| SECURITIES AND EXCHANGE COMMISSION | |
| Washington, D.C. 20549 | |
| SCHEDULE 13D/A | |
| Under the Securities Exchange Act of 1934 | |
| (Amendment No. 4)* | |
|
Deutsche High Income Trust | |
| (Name of Issuer) | |
|
Common Stock, par value $0.01 per share | |
| (Title of Class of Securities) | |
|
25155R100 | |
| (CUSIP Number) | |
|
Saba Capital Management, L.P. 405 Lexington Avenue 58th Floor New York, NY 10174 Attention: Michael D'Angelo (212) 542-4635
with a copy to:
Eleazer Klein, Esq. Schulte Roth & Zabel LLP 919 Third Avenue New York, New York 10022 (212) 756-2000 | |
| (Name, Address and Telephone Number of Person | |
| Authorized to Receive Notices and Communications) | |
|
February 26, 2016 | |
| (Date of Event Which Requires Filing of This Statement) | |
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box. [X]
(Page 1 of 8 Pages)
______________________________
* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).
CUSIP No. 25155R100 | SCHEDULE 13D/A | Page 2 of 8 Pages |
| 1 |
NAME OF REPORTING PERSON Saba Capital Management, L.P. | |||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP |
(a) ¨ (b) ¨ | ||
| 3 | SEC USE ONLY | |||
| 4 |
SOURCE OF FUNDS OO (see Item 3) | |||
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) | ¨ | ||
| 6 |
CITIZENSHIP OR PLACE OF ORGANIZATION Delaware | |||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: |
7 |
SOLE VOTING POWER -0- | ||
| 8 |
SHARED VOTING POWER 2,226,209 | |||
| 9 |
SOLE DISPOSITIVE POWER -0- | |||
| 10 |
SHARED DISPOSITIVE POWER 2,226,209 | |||
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 2,226,209 | |||
| 12 | CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES | ¨ | ||
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.62%1 | |||
| 14 |
TYPE OF REPORTING PERSON PN; IA | |||
____________________________
1 The percentages used herein and in the rest of this Schedule 13D/A are calculated based upon 15,224,364 Shares outstanding as of November 30, 2015 as reported in the Issuer's Annual Report to Shareholders on Form N-CSR filed with the SEC on February 5, 2016.
CUSIP No. 25155R100 | SCHEDULE 13D/A | Page 3 of 8 Pages |
| 1 |
NAME OF REPORTING PERSON Boaz R. Weinstein | |||
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP |
(a) ¨ (b) ¨ | ||
| 3 | SEC USE ONLY | |||
| 4 |
SOURCE OF FUNDS OO (see Item 3) | |||
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) | ¨ | ||
| 6 |
CITIZENSHIP OR PLACE OF ORGANIZATION United States | |||
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: |
7 |
SOLE VOTING POWER -0- | ||
| 8 |
SHARED VOTING POWER 2,226,209 | |||
| 9 |
SOLE DISPOSITIVE POWER -0- | |||
| 10 |
SHARED DISPOSITIVE POWER 2,226,209 | |||
| 11 |
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH PERSON 2,226,209 | |||
| 12 | CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES | ¨ | ||
| 13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.62%1 | |||
| 14 |
TYPE OF REPORTING PERSON IN | |||
____________________________
1 The percentages used herein and in the rest of this Schedule 13D/A are calculated based upon 15,224,364 Shares outstanding as of November 30, 2015 as reported in the Issuer's Annual Report to Shareholders on Form N-CSR filed with the SEC on February 5, 2016.
CUSIP No. 25155R100 | SCHEDULE 13D/A | Page 4 of 8 Pages |
| This Amendment No. 4 ("Amendment No. 4") amends and supplements the statement on Schedule 13D filed with the Securities and Exchange Commission (the "SEC") on April 27, 2015 (the "Original Schedule 13D") as amended by Amendment No. 1 filed with the SEC on August 6, 2015 ("Amendment No. 1"), Amendment No. 2 filed with the SEC on August 18, 2015 ("Amendment No. 2") and Amendment No. 3 filed with the SEC on December 23, 2015 ("Amendment No. 3" and together with the Original Schedule 13D, Amendment No. 1, Amendment No. 2 and this Amendment No. 4, the "Schedule 13D") with respect to the shares ("Shares") of common stock, par value $0.01 per share, of Deutsche High Income Trust (the "Issuer"). Capitalized terms used herein and not otherwise defined in this Amendment No. 4 have the meanings set forth in the Schedule 13D. This Amendment No. 4 amends Items 3, 4, 5, 6 and 7 as set forth below. |
| Item 3. | SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION |
| Item 3 of the Schedule 13D is hereby amended and restated as follows: | |
| Funds for the purchase of the Shares were derived from the subscription proceeds from investors in SCMF, SCMF II, SCLMF, SCS, Saba Capital CEF Opportunities 1 Ltd., a Cayman Islands exempted company ("SCCO 1") and Saba Capital CEF Opportunities 2, Ltd., a Cayman Islands exempted company ("SCCO 2") and the capital appreciation thereon and margin account borrowings made in the ordinary course of business. In such instances, the positions held in the margin accounts are pledged as collateral security for the repayment of debit balances in the account, which may exist from time to time. Since other securities are held in the margin accounts, it is not possible to determine the amounts, if any, of margin used to purchase the Shares reported herein. A total of $19,578,805 was paid to acquire the Shares reported herein. |
| Item 4. | PURPOSE OF TRANSACTION |
| Item 4 of the Schedule 13D is hereby amended and supplemented by the addition of the following: | |
| On February 26, 2016, the Issuer and Deutsche Investment Management Americas Inc. ("DIMA"), a Delaware corporation and registered investment adviser which acts pursuant to an investment management agreement as the investment manager to the Issuer, entered into an agreement (the "Standstill Agreement") with Saba Capital on behalf of its principals and all investment funds and accounts managed by Saba Capital (collectively, "Saba"), which provides, among other things, that the Board of Trustees of the Issuer (the "Board") will approve the termination of the Issuer and make a liquidating distribution to its shareholders by no later than November 30, 2016. Under the terms of the Standstill Agreement, Saba agreed, among other things, to vote in accordance with the Board's recommendation on various matters affecting the Issuer, including any proposal to convert the Issuer to an open-end investment company. |
CUSIP No. 25155R100 | SCHEDULE 13D/A | Page 5 of 8 Pages |
| The above description of the Standstill Agreement is qualified in its entirety by reference to the full text of the Standstill Agreement, attached as Exhibit 2 hereto and incorporated by reference herein. |
| Item 5. | INTEREST IN SECURITIES OF THE ISSUER |
| Item 5 of the Schedule 13D is hereby amended and restated as follows: | |
| (a) | See rows (11) and (13) of the cover pages to this Schedule 13D for the aggregate number of Shares and percentages of the Shares beneficially owned by each of the Reporting Persons. The percentages used in this Schedule 13D are calculated based upon 15,224,364 Shares outstanding as of November 30, 2015 as reported in the Issuer's Annual Report to Shareholders on Form N-CSR filed with the SEC on February 5, 2016. |
| (b) | See rows (7) through (10) of the cover pages to this Schedule 13D for the number of Shares as to which each Reporting Person has the sole or shared power to vote or direct the vote and sole or shared power to dispose or to direct the disposition. |
| (c) | The transactions in the Shares within the past sixty days by Saba Capital, which were all in the open market, are set forth in Schedule A, and are incorporated herein by reference. |
| (d) | No person other than the Reporting Persons and the Saba Entities is known to have the right to receive, or the power to direct the receipt of dividends from, or proceeds from the sale of, such Shares. |
| (e) | Not applicable. |
| Item 6. | CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER |
| Item 6 of the Schedule 13D is hereby amended and supplemented by the addition of the following: | |
| On February 26, 2016, the Issuer, DIMA and Saba Capital on behalf of its principals and all investment funds and accounts managed by Saba Capital entered into the Standstill Agreement, the terms of which are described in Item 4 of the Schedule 13D. |
| Item 7. | MATERIAL TO BE FILED AS EXHIBITS |
| Item 7 of the Schedule 13D is hereby amended and supplemented by the addition of the following: |
CUSIP No. 25155R100 | SCHEDULE 13D/A | Page 6 of 8 Pages |
| Exhibit 2: | Standstill Agreement, dated as of February 26, 2016 by and among the Issuer, DIMA and Saba Capital on behalf of its principals and all investment funds and accounts managed by Saba Capital. |
CUSIP No. 25155R100 | SCHEDULE 13D/A | Page 7 of 8 Pages |
SIGNATURES
After reasonable inquiry and to the best of his or its knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.
Date: March 1, 2016
|
SABA CAPITAL Management, L.P.
/s/ Michael D'Angelo | |
|
Name: Michael D'Angelo Title: Chief Compliance Officer | |
|
BOAZ R. WEINSTEIN
/s/ Michael D'Angelo | |
| Name: Michael D'Angelo | |
| Title: Attorney-in-fact* | |
| * Pursuant to a power of attorney dated as of November 16, 2015, which is incorporated herein by reference to Exhibit 2 to the Schedule 13G filed by the Reporting Persons on December 28, 2015, accession number: 0001062993-15-006823 | |
CUSIP No. 25155R100 | SCHEDULE 13D/A | Page 8 of 8 Pages |
Schedule A
This Schedule sets forth information with respect to each purchase and sale of Shares which were effectuated by Saba Capital during the past sixty days. All transactions were effectuated in the open market through a broker.
| Trade Date | Shared Purchased (Sold) | Price ($)* |
| 01/15/2016 | 7,340 | 7.53 |
| 01/25/2016 | 17,129 | 7.69 |
| 01/26/2016 | 3,049 | 7.81 |
| 01/27/2016 | 9,100 | 7.79 |
| 01/29/2016 | 500 | 7.87 |
| 02/29/2016 | 300 | 8.09 |
* Excluding commissions.
STANDSTILL AGREEMENT
This Standstill Agreement (the “Agreement”) is made and entered into effective as of the 26th day of February, 2016 by and among Deutsche High Income Trust (“KHI”), a Massachusetts business trust, Deutsche Investment Management Americas Inc. (“DIMA”), a Delaware corporation having a place of business at 345 Park Avenue, New York, New York, and Saba Capital Management L.P. (“Saba Capital”), a Delaware limited partnership having a place of business at 405 Lexington Avenue, 58th Floor, New York, New York, on behalf of its principals and all investment funds and accounts managed by Saba Capital (collectively, “Saba”). Any pooled investment vehicles or accounts managed or controlled by Saba or its affiliated persons are referred to herein collectively as “Saba Funds.”
WHEREAS, DIMA is registered as an investment adviser with the Securities and Exchange Commission (the “SEC”) under the Investment Advisers Act of 1940, as amended, and acts pursuant to an investment management agreement as the investment manager to KHI;
WHEREAS, the Saba Funds are shareholders of KHI;
WHEREAS, KHI and Saba have entered into a separate Letter Agreement dated February 5, 2016, as amended February 19, 2016, regarding certain confidentiality and other obligations with respect to discussions regarding KHI (the “Letter Agreement”) and
WHEREAS, the parties to this Agreement wish to resolve these matters;
NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Agreement, and for other good and valuable consideration, and without any admission of liability, or inadequacy of claims, whatsoever by any of the parties, the parties agree as follows:
| 1. | Proposal to the Board. Promptly following the execution of this Agreement, DIMA shall propose to the Board of Trustees of KHI (the “Board”) that it undertake the following measures: |
| (a) | The Board should approve the termination of KHI, pursuant to which KHI will make a liquidating distribution to shareholders no later than November 30, 2016. The liquidating distribution shall be principally in the form of cash, and to the extent it includes any securities or other property, all shareholders shall receive a pro rata share of such securities or other property. |
| (b) | The Board should authorize the issuance of a press release to announce its approval of such termination and the timing of the liquidating distribution (the “Announcement”). This press release shall be substantially in the form attached as Exhibit A to this Agreement, subject to any non-material changes as may be approved by the Board or its counsel, or to any other changes as may be agreed to by the parties hereto. The Announcement shall be made on or prior to February 29, 2016. |
| 2. | Saba Obligations. Effective upon the Announcement and provided that (a) such Announcement is made on or before February 29, 2016 and (b) neither DIMA nor the Board are materially in breach of any of their obligations under the terms of this Agreement or the Letter Agreement, Saba Capital and the Saba Funds shall: (i) refrain from directly or indirectly making, supporting or encouraging any shareholder proposals concerning KHI; (ii) vote in accordance with the Board’s recommendations on nominees for election as Trustees of KHI; (iii) vote in accordance with the Board’s recommendations on any proposal to convert KHI to an open-end investment company; (iv) vote in accordance with the Board’s recommendations on any other matter submitted to KHI’s shareholders, provided that Saba Capital and the Saba Funds shall have no obligation to support any proposal that would have the effect of extending the date of KHI’s liquidating distribution beyond November 30, 2016; (v) refrain from directly or indirectly soliciting or encouraging others to vote against the Board’s recommendations on any matters affecting KHI; (vi) refrain from proposing any nominees for election to the Board of KHI; (vii) refrain from directly proposing, or making any filing with respect to, any form of business combination, restructuring, recapitalization, dissolution or similar transaction involving KHI, including, without limitation, a merger, tender or exchange offer, open-ending, share repurchase or liquidation of KHI’s assets; (viii) refrain from granting a proxy with respect to shares of KHI other than to officers of, or other persons named as proxies by, KHI; (ix) refrain from executing any written consent with respect to KHI other than as may be solicited by KHI; (x) refrain from joining or participating in a group concerning KHI (other than with affiliates of Saba); (xi) refrain from seeking the removal of any member of the Board of KHI; and (xii) refrain from seeking control or influence over the management or policies of KHI; provided, that, in each case, Saba Capital and the Saba Funds shall not be required to undertake any obligation that conflicts with the terms of this Agreement. Notwithstanding the foregoing, nothing in this Agreement shall prohibit or restrict Saba from: (A) voting all of its voting securities of KHI in its discretion on any matter submitted to shareholders that would have the effect of extending the date of KHI’s liquidating distribution beyond November 30, 2016, or on any matter relating to the selection or approval of KHI’s independent audit firm, (B) communicating privately with the Board or any officers of KHI or DIMA regarding any matter so long as such communications are not intended to, and would not reasonably be expected to, require any public disclosure of such communications, or (C) taking any action necessary to comply with any law, rule or regulation or any action required by any governmental or regulatory authority or stock exchange that has, or may have, jurisdiction over Saba or any of its affiliates. |
| 3. | No Disparagement. Each party hereto shall refrain from directly or indirectly disparaging, impugning or taking any action reasonably likely to damage the reputation of any other party, their members, directors, officers, employees or affiliates, or any of the members of the Board. The foregoing shall not apply to any compelled testimony or production of information, either by legal process or subpoena or in connection with a response to a request for information from any governmental authority with jurisdiction over the party from whom information is sought. |
| 2 |
| 4. | No Assignment. This Agreement shall be binding upon the parties and, except as otherwise provided herein, upon their respective legal successors. No party may assign this Agreement without the prior written consent of each other party and any such attempted assignment shall be void. |
| 5. | Applicable Law. The validity of this Agreement, the construction and enforcement of its terms, and the interpretations of the rights and duties of the parties shall be governed by the laws of the State of New York, without regard to conflicts-of-law principles. |
| 6. | Jurisdiction. The parties agree that the United States District Court for the Southern District of New York (the “District Court”) shall have exclusive jurisdiction to hear and determine any suit, action or proceeding arising under this Agreement. For such purpose, each of the Parties irrevocably submits to the District Court’s jurisdiction. If the District Court lacks federal subject matter jurisdiction with respect to any such suit, action or proceeding, each of the Parties irrevocably agrees that any state court sitting in the City and County of New York (the “State Court”) shall have exclusive jurisdiction to hear and determine any such suit, action or proceeding; and, for such purpose, each of the Parties irrevocably submits to the State Court’s jurisdiction and agrees that the Parties will request any such case be assigned to the State Court’s Commercial Division. |
| 7. | Waiver of Jury Trial. To the fullest extent permitted by applicable law, each of the parties hereto hereby irrevocably waives any and all right to trial by jury in any suit, action or proceeding arising under this Agreement. |
| 8. | Damages; Injunctive Relief. Each party acknowledges that a breach of its obligations under this Agreement may result in irreparable harm to another party for which monetary damages will not be sufficient. Each party hereto agrees that, in the event of a breach or threatened breach by another party of its obligations under this Agreement, each non-breaching party shall be entitled, in addition to its other rights and remedies hereunder or at law, to injunctive or other equitable relief, and such further relief as may be proper from a court of competent jurisdiction, including specific performance of the obligations of the breaching party under this Agreement. |
| 9. | Modification. No modification, amendment, supplement to or waiver of this Agreement of any of its provisions shall be binding upon the parties hereto unless made in writing and duly signed by all parties. |
| 10. | Invalidity. In the event that any one or more of the provisions of this Agreement shall for any reasons be held to be invalid, illegal or unenforceable, the remaining provisions of this Agreement shall be unimpaired, and the invalid, illegal or unenforceable provision or provisions shall be replaced by a mutually acceptable provision, which being valid, legal and enforceable, comes closest to the economic effect and intent of the parties underlying the invalid, illegal or unenforceable provision or provisions. |
| 11. | No Waiver. A waiver or breach or default under this Agreement shall not be a waiver of any other or subsequent breach or default. The failure or delay in enforcing compliance |
| 3 |
with any term or condition of this Agreement shall not constitute a waiver of such term or condition unless such term or condition is expressly waived in writing.
| 12. | Counterparts. This Agreement may be executed in one or more counterparts transmitted by facsimile or other electronic means, and each counterpart shall have the effect of an original. |
| 13. | Notices. Unless otherwise provided herein, all notices called for by this Agreement shall be given in writing, or by facsimile transmission. Until notice is given to the contrary in accordance with this Paragraph 13, all notices to the respective parties shall be directed to: |
| If to KHI: | |
| c/o Deutsche Investment Management Americas Inc. | |
| One Beacon Street, 11th Floor | |
| Boston, Massachusetts 02108 | |
| Attention: Secretary of the Deutsche Funds | |
| If to DIMA: | |
| Deutsche Investment Management Americas Inc. | |
| One Beacon Street, 11th Floor | |
| Boston, Massachusetts 02108 | |
| Attention: John Millette, Chief Legal Officer | |
| Telephone: (617) 295-2572 | |
| Facsimile: (617) 295-4326 | |
| with a copy to: | |
| Deutsche Investment Management Americas Inc. | |
| One Beacon Street, 11th Floor | |
| Boston, Massachusetts 02108 | |
| Attention: Caroline Pearson, Esq. | |
| Telephone: (617) 295-2565 | |
| Facsimile: (617) 443-7059 | |
| If to Saba or the Saba Funds: | |
| Saba Capital Management, L.P. | |
| 405 Lexington Avenue, 58th Floor | |
| New York, NY 10174 | |
| Attention: Michael D’Angelo, General Counsel | |
| Telephone: (212) 542-4635 |
| 4 |
| 14. | Letter Agreement. For sake of clarity, the Letter Agreement shall remain in full force and effect in accordance with its terms following the execution of this Agreement. |
| 15. | Public Disclosure. Each party hereby acknowledges and agrees that from and after the issuance of the Announcement, Saba will not be in possession of any material non-public information received pursuant to the Letter Agreement and it shall not have any duty not to trade on the basis of, any Confidential Information (as defined in the Letter Agreement) provided thereunder. Each of DIMA and KHI acknowledges that Saba intends to file this Agreement as an exhibit to its Schedule 13D originally filed with the SEC on April 27, 2015, as amended (the "Schedule 13D"), in an amendment to such Schedule 13D. |
| 16. | Entire Agreement. This Agreement together with any written agreement entered into by the parties on or after the date of this Agreement shall constitute the entire Agreement among the parties and shall supersede all previous agreements, promises, proposals, representations, understandings and negotiations, whether written or oral, among the parties respecting the subject matter hereof. |
| 5 |
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
Deutsche HIGH Income TRUST
By: /s/ Brian Binder
Name: Brian Binder
Title: President
DEUTSCHE INVESTMENT MANAGEMENT AMERICAS INC.
By: /s/ Brian Binder
Name: Brian Binder
Title: Managing Director
By: /s/ Cynthia Nestle
Name: Cynthia Nestle
Title: Managing Director
SABA CAPITAL MANAGEMENT L.P., on its own behalf
and on behalf of the saba funds
By: /s/ Muqu Karim
Name: Muqu Karim
Title: Chief Operating Officer
EXHIBIT A – FORM OF Announcement
Deutsche High Income Trust (KHI) Announces Termination of Trust and Liquidating Distribution to Shareholders by November 30, 2016 and Special Meeting of
Shareholders to be Held in June 2016
New York, NY February 26, 2016 – Deutsche High Income Trust (NYSE: KHI) (the “Fund”) announced today that the Board of Trustees has approved the termination of the Fund, pursuant to which KHI will make a liquidating distribution to shareholders no later than November 30, 2016. The Fund also announced that a special meeting of shareholders will be held on June 30, 2016 at the offices of Deutsche Investment Management Americas Inc. (“DIMA”) at 345 Park Avenue, New York, NY 10154. As previously disclosed, at the special meeting, shareholders will consider a proposal to convert the Fund from a closed-end investment company to an open-end investment company. The proposal to convert the Fund from a closed-end investment company to an open-end investment company is being made to satisfy a requirement of the Fund’s Agreement and Declaration of Trust. After careful consideration of a range of factors, and in light of the Board’s approval of the Fund’s termination and liquidating distribution to shareholders no later than November 30, 2016, the Board recommends that shareholders vote against the proposal to convert the Fund to an open-end investment. A discussion of factors considered by the Board in developing this recommendation will be set forth in the proxy statement to be provided to Fund shareholders. Holders of record of common shares of the Fund at the close of business on April 26, 2016 will be entitled to vote at the meeting and any adjournments thereof.
DIMA proposed to the Fund’s Board the termination of the Fund and liquidating distribution pursuant to the terms of a Standstill Agreement that DIMA and the Fund entered into with Saba Capital Management L.P. (“Saba”), a large shareholder in the Fund, and certain parties associated with Saba. Under the terms of the Standstill Agreement, Saba has agreed, among other things, to vote in accordance with the Board's recommendation on various matters affecting KHI, including any proposal to convert KHI to an open-end investment company. The Fund has been advised that Saba will file a copy of the Standstill Agreement with the Securities and Exchange Commission as an exhibit to its Schedule 13D.