities continued their general decline throughout the end of the calendar year. However, comments made in January by the U.S. Federal Reserve (the “Fed”) that it might slow the pace of interest rate increases in 2019 helped stimulate a rebound across equity markets that lasted throughout the end of the reporting period.
Fixed income markets struggled during the first month of the period as interest rates and inflation rose, pressuring most bond prices. Favorable U.S. equity market performance fed investor risk appetites, reducing the demand for Treasuries and increasing yields. However, equity volatility in October triggered a flight to quality in the bond market, raising Treasury prices and flattening the yield curve. Growth concerns also affected corporate bonds, causing increased spreads and hurting prices through the end of the calendar year. After encouraging comments by the Fed in January, Bond markets rebounded and many indices continued to experience moderately positive returns through the end of February.
We expect economic momentum to continue in the U.S., but we will monitor relevant data for any signs of a change in our outlook. As always, we encourage you to discuss the risks and opportunities in today’s investment environment with your financial advisor.
Thank you for your continued confidence and support.
Sincerely,
Renee Laroche-Morris
President
The Dreyfus Corporation
March 15, 2019
2
DISCUSSION OF FUND PERFORMANCE (Unaudited)
For the period from September 1, 2018 through February 28, 2019, as provided by the fund’s primary portfolio managers, Kevin Cronk, Chris Barris, Hiram Hamilton and Leland Hart of Alcentra NY, LLC, Sub-Investment Adviser
Market and Fund Performance Overview
For the six-month period ended February 28, 2019, Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc. produced a total return of -0.18% on a net-asset-value basis.1 Over the same period, the fund provided aggregate income dividends of $0.2570 per share, which reflects an annualized distribution rate of 5.90%.2
Global credit instruments generally produced positive total returns over the period in U.S. dollar terms when hedged for currency effects. In many market segments, U.S. bond markets lagged the rest of the developed world. U.S. market activity was volatile during the reporting period, driven by concerns over future U.S. Federal Reserve (“Fed”) rate hikes, slowing global growth and geopolitical tensions. The fund produced a negative total return, primarily due to its position in collateralized loan obligation (CLO)-structured credit, which underperformed the broader market during the period.
The Fund’s Investment Approach
The fund’s investment objectives are to seek high current income and to return at least $9.835 per Common Share to holders of record of Common Shares on or about December 1, 2024 (the “Termination Date”) (subject to certain extensions). The fund will normally invest primarily in credit instruments and other investments with similar economic characteristics. Such credit instruments include: first lien secured floating rate loans, as well as investments in participations and assignments of such loans; second lien, senior unsecured, mezzanine and other collateralized and uncollateralized subordinated loans; corporate debt obligations other than loans; and structured products, including collateralized bond, loan and other debt obligations, structured notes and credit-linked notes.
Principal investment strategies include:
• Senior Secured Loans and Other Loans
• Corporate Debt
• Special Situations
• Structured Credit
Market Volatility Dampens Leveraged Finance Asset Returns
Over the reporting period, several shifts in investor sentiment and behavior occurred. During the month of September, markets were still enjoying momentum from strong summer returns, despite continued concerns over trade disputes, geopolitical disagreements and the possibility of slowing global growth. In October, the Fed made comments that led investors to believe it was set to proceed down a hawkish trajectory in terms of 2019 interest-rate hikes. This, along with softness in earnings of cyclical companies, increasing corporate leverage, and continued global political uncertainty unnerved investors and sparked a period of volatility that lasted throughout the fourth calendar quarter of 2018.
3
DISCUSSION OF FUND PERFORMANCE (Unaudited) (continued)
The U.S. loan market, which had performed well through the majority of 2018, started to see outflows in late November. This pressured prices and induced more selling, particularly throughout the month of December, which saw record outflows by retail investors. In December, high yield bonds, loans, and CLO-structured credit security spreads widened, hurting asset prices. However, investor sentiment and market performance shifted once again in January after comments by the Fed which emphasized its focus on data as a driver for rate-hike decisions and its ability to suspend additional rate increases when the data is not supportive. Since that Fed meeting, spreads have narrowed and risk assets have recovered. The spread compression of high yield bonds, loans and, to a lesser extent, CLO-structured credit, led to a price recovery. In fact, the high yield bond and loan negative performance seen during the fourth quarter was mitigated during the last two months of the reporting period.
Constructing a Diversified Income-Oriented Portfolio
Of the asset classes in which the fund invests, structured credit lagged in terms of total returns during the period. Pricing pressure within the CLO market occurred during the fourth calendar quarter of 2018, impacting the fund’s performance. CLOs are composed of individual loans and tend to be less liquid than the broader market. The combination of softer loan performance and an illiquid market in December contributed to challenging CLO performance. As of the period-end, CLOs were approximately 23% of the overall fund. The asset class was the largest detractor from performance for the six months.
High yield bonds and loans exhibited similar performance patterns during the reporting period. Pricing pressure experienced by the fund’s high yield holdings during the fourth quarter was negated in January and February when the markets rebounded. Debt issued by health care companies was among the top contributors for the period. Energy sector holdings did not perform well. The fund holds a bias towards U.S. high yield bonds, but does hold debt from European issuers, which made a positive contribution to returns during the first two months of 2019.
In the loan market, European loans outperformed U.S. loans during the fourth quarter volatility of 2018. The fund possesses a bias towards U.S. loans, which was a drag on performance during that period. However, the U.S. loan market rebounded in January and February, recovering its losses. Financial sector and chemical company loans performed well. Strong results were also seen from services and technology company loans. From a credit quality perspective, the fund was underweighted in high-quality, low-spread BB rated loans in favor of a heavier allocation to mid-quality B rated securities. This positioning helped performance in late 2018 when BBs underperformed B rated loans. However, in January and February, this underweight to higher-quality, more liquid BB rated securities was a drag on performance, as they outperformed their B rated counterparts.
Positioned for Income Generation
At the end of the reporting period, fundamentals across asset classes appeared to be firm. The fourth-quarter earnings season was generally positive, even among some of the cyclical companies that had difficulties back in October. Defaults across asset classes appear non-threatening, and we do not believe there will be any material increase in defaults within the next year. We believe global growth is showing signs of a slowdown. In Europe, there have been pockets of weak economic data in countries such as Italy, Germany and France.
4
However, we don’t see evidence that corporate earnings are affected as of yet. While we do not believe the U.S. has been affected, we think the question is how long this can continue before the U.S. becomes vulnerable to a global slowdown.
Within the markets, we believe a lack of new issues will help to prop up prices across leveraged finance assets. We think that high yield bond and loan valuations continue to look attractive versus the broader fixed income investment universe due to their more favorable credit statistics. Between the two classes, we currently favor loans over high yield bonds because we believe they offer a better relative value. We also favor U.S. loans versus European and are focused on gaining more exposure in the U.S. loan market. In addition, we are opting for U.S. high yield bonds over those issued by companies in the Eurozone. Lastly, we expect the structured credit market to continue its slow appreciation.
March 15, 2019
1 Total return includes reinvestment of dividends and any capital gains paid, based upon net asset value per share. Past performance is no guarantee of future results. Share price, yield, and investment return fluctuate such that upon redemption, fund shares may be worth more or less than their original cost.
2 Annualized distribution rate per share is based upon dividends per share paid from net investment income during the period, divided by the market price per share at the end of the period, adjusted for any capital gain distributions.
Bonds are subject generally to interest-rate, credit, liquidity, and market risks, to varying degrees.
High yield bonds are subject to increased credit risk and are considered speculative in terms of the issuer’s perceived ability to continue making interest payments on a timely basis and to repay principal upon maturity.
Collateralized loan obligations (CLOs) and other types of collateralized debt obligations (CDOs) are typically privately offered and sold, and thus are not registered under the securities laws. As a result, investments in CLOs and other types of CDOs may be characterized by the fund as illiquid securities. In addition to the general risks associated with credit instruments, CLOs and other types of CDOs carry additional risks, including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (ii) the quality of the collateral may decline in value or default; (iii) the possibility that the CLO or CDO is subordinate to other classes; and (iv) the complex structure of the security may not be fully understood at the time of investment and may produce disputes with the issuer or unexpected investment results.
The Senior Secured Loans in which the fund will invest typically will be below investment-grade quality. Although, in contrast to other below-investment-grade instruments, Senior Secured Loans hold senior positions in the capital structure of a business entity, are secured with specific collateral and have a claim on the assets and/or stock of the borrower that is senior to that held by unsecured creditors, subordinated debt holders and stockholders of the borrower, the risks associated with Senior Secured Loans are similar to the risks of below-investment-grade instruments. Although the Senior Secured Loans in which the fund will invest will be secured by collateral, there can be no assurance that such collateral can be readily liquidated or that the liquidation of such collateral would satisfy the borrower’s obligation in the event of non-payment of scheduled interest or principal. Additionally, if a borrower under a Senior Secured Loan default becomes insolvent or goes into bankruptcy, the fund may recover only a fraction of what is owed on the Senior Secured Loan or nothing at all. In general, the secondary trading market for Senior Secured Loans is not fully developed. Illiquidity and adverse market conditions may mean that the fund may not be able to sell certain Senior Secured Loans quickly or at a fair price.
Subordinated Loans generally are subject to similar risks as those associated with investments in Senior Secured Loans, except that such loans are subordinated in payment and/or lower in lien priority to first lien holders. Subordinated Loans are subject to the additional risk that the cash flow of the borrower and collateral securing the loan or debt, if any, may be insufficient to meet scheduled payments after giving effect to the senior unsecured or senior secured obligations of the borrower. This risk is generally higher for subordinated unsecured loans or debt, which are not backed by a security interest in any specific collateral. Subordinated Loans generally have greater price volatility than Senior Secured Loans and may be less liquid.
The use of leverage magnifies the fund’s investment, market and certain other risks. For derivatives with a leverage component, adverse changes in the value or level of the underlying asset, reference rate or index can result in a loss substantially greater than the amount invested in the derivative itself.
5
STATEMENT OF INVESTMENTS
February 28, 2019 (Unaudited)
Description |
Coupon |
Maturity |
Principal |
a |
Value ($) |
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Bonds and Notes - 88.9% |
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Aerospace & Defense - 1.0% |
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Bombardier, |
7.50 |
3/15/2025 |
1,450,000 |
b,c |
1,457,250 |
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Automobiles & Components - .4% |
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American Axle & Manufacturing, |
6.25 |
4/1/2025 |
585,000 |
c |
585,789 |
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Building Materials - .4% |
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Griffon, |
5.25 |
3/1/2022 |
530,000 |
c |
525,362 |
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Chemicals - 1.8% |
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CVR Partners, |
9.25 |
6/15/2023 |
1,315,000 |
b,c |
1,392,124 |
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INEOS Group Holdings, |
5.63 |
8/1/2024 |
540,000 |
b |
525,825 |
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Kraton Polymers, |
7.00 |
4/15/2025 |
585,000 |
b,c |
594,506 |
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2,512,455 |
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Collateralized Loan Obligations Debt - 24.3% |
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AMMC CLO, |
9.24 |
1/15/2032 |
500,000 |
b,d |
494,101 |
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AMMC CLO, |
8.50 |
4/14/2029 |
4,000,000 |
b,d |
3,870,200 |
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Arch Street CLO, |
8.77 |
10/20/2028 |
1,000,000 |
b,d |
974,855 |
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Battalion CLO, |
8.76 |
7/17/2028 |
750,000 |
b,d |
728,474 |
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Cairn CLO, |
EUR |
6.60 |
10/20/2028 |
3,000,000 |
b,c,d |
3,186,931 |
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Carlyle Global Market Strategies Euro CLO, |
EUR |
6.44 |
7/15/2030 |
2,000,000 |
b,c,d |
1,942,448 |
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Carlyle Global Market Strategies Euro CLO, |
EUR |
7.75 |
1/18/2030 |
2,000,000 |
b,c,d |
2,250,859 |
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CIFC Funding, |
8.57 |
10/22/2031 |
1,000,000 |
b,d |
944,255 |
6
Description |
Coupon |
Maturity |
Principal |
a |
Value ($) |
||||
Bonds and Notes - 88.9% (continued) |
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Collateralized Loan Obligations Debt - 24.3% (continued) |
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Euro-Galaxy CLO, |
EUR |
6.85 |
7/30/2030 |
2,000,000 |
b,c,d |
2,034,203 |
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Marble Point XII CLO, |
8.44 |
7/16/2031 |
750,000 |
b,d |
687,941 |
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OCP CLO, |
8.97 |
10/17/2030 |
1,000,000 |
b,d |
957,484 |
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OZLM VI, |
8.50 |
4/17/2031 |
2,000,000 |
b,d |
1,855,638 |
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OZLM XIII, |
7.97 |
7/30/2027 |
2,250,000 |
b,d |
2,152,193 |
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OZLME, |
EUR |
6.45 |
8/24/2030 |
1,000,000 |
b,c,d |
980,717 |
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Penta CLO, |
EUR |
5.48 |
8/4/2028 |
3,000,000 |
b,c,d |
3,128,292 |
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Rockford Tower CLO, |
8.49 |
5/20/2031 |
750,000 |
b,d |
715,808 |
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Sounds Point IV-R CLO, |
8.69 |
4/18/2031 |
750,000 |
b,d |
718,250 |
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St Pauls V CLO, |
EUR |
6.60 |
8/20/2030 |
4,000,000 |
b,c,d |
4,082,424 |
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Venture CLO, |
8.70 |
10/22/2031 |
1,000,000 |
b,d |
967,484 |
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Vibrant CLO, |
8.82 |
10/20/2031 |
1,000,000 |
b,d |
967,435 |
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33,639,992 |
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Collateralized Loan Obligations Equity - 4.2% |
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Dryden 36 Senior Loan Fund, |
6.01 |
1/15/2028 |
2,450,931 |
b,e |
1,472,647 |
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Dryden 36 Senior Loan Fund, |
6.01 |
1/15/2028 |
484,569 |
b,e |
291,154 |
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KVK CLO, |
4.60 |
5/20/2029 |
4,000,000 |
b,e |
1,840,388 |
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Madison Park Funding X, |
7.50 |
1/20/2025 |
3,000,000 |
b,e |
2,251,095 |
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5,855,284 |
7
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description |
Coupon |
Maturity |
Principal |
a |
Value ($) |
||||
Bonds and Notes - 88.9% (continued) |
|||||||||
Commercial & Professional Services - 2.0% |
|||||||||
Ahern Rentals, |
7.38 |
5/15/2023 |
900,000 |
b,c |
834,750 |
||||
Prime Security Services Borrower, |
9.25 |
5/15/2023 |
1,886,000 |
b,c |
1,993,502 |
||||
2,828,252 |
|||||||||
Consumer Discretionary - 3.2% |
|||||||||
AMC Entertainment Holdings, |
GBP |
6.38 |
11/15/2024 |
585,000 |
c |
733,821 |
|||
Brookfield Residential Properties, |
6.38 |
5/15/2025 |
590,000 |
b,c |
566,164 |
||||
Cirsa Finance International, |
7.88 |
12/20/2023 |
1,100,000 |
b |
1,130,250 |
||||
International Game Technology, |
6.50 |
2/15/2025 |
605,000 |
b,c |
646,594 |
||||
Scientific Games International, |
10.00 |
12/1/2022 |
450,000 |
c |
474,750 |
||||
William Lyon Homes, |
5.88 |
1/31/2025 |
460,000 |
c |
416,300 |
||||
Williams Scotsman International, |
6.88 |
8/15/2023 |
435,000 |
b,c |
428,475 |
||||
4,396,354 |
|||||||||
Consumer Staples - .6% |
|||||||||
Kronos Acquisition Holdings, |
9.00 |
8/15/2023 |
480,000 |
b,c |
411,600 |
||||
Prestige Brands, |
6.38 |
3/1/2024 |
370,000 |
b,c |
373,700 |
||||
785,300 |
|||||||||
Diversified Financials - 8.0% |
|||||||||
Amigo Luxembourg, |
GBP |
7.63 |
1/15/2024 |
1,785,000 |
c |
2,445,860 |
|||
Bracken MidCo1, |
GBP |
8.88 |
10/15/2023 |
540,000 |
b,c |
685,182 |
|||
Cabot Financial Luxembourg, |
GBP |
7.50 |
10/1/2023 |
1,465,000 |
c |
1,885,130 |
|||
FS Energy & Power Fund, |
7.50 |
8/15/2023 |
765,000 |
b,c |
775,947 |
||||
Garfunkelux Holdco 2, |
GBP |
11.00 |
11/1/2023 |
1,730,000 |
c |
1,858,931 |
|||
Nationstar Mortgage Holdings, |
8.13 |
7/15/2023 |
970,000 |
b,c |
989,400 |
||||
Navient, |
5.88 |
10/25/2024 |
525,000 |
c |
507,937 |
||||
Navient, |
6.50 |
6/15/2022 |
400,000 |
c |
411,000 |
||||
Quicken Loans, |
5.75 |
5/1/2025 |
475,000 |
b,c |
471,200 |
8
Description |
Coupon |
Maturity |
Principal |
a |
Value ($) |
||||
Bonds and Notes - 88.9% (continued) |
|||||||||
Diversified Financials - 8.0% (continued) |
|||||||||
Tempo Acquisition, |
6.75 |
6/1/2025 |
1,045,000 |
b,c |
1,060,675 |
||||
11,091,262 |
|||||||||
Energy - 7.4% |
|||||||||
California Resources, |
8.00 |
12/15/2022 |
575,000 |
b,c |
460,718 |
||||
Chesapeake Energy, |
8.00 |
1/15/2025 |
800,000 |
c |
817,000 |
||||
Extraction Oil & Gas, |
7.38 |
5/15/2024 |
1,310,000 |
b,c |
1,179,000 |
||||
Genesis Energy, |
5.63 |
6/15/2024 |
1,110,000 |
c |
1,038,738 |
||||
Gulfport Energy, |
6.38 |
5/15/2025 |
1,040,000 |
c |
934,700 |
||||
Nabors Industries, |
5.50 |
1/15/2023 |
200,000 |
c |
188,500 |
||||
Precision Drilling, |
7.75 |
12/15/2023 |
1,485,000 |
c |
1,510,987 |
||||
SemGroup, |
6.38 |
3/15/2025 |
1,245,000 |
c |
1,179,637 |
||||
SESI, |
7.75 |
9/15/2024 |
565,000 |
c |
483,075 |
||||
Shelf Drill Holdings, |
8.25 |
2/15/2025 |
910,000 |
b |
872,462 |
||||
SM Energy, |
5.63 |
6/1/2025 |
180,000 |
c |
169,200 |
||||
Unit, |
6.63 |
5/15/2021 |
1,410,000 |
c |
1,388,850 |
||||
10,222,867 |
|||||||||
Environmental Control - 1.1% |
|||||||||
Covanta Holding, |
5.88 |
3/1/2024 |
460,000 |
c |
470,925 |
||||
GFL Environmental, |
5.38 |
3/1/2023 |
1,065,000 |
b,c |
1,008,422 |
||||
1,479,347 |
|||||||||
Financials - .7% |
|||||||||
Icahn Enterprises, |
6.75 |
2/1/2024 |
975,000 |
c |
1,023,750 |
||||
Food Products - 1.5% |
|||||||||
Albertsons, |
6.63 |
6/15/2024 |
2,100,000 |
c |
2,110,500 |
||||
Forest Products & Other - 1.1% |
|||||||||
Mercer International, |
7.38 |
1/15/2025 |
1,520,000 |
b,c |
1,592,200 |
9
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description |
Coupon |
Maturity Date |
Principal |
a |
Value ($) |
||||
Bonds and Notes - 88.9% (continued) |
|||||||||
Health Care - 7.7% |
|||||||||
Bausch Health, |
6.13 |
4/15/2025 |
3,870,000 |
b,c |
3,734,550 |
||||
Eagle Holding, |
7.63 |
5/15/2022 |
1,155,000 |
b,c |
1,160,775 |
||||
Endo Finance, |
5.38 |
1/15/2023 |
380,000 |
b,c |
317,300 |
||||
Endo Finance, |
6.00 |
7/15/2023 |
455,000 |
b,c |
379,356 |
||||
Endo Finance, |
7.25 |
1/15/2022 |
155,000 |
b,c |
149,527 |
||||
MPH Acquisition Holdings, |
7.13 |
6/1/2024 |
540,000 |
b,c |
539,325 |
||||
Ortho-Clinical Diagnostics, |
6.63 |
5/15/2022 |
975,000 |
b,c |
943,312 |
||||
Polaris Intermediate, |
8.50 |
12/1/2022 |
2,055,000 |
b,c |
2,036,423 |
||||
Tenet Healthcare, |
6.75 |
6/15/2023 |
1,405,000 |
c |
1,445,394 |
||||
10,705,962 |
|||||||||
Information Technology - .9% |
|||||||||
Genesys, |
10.00 |
11/30/2024 |
1,095,000 |
b,c |
1,199,025 |
||||
Insurance - .9% |
|||||||||
USIS Merger Sub, |
6.88 |
5/1/2025 |
930,000 |
b,c |
906,750 |
||||
York Risk Services Holding, |
8.50 |
10/1/2022 |
460,000 |
b |
365,700 |
||||
1,272,450 |
|||||||||
Materials - 6.4% |
|||||||||
ARD Finance, |
EUR |
6.63 |
9/15/2023 |
420,000 |
c |
485,014 |
|||
ARD Securities Finance, |
8.75 |
1/31/2023 |
1,252,407 |
b,c |
1,183,524 |
||||
Ardagh Packaging Finance, |
7.25 |
5/15/2024 |
1,785,000 |
b,c |
1,867,556 |
||||
Bway Holding, |
7.25 |
4/15/2025 |
1,800,000 |
b,c |
1,714,500 |
||||
Flex Acquisition, |
6.88 |
1/15/2025 |
520,000 |
b,c |
494,000 |
||||
Peabody Energy, |
6.38 |
3/31/2025 |
1,005,000 |
b,c |
991,935 |
||||
Reynolds Group, |
7.00 |
7/15/2024 |
1,085,000 |
b,c |
1,113,053 |
||||
W/S Packaging Holdings, |
9.00 |
4/15/2023 |
985,000 |
b,c |
1,014,550 |
||||
8,864,132 |
10
Description |
Coupon |
Maturity |
Principal |
a |
Value ($) |
||||
Bonds and Notes - 88.9% (continued) |
|||||||||
Media - 4.3% |
|||||||||
Altice, |
7.63 |
2/15/2025 |
1,080,000 |
b,c |
957,949 |
||||
Altice, |
7.75 |
5/15/2022 |
515,000 |
b,c |
513,712 |
||||
Altice Finco, |
7.63 |
2/15/2025 |
829,000 |
b,c |
745,064 |
||||
CBS Radio, |
7.25 |
11/1/2024 |
735,000 |
b,c |
732,243 |
||||
DISH DBS, |
5.88 |
11/15/2024 |
1,150,000 |
c |
972,842 |
||||
Radiate Holdco, |
6.63 |
2/15/2025 |
610,000 |
b,c |
576,450 |
||||
Radiate Holdco, |
6.88 |
2/15/2023 |
207,000 |
b,c |
201,825 |
||||
Townsquare Media, |
6.50 |
4/1/2023 |
780,000 |
b,c |
722,475 |
||||
Univision Communications, |
5.13 |
2/15/2025 |
545,000 |
b,c |
475,512 |
||||
5,898,072 |
|||||||||
Metals & Mining - 2.4% |
|||||||||
Constellium, |
6.63 |
3/1/2025 |
995,000 |
b,c |
1,004,950 |
||||
First Quantum Minerals , |
7.50 |
4/1/2025 |
1,580,000 |
b |
1,530,625 |
||||
Hudbay Minerals, |
7.63 |
1/15/2025 |
705,000 |
b,c |
734,081 |
||||
3,269,656 |
|||||||||
Real Estate - .9% |
|||||||||
GEO Group, |
5.88 |
10/15/2024 |
610,000 |
c |
581,025 |
||||
Haya Finance 2017, |
EUR |
5.25 |
11/15/2022 |
700,000 |
736,097 |
||||
1,317,122 |
|||||||||
Retailing - .2% |
|||||||||
New Look Secured Issuer, |
GBP |
6.50 |
7/1/2022 |
635,000 |
265,185 |
||||
Technology Hardware & Equipment - .8% |
|||||||||
Exela Finance, |
10.00 |
7/15/2023 |
1,055,000 |
b,c |
1,080,056 |
||||
Telecommunication Services - 5.6% |
|||||||||
Cincinnati Bell, |
7.00 |
7/15/2024 |
920,000 |
b,c |
837,200 |
||||
CommScope, |
5.50 |
6/15/2024 |
640,000 |
b,c |
616,800 |
||||
DKT Finance, |
9.38 |
6/17/2023 |
1,240,000 |
b,c |
1,336,100 |
11
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description |
Coupon |
Maturity |
Principal |
a |
Value ($) |
||||
Bonds and Notes - 88.9% (continued) |
|||||||||
Telecommunication Services - 5.6% (continued) |
|||||||||
Intelsat Connect Finance, |
9.50 |
2/15/2023 |
545,000 |
b |
530,012 |
||||
Intelsat Jackson Holdings, |
8.50 |
10/15/2024 |
1,535,000 |
b,c |
1,557,564 |
||||
Sprint, |
7.63 |
2/15/2025 |
2,820,000 |
c |
2,961,000 |
||||
7,838,676 |
|||||||||
Utilities - 1.1% |
|||||||||
Calpine, |
5.75 |
1/15/2025 |
485,000 |
c |
464,994 |
||||
Viridian Group FinanceCo, |
GBP |
4.75 |
9/15/2024 |
790,000 |
1,021,317 |
||||
1,486,311 |
|||||||||
Total Bonds and Notes |
123,302,611 |
||||||||
Floating Rate Loan Interests - 50.3% |
|||||||||
Advertising - .5% |
|||||||||
Polyconcept North America Holdings, |
6.24 |
8/16/2023 |
740,639 |
c,d |
743,416 |
||||
Aerospace & Defense - .4% |
|||||||||
Transdigm, |
4.99 |
6/9/2023 |
500,000 |
d |
494,915 |
||||
Automobiles & Components - .3% |
|||||||||
Dealer Tire, |
7.99 |
12/12/2025 |
450,000 |
d |
451,688 |
||||
Chemicals - 2.4% |
|||||||||
AgroFresh, |
7.55 |
7/30/2021 |
740,409 |
c,d |
733,931 |
||||
Cyanco Intermediate, |
5.99 |
3/16/2025 |
748,047 |
c,d |
742,751 |
||||
OCI Partners, |
6.80 |
3/13/2025 |
972,650 |
c,d |
972,650 |
||||
Polar US Borrower, |
7.54 |
10/15/2025 |
884,790 |
d |
884,790 |
||||
3,334,122 |
|||||||||
Commercial & Professional Services - 6.9% |
|||||||||
Allied Universal Holdco, |
6.74 |
7/28/2022 |
889,488 |
d |
880,593 |
12
Description |
Coupon |
Maturity Date |
Principal Amount ($) |
a |
Value ($) |
||||
Floating Rate Loan Interests - 50.3% (continued) |
|||||||||
Commercial & Professional Services - 6.9% (continued) |
|||||||||
AVSC Holding, |
9.99 |
9/1/2025 |
207,000 |
d |
194,839 |
||||
Cast & Crew Payroll, |
6.50 |
2/9/2026 |
185,471 |
d |
186,537 |
||||
Electro Rentoration, |
7.71 |
1/31/2024 |
226,119 |
c,d |
227,108 |
||||
Employbridge, |
7.30 |
4/18/2025 |
466,957 |
c,d |
467,153 |
||||
Fort Dearborn Holding, |
6.70 |
10/19/2023 |
250,000 |
d |
242,813 |
||||
IndigoCyan HoldCo 3 , |
GBP |
5.60 |
6/24/2024 |
2,000,000 |
d |
2,656,016 |
|||
Minerva Bidco, |
GBP |
5.91 |
7/25/2025 |
1,000,000 |
d |
1,320,965 |
|||
Pi Lux Finco, |
9.74 |
12/22/2025 |
1,000,000 |
d |
965,000 |
||||
Pre Paid Legal Services, |
5.49 |
5/1/2025 |
571,337 |
c,d |
565,624 |
||||
Verscend Holding, |
6.99 |
8/27/2025 |
796,781 |
d |
799,271 |
||||
Wand Newco 3, |
6.01 |
2/5/2026 |
525,000 |
d |
527,166 |
||||
Weight Watchers International, |
7.56 |
11/29/2024 |
487,179 |
d |
474,186 |
||||
9,507,271 |
|||||||||
Consumer Discretionary - 1.2% |
|||||||||
Stars Group Holdings, |
6.30 |
7/10/2025 |
581,671 |
d |
582,730 |
||||
Travel Leaders Group, |
6.48 |
1/25/2024 |
270,427 |
d |
272,005 |
||||
Yak Access, |
7.49 |
7/11/2025 |
993,750 |
d |
863,320 |
||||
1,718,055 |
|||||||||
Diversified Financials - 1.4% |
|||||||||
Capital Automotive, |
8.49 |
3/24/2025 |
1,425,253 |
d |
1,428,816 |
13
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description |
Coupon |
Maturity Date |
Principal Amount ($) |
a |
Value ($) |
||||
Floating Rate Loan Interests - 50.3% (continued) |
|||||||||
Diversified Financials - 1.4% (continued) |
|||||||||
Vfh Parent, |
6.13 |
3/1/2026 |
487,013 |
d |
488,917 |
||||
1,917,733 |
|||||||||
Energy - 3.0% |
|||||||||
California Resources, |
7.24 |
12/31/2022 |
925,926 |
c,d |
914,736 |
||||
Gavilan Resources, |
8.49 |
3/1/2024 |
1,025,000 |
d |
821,286 |
||||
GIP III Stetson I, |
6.73 |
7/18/2025 |
778,542 |
d |
773,676 |
||||
Granite Acquisition, |
10.05 |
12/19/2022 |
509,839 |
c,d |
509,202 |
||||
Keane Group Holdings, |
6.25 |
5/25/2025 |
215,935 |
d |
207,657 |
||||
Natgasoline, |
6.25 |
11/14/2025 |
459,923 |
d |
461,073 |
||||
Oxbow Carbon , |
9.99 |
1/4/2024 |
476,190 |
d |
477,381 |
||||
4,165,011 |
|||||||||
Health Care - 5.0% |
|||||||||
Albany Molecular Research, |
5.74 |
8/30/2024 |
500,000 |
d |
498,283 |
||||
Avantor, |
6.57 |
11/21/2024 |
473,117 |
d |
474,976 |
||||
Dentalcorp Perfect Smile, |
6.24 |
6/6/2025 |
631,932 |
d |
626,800 |
||||
Dentalcorp Perfect Smile, |
6.24 |
6/6/2025 |
158,454 |
d,f |
157,167 |
||||
Envision Healthcare, |
6.24 |
10/10/2025 |
1,200,000 |
d |
1,156,278 |
||||
Femur Buyer, |
4.50 |
3/4/2026 |
131,467 |
d |
130,152 |
||||
Immucor, |
7.80 |
6/15/2021 |
746,842 |
d |
747,776 |
14
Description |
Coupon |
Maturity Date |
Principal Amount ($) |
a |
Value ($) |
||||
Floating Rate Loan Interests - 50.3% (continued) |
|||||||||
Health Care - 5.0% (continued) |
|||||||||
Nidda Healthcare Holding, |
EUR |
4.00 |
8/21/2024 |
2,000,000 |
d |
2,283,909 |
|||
Petvet Care Centers, |
8.74 |
2/13/2026 |
400,000 |
d |
394,000 |
||||
Pharmerica, |
5.98 |
12/6/2024 |
497,494 |
d |
497,262 |
||||
6,966,603 |
|||||||||
Industrials - 3.1% |
|||||||||
American Traffic Solutions, |
6.24 |
2/28/2025 |
829,730 |
c,d |
834,916 |
||||
Brand Energy & Infrastructure Services, |
6.96 |
6/21/2024 |
1,087,191 |
c,d |
1,064,941 |
||||
Dynasty Acquisition Co I, |
4.00 |
1/23/2026 |
189,978 |
d |
190,775 |
||||
Iea Energy Services, |
9.05 |
11/14/2024 |
273,141 |
d |
260,167 |
||||
Loparex International, |
7.05 |
4/11/2025 |
609,332 |
d |
610,855 |
||||
North American Lifting Holdings, |
7.30 |
11/27/2020 |
477,490 |
d |
437,500 |
||||
Pisces Midco, |
6.55 |
4/12/2025 |
852,431 |
d |
831,120 |
||||
Standard Aero, |
4.00 |
1/23/2026 |
102,139 |
d |
102,567 |
||||
4,332,841 |
|||||||||
Information Technology - 7.7% |
|||||||||
BMC Software Finance, |
7.05 |
10/2/2025 |
1,000,000 |
d |
995,725 |
||||
Camelia Bidco, |
GBP |
4.75 |
10/10/2024 |
2,000,000 |
d |
2,635,457 |
|||
Compuware, |
5.99 |
8/25/2025 |
742,779 |
d |
746,960 |
||||
Digicert Holdings, |
6.49 |
10/31/2024 |
995,006 |
c,d |
991,688 |
15
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description |
Coupon |
Maturity Date |
Principal Amount ($) |
a |
Value ($) |
||||
Floating Rate Loan Interests - 50.3% (continued) |
|||||||||
Information Technology - 7.7% (continued) |
|||||||||
Dun & Bradstreet, |
7.48 |
2/6/2026 |
852,752 |
d |
854,990 |
||||
Hyland Software, |
5.99 |
7/1/2024 |
141,819 |
d |
142,321 |
||||
Hyland Software, |
9.49 |
7/7/2025 |
207,500 |
d |
207,604 |
||||
Marcel Bidco, |
10.27 |
9/26/2025 |
197,498 |
d |
195,770 |
||||
Mitchell International, |
5.74 |
11/29/2024 |
198,500 |
c,d |
194,159 |
||||
Mitchell International, |
9.74 |
12/1/2025 |
533,333 |
d |
522,891 |
||||
Quest Software US Holdings, |
6.99 |
5/16/2025 |
878,197 |
d |
876,278 |
||||
Unit4, |
EUR |
4.25 |
3/17/2021 |
2,000,000 |
c,d |
2,280,383 |
|||
10,644,226 |
|||||||||
Insurance - 3.8% |
|||||||||
Amynta Agency Borrower, |
6.49 |
2/28/2025 |
88,014 |
d |
86,254 |
||||
AssuredPartners, |
5.74 |
10/22/2024 |
339,418 |
c,d |
337,296 |
||||
Asurion, |
8.99 |
8/4/2025 |
3,750,000 |
d |
3,821,869 |
||||
HUB International , |
5.45 |
4/25/2025 |
498,747 |
d |
494,864 |
||||
Mayfield Agency Borrower, |
10.99 |
3/2/2026 |
578,000 |
d |
569,330 |
||||
5,309,613 |
|||||||||
Internet Software & Services - 2.7% |
|||||||||
Infinitas Learning Holding, |
EUR |
3.75 |
5/3/2024 |
2,000,000 |
d |
2,237,933 |
|||
Web.com Group, |
6.27 |
10/10/2025 |
919,238 |
d |
914,642 |
16
Description |
Coupon |
Maturity Date |
Principal Amount ($) |
a |
Value ($) |
||||
Floating Rate Loan Interests - 50.3% (continued) |
|||||||||
Internet Software & Services - 2.7% (continued) |
|||||||||
Web.com Group, |
10.27 |
10/9/2026 |
142,857 |
d |
140,714 |
||||
Xo Group, |
7.29 |
12/19/2025 |
385,000 |
d |
385,722 |
||||
3,679,011 |
|||||||||
Materials - 1.3% |
|||||||||
Ball Metalpack Finco, |
6.99 |
7/31/2025 |
409,243 |
d |
409,754 |
||||
Murray Energyoration, |
9.88 |
10/17/2022 |
490,868 |
d |
405,887 |
||||
TricorBraun, |
6.55 |
11/30/2023 |
994,927 |
d |
994,927 |
||||
1,810,568 |
|||||||||
Media - 1.1% |
|||||||||
Altice France, |
6.49 |
8/14/2026 |
997,500 |
d |
973,061 |
||||
Nep Group, |
9.49 |
10/19/2026 |
507,263 |
d |
498,386 |
||||
1,471,447 |
|||||||||
Metals & Mining - 1.0% |
|||||||||
Aleris International, |
7.24 |
2/27/2023 |
846,994 |
d |
851,229 |
||||
Covia Holdingsoration, |
6.55 |
6/2/2025 |
619,680 |
c,d |
540,981 |
||||
1,392,210 |
|||||||||
Retailing - 4.3% |
|||||||||
Bass Pro Group, |
7.49 |
9/25/2024 |
897,727 |
d |
897,260 |
||||
Comfort Holding, |
7.24 |
2/5/2024 |
740,578 |
c,d |
702,627 |
||||
EG America, |
6.81 |
2/7/2025 |
340,009 |
c,d |
332,148 |
||||
EG Finco , |
GBP |
5.66 |
2/6/2025 |
2,297,593 |
d |
2,965,513 |
|||
Neiman Marcus Group , |
5.76 |
10/26/2020 |
272,907 |
d |
251,439 |
17
STATEMENT OF INVESTMENTS (Unaudited) (continued)
Description |
Coupon |
Maturity Date |
Principal Amount ($) |
a |
Value ($) |
||||
Floating Rate Loan Interests - 50.3% (continued) |
|||||||||
Retailing - 4.3% (continued) |
|||||||||
New Look Finance, |
GBP |
12.00 |
12/31/2019 |
1,265 |
d |
1,679 |
|||
New Look Finance, |
GBP |
12.00 |
12/31/2019 |
47,663 |
d |
63,217 |
|||
Staples, |
6.51 |
9/12/2024 |
746,474 |
d |
742,708 |
||||
5,956,591 |
|||||||||
Technology Hardware & Equipment - 1.6% |
|||||||||
Harland Clarke Holdings, |
7.55 |
11/3/2023 |
524,907 |
c,d |
498,661 |
||||
Mcafee, |
10.99 |
9/29/2025 |
425,000 |
d |
431,906 |
||||
Mcafee, |
6.24 |
9/30/2024 |
978,911 |
d |
982,357 |
||||
Sandvine, |
7.01 |
10/31/2025 |
267,490 |
d |
263,477 |
||||
2,176,401 |
|||||||||
Telecommunication Services - 2.0% |
|||||||||
Commscope, |
4.25 |
2/6/2026 |
827,201 |
d |
831,080 |
||||
Intelsat Jackson Holdings, |
6.98 |
1/2/2024 |
476,190 |
c,d |
485,417 |
||||
Westoration, |
6.56 |
10/10/2024 |
1,485,000 |
c,d |
1,411,054 |
||||
2,727,551 |
|||||||||
Utilities - .6% |
|||||||||
Helix Gen Funding, |
6.24 |
6/3/2024 |
500,000 |
d |
485,990 |
||||
Pikeoration, |
6.00 |
3/23/2025 |
408,807 |
c,d |
409,402 |
||||
895,392 |
|||||||||
Total Floating Rate Loan Interests |
69,694,665 |
18
Description |
1-Day |
Shares |
Value ($) |
||||||
Investment Companies - 1.4% |
|||||||||
Registered Investment Companies - 1.4% |
|||||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund |
2.41 |
1,868,368 |
g |
1,868,368 |
|||||
Total Investments (cost $200,458,636) |
140.6% |
194,865,644 |
|||||||
Liabilities, Less Cash and Receivables |
(40.6%) |
(56,222,350) |
|||||||
Net Assets |
100.0% |
138,643,294 |
EURIBOR—Euro Interbank Offered Rate
LIBOR—London Interbank Offered Rate
EUR—Euro
GBP—British Pound
a Amount stated in U.S. Dollars unless otherwise noted above.
b Security exempt from registration pursuant to Rule 144A under the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At February 28, 2019, these securities were valued at $93,209,001 or 67.23% of net assets.
c Security, or portion thereof, has been pledged as collateral for the fund’s Revolving Credit and Security Agreement.
d Variable rate security—rate shown is the interest rate in effect at period end.
e Collateralized Loan Obligations equity positions are entitled to recurring distributions which are generally equal to the remaining cash flow of payments made by underlying securities less contractual payments to debt holders and fund expenses. The effective yield is estimated based upon the current projection of the amount and timing of these recurring distributions in addition to the estimated amount of terminal principal payment. The estimated yield and investment cost may ultimately not be realized.
f Investment, or portion of investment, represents an unfunded floating note loan interest outstanding.
g Investment in affiliated issuer. The investment objective of this investment company is publicly available and can be found within the investment company’s prospectus.
Portfolio Summary (Unaudited) † |
Value (%) |
Collateralized Loan Obligations |
28.5 |
Consumer, Non-cyclical |
23.8 |
Communications |
16.1 |
Financial |
15.8 |
Industrial |
12.7 |
Energy |
11.4 |
Technology |
10.9 |
Consumer, Cyclical |
9.6 |
Basic Materials |
8.7 |
Utilities |
1.7 |
Investment Companies |
1.4 |
140.6 |
† Based on net assets.
See notes to financial statements.
19
STATEMENT OF INVESTMENTS IN AFFILIATED ISSUERS (Unaudited)
Investment Companies |
Value |
Purchases ($) |
Sales ($) |
Value |
Net |
Dividends/ |
Registered Investment | ||||||
Dreyfus Institutional Preferred Government Plus Money Market Fund |
1,840,399 |
45,586,424 |
45,558,455 |
1,868,368 |
1.4 |
30,111 |
See notes to financial statements.
20
STATEMENT OF FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS February 28, 2019 (Unaudited)
Counterparty/ Purchased |
Purchased Currency |
Currency |
Sold |
Settlement Date |
Unrealized Appreciation (Depreciation)($) |
Goldman Sachs |
|||||
Euro |
1,870,000 |
United States Dollar |
2,127,620 |
3/29/19 |
4,622 |
United States Dollar |
3,600,001 |
Euro |
3,163,542 |
3/29/19 |
(7,185) |
United States Dollar |
6,859,705 |
British Pound |
5,345,000 |
3/19/19 |
(236,581) |
United States Dollar |
30,281,511 |
Euro |
26,845,000 |
3/19/19 |
(302,160) |
British Pound |
1,960,000 |
United States Dollar |
2,565,920 |
3/29/19 |
37,629 |
United States Dollar |
11,380,000 |
British Pound |
8,693,438 |
3/29/19 |
(167,855) |
Gross Unrealized Appreciation |
42,251 | ||||
Gross Unrealized Depreciation |
(713,781) |
See notes to financial statements.
21
STATEMENT OF ASSETS AND LIABILITIES
February 28, 2019 (Unaudited)
|
|
|
|
|
|
| ||
|
|
|
Cost |
|
Value |
| ||
Assets ($): |
|
|
|
| ||||
Investments in securities—See Statement of Investments: |
|
|
| |||||
Unaffiliated issuers |
198,590,268 |
|
192,997,276 |
| ||||
Affiliated issuers |
|
1,868,368 |
|
1,868,368 |
| |||
Cash |
|
|
|
|
25,545 |
| ||
Cash denominated in foreign currency |
|
|
3,068,989 |
|
3,078,118 |
| ||
Receivable for investment securities sold |
|
2,373,449 |
| |||||
Interest receivable |
|
2,340,962 |
| |||||
Cash collateral held by broker—Note 4 |
|
1,910,000 |
| |||||
Unrealized appreciation on forward foreign |
|
42,251 |
| |||||
Prepaid expenses |
|
|
|
|
24,526 |
| ||
|
|
|
|
|
204,660,495 |
| ||
Liabilities ($): |
|
|
|
| ||||
Due to The Dreyfus Corporation and affiliates—Note 3(b) |
|
|
151,805 |
| ||||
Loan payable—Note 2 |
|
60,000,000 |
| |||||
Payable for investment securities purchased |
|
4,971,116 |
| |||||
Unrealized depreciation on forward foreign |
|
713,781 |
| |||||
Interest and loan fees payable—Note 2 |
|
66,856 |
| |||||
Unrealized depreciation on foreign currency transactions |
|
46,971 |
| |||||
Directors fees and expenses payable |
|
2,705 |
| |||||
Accrued expenses |
|
|
|
|
63,967 |
| ||
|
|
|
|
|
66,017,201 |
| ||
Net Assets ($) |
|
|
138,643,294 |
| ||||
Composition of Net Assets ($): |
|
|
|
| ||||
Paid-in capital |
|
|
|
|
146,823,652 |
| ||
Total distributable earnings (loss) |
|
|
|
|
(8,180,358) |
| ||
Net Assets ($) |
|
|
138,643,294 |
| ||||
Shares Outstanding |
|
| ||||||
(100 million shares of $.001 par value Common Stock authorized) |
14,961,374 |
| ||||||
Net Asset Value Per Share ($) |
|
9.27 |
| |||||
See notes to financial statements. |
22
STATEMENT OF OPERATIONS
Six Months Ended February 28, 2019 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment Income ($): |
|
|
|
| ||
Income: |
|
|
|
| ||
Interest |
|
|
7,104,086 |
| ||
Dividends from affiliated issuers |
|
|
30,111 |
| ||
Total Income |
|
|
7,134,197 |
| ||
Expenses: |
|
|
|
| ||
Management fee—Note 3(a) |
|
|
838,604 |
| ||
Interest expense—Note 2 |
|
|
1,076,061 |
| ||
Professional fees |
|
|
61,995 |
| ||
Custodian fees—Note 3(b) |
|
|
10,082 |
| ||
Shareholder servicing costs |
|
|
3,591 |
| ||
Directors’ fees and expenses—Note 3(c) |
|
|
2,950 |
| ||
Prospectus and shareholders’ reports |
|
|
192 |
| ||
Miscellaneous |
|
|
75,355 |
| ||
Total Expenses |
|
|
2,068,830 |
| ||
Less—reduction in fees due to earnings credits—Note 3(b) |
|
|
(10,082) |
| ||
Net Expenses |
|
|
2,058,748 |
| ||
Investment Income—Net |
|
|
5,075,449 |
| ||
Realized and Unrealized Gain (Loss) on Investments—Note 4 ($): |
|
| ||||
Net realized gain (loss) on investments and foreign currency transactions |
(4,897,719) |
| ||||
Net realized gain (loss) on forward foreign currency exchange contracts |
1,304,087 |
| ||||
Net Realized Gain (Loss) |
|
|
(3,593,632) |
| ||
Net unrealized appreciation (depreciation) on investments |
|
|
(2,233,542) |
| ||
Net unrealized appreciation (depreciation) on |
|
|
(168,841) |
| ||
Net Unrealized Appreciation (Depreciation) |
|
|
(2,402,383) |
| ||
Net Realized and Unrealized Gain (Loss) on Investments |
|
|
(5,996,015) |
| ||
Net (Decrease) in Net Assets Resulting from Operations |
|
(920,566) |
| |||
See notes to financial statements. |
23
STATEMENT OF CASH FLOWS
Six Months Ended February 28, 2019 (Unaudited)
|
|
|
|
|
| |
|
|
|
|
|
|
|
Cash Flows from Operating Activities ($): |
|
|
|
|
| |
Purchases of portfolio securities |
|
(74,764,885) |
|
|
| |
Proceeds from sales of portfolio securities |
69,391,840 |
|
|
| ||
Net proceeds for sales of short-term securities |
(27,969) |
|
|
| ||
Interest received |
|
7,381,916 |
|
|
| |
Interest and loan fees paid |
|
(1,097,153) |
|
|
| |
Paid to The Dreyfus Corporation |
|
(861,557) |
|
|
| |
Operating expenses paid |
|
(150,079) |
|
|
| |
Realized loss from forward foreign currency exchange contracts transactions |
|
1,304,087 |
|
|
| |
Net Cash Provided by Operating Activities |
|
|
|
1,176,200 |
| |
Cash Flows from Financing Activities ($): |
|
|
|
|
| |
Dividends paid to Common Shareholders |
|
(5,655,399) |
|
|
| |
Net Cash Provided in Financing Activities |
|
(5,655,399) |
| |||
Effect of foreign exchange rate changes on cash |
|
(72,290) |
| |||
Net Increase (Decrease) in cash |
|
(4,551,489) |
| |||
Cash and cash denominated in foreign currency at beginning of period† |
|
9,565,152 |
| |||
Cash and cash denominated in foreign currency at end of period† |
|
5,013,663 |
| |||
Reconciliation of Net Increase (Decrease) in Net Assets |
|
|
| |||
|
Resulting from Operations to Net Cash Provided |
|
|
| ||
|
by Operating Activities ($): |
|
|
| ||
Net (Decrease) in Net Assets Resulting From Operations |
|
(920,566) |
| |||
Adjustments to reconcile net (decrease) in net assets |
|
|
| |||
|
resulting from operations to net cash |
|
|
| ||
|
provided by operating activities ($): |
|
|
| ||
Decrease in investments in securities at cost |
|
6,864,559 |
| |||
Decrease in dividends and interest receivable |
|
176,946 |
| |||
Decrease in Receivable for Investment securities sold |
|
455,070 |
| |||
Increase in prepaid expenses |
|
(24,526) |
| |||
Decrease in Due to The Dreyfus Corporation and affiliates |
|
(22,953) |
| |||
Decrease in payable for investment securities purchased |
|
(7,752,151) |
| |||
Decrease in interest and loan fees payable |
|
(21,092) |
| |||
Increase in Directors fees and expense payable |
|
(1,190) |
| |||
Increase in accrued expenses |
|
19,720 |
| |||
Net unrealized depreciation on investments |
|
2,402,383 |
| |||
Net Cash Provided by Operating Activities |
|
1,176,200 |
| |||
† Includes deposits held as collateral by broker. | ||||||
|
24
STATEMENT OF CHANGES IN NET ASSETS
|
|
|
|
Six Months Ended |
|
Year Ended |
| ||
Operations ($): |
|
|
|
|
|
|
|
| |
Investment income—net |
|
|
5,075,449 |
|
|
|
8,347,502 |
| |
Net realized gain (loss) on investments |
|
(3,593,632) |
|
|
|
388,965 |
| ||
Net unrealized appreciation (depreciation) |
|
(2,402,383) |
|
|
|
(3,899,981) |
| ||
Net Increase (Decrease) in Net Assets |
(920,566) |
|
|
|
4,836,486 |
| |||
Distributions ($): |
| ||||||||
Distributions to shareholders |
|
|
(4,847,485) |
|
|
|
(7,271,228) |
| |
Capital Stock Transactions ($): |
| ||||||||
Net proceeds from shares sold |
|
|
- |
|
|
|
147,045,314 |
| |
Offering costs charged to paid in capital |
|
|
- |
|
|
|
(299,227) |
| |
Increase (Decrease) in Net Assets |
- |
|
|
|
146,746,087 |
| |||
Total Increase (Decrease) in Net Assets |
(5,768,051) |
|
|
|
144,311,345 |
| |||
Net Assets ($): |
| ||||||||
Beginning of Period |
|
|
144,411,345 |
|
|
|
100,000 |
| |
End of Period |
|
|
138,643,294 |
|
|
|
144,411,345 |
| |
Capital Share Transactions (Shares): |
| ||||||||
Shares sold |
|
|
- |
|
|
|
14,961,374 |
| |
Net Increase (Decrease) in Shares Outstanding |
- |
|
|
|
14,961,374 |
| |||
a Distributions to shareholders include only distributions from net investment income and accumulated investment (loss)―net was $299,002 in 2018 and is no longer presented as a result of the adoption of SEC’s Disclosure Update and Simplification Rule. |
|||||||||
|
25
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated. Total return shows how much your investment in the fund would have increased (or decreased) during each period, assuming you had reinvested all dividends and distributions. These figures have been derived from the fund’s financial statements and market price data for the fund’s shares.
Six Months Ended |
||||||
February 28, 2019 |
Year Ended |
|||||
(Unaudited) |
August 31, 2018a | |||||
Per Share Data ($): |
||||||
Net asset value, |
9.65 |
9.84b | ||||
Investment Operations: |
||||||
Investment income—netc |
.34 |
.56 | ||||
Net realized and unrealized |
(.39) |
(.24) | ||||
Total from Investment Operations |
(.05) |
.32 | ||||
Distributions: |
||||||
Dividends from investment income—net |
(.26) |
(.49) | ||||
Dividends from net realized |
(.07) |
- | ||||
Total Distributions |
(.33) |
- | ||||
Offering costs charged to paid-in capital |
- |
(.02) | ||||
Net asset value, end of period |
9.27 |
9.65 | ||||
Market value, end of period |
8.65 |
9.17 | ||||
Total Return (%)d,e |
(2.04) |
(3.57) | ||||
Ratios/Supplemental Data (%) |
||||||
Ratio of total expenses |
3.00 |
2.73 | ||||
Ratio of net expenses |
2.99 |
2.73 | ||||
Ratio of interest expense |
1.56 |
1.15 | ||||
Ratio of net investment income |
7.37 |
6.92 | ||||
Portfolio Turnover Ratee |
34.33 |
67.71 | ||||
Net Assets, end of period ($ x 1,000) |
138,643 |
144,411 | ||||
Average borrowings outstanding ($ x 1,000) |
60,000 |
56,177 | ||||
Weighted average number of fund |
||||||
shares outstanding ($ x 1,000) |
14,961 |
14,866 | ||||
Average amount of debt per share ($) |
4.01 |
3.78 |
a From October 27, 2017 (commencement of operations) to August 31, 2018.
b Reflects a deduction of $.16 per share sales load from the initial offering price of $10.00 per share.
c Based on average shares outstanding.
d Calculated based on market value.
e Not annualized.
f Annualized.
See notes to financial statements.
26
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1—Significant Accounting Policies:
Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc. (the “fund”) under the Investment Company Act of 1940, as amended (the “Act”), as a diversified closed-end management investment company that has a limited term of approximately seven years. The fund’s investment objective is to seek high current income and to return at least $9.835 per share of Common Stock (the public offering price per Common Stock after deducting a sales load of $0.165 per Common Stock but before deducting offering costs of $0.02 per Common Stock (“Original NAV”)) to holders of record of Common Shares on or about December 1, 2024 (the “Termination Date”) (subject to certain extensions). The Dreyfus Corporation (the “Manager” or “Dreyfus”), a wholly-owned subsidiary of The Bank of New York Mellon Corporation (“BNY Mellon”), serves as the fund’s investment adviser. Alcentra NY, LLC (“Alcentra”), a wholly-owned subsidiary of BNY Mellon and affiliate of Dreyfus, serves as the fund’s sub-investment adviser. The fund’s Common Stock trades on the New York Stock Exchange (the “NYSE”) under the ticker symbol DCF.
The Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) is the exclusive reference of authoritative U.S. generally accepted accounting principles (“GAAP”) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal laws are also sources of authoritative GAAP for SEC registrants. The fund’s financial statements are prepared in accordance with GAAP, which may require the use of management estimates and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: The fair value of a financial instrument is the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). GAAP establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. This hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
Additionally, GAAP provides guidance on determining whether the volume and activity in a market has decreased significantly and whether such a decrease in activity results in transactions that are not orderly. GAAP requires enhanced disclosures around valuation inputs and techniques used during annual and interim periods.
27
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Various inputs are used in determining the value of the fund’s investments relating to fair value measurements. These inputs are summarized in the three broad levels listed below:
Level 1—unadjusted quoted prices in active markets for identical investments.
Level 2—other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.).
Level 3—significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments).
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. Valuation techniques used to value the fund’s investments are as follows:
Registered investment companies that are not traded on an exchange are valued at their net asset value and are generally categorized within Level 1 of the fair value hierarchy.
Investments in securities, floating rate loan interests and other securities, excluding short-term investments (other than U.S. Treasury Bills), and forward foreign currency exchange contracts (“forward contracts”) are valued each business day by an independent pricing service (the “Service”) approved by the fund’s Board of Directors (the “Board”). Investments for which quoted bid prices are readily available and are representative of the bid side of the market in the judgment of the Service are valued at the mean between the quoted bid prices (as obtained by the Service from dealers in such securities) and asked prices (as calculated by the Service based upon its evaluation of the market for such securities). Other investments (which constitute a majority of the portfolio securities) are valued as determined by the Service, based on methods which include consideration of the following: yields or prices of securities of comparable quality, coupon, maturity and type; indications as to values from dealers; and general market conditions. These securities are generally categorized within Level 2 of the fair value hierarchy.
The Service is engaged under the general supervision of the Board.
When market quotations or official closing prices are not readily available, or are determined not to accurately reflect fair value, such as when the value of a security has been significantly affected by events after the close
28
of the exchange or market on which the security is principally traded, but before the fund calculates its net asset value, the fund may value these investments at fair value as determined in accordance with the procedures approved by the Board. Certain factors may be considered when fair valuing investments such as: fundamental analytical data, the nature and duration of restrictions on disposition, an evaluation of the forces that influence the market in which the securities are purchased and sold, and public trading in similar securities of the issuer or comparable issuers. These securities are either categorized within Level 2 or 3 of the fair value hierarchy depending on the relevant inputs used.
For restricted securities where observable inputs are limited, assumptions about market activity and risk are used and such securities are generally categorized within Level 3 of the fair value hierarchy.
Investments denominated in foreign currencies are translated to U.S. dollars at the prevailing rates of exchange.
Forward contracts are valued at the forward rate and are generally categorized within Level 2 of the fair value hierarchy.
The following is a summary of the inputs used as of February 28, 2019 in valuing the fund’s investments:
Level 1– Unadjusted Quoted Prices |
Level 2–Other Significant Observable |
Level 3–Significant Unobservable Inputs |
Total | |
Assets ($) |
||||
Investments in Securities: |
|
|
|
|
Collateralized Loan Obligations† |
– |
39,495,276 |
– |
39,495,276 |
Corporate Bonds† |
– |
83,807,335 |
– |
83,807,335 |
Floating Rate Loan Interests† |
– |
69,694,665 |
– |
69,694,665 |
Investment Companies |
1,868,368 |
– |
– |
1,868,368 |
Other Financial Instruments: |
||||
Forward Foreign Currency Exchange Contracts†† |
– |
42,251 |
– |
42,251 |
Liabilities ($) |
||||
Other Financial Instruments: |
||||
Forward Foreign Currency Exchange Contracts†† |
(713,781) |
– |
(713,781) |
† See Statement of Investments for additional detailed categorizations.
†† Amount shown represents unrealized appreciation (depreciation) at period end.
29
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
At February 28, 2019, there were no transfers between levels of the fair value hierarchy. It is the fund’s policy to recognize transfers between levels at the end of the reporting period.
(b) Foreign currency transactions: The fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in the market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.
Net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized on securities transactions between trade and settlement date, and the difference between the amounts of dividends, interest and foreign withholding taxes recorded on the fund’s books and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the value of assets and liabilities other than investments resulting from changes in exchange rates. Foreign currency gains and losses on foreign currency transactions are also included with net realized and unrealized gain or loss on investments.
(c) Securities transactions and investment income: Securities transactions are recorded on a trade date basis. Realized gains and losses from securities transactions are recorded on the identified cost basis. Dividend income is recognized on the ex-dividend date and interest income, including, where applicable, accretion of discount and amortization of premium on investments, is recognized on the accrual basis.
(d) Affiliated issuers: Investments in other investment companies advised by Dreyfus are considered “affiliated” under the Act.
(e) Risk: The fund invests primarily in debt securities. Failure of an issuer of the debt securities to make timely interest or principal payments, or a decline or the perception of a decline in the credit quality of a debt security, can cause the debt security’s price to fall, potentially lowering the fund’s share price. High yield (“junk”) bonds involve greater credit risk, including the risk of default, than investment grade bonds, and are considered predominantly speculative with respect to the issuer’s continuing ability to make principal and interest payments. In addition, the value of debt securities may decline due to general market conditions that are not specifically related to a particular issuer, such as real or perceived adverse economic conditions, changes in outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment. Such values may also decline because of factors that affect a particular industry.
30
The fund invests in floating rate loan interests. The floating rate loans in which the fund invests typically are below investment grade securities, and inherently speculative. In the event of the bankruptcy of a borrower, the fund could experience delays or limitations imposed by insolvency laws with respect to its ability to realize the benefits of any collateral securing the borrower’s loan.
The fund invests in Collateralized Loan Obligations (“CLOs”). CLO and structured finance securities are generally backed by an asset or a pool of assets (typically senior secured loans and other credit-related assets in the case of a CLO) which serve as collateral. The fund and other investors in CLO and structured finance securities ultimately bear the credit risk of the underlying collateral. If there are defaults or the relevant collateral otherwise underperforms, scheduled payments to senior tranches of such securities take precedence over those of mezzanine tranches, and scheduled payments to mezzanine tranches take precedence over those to subordinated/equity tranches. Therefore, CLO and other structured finance securities may present risks similar to those of the other types of debt obligations and, in fact, such risks may be of greater significance in the case of CLO and other structured finance securities. In addition to the general risks associated with investing in debt securities, CLO securities carry additional risks, including, but not limited to: (1) the possibility that distributions from collateral assets will not be adequate to make interest or other payments; (2) the quality of the collateral may decline in value or default; (3) the fact that investments in CLO equity and junior debt tranches will likely be subordinate to other senior classes of CLO debt; and (4) the complex structure of the security may not be fully understood at the time of investment and may produce disputes with the issuer or unexpected investment results. Additionally, changes in the collateral held by a CLO may cause payments on the instruments the Fund holds to be reduced, either temporarily or permanently. Structured investments, particularly the subordinated interests in which the Fund invests, are less liquid than many other types of securities and may be more volatile than the assets underlying the CLOs the Fund may target. In addition, CLO and other structured finance securities may be subject to prepayment risk.
(f) Dividends and distributions to shareholders: Dividends and distributions are recorded on the ex-dividend date. Dividends from investment income-net are normally declared and paid monthly. Dividends from net realized capital gains, if any, are normally declared and paid annually, but the fund may make distributions on a more frequent basis to comply with the distribution requirements of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent that net realized capital gains can be offset by capital loss carryovers, it is the policy of the fund not
31
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
to distribute such gains. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.
Shareholders will have their distributions reinvested in additional shares of the fund, unless such shareholders elect to receive cash, at the lower of the market price or net asset value per share (but not less than 95% of the market price). If market price is equal to or exceeds net asset value, shares will be issued at net asset value. If net asset value exceeds market price, Computershare Inc., the transfer agent, will buy fund shares in the open market and reinvest those shares accordingly.
On February 25, 2019, the Board declared a cash dividend of $0.054 per share from undistributed investment income-net, payable on March 26, 2019 to Shareholders of record as of the close of business on March 12, 2019. The ex-dividend date was March 11, 2019.
(g) Federal income taxes: It is the policy of the fund to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the applicable provisions of the Code, and to make distributions of taxable income and net realized capital gain sufficient to relieve it from substantially all federal income and excise taxes.
As of and during the period ended February 28, 2019, the fund did not have any liabilities for any uncertain tax positions. The fund recognizes interest and penalties, if any, related to uncertain tax positions as income tax expense in the Statement of Operations. During the period ended February 28, 2019, the fund did not incur any interest or penalties.
The tax year in the period ended August 31, 2018 remains subject to examination by the Internal Revenue Service and state taxing authorities.
The tax character of distributions paid to shareholders during the fiscal year ended August 31, 2018 was as follows: ordinary income $7,271,228. The tax character of current year distributions will be determined at the end of the current fiscal year.
(h) New Accounting Pronouncements: In March 2017, the FASB issued Accounting Standards Update 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization On Purchased Callable Debt Securities (“ASU 2017-08”). The update shortens the amortization period for the premium on certain purchased callable debt securities to the earliest call date. ASU 2017-08 will be effective for annual periods beginning after December 15, 2018.
32
Also in August 2018, the FASB issued Accounting Standards Update 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”). The update provides guidance that eliminates, adds and modifies certain disclosure requirements for fair value measurements. ASU 2018-13 will be effective for annual periods beginning after December 15, 2019. Management is currently assessing the potential impact of these changes to future financial statements.
NOTE 2—Borrowings:
The fund has a $68,000,000 Revolving Credit and Security Agreement (the “Agreement”), which continues until October 29, 2019. Under the terms of the Agreement, the fund may borrow “Advances” (including Eurodollar Rate Advances), on a collateralized basis with certain fund assets used as collateral, which amounted to $108,234,627 as of February 28, 2019. The interest to be paid by the fund on such Advances is determined with reference to the principal amount of each Advance (and/or Eurodollar Rate Advance) outstanding from time to time. The fund also pays additional fees pursuant to the Agreement. During the period ended February 28, 2019, total expenses pursuant to the Agreement amounted to $67,776.
The average amount of borrowings outstanding under the Agreement during the period ended February 28, 2019 was $60,000,000, with a related weighted average annualized interest rate of 3.62% and is inclusive of all expenses related to the Agreement.
NOTE 3—Investment Management Fee, Sub-Investment Advisory Fee and Other Transactions with Affiliates:
(a) Pursuant to an Investment Management Agreement with Dreyfus, the management fee is computed at the annual rate of .85% of the value of the fund's “Managed Assets” and is payable monthly. “Managed Assets” of the fund means the total assets of the fund, including any assets attributable to leverage (i.e., any loans from certain financial institutions and/or the issuance of debt securities (collectively, “Borrowings”), preferred stock or other similar preference securities (“Preferred Shares”), or the use of derivative instruments that have the economic effect of leverage), minus the fund’s accrued liabilities, other than any liabilities or obligations attributable to leverage obtained through (i) indebtedness of any type (including, without limitation, Borrowings), (ii) the issuance of Preferred Shares, and/or (iii) any other means, all as determined in accordance with generally accepted accounting principles.
33
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Pursuant to a sub-investment advisory agreement between Dreyfus and Alcentra, Dreyfus pays Alcentra a fee at the annual rate of .425% of the value of the fund’s average daily Managed Assets and is payable monthly.
(b) The fund compensates The Bank of New York Mellon, a subsidiary of BNY Mellon and an affiliate of Dreyfus, under a custody agreement for providing custodial services for the fund. These fees are determined based on net assets and transaction activity. During the period ended February 28, 2019, the fund was charged $10,082 pursuant to the custody agreement. These fees were offset by earnings credits of $10,082.
The fund had an arrangement with the custodian whereby the fund may receive earnings credits when positive cash balances are maintained, which are used to offset custody fees. Effective February 1, 2019, the arrangement with the custodian changed whereby the fund will no longer receive earnings credits to offset its custody fees and will receive interest income or overdraft fees going forward. For financial reporting purposes, the fund includes net earnings credits, if any, as an expense offset in the Statement of Operations.
During the period ended February 28, 2019, the fund was charged $3,783 for services performed by the Chief Compliance Officer and his staff. These fees are included in Miscellaneous in the Statement of Operations.
The components of “Due to The Dreyfus Corporation and affiliates” in the Statement of Assets and Liabilities consist of: management fees $128,552, custodian fees $18,000, Chief Compliance Officer fees $3,153 and transfer agency fees $2,100.
(c) Each Board member also serves as a Board member of other funds within the Dreyfus complex. Annual retainer fees and attendance fees are allocated to each fund based on net assets.
NOTE 4—Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding short-term securities and forward contracts, during the period ended February 28, 2019, amounted to $67,006,791 and $68,497,528, respectively.
Floating Rate Loan Interests: Floating rate instruments are loans and other securities with interest rates that adjust or “float” periodically. Floating rate loans are made by banks and other financial institutions to their corporate clients. The rates of interest on the loans adjust periodically by reference to a base lending rate, such as the London Interbank Offered Rate (“LIBOR”) plus a premium or credit spread. Floating rate loans reset on periodic set dates, typically 30 to 90 days, but not to exceed one year.
34
The fund may invest in multiple series or tranches of a loan. A different series or tranche may have varying terms and carry different associated risks.
The fund may enter into certain credit agreements all or a portion of which may be unfunded. The fund is obligated to fund these commitments at the borrower’s discretion. The commitments are disclosed in the accompanying Statement of Investments. At February 28, 2019, the fund had sufficient cash and/or securities to cover these commitments.
Derivatives: A derivative is a financial instrument whose performance is derived from the performance of another asset. The fund enters into International Swaps and Derivatives Association, Inc. Master Agreements or similar agreements (collectively, “Master Agreements”) with its over-the-counter (“OTC”) derivative contract counterparties in order to, among other things, reduce its credit risk to counterparties. Master Agreements include provisions for general obligations, representations, collateral and events of default or termination. Under a Master Agreement, the fund may offset with the counterparty certain derivative financial instrument’s payables and/or receivables with collateral held and/or posted and create one single net payment in the event of default or termination.
Each type of derivative instrument that was held by the fund during the period ended February 28, 2019 is discussed below.
Forward Foreign Currency Exchange Contracts: The fund enters into forward contracts in order to hedge its exposure to changes in foreign currency exchange rates on its foreign portfolio holdings, to settle foreign currency transactions or as a part of its investment strategy. When executing forward contracts, the fund is obligated to buy or sell a foreign currency at a specified rate on a certain date in the future. With respect to sales of forward contracts, the fund incurs a loss if the value of the contract increases between the date the forward contract is opened and the date the forward contract is closed. The fund realizes a gain if the value of the contract decreases between those dates. With respect to purchases of forward contracts, the fund incurs a loss if the value of the contract decreases between the date the forward contract is opened and the date the forward contract is closed. The fund realizes a gain if the value of the contract increases between those dates. Any realized or unrealized gains or losses which occurred during the period are reflected in the Statement of Operations. The fund is exposed to foreign currency risk as a result of changes in value of underlying financial instruments. The fund is also exposed to credit risk associated with counterparty nonperformance on these forward contracts, which is generally limited to the unrealized gain on each open contract. This risk may be mitigated by Master Agreements,
35
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
if any, between the fund and the counterparty and the posting of collateral, if any, by the counterparty to the fund to cover the fund’s exposure to the counterparty. Forward Contracts open at February 28, 2019 are set forth in the Statement of Forward Foreign Currency Exchange Contracts.
The provisions of ASC Topic 210 “Disclosures about Offsetting Assets and Liabilities” require disclosure on the offsetting of financial assets and liabilities. These disclosures are required for certain investments, including derivative financial instruments subject to Master Agreements which are eligible for offsetting in the Statement of Assets and Liabilities and require the fund to disclose both gross and net information with respect to such investments. For financial reporting purposes, the fund does not offset derivative assets and derivative liabilities that are subject to Master Agreements in the Statement of Assets and Liabilities.
At February 28, 2019, derivative assets and liabilities (by type) on a gross basis are as follows:
Derivative Financial Instruments: |
|
Assets ($) |
|
Liabilities ($) |
|
Forward contracts |
42,251 |
(713,781) |
|||
Total gross amount of derivative |
|||||
assets and liabilities in the |
|||||
Statement of Assets and Liabilities |
42,251 |
(713,781) |
|||
Derivatives not subject to |
|||||
Master Agreements |
- |
- |
|||
Total gross amount of assets |
|||||
and liabilities subject to |
|||||
Master Agreements |
42,251 |
(713,781) |
The following tables present derivative assets and liabilities net of amounts available for offsetting under Master Agreements and net of related collateral received or pledged, if any, as of February 28, 2019:
Financial |
||||||
Instruments |
||||||
and Derivatives |
||||||
Gross Amount of |
Available |
Collateral |
Net Amount of | |||
Counterparty |
Assets ($) |
1 |
for Offset ($) |
Received ($) |
2 |
Assets ($) |
Goldman Sachs |
42,251 |
(42,251) |
- |
- | ||
36
Financial |
||||||
Instruments |
||||||
and Derivatives |
||||||
Gross Amount of |
Available |
Collateral |
Net Amount of | |||
Counterparty |
Liabilities ($) |
1 |
for Offset ($) |
Pledged ($) |
2 |
Liabilities ($) |
Goldman Sachs |
(713,781) |
42,251 |
290,000 |
(381,530) | ||
1 Absent a default event or early termination, OTC derivative assets and liabilities are presented at gross amounts and are not offset in the Statement of Assets and Liabilities. | ||||||
2 In some instances, the actual collateral received and/or pledged may be more than the amount shown due to over collateralization. |
The following summarizes the average market value of derivatives outstanding during the period ended February 28, 2019:
|
|
Average Market Value ($) |
Forward contracts |
59,202,464 |
At February 28, 2019, accumulated net unrealized depreciation on investments inclusive of derivative contracts was $6,264,522, consisting of $1,534,456 gross unrealized appreciation and $7,798,978 gross unrealized depreciation.
At February 28, 2019, the cost of investments inclusive of derivative contracts for federal income tax purposes was substantially the same as the cost for financial reporting purposes (see the Statement of Investments).
NOTE 5—Subsequent Event:
On March 4, 2019, the fund announced that effective on or about June 3, 2019 (the “Effective Date”), the fund will change its name from Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc. to BNY Mellon Alcentra Global Credit Income 2024 Target Term Fund, Inc. In addition, on the effective date, Dreyfus, the fund’s investment adviser and administrator, will change its name to “BNY Mellon Investment Adviser, Inc.”
37
INFORMATION ABOUT THE APPROVAL OF THE FUND’S MANAGEMENT AND SUB-INVESTMENT ADVISORY AGREEMENTS (Unaudited)
At a meeting of the fund’s Board of Directors held on February 27-28, 2019, the Board considered the renewal of the fund’s Management Agreement, pursuant to which Dreyfus provides the fund with investment advisory and administrative services (the “Agreement”), and the Sub-Investment Advisory Agreement (together, the “Agreements”), pursuant to which Alcentra NY, LLC (the “Subadviser”) provides day-to-day management of the fund’s investments. The Board members, a majority of whom are not “interested persons” (as defined in the Investment Company Act of 1940, as amended) of the fund, were assisted in their review by independent legal counsel and met with counsel in executive session separate from representatives of Dreyfus and the Subadviser. In considering the renewal of the Agreements, the Board considered all factors that it believed to be relevant, including those discussed below. The Board did not identify any one factor as dispositive, and each Board member may have attributed different weights to the factors considered.
Analysis of Nature, Extent, and Quality of Services Provided to the Fund. The Board considered information provided to it at the meeting and in previous presentations from Dreyfus representatives regarding the nature, extent, and quality of the services provided to funds in the Dreyfus fund complex. Dreyfus representatives stated that the fund is a closed-end fund without daily inflows and outflows of capital and provided the fund’s asset size.
The Board also considered research support available to, and portfolio management capabilities of, the fund’s portfolio management personnel and that Dreyfus also provides oversight of day-to-day fund operations, including fund accounting and administration and assistance in meeting legal and regulatory requirements. The Board also considered Dreyfus’ extensive administrative, accounting and compliance infrastructures, as well as Dreyfus’ supervisory activities over the Subadviser.
Comparative Analysis of the Fund’s Performance and Management Fee and Expense Ratio. The Board reviewed reports prepared by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent provider of investment company data, which included information comparing (1) the fund’s performance with the performance of a group of comparable funds (the “Performance Group”) and with a broader group of funds (the “Performance Universe”), all for the one-year period ended December 31, 2018, and (2) the fund’s actual and contractual management fees and total expenses with those of a group of comparable funds (the “Expense Group”) and with a broader group of funds (the “Expense Universe”), the information for which was derived in part from fund financial statements available to Broadridge as of the date of its analysis. Dreyfus previously had furnished the Board with a description of the methodology Broadridge used to select the Performance Group and Performance Universe and the Expense Group and Expense Universe.
Dreyfus representatives stated that the usefulness of performance comparisons may be affected by a number of factors, including different investment limitations and policies that may be applicable to the fund and comparison funds. The Board discussed with
38
representatives of Dreyfus, its affiliates and/or the Subadviser the results of the comparisons and considered that the fund’s total return performance, on a net asset value basis, was above the Performance Group median and below the Performance Universe median for the one-year period; the fund’s total return performance, on a market price basis, was below the Performance Group and Performance Universe medians for the one-year period. The Board also considered that, on both a net asset value basis and market price basis, the fund’s yield performance was below the Performance Group median and above the Performance Universe median for the one-year period ended December 31, 2018.
The Board also reviewed the range of actual and contractual management fees and total expenses of the Expense Group and Expense Universe funds and discussed the results of the comparisons. The Board considered that, based on common assets alone, the fund’s contractual management fee was above the Expense Group median; the fund’s actual management fee, based on common assets and on common assets and leveraged assets together, was above the Expense Group and Expense Universe medians; and the fund’s total expenses, based on common assets and leveraged assets together, were above the Expense Group and Expense Universe medians.
Dreyfus representatives reviewed with the Board the management or investment advisory fees (1) paid by funds advised or administered by Dreyfus that are in the same Lipper category as the fund and (2) paid to Dreyfus or the Subadviser or its affiliates for advising any separate accounts and/or other types of client portfolios that are considered to have similar investment strategies and policies as the fund (the “Similar Clients”), and explained the nature of the Similar Clients. They discussed differences in fees paid and the relationship of the fees paid in light of any differences in the services provided and other relevant factors, stating that the fund is a closed-end fund. The Board considered the relevance of the fee information provided for the Similar Clients to evaluate the appropriateness of the fund’s management fee.
The Board considered the fee to the Subadviser in relation to the fee paid to Dreyfus by the fund and the respective services provided by the Subadviser and Dreyfus. The Board also took into consideration that the Subadviser’s fee is paid by Dreyfus (out of its fee from the fund) and not the fund.
Analysis of Profitability and Economies of Scale. Dreyfus representatives reviewed the expenses allocated and profit received by Dreyfus and its affiliates and the resulting profitability percentage for managing the fund and the aggregate profitability percentage to Dreyfus and its affiliates for managing the funds in the Dreyfus fund complex, and the method used to determine the expenses and profit. The Board concluded that the profitability results were not unreasonable, given the services rendered and service levels provided by Dreyfus. The Board also had been provided with information prepared by an independent consulting firm regarding Dreyfus’ approach to allocating costs to, and determining the profitability of, individual funds and the entire Dreyfus fund complex. The consulting firm also had analyzed where any economies of scale might emerge in connection with the management of a fund.
39
INFORMATION ABOUT THE APPROVAL OF THE FUND’S MANAGEMENT AND SUB-INVESTMENT ADVISORY AGREEMENTS (Unaudited) (continued)
The Board considered on the advice of its counsel the profitability analysis (1) as part of its evaluation of whether the fees under the Agreements, considered in relation to the mix of services provided by Dreyfus and the Subadviser, including the nature, extent and quality of such services, supported the renewal of the Agreements and (2) in light of the relevant circumstances for the fund and the extent to which economies of scale would be realized if the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders. Dreyfus representatives stated that, because the fund is a closed-end fund without daily inflows and outflows of capital, there were not at this time significant economies of scale to be realized by Dreyfus and Alcentra in managing the fund’s assets. Since Dreyfus, and not the fund, pays the Subadviser pursuant to the Sub-Investment Advisory Agreement, the Board did not consider the Subadviser’s profitability to be relevant to its deliberations. Dreyfus representatives also stated that, as a result of shared and allocated costs among funds in the Dreyfus fund complex, the extent of economies of scale could depend substantially on the level of assets in the complex as a whole, so that increases and decreases in complex-wide assets can affect potential economies of scale in a manner that is disproportionate to, or even in the opposite direction from, changes in the fund’s asset level. The Board also considered potential benefits to Dreyfus and the Subadviser from acting as investment adviser and sub-investment adviser, respectively, and took into consideration that there were no soft dollar arrangements in effect for trading the fund’s investments.
At the conclusion of these discussions, the Board agreed that it had been furnished with sufficient information to make an informed business decision with respect to the renewal of the Agreements. Based on the discussions and considerations as described above, the Board concluded and determined as follows.
· The Board concluded that the nature, extent and quality of the services provided by Dreyfus and the Subadviser are adequate and appropriate.
· The Board generally was satisfied with the fund’s overall performance, noting that the fund only had one full calendar year of performance.
· The Board concluded that the fees paid to Dreyfus and the Subadviser continued to be appropriate under the circumstances and in light of the factors and the totality of the services provided as discussed above.
· The Board determined that the economies of scale which may accrue to Dreyfus and its affiliates in connection with the management of the fund had been adequately considered by Dreyfus in connection with the fee rate charged to the fund pursuant to the Agreement and that, to the extent in the future it were determined that material economies of scale had not been shared with the fund, the Board would seek to have those economies of scale shared with the fund.
In evaluating the Agreements, the Board considered these conclusions and determinations and also relied on its previous knowledge, gained through meetings and other interactions with Dreyfus and its affiliates and the Subadviser, of Dreyfus and the
40
Subadviser and the services provided to the fund by Dreyfus and the Subadviser. The Board also relied on information received on a routine and regular basis throughout the year relating to the operations of the fund and the investment management and other services provided under the Agreements, including information on the investment performance of the fund in comparison to similar mutual funds and benchmark performance indices; general market outlook as applicable to the fund; and compliance reports. In addition, the Board’s consideration of the contractual fee arrangements for this fund had the benefit of a number of years of reviews of the Agreements for the fund, or substantially similar agreements for other Dreyfus funds that the Board oversees, during which lengthy discussions took place between the Board and Dreyfus representatives. Certain aspects of the arrangements may receive greater scrutiny in some years than in others, and the Board’s conclusions may be based, in part, on their consideration of the fund’s arrangements, or substantially similar arrangements for other Dreyfus funds that the Board oversees, in prior years. The Board determined to renew the Agreements.
41
OFFICERS AND DIRECTORS
Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc.
200 Park Avenue
New York, NY 10166
Officers (continued) |
|||
Joseph S. DiMartino, Chairman |
Chief Compliance Officer |
||
Francine J. Bovich |
Joseph W. Connolly |
||
Kenneth A. Himmel |
Portfolio Managers |
||
Stephen J. Lockwood |
Chris Barris |
||
Richard C. Rochon |
Kevin Cronk |
||
Roslyn M. Watson |
Leland Hart |
||
Benaree Pratt Wiley |
Hiram Hamilton |
||
Officers |
|||
President |
Manager |
||
Bradley J. Skapyak |
The Dreyfus Corporation |
||
Chief Legal Officer |
Sub-Investment Adviser |
||
Bennett A. MacDougall |
Alcentra NY, LLC |
||
Vice President and Secretary |
Custodian |
||
James Bitetto |
The Bank of New York Mellon |
||
Vice Presidents and Assistant Secretaries |
Counsel |
||
Sonalee Cross |
Proskauer Rose LLP |
||
Deirdre Cunnane |
Transfer Agent, |
||
Sarah S. Kelleher |
Dividend Disbursing Agent |
||
Jeff Prusnofsky |
Computershare Inc. |
||
Peter M. Sullivan |
Stock Exchange Listing |
||
Natalya Zelensky |
NYSE Symbol: DCF |
||
Treasurer |
Initial SEC Effective Date |
||
James Windels |
10/27/17 |
||
Assistant Treasurers |
|||
Gavin C. Reilly |
|||
Robert S. Robol |
|||
Robert Salviolo |
|||
Robert Svagna |
|||
The fund’s net asset value per share appears in the following publications: Barron’s, Closed-End Bond Funds section under the heading “Bond Funds” every Monday; The Wall Street Journal, Mutual Funds section under the heading “Closed-End Bond Funds” every Monday. | |||
Notice is hereby given in accordance with Section 23(c) of the Act that the fund may purchase shares of its common stock in the open market when it can do so at prices below the then current net asset value per share. |
42
NOTES
43
NOTES
44
NOTES
45
Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Sub-Investment Adviser
Alcentra NY, LLC
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Transfer Agent &
Registrar
Computershare Inc.
480 Washington Boulevard
Jersey City, NJ 07310
Dividend Disbursing Agent
Computershare Inc.
P.O. Box 30170
College Station, TX 77842
Ticker Symbol: |
DCF |
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Forms N-Q are available on the SEC’s website at www.sec.gov.
A description of the policies and procedures that the fund uses to determine how to vote proxies relating to portfolio securities and information regarding how the fund voted these proxies for the most recent 12-month period ended June 30 is available at www.dreyfus.com and on the SEC’s website at www.sec.gov and without charge, upon request, by calling 1-800-DREYFUS.
|
|
Item 2. Code of Ethics.
Not applicable.
Item 3. Audit Committee Financial Expert.
Not applicable.
Item 4. Principal Accountant Fees and Services.
Not applicable.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Investments.
(a) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
There have been no material changes to the procedures applicable to Item 10.
Item 11. Controls and Procedures.
(a) The Registrant's principal executive and principal financial officers have concluded, based on their evaluation of the Registrant's disclosure controls and procedures as of a date within 90 days of the filing date of this report, that the Registrant's disclosure controls and procedures are reasonably designed to ensure that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Registrant in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Registrant's management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.
(b) There were no changes to the Registrant's internal control over financial reporting 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. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13. Exhibits.
(a)(1) Not applicable.
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940.
(a)(3) Not applicable.
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940.
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.
Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc.
By: /s/ Bradley J. Skapyak
Bradley J. Skapyak
President
Date: April 25, 2019
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/ Bradley J. Skapyak
Bradley J. Skapyak
President
Date: April 25, 2019
By: /s/ James Windels
James Windels
Treasurer
Date: April 25, 2019
EXHIBIT INDEX
(a)(2) Certifications of principal executive and principal financial officers as required by Rule 30a-2(a) under the Investment Company Act of 1940. (EX-99.CERT)
(b) Certification of principal executive and principal financial officers as required by Rule 30a-2(b) under the Investment Company Act of 1940. (EX-99.906CERT)
[EX-99.CERT]—Exhibit (a)(2)
SECTION 302 CERTIFICATION
I, Bradley J. Skapyak, certify that:
1. I have reviewed this report on Form N-CSR of Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc.;
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) and internal control over financial reporting (as defined in Rule 30a-3(d) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) 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
(d) 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;
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 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.
By: /s/ Bradley J. Skapyak
Bradley J. Skapyak
President
Date: April 25, 2019
SECTION 302 CERTIFICATION
I, James Windels, certify that:
1. I have reviewed this report on Form N-CSR of Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc.;
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) and internal control over financial reporting (as defined in Rule 30a-3(d) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) 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
(d) 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;
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 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.
By: /s/ James Windels
James Windels
Treasurer
Date: April 25, 2019
[EX-99.906CERT]
Exhibit (b)
SECTION 906 CERTIFICATIONS
In connection with this report on Form N-CSR for the Registrant as furnished to the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned hereby certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as applicable; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
By: /s/ Bradley J. Skapyak
Bradley J. Skapyak
President
Date: April 25, 2019
By: /s/ James Windels
James Windels
Treasurer
Date: April 25, 2019
This certificate is furnished pursuant to the requirements of Form N-CSR and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
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