As filed with the Securities and Exchange Commission on July 6,
2022
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: 811-22396
NEUBERGER BERMAN HIGH YIELD STRATEGIES FUND INC.
(Exact name of registrant as specified in charter)
c/o Neuberger Berman Investment Advisers LLC
1290 Avenue of the Americas
New York, New York 10104-0002
(Address of principal executive offices – Zip Code)
Registrant's telephone number, including area code: (212)
476-8800
Joseph V. Amato
Chief Executive Officer and President
Neuberger Berman High Yield Strategies Fund Inc.
c/o Neuberger Berman Investment Advisers LLC
1290 Avenue of the Americas
New York, New York 10104-0002
Lori L. Schneider, Esq.
K&L Gates LLP
1601 K Street, N.W.
Washington, D.C. 20006-1600
(Names and addresses of agents for service)
Date of fiscal year end: October 31
Date of reporting period: April 30, 2022
Form N-CSR is to be used by management investment companies to file
reports with the Commission not later than 10 days after the
transmission to stockholders of any report that is required to be
transmitted to stockholders under Rule 30e-1 under the Investment
Company Act of 1940, as amended (“Act”) (17 CFR 270.30e-1). The
Commission may use the information provided on Form N-CSR in its
regulatory, disclosure review, inspection, and policymaking
roles.
A registrant is required to disclose the information specified by
Form N-CSR, and the Commission will make this information public. A
registrant is not required to respond to the collection of
information contained in Form N-CSR unless the Form displays a
currently valid Office of Management and Budget (“OMB”) control
number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for
reducing the burden to the Secretary, Securities and Exchange
Commission, 100 F Street, NE, Washington, DC 20549-1090. The
OMB has reviewed this collection of information under the clearance
requirements of 44 U.S.C. § 3507.
Item 1. Report to Stockholders.
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(a) |
Following is a copy of
the semi-annual report transmitted to stockholders pursuant to Rule
30e-1 under the Act.
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Neuberger Berman
High Yield Strategies
Fund Inc.
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Semi-Annual
Report
April 30,
2022
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Contents |
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PRESIDENT’S LETTER |
1 |
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PORTFOLIO COMMENTARY |
2 |
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SCHEDULE OF
INVESTMENTS |
7 |
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Positions by
Country |
21 |
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FINANCIAL STATEMENTS |
24 |
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NOTES TO FINANCIAL
STATEMENTS |
28 |
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FINANCIAL HIGHLIGHTS |
38 |
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Distribution Reinvestment Plan for
the Fund |
40 |
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Directory |
43 |
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Proxy Voting Policies and
Procedures |
44 |
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Quarterly Portfolio Schedule |
44 |
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Privacy Notice |
Located after the Fund’s
Report |
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The “Neuberger Berman” name and logo
and “Neuberger Berman Investment Advisers LLC” name are registered
service marks of Neuberger Berman Group LLC. The individual Fund
name in this piece is either a service mark or registered service
mark of Neuberger Berman Investment Advisers LLC. ©2022 Neuberger
Berman Investment Advisers LLC. All rights reserved.
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Dear Stockholder,
I
am pleased to present this semi-annual report for Neuberger Berman
High Yield Strategies Fund Inc. (the Fund) for the six months ended
April 30, 2022 (the reporting period). The report includes a
portfolio commentary, a listing of the Fund’s investments and its
unaudited financial statements for the reporting period.
The Fund seeks high total return (income plus
capital appreciation). To pursue that objective, we have assembled
a portfolio that consists primarily of high yield debt
securities.
As previously announced on December 15, 2021,
Co-Portfolio Managers Russ Covode and Dan Doyle plan to retire from
the asset management business on or about June 30, 2022 and will
cease their portfolio management responsibilities at that time.
Current Co-Portfolio Managers Joseph Lind and Christopher Kocinski,
with an average of 19 years of industry experience, will continue
to manage the Fund with the support of Neuberger Berman’s broader
Non-Investment Grade Credit team following the retirements of Russ
Covode and Daniel Doyle.
As previously announced, the Fund commenced a
transferable rights offering (Offer) on April 19, 2022 (Record
Date), whereby the Fund issued one transferable right (Right) for
each share of common stock of the Fund (Common Stock) held by
stockholders of record as of the Record Date. Holders of Rights
were entitled to purchase Common Stock by submitting three Rights
and the subscription price per share for each share purchased. The
final subscription price of $8.60 per share of Common Stock was
equal to 87% of the Fund’s net asset value per share of Common
Stock at the close of trading on the NYSE American on May 17, 2022,
the expiration date of the Offer. The Offer resulted in the
issuance of 4,763,981 shares of Common Stock and the gross proceeds
of the Offer were approximately $40.9 million.
Subsequent to the reporting period end, on June
3, 2022, the Fund completed a private placement of $26,500,000 via
a Floating Rate Senior Note (Note) with a major unaffiliated
financial institution. The Note pays interest based on a floating
rate and matures in September 2023. The issuance of the Note
increased the amount of leverage employed by the Fund in order to
bring it more in line with the Fund’s asset level following the
Offer.
Thank you for your confidence in the Fund. We
will continue to do our best to retain your trust in the years to
come.
Sincerely,
Joseph V. Amato
President and CEO
Neuberger Berman High Yield Strategies Fund Inc.
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Neuberger Berman High Yield Strategies Fund
Inc.
Portfolio Commentary (Unaudited) |
Neuberger Berman High Yield Strategies Fund Inc.
(the Fund) generated a -10.97% total return on a net asset value
(NAV) basis for the six-month period ended April 30, 2022 (the
reporting period), underperforming its benchmark, the ICE BofA U.S.
High Yield Constrained Index (the Index), which provided a -7.21%
total return for the same period. (Fund performance on a market
price basis is provided in the table immediately following this
commentary.) The use of leverage (typically a performance enhancer
in up markets and a detractor during market retreats) detracted
from the Fund’s performance during the reporting period.
The overall high yield market, as measured by the
Index, generated weak results, but outperformed all other longer
duration fixed income categories during the reporting period. U.S.
Treasury yields moved sharply higher as inflation hit a four-decade
high, the U.S. Federal Reserve Board (Fed) indicated it would
aggressively raise interest rates, and the tragic war in Ukraine
triggered numerous supply shortages and fueled spikes in commodity
prices. Meanwhile, consumer spending was generally resilient and
the impact from COVID-19 and its variants appeared to wane.
Concurrently, U.S. credit spreads widened given the risk aversion
and the tightening of financial conditions.
From a sector perspective, security selection
within the real estate & homebuilders and super retail sectors
and security selection within and an overweight to the media-cable
sector versus the Index detracted the most from results. In
contrast, security selection within the diversified financial
services, gas distribution, and health care sectors were the top
contributors to relative performance.
In terms of the Fund’s portfolio credit quality,
an underweight to not rated, security selection within CCC and
below, and security selection within B were the primary detractors
from performance. Conversely, security selection within and an
underweight to BB, and an overweight to B rated issuers contributed
the most to performance.
The Fund’s use of swap contracts contributed
positively to performance during the reporting period.
As it became increasingly clear that the Fed
would have to become more aggressive with tightening monetary
policy, thus creating more volatility, we selectively increased the
Fund’s exposure to shorter duration and lower beta1
(risk) BB rated issuers, while reducing some CCC and below and B
rated issuers that had performed well. As credit spreads widened
over the reporting period, we subsequently looked to decrease the
Fund’s exposure to higher beta issuers, particularly in the CCC and
below credit tier. Based on individual credit decisions and looking
to reduce duration, the Fund’s BBB and above rated exposure also
decreased over the reporting period.
Looking ahead, we believe current valuations
present an attractive opportunity. While the Russia-Ukraine
conflict and tightening of financial conditions are creating
incremental volatility, real U.S. GDP growth is estimated to be
around historical trend rates for 2022 and input costs for many
issuers are being passed on to end markets. We believe that if real
growth slows back toward trend it will help alleviate some of the
inflationary pressures. Our analysts continue focus on the outlook
for issuer margins given rising input costs. Mitigating this are
strong consumer and business balance sheets, growing wages, solid
jobs growth and businesses working to clear supply
bottlenecks. While there is near zero direct exposure to
Russia and Ukraine in the high yield market, our global research
team continues to monitor the investment thesis for each issuer in
the portfolio given the secondary impacts from the Russia-Ukraine
conflict related to commodity prices and trade disruptions. Even
with the heightened uncertainty, which is resulting in short-term
volatility, we believe our bottom-up, fundamental credit research
focused on security selection while seeking to avoid credit
deterioration and putting only our “best ideas” into portfolios,
position us well to take advantage of the increased
volatility.
Sincerely,
Russ Covode, Daniel Doyle, Joe
Lind and Chris Kocinski
Portfolio Co-Managers
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1 |
Beta is a measure of the systematic risk of a portfolio. It
is the covariance of the portfolio and a market index divided by
the variance of the market index. Beta measures the historical
sensitivity of a portfolio’s returns to movements in the market
index. The beta of the market index will always be one. A portfolio
with a beta above the market index (i.e. >1) means that the
portfolio has greater volatility than the market index. If the beta
of the portfolio is 1.2, a market increase in return of 1% implies
a 1.2% increase in the portfolio’s return. If the beta of the
portfolio is 0.8, a market decrease in return of 1% implies a 0.8%
decrease in the portfolio’s return. |
The
portfolio composition, industries and holdings of the Fund are
subject to change without notice.
The
opinions expressed are those of the Fund’s portfolio managers. The
opinions are as of the date of this report and are subject to
change without notice.
The value
of securities owned by the Fund, as well as the market value of
shares of the Fund’s common stock, may decline in response to
certain events, including those directly involving the issuers
whose securities are owned by the Fund; conditions affecting the
general economy; overall market changes; local, regional, national
or global political, social or economic instability; regulatory or
legislative developments; price, currency and interest rate
fluctuations, including those resulting from changes in central
bank policies; and changes in investor sentiment.
The
performance of certain rated bonds within the Index, as noted
above, represent issues that are rated Baa3/BBB- and above, Ba1/BB+
through Ba3/BB-, B1/B+ through B3/B- and Caa1/CCC+ or lower, based
on an average of Moody’s, S&P Global and Fitch ratings, as
calculated by ICE BofA.
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| High Yield Strategies Fund Inc. (Unaudited) |
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TICKER
SYMBOL |
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High Yield Strategies Fund
Inc. |
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NHS |
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| PORTFOLIO
BY MATURITY DISTRIBUTION |
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(as a % of Total
Investments*) |
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Less than One Year |
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0.0 |
% |
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One to less than Five Years |
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26.4 |
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Five to less than Ten Years |
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69.7 |
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Ten Years or Greater |
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3.9 |
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Total |
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100.0 |
% |
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* |
Does not include Short-Term Investments or the impact of
the Fund’s open positions in derivatives, if any. |
| PERFORMANCE HIGHLIGHTS1 |
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Six Month |
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Average Annual Total
Return |
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Period |
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Ended 04/30/2022 |
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Inception |
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Ended |
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Date |
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04/30/2022 |
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1 Year |
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5 Years |
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10 Years |
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Life of Fund |
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At NAV2 |
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High Yield Strategies |
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Fund Inc. |
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07/28/2003 |
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-10.97% |
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-9.49% |
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3.57% |
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6.01% |
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8.30% |
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At Market
Price3 |
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High Yield Strategies |
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Fund Inc. |
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07/28/2003 |
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-22.19% |
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-16.76% |
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4.39% |
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4.82% |
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7.62% |
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Index |
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ICE BofA |
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U.S. High Yield |
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Constrained
Index4 |
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-7.21% |
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-4.96% |
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3.54% |
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5.19% |
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6.87% |
Listed
closed-end funds, unlike open-end funds, are not continually
offered. Generally, there is an initial public offering and, once
issued, shares of common stock of closed-end funds are sold in the
secondary market on a stock exchange.
The
performance data quoted represent past performance and do not
indicate future results. Current performance may be lower or higher
than the performance data quoted. For current performance data,
please visit www.nb.com/cef-performance.
The
results shown in the table reflect the reinvestment of income
dividends and other distributions, if any. The results do not reflect the effect of taxes a
stockholder would pay on Fund distributions or on the sale of
shares of the Fund’s common stock.
The
investment return and market price will fluctuate and shares of the
Fund’s common stock may trade at prices above or below NAV. Shares
of the Fund’s common stock, when sold, may be worth more or less
than their original cost.
Returns
would have been lower if Neuberger Berman Investment Advisers LLC
(“NBIA”) had not waived certain expenses during certain of the
periods shown. The waived fees are from prior years that are no
longer disclosed in the Financial Highlights.
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1 |
The performance information for periods prior to
August 6, 2010 is that of a predecessor fund (Neuberger Berman High
Yield Strategies Fund). |
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2 |
Returns based on the NAV of the Fund. |
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3 |
Returns based on the market price of shares of
the Fund’s common stock on the NYSE American. |
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4 |
Please see “Description of Index” on page 5 for a
description of the index. |
For more complete information on Neuberger Berman
High Yield Strategies Fund Inc., call Neuberger Berman Investment
Advisers LLC at (877) 461-1899, or visit our website at
www.nb.com.
| |
| Description of Index (Unaudited) |
ICE BofA U.S. High Yield
Constrained Index: |
The index
tracks the performance of U.S. dollar-denominated, below investment
grade corporate debt publicly issued in the U.S. domestic market.
In addition to meeting other criteria, qualifying securities must
have a below investment grade rating (based on an average of
Moody’s, S&P and Fitch ratings) and have risk exposure to
countries that are members of the FX-G10, Western Europe or
territories of the U.S. and Western Europe. Securities in legal
default are excluded from the index. Index constituents are
capitalization-weighted, provided the total allocation to an
individual issuer does not exceed 2%.
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Please note
that the index does not take into account any fees and expenses or
any tax consequences of investing in the individual securities that
it tracks and that individuals cannot invest directly in any index.
Data about the performance of this index are prepared or obtained
by NBIA and include reinvestment of all income dividends and other
distributions, if any. The Fund may invest in securities not
included in the above described index and generally does not invest
in all securities included in the index.
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| Legend April 30, 2022 (Unaudited) |
Neuberger Berman High Yield Strategies Fund
Inc.
Benchmarks
LIBOR
= London Interbank Offered Rate
CME Term SOFR = CME Group, Inc. Term Secured Overnight Financing
Rate
Currency
Abbreviations:
USD =
United States Dollar
Other
Abbreviations:
Management or NBIA = Neuberger Berman Investment Advisers
LLC
Clearinghouses:
CME = CME Group, Inc.
Index
Periods/Payment Frequencies:
1M = 1 Month
3M = 3 Months
6M = 6 Months
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| Schedule of Investments High Yield Strategies Fund Inc.^
(Unaudited) April 30, 2022 |
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PRINCIPAL AMOUNT |
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VALUE |
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Loan
Assignments(a)4.9% |
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Automotive 0.3% |
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| $ |
452,743 |
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Tenneco, Inc., Term Loan B, (1M USD LIBOR + 3.00%), 3.76%,
due 10/1/2025 |
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$ |
446,328 |
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Containers & Glass Products
0.5% |
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544,975 |
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BWAY Holding Company, Term Loan B, (1M USD LIBOR + 3.25%),
3.71%, due 4/3/2024 |
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533,666 |
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250,000 |
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Trident TPI Holdings, Inc., Term Loan B1, (3M USD LIBOR +
3.25%), 4.26%, due 10/17/2024 |
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248,333 |
(b)(c) |
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781,999 |
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Diversified Insurance
0.5% |
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656,617 |
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Gainwell Acquisition Corp., Term Loan B, (3M USD LIBOR +
4.00%), 5.01%, due 10/1/2027 |
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653,747 |
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162,014 |
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Hub International Limited, Term Loan B, (3M USD LIBOR +
3.25%), due 4/25/2025 |
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161,045 |
(b)(c) |
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814,792 |
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Drugs 0.3% |
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399,887 |
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Bausch Health Companies Inc., Term Loan B, (1M USD LIBOR +
3.00%), due 6/2/2025 |
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397,472 |
(b)(c) |
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| Electronics - Electrical 0.5% |
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746,250 |
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Redstone Holdco 2 LP, Term Loan, (3M USD LIBOR + 4.75%),
5.93%, due 4/27/2028 |
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715,698 |
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Financial Intermediaries
0.2% |
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370,000 |
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Asurion LLC, Second Lien Term Loan B4, (1M USD LIBOR +
5.25%), 6.01%, due 1/20/2029 |
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358,530 |
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Health Care 1.3% |
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250,000 |
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PetVet Care Centers, LLC, Term Loan B3, (1M USD LIBOR +
3.50%), due 2/14/2025 |
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248,203 |
(b)(c) |
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250,000 |
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RegionalCare Hospital Partners Holdings, Inc., Term Loan B,
(1M USD LIBOR + 3.75%), due |
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11/16/2025 |
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246,770 |
(b)(c) |
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1,603,231 |
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Team Health Holdings, Inc., Term Loan B, (1M SOFR + 5.25%),
6.25%, due 3/2/2027 |
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1,503,029 |
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1,998,002 |
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Leisure Goods - Activities - Movies
0.3% |
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255,000 |
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Carnival Corporation, Term Loan B, (3M USD LIBOR + 3.00%),
3.75%, due 6/30/2025 |
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250,583 |
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250,000 |
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Delta 2 (LUX) S.a.r.l., Term Loan, (1M USD LIBOR + 2.50%),
due 2/1/2024 |
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248,555 |
(b)(c) |
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499,138 |
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Oil & Gas 0.5% |
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375,000 |
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Ascent Resources - Utica, Second Lien Term Loan, (3M USD
LIBOR + 9.00%), 10.02%, due |
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11/1/2025 |
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399,533 |
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395,000 |
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Prairie ECI Acquiror LP, Term Loan B, (1M USD LIBOR +
4.75%), 5.51%, due 3/11/2026 |
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386,440 |
(b)(c) |
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785,973 |
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Retailers (except food & drug)
0.5% |
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790,405 |
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Great Outdoors Group, LLC, Term Loan B1, (1M USD LIBOR +
3.75%), 4.51%, due 3/6/2028 |
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781,513 |
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Total Loan Assignments (Cost
$7,705,267) |
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7,579,445 |
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| See Notes to Financial Statements |
7 |
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| Schedule of Investments High Yield Strategies Fund
Inc.^ |
| (Unaudited) (cont’d) |
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PRINCIPAL AMOUNT |
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VALUE |
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| Corporate Bonds
150.1% |
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| Advertising
0.7% |
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| $ |
1,110,000 |
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Cars.com, Inc., 6.38%, due 11/1/2028 |
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$ |
1,040,092 |
(d) |
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| Aerospace & Defense
1.9% |
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TransDigm, Inc. |
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1,535,000 |
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6.38%, due
6/15/2026 |
|
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1,515,736 |
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505,000 |
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7.50%, due
3/15/2027 |
|
|
508,787 |
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980,000 |
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5.50%, due
11/15/2027 |
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898,650 |
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2,923,173 |
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| Air Transportation
2.7% |
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515,000 |
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Air Canada, 3.88%, due 8/15/2026 |
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476,208 |
(d)(e) |
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300,000 |
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American Airlines Group, Inc., 3.75%,
due 3/1/2025 |
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267,750 |
(d) |
|
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American Airlines, Inc./AAdvantage Loyalty IP
Ltd. |
|
|
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810,000 |
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5.50%, due
4/20/2026 |
|
|
802,912 |
(d) |
|
825,000 |
|
5.75%, due
4/20/2029 |
|
|
794,949 |
(d) |
|
|
400,000 |
|
United Airlines, Inc., 4.38%, due
4/15/2026 |
|
|
386,200 |
(d) |
|
|
|
VistaJet Malta Finance PLC/XO Management Holding,
Inc. |
|
|
|
|
|
720,000 |
|
7.88%, due
5/1/2027 |
|
|
677,304 |
(d) |
|
935,000 |
|
6.38%, due
2/1/2030 |
|
|
815,956 |
(d) |
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|
|
4,221,279 |
|
| |
| Auto Loans
0.7% |
|
|
|
|
|
|
|
Ford Motor Credit Co. LLC |
|
|
|
|
|
635,000 |
|
4.06%, due
11/1/2024 |
|
|
621,133 |
|
|
390,000 |
|
4.13%, due
8/4/2025 |
|
|
374,400 |
|
|
|
|
|
|
|
|
995,533 |
|
| |
| Auto Parts &
Equipment 1.6% |
|
|
|
|
|
165,000 |
|
Dana, Inc., 4.50%, due 2/15/2032 |
|
|
136,125 |
|
|
|
|
|
Goodyear Tire & Rubber
Co. |
|
|
|
|
|
|
985,000 |
|
9.50%, due
5/31/2025 |
|
|
1,032,881 |
|
|
|
455,000 |
|
5.00%, due
7/15/2029 |
|
|
405,723 |
|
|
|
285,000 |
|
5.63%, due
4/30/2033 |
|
|
245,476 |
|
|
167,000 |
|
Panther BF Aggregator 2 L.P./Panther Finance Co., Inc.,
6.25%, due 5/15/2026 |
|
|
168,670 |
(d) |
|
|
475,000 |
|
Tenneco, Inc., 7.88%, due
1/15/2029 |
|
|
479,888 |
(d) |
|
|
|
|
|
|
2,468,763 |
|
| |
| Automakers
2.3% |
|
|
|
|
|
|
|
Ford Motor Co. |
|
|
|
|
|
600,000 |
|
9.63%, due
4/22/2030 |
|
|
733,500 |
|
|
760,000 |
|
4.75%, due
1/15/2043 |
|
|
611,800 |
|
|
1,860,000 |
|
7.40%, due
11/1/2046 |
|
|
2,001,751 |
|
|
|
225,000 |
|
Jaguar Land Rover Automotive PLC,
5.88%, due 1/15/2028 |
|
|
197,437 |
(d) |
|
|
|
|
|
|
3,544,488 |
|
|
See Notes
to Financial Statements
|
8
|
|
|
|
| Schedule of Investments High Yield Strategies Fund
Inc.^ |
| (Unaudited) (cont’d) |
|
PRINCIPAL AMOUNT |
|
VALUE |
| |
| Building &
Construction 0.6% |
|
|
|
|
| $ |
365,000 |
|
Global Infrastructure Solutions, Inc., 7.50%, due
4/15/2032 |
|
$ |
340,019 |
(d) |
|
|
|
|
Shea Homes L.P./Shea Homes Funding
Corp. |
|
|
|
|
|
|
300,000 |
|
4.75%, due
2/15/2028 |
|
|
268,500 |
(d) |
|
|
280,000 |
|
4.75%, due
4/1/2029 |
|
|
242,339 |
(d) |
|
|
|
|
|
|
850,858 |
|
| |
| Building Materials
3.1% |
|
|
|
|
|
975,000 |
|
Cornerstone Building Brands, Inc., 6.13%, due
1/15/2029 |
|
|
811,249 |
(d) |
|
|
1,775,000 |
|
Jeld-Wen, Inc., 4.88%, due
12/15/2027 |
|
|
1,609,606 |
(d) |
|
1,370,000 |
|
Masonite Int'l Corp., 5.38%, due 2/1/2028 |
|
|
1,311,638 |
(d) |
|
|
|
|
Standard Industries, Inc. |
|
|
|
|
|
|
405,000 |
|
4.75%, due
1/15/2028 |
|
|
372,600 |
(d) |
|
|
715,000 |
|
4.38%, due
7/15/2030 |
|
|
596,206 |
(d) |
|
|
|
|
|
|
4,701,299 |
|
| |
| Cable & Satellite
Television 5.5% |
|
|
|
|
|
|
|
CCO Holdings LLC/CCO Holdings Capital Corp. |
|
|
|
|
|
645,000 |
|
5.00%, due
2/1/2028 |
|
|
614,362 |
(d) |
|
570,000 |
|
4.25%, due
2/1/2031 |
|
|
480,396 |
(d) |
|
|
|
|
CSC Holdings LLC |
|
|
|
|
|
|
430,000 |
|
7.50%, due
4/1/2028 |
|
|
396,396 |
(d) |
|
|
535,000 |
|
6.50%, due
2/1/2029 |
|
|
508,250 |
(d) |
|
|
4,720,000 |
|
5.75%, due
1/15/2030 |
|
|
3,917,600 |
(d) |
|
|
880,000 |
|
4.63%, due
12/1/2030 |
|
|
673,200 |
(d) |
|
|
|
DISH DBS Corp. |
|
|
|
|
|
595,000 |
|
7.75%, due
7/1/2026 |
|
|
559,696 |
|
|
505,000 |
|
7.38%, due
7/1/2028 |
|
|
441,562 |
|
|
710,000 |
|
5.13%, due
6/1/2029 |
|
|
554,588 |
|
|
|
390,000 |
|
Radiate Holdco LLC/Radiate Finance,
Inc., 6.50%, due 9/15/2028 |
|
|
343,200 |
(d) |
|
|
|
|
|
|
8,489,250 |
|
| |
| Chemicals
4.3% |
|
|
|
|
|
325,000 |
|
Illuminate Buyer LLC/Illuminate Holdings IV, Inc., 9.00%,
due 7/1/2028 |
|
|
308,750 |
(d) |
|
|
|
|
NOVA Chemicals Corp. |
|
|
|
|
|
|
65,000 |
|
5.00%, due
5/1/2025 |
|
|
64,350 |
(d) |
|
|
1,171,000 |
|
5.25%, due
6/1/2027 |
|
|
1,109,522 |
(d) |
|
|
|
Olympus Water U.S. Holding Corp. |
|
|
|
|
|
700,000 |
|
4.25%, due
10/1/2028 |
|
|
618,562 |
(d) |
|
285,000 |
|
6.25%, due
10/1/2029 |
|
|
236,550 |
(d) |
|
|
610,000 |
|
PMHC II, Inc., 9.00%, due
2/15/2030 |
|
|
491,050 |
(d) |
|
|
|
SCIH Salt Holdings, Inc. |
|
|
|
|
|
730,000 |
|
4.88%, due
5/1/2028 |
|
|
631,118 |
(d) |
|
1,015,000 |
|
6.63%, due
5/1/2029 |
|
|
809,625 |
(d) |
|
|
400,000 |
|
SCIL IV LLC/SCIL USA Holdings LLC,
5.38%, due 11/1/2026 |
|
|
365,000 |
(d) |
|
635,000 |
|
Tronox, Inc., 4.63%, due 3/15/2029 |
|
|
566,738 |
(d) |
|
|
1,655,000 |
|
WR Grace Holdings LLC, 5.63%, due
8/15/2029 |
|
|
1,409,894 |
(d) |
|
|
|
|
|
|
6,611,159 |
|
| See Notes to Financial Statements |
9 |
|
|
|
| Schedule of Investments High Yield Strategies Fund
Inc.^ |
| (Unaudited) (cont’d) |
| PRINCIPAL AMOUNT |
|
|
VALUE |
| |
| Consumer - Commercial
Lease Financing 3.0% |
|
|
|
|
| $ |
715,000 |
|
AerCap Global Aviation Trust, 6.50%, due
6/15/2045 |
|
$ |
693,550 |
(d)(f) |
|
|
2,732,508 |
|
Global Aircraft Leasing Co. Ltd., 6.50%
Cash/7.25% PIK, due 9/15/2024 |
|
|
2,356,733 |
(d)(g) |
|
435,000 |
|
OneMain Finance Corp., 3.88%, due 9/15/2028 |
|
|
368,663 |
|
|
|
|
|
Springleaf Finance Corp. |
|
|
|
|
|
|
495,000 |
|
6.88%, due
3/15/2025 |
|
|
497,475 |
|
|
|
365,000 |
|
7.13%, due
3/15/2026 |
|
|
369,562 |
|
|
370,000 |
|
World Acceptance Corp., 7.00%, due 11/1/2026 |
|
|
320,971 |
(d) |
|
|
|
|
|
|
|
4,606,954 |
|
| |
| Diversified Capital Goods 0.4% |
|
|
|
|
|
705,000 |
|
Resideo Funding, Inc., 4.00%, due 9/1/2029 |
|
|
627,450 |
(d) |
| |
| Electric - Generation
5.1% |
|
|
|
|
|
|
|
Calpine Corp. |
|
|
|
|
|
420,000 |
|
5.13%, due
3/15/2028 |
|
|
381,518 |
(d) |
|
1,365,000 |
|
4.63%, due
2/1/2029 |
|
|
1,192,935 |
(d) |
|
2,695,000 |
|
5.00%, due
2/1/2031 |
|
|
2,298,107 |
(d) |
|
|
450,000 |
|
Leeward Renewable Energy Operations
LLC, 4.25%, due 7/1/2029 |
|
|
402,750 |
(d) |
|
|
|
NRG Energy, Inc. |
|
|
|
|
|
515,000 |
|
5.25%, due
6/15/2029 |
|
|
485,063 |
(d) |
|
595,000 |
|
3.63%, due
2/15/2031 |
|
|
495,338 |
(d) |
|
|
1,545,000 |
|
Vistra Corp., 7.00%, due
12/15/2026 |
|
|
1,502,512 |
(d)(f)(h) |
|
1,240,000 |
|
Vistra Operations Co. LLC, 4.38%, due 5/1/2029 |
|
|
1,125,275 |
(d) |
|
|
|
|
|
|
|
7,883,498 |
|
| |
| Electric - Integrated
0.5% |
|
|
|
|
|
|
|
FirstEnergy Corp. |
|
|
|
|
|
385,000 |
|
Ser. B, 4.40%,
due 7/15/2027 |
|
|
373,523 |
(i) |
|
390,000 |
|
Ser. C, 5.35%,
due 7/15/2047 |
|
|
364,533 |
(i) |
|
|
|
|
|
|
|
738,056 |
|
| |
| Energy - Exploration
& Production 9.3% |
|
|
|
|
|
525,000 |
|
Antero Resources Corp., 5.38%, due 3/1/2030 |
|
|
512,972 |
(d) |
|
|
400,000 |
|
Apache Corp., 5.10%, due
9/1/2040 |
|
|
362,000 |
|
|
|
|
Ascent Resources Utica Holdings LLC/ARU Finance
Corp. |
|
|
|
|
|
810,000 |
|
7.00%, due
11/1/2026 |
|
|
816,350 |
(d) |
|
190,000 |
|
9.00%, due
11/1/2027 |
|
|
264,356 |
(d) |
|
455,000 |
|
8.25%, due
12/31/2028 |
|
|
473,200 |
(d) |
|
600,000 |
|
5.88%, due
6/30/2029 |
|
|
580,746 |
(d) |
|
|
|
|
Callon Petroleum Co. |
|
|
|
|
|
|
510,000 |
|
6.13%, due
10/1/2024 |
|
|
503,503 |
|
|
|
250,000 |
|
8.00%, due
8/1/2028 |
|
|
258,580 |
(d) |
|
740,000 |
|
Chesapeake Energy Corp., 6.75%, due 4/15/2029 |
|
|
744,625 |
(d) |
|
|
635,000 |
|
Colgate Energy Partners III LLC, 5.88%,
due 7/1/2029 |
|
|
631,825 |
(d) |
|
|
|
Comstock Resources, Inc. |
|
|
|
|
|
662,000 |
|
6.75%, due
3/1/2029 |
|
|
669,401 |
(d) |
|
505,000 |
|
5.88%, due
1/15/2030 |
|
|
485,967 |
(d) |
| See Notes to Financial Statements |
10 |
|
|
|
| Schedule of Investments High Yield Strategies Fund
Inc.^ |
| (Unaudited) (cont’d) |
|
PRINCIPAL AMOUNT |
|
VALUE |
|
|
|
|
|
|
|
|
Hilcorp Energy I L.P./Hilcorp Finance
Co. |
|
|
|
|
|
$ |
520,000 |
|
6.25%, due
11/1/2028 |
|
$ |
517,738 |
(d) |
|
|
338,000 |
|
5.75%, due
2/1/2029 |
|
|
331,240 |
(d) |
|
|
373,000 |
|
6.00%, due
2/1/2031 |
|
|
359,960 |
(d) |
|
575,000 |
|
Northern Oil and Gas, Inc., 8.13%, due 3/1/2028 |
|
|
572,125 |
(d) |
|
|
|
|
Occidental Petroleum Corp. |
|
|
|
|
|
|
345,000 |
|
8.00%, due
7/15/2025 |
|
|
371,737 |
|
|
|
600,000 |
|
5.50%, due
12/1/2025 |
|
|
610,500 |
|
|
|
240,000 |
|
5.55%, due
3/15/2026 |
|
|
246,000 |
|
|
|
560,000 |
|
6.13%, due
1/1/2031 |
|
|
588,594 |
|
|
|
225,000 |
|
7.50%, due
5/1/2031 |
|
|
256,500 |
|
|
|
565,000 |
|
7.88%, due
9/15/2031 |
|
|
660,587 |
|
|
|
335,000 |
|
6.60%, due
3/15/2046 |
|
|
365,150 |
|
|
1,040,000 |
|
PDC Energy, Inc., 5.75%, due 5/15/2026 |
|
|
1,012,086 |
|
|
|
310,000 |
|
Rockcliff Energy II LLC, 5.50%, due
10/15/2029 |
|
|
300,700 |
(d) |
|
1,310,000 |
|
Southwestern Energy Co., 4.75%, due 2/1/2032 |
|
|
1,238,775 |
|
|
|
605,000 |
|
Tap Rock Resources LLC, 7.00%, due
10/1/2026 |
|
|
611,177 |
(d) |
|
|
|
|
|
|
14,346,394 |
|
| |
| Environmental
0.2% |
|
|
|
|
|
405,000 |
|
GFL Environmental, Inc., 4.38%, due 8/15/2029 |
|
|
359,316 |
(d) |
| |
| Food
- Wholesale 3.2% |
|
|
|
|
|
|
|
Performance Food Group, Inc. |
|
|
|
|
|
1,390,000 |
|
5.50%, due
10/15/2027 |
|
|
1,348,891 |
(d) |
|
525,000 |
|
4.25%, due
8/1/2029 |
|
|
466,583 |
(d) |
|
|
380,000 |
|
Pilgrim's Pride Corp., 5.88%, due
9/30/2027 |
|
|
382,776 |
(d) |
|
|
|
Post Holdings, Inc. |
|
|
|
|
|
65,000 |
|
5.50%, due
12/15/2029 |
|
|
59,150 |
(d) |
|
865,000 |
|
4.63%, due
4/15/2030 |
|
|
739,575 |
(d) |
|
300,000 |
|
4.50%, due
9/15/2031 |
|
|
249,480 |
(d) |
|
|
|
|
U.S. Foods, Inc. |
|
|
|
|
|
|
1,365,000 |
|
4.75%, due
2/15/2029 |
|
|
1,260,850 |
(d) |
|
|
460,000 |
|
4.63%, due
6/1/2030 |
|
|
411,700 |
(d) |
|
|
|
|
|
|
4,919,005 |
|
| |
| Forestry & Paper
0.4% |
|
|
|
|
|
605,000 |
|
Ahlstrom-Munksjo Holding 3 Oy, 4.88%, due
2/4/2028 |
|
|
533,670 |
(d) |
| |
| Gaming
3.6% |
|
|
|
|
|
1,225,000 |
|
Boyd Gaming Corp., 4.75%, due 12/1/2027 |
|
|
1,157,797 |
|
|
|
|
|
Caesars Entertainment, Inc. |
|
|
|
|
|
|
1,185,000 |
|
8.13%, due
7/1/2027 |
|
|
1,238,325 |
(d) |
|
|
460,000 |
|
4.63%, due
10/15/2029 |
|
|
394,450 |
(d) |
|
120,000 |
|
Everi Holdings, Inc., 5.00%, due 7/15/2029 |
|
|
108,876 |
(d) |
|
|
730,000 |
|
SC Games Holdings L.P./ U.S. FinCo LLC,
6.63%, due 3/1/2030 |
|
|
693,500 |
(d) |
|
1,240,000 |
|
Scientific Games Int'l, Inc., 7.00%, due
5/15/2028 |
|
|
1,269,496 |
(d) |
|
|
730,000 |
|
Wynn Las Vegas LLC/Wynn Las Vegas
Capital Corp., 5.50%, due 3/1/2025 |
|
|
706,275 |
(d) |
|
|
|
|
|
|
5,568,719 |
|
| See Notes to Financial Statements |
11 |
|
|
|
| Schedule of Investments High Yield Strategies Fund
Inc.^ |
| (Unaudited) (cont’d) |
|
PRINCIPAL AMOUNT |
|
VALUE |
| |
| Gas Distribution
14.8% |
|
|
|
|
| $ |
1,800,000 |
|
Antero Midstream Partners L.P./Antero Midstream Finance
Corp., 7.88%, due 5/15/2026 |
|
$ |
1,882,782 |
(d) |
|
|
|
|
Buckeye Partners L.P. |
|
|
|
|
|
|
910,000 |
|
4.13%, due
12/1/2027 |
|
|
839,475 |
|
|
|
460,000 |
|
5.85%, due
11/15/2043 |
|
|
366,850 |
|
|
785,000 |
|
Cheniere Energy Partners L.P., 4.50%, due
10/1/2029 |
|
|
751,637 |
|
|
|
2,250,000 |
|
CQP Holdco L.P./BIP-V Chinook Holdco
LLC, 5.50%, due 6/15/2031 |
|
|
2,075,175 |
(d) |
|
70,000 |
|
Crestwood Midstream Partners L.P./Crestwood Midstream
Finance Corp., 5.63%, due 5/1/2027 |
|
|
68,163 |
(d) |
|
|
920,000 |
|
DCP Midstream LLC, 5.85%, due
5/21/2043 |
|
|
836,160 |
(d)(f) |
|
305,000 |
|
DCP Midstream Operating L.P., 5.60%, due
4/1/2044 |
|
|
291,574 |
|
|
|
|
|
EQM Midstream Partners L.P. |
|
|
|
|
|
|
250,000 |
|
6.50%, due
7/1/2027 |
|
|
252,500 |
(d)(e) |
|
|
320,000 |
|
4.50%, due
1/15/2029 |
|
|
288,070 |
(d) |
|
|
320,000 |
|
4.75%, due
1/15/2031 |
|
|
285,312 |
(d) |
|
|
|
EQT Midstream Partners L.P. |
|
|
|
|
|
450,000 |
|
4.13%, due
12/1/2026 |
|
|
417,938 |
|
|
1,095,000 |
|
5.50%, due
7/15/2028 |
|
|
1,045,725 |
|
|
|
|
|
Genesis Energy L.P./Genesis Energy
Finance Corp. |
|
|
|
|
|
|
165,000 |
|
6.50%, due
10/1/2025 |
|
|
156,750 |
|
|
|
270,000 |
|
6.25%, due
5/15/2026 |
|
|
251,775 |
|
|
|
275,000 |
|
8.00%, due
1/15/2027 |
|
|
269,703 |
|
|
|
645,000 |
|
7.75%, due
2/1/2028 |
|
|
620,813 |
|
|
125,000 |
|
Global Partners L.P./GLP Finance Corp., 6.88%, due
1/15/2029 |
|
|
121,883 |
|
|
|
735,000 |
|
Harvest Midstream I L.P., 7.50%, due
9/1/2028 |
|
|
745,775 |
(d) |
|
610,000 |
|
Howard Midstream Energy Partners LLC, 6.75%, due
1/15/2027 |
|
|
591,008 |
(d) |
|
|
685,000 |
|
ITT Holdings LLC, 6.50%, due
8/1/2029 |
|
|
606,225 |
(d) |
|
|
|
New Fortress Energy, Inc. |
|
|
|
|
|
1,435,000 |
|
6.75%, due
9/15/2025 |
|
|
1,410,806 |
(d) |
|
1,770,000 |
|
6.50%, due
9/30/2026 |
|
|
1,713,041 |
(d) |
|
|
|
|
NuStar Logistics L.P. |
|
|
|
|
|
|
400,000 |
|
5.75%, due
10/1/2025 |
|
|
398,000 |
|
|
|
355,000 |
|
6.00%, due
6/1/2026 |
|
|
354,162 |
(e) |
|
|
435,000 |
|
5.63%, due
4/28/2027 |
|
|
417,139 |
(e) |
|
550,000 |
|
Solaris Midstream Holdings LLC, 7.63%, due
4/1/2026 |
|
|
563,750 |
(d) |
|
|
|
|
Summit Midstream Holdings LLC/Summit
Midstream Finance Corp. |
|
|
|
|
|
|
585,000 |
|
5.75%, due
4/15/2025 |
|
|
468,000 |
|
|
|
445,000 |
|
8.50%, due
10/15/2026 |
|
|
415,465 |
(d) |
|
|
|
Tallgrass Energy Partners L.P./Tallgrass Energy Finance
Corp. |
|
|
|
|
|
375,000 |
|
7.50%, due
10/1/2025 |
|
|
382,695 |
(d) |
|
500,000 |
|
6.00%, due
3/1/2027 |
|
|
480,000 |
(d) |
|
525,000 |
|
5.50%, due
1/15/2028 |
|
|
489,384 |
(d) |
|
405,000 |
|
6.00%, due
12/31/2030 |
|
|
374,625 |
(d) |
|
350,000 |
|
6.00%, due
9/1/2031 |
|
|
319,375 |
(d) |
|
|
|
|
Venture Global Calcasieu Pass
LLC |
|
|
|
|
|
|
525,000 |
|
3.88%, due
8/15/2029 |
|
|
479,063 |
(d) |
|
|
525,000 |
|
4.13%, due
8/15/2031 |
|
|
476,438 |
(d) |
|
See Notes to Financial
Statements |
12 |
|
| |
| Schedule of Investments High Yield Strategies Fund
Inc.^ |
| (Unaudited) (cont’d) |
|
PRINCIPAL AMOUNT |
|
|
VALUE |
|
|
|
|
|
|
|
| $ |
1,270,000 |
|
Western Midstream Operating L.P., 4.55%, due
2/1/2030 |
|
$ |
1,166,736 |
(i) |
|
|
|
|
|
|
22,673,972 |
|
| |
|
|
|
|
|
|
|
| Health Facilities 2.1% |
|
|
|
|
|
470,000 |
|
Acadia Healthcare Co., Inc., 5.50%, due
7/1/2028 |
|
|
457,714 |
(d) |
|
|
|
CHS/Community Health Systems, Inc. |
|
|
|
|
|
227,000 |
|
8.00%, due
12/15/2027 |
|
|
235,163 |
(d) |
|
530,000 |
|
6.88%, due
4/15/2029 |
|
|
464,821 |
(d) |
|
455,000 |
|
5.25%, due
5/15/2030 |
|
|
398,876 |
(d) |
|
480,000 |
|
4.75%, due
2/15/2031 |
|
|
406,800 |
(d) |
|
|
|
HCA, Inc. |
|
|
|
|
|
485,000 |
|
5.38%, due
2/1/2025 |
|
|
498,944 |
|
|
360,000 |
|
5.88%, due
2/15/2026 |
|
|
372,780 |
|
|
415,000 |
|
3.50%, due
9/1/2030 |
|
|
371,769 |
|
|
|
|
|
|
|
3,206,867 |
|
| |
|
|
|
|
|
|
|
| Health Services 2.7% |
|
|
|
|
|
580,000 |
|
Envision Healthcare Corp., 8.75%, due
10/15/2026 |
|
|
241,535 |
(d) |
|
380,000 |
|
IQVIA, Inc., 5.00%, due 10/15/2026 |
|
|
378,100 |
(d) |
|
1,275,000 |
|
Minerva Merger Sub, Inc., 6.50%, due 2/15/2030 |
|
|
1,173,561 |
(d) |
|
819,000 |
|
Ortho-Clinical Diagnostics, Inc./Ortho-Clinical Diagnostics
SA, 7.25%, due 2/1/2028 |
|
|
827,190 |
(d) |
|
700,000 |
|
Team Health Holdings, Inc., 6.38%, due 2/1/2025 |
|
|
596,568 |
(d) |
|
320,000 |
|
U.S. Acute Care Solutions LLC, 6.38%, due
3/1/2026 |
|
|
310,800 |
(d) |
|
550,000 |
|
Vizient, Inc., 6.25%, due 5/15/2027 |
|
|
567,875 |
(d) |
|
|
|
|
|
|
4,095,629 |
|
| |
|
|
|
|
|
|
|
| Hotels 1.2% |
|
|
|
|
|
1,895,000 |
|
Park Intermediate Holdings LLC/PK Domestic Property LLC/PK
Finance Co-Issuer, 5.88%, due |
|
|
|
|
|
|
|
10/1/2028 |
|
|
1,838,150 |
(d) |
| |
|
|
|
|
|
|
|
| Insurance Brokerage 6.6% |
|
|
|
|
|
|
|
Alliant Holdings Intermediate LLC/Alliant Holdings
Co-Issuer |
|
|
|
|
|
2,215,000 |
|
6.75%, due
10/15/2027 |
|
|
2,094,570 |
(d) |
|
365,000 |
|
5.88%, due
11/1/2029 |
|
|
340,363 |
(d) |
|
780,000 |
|
AmWINS Group, Inc., 4.88%, due 6/30/2029 |
|
|
713,957 |
(d) |
|
|
|
AssuredPartners, Inc. |
|
|
|
|
|
1,515,000 |
|
7.00%, due
8/15/2025 |
|
|
1,494,032 |
(d) |
|
815,000 |
|
5.63%, due
1/15/2029 |
|
|
716,760 |
(d) |
|
550,000 |
|
BroadStreet Partners, Inc., 5.88%, due
4/15/2029 |
|
|
477,125 |
(d) |
|
2,605,000 |
|
GTCR AP Finance, Inc., 8.00%, due 5/15/2027 |
|
|
2,595,114 |
(d) |
|
1,740,000 |
|
HUB Int'l Ltd., 7.00%, due 5/1/2026 |
|
|
1,724,636 |
(d) |
|
|
|
|
|
|
10,156,557 |
|
| |
|
|
|
|
|
|
|
| Investments & Misc. Financial Services
0.5% |
|
|
|
|
|
280,000 |
|
MoneyGram Int'l, Inc., 5.38%, due 8/1/2026 |
|
|
285,617 |
(d) |
|
535,000 |
|
MSCI, Inc., 4.00%, due 11/15/2029 |
|
|
492,762 |
(d) |
|
|
|
|
|
|
778,379 |
|
| See Notes to Financial Statements |
13 |
|
| |
| Schedule of Investments High Yield Strategies Fund
Inc.^ |
| (Unaudited) (cont’d) |
|
PRINCIPAL AMOUNT |
|
|
VALUE |
|
| |
|
|
|
|
|
|
|
|
Machinery 1.3% |
|
|
|
|
| $ |
1,175,000 |
|
SPX FLOW, Inc., 8.75%, due 4/1/2030 |
|
$ |
1,058,475 |
(d) |
|
730,000 |
|
Terex Corp., 5.00%, due 5/15/2029 |
|
|
670,826 |
(d) |
|
360,000 |
|
Vertical U.S. Newco, Inc., 5.25%, due 7/15/2027 |
|
|
337,255 |
(d) |
|
|
|
|
|
|
2,066,556 |
|
| |
|
|
|
|
|
|
|
|
Managed Care 3.1% |
|
|
|
|
|
|
|
Centene Corp. |
|
|
|
|
|
895,000 |
|
4.63%, due
12/15/2029 |
|
|
866,830 |
|
|
445,000 |
|
2.50%, due
3/1/2031 |
|
|
369,906 |
|
|
170,000 |
|
HealthEquity, Inc., 4.50%, due 10/1/2029 |
|
|
155,338 |
(d) |
|
880,000 |
|
Molina Healthcare, Inc., 3.88%, due 5/15/2032 |
|
|
772,622 |
(d) |
|
|
|
MPH Acquisition Holdings LLC |
|
|
|
|
|
620,000 |
|
5.50%, due
9/1/2028 |
|
|
574,275 |
(d) |
|
2,345,000 |
|
5.75%, due
11/1/2028 |
|
|
2,042,460 |
(d) |
|
|
|
|
|
|
4,781,431 |
|
| |
|
|
|
|
|
|
|
|
Media Content 2.2% |
|
|
|
|
|
1,070,000 |
|
Lions Gate Capital Holdings LLC, 5.50%, due
4/15/2029 |
|
|
948,544 |
(d) |
|
|
|
Sirius XM Radio, Inc. |
|
|
|
|
|
1,855,000 |
|
5.50%, due
7/1/2029 |
|
|
1,783,880 |
(d) |
|
690,000 |
|
3.88%, due
9/1/2031 |
|
|
582,712 |
(d) |
|
|
|
|
|
|
3,315,136 |
|
| |
|
|
|
|
|
|
|
|
Medical Products
0.7% |
|
|
|
|
|
|
|
Mozart Debt Merger Sub, Inc. |
|
|
|
|
|
710,000 |
|
3.88%, due
4/1/2029 |
|
|
620,370 |
(d) |
|
575,000 |
|
5.25%, due
10/1/2029 |
|
|
500,250 |
(d) |
|
|
|
|
|
|
1,120,620 |
|
| |
|
|
|
|
|
|
|
|
Metals - Mining Excluding Steel
4.1% |
|
|
|
|
|
2,080,000 |
|
Century Aluminum Co., 7.50%, due 4/1/2028 |
|
|
2,087,800 |
(d) |
|
|
|
First Quantum Minerals Ltd. |
|
|
|
|
|
965,000 |
|
6.88%, due
3/1/2026 |
|
|
967,413 |
(d) |
|
1,020,000 |
|
6.88%, due
10/15/2027 |
|
|
1,025,100 |
(d) |
|
|
|
FMG Resources August 2006 Pty Ltd. |
|
|
|
|
|
655,000 |
|
5.88%, due
4/15/2030 |
|
|
650,284 |
(d) |
|
625,000 |
|
6.13%, due
4/15/2032 |
|
|
620,322 |
(d) |
|
|
|
Hudbay Minerals, Inc. |
|
|
|
|
|
415,000 |
|
4.50%, due
4/1/2026 |
|
|
383,690 |
(d) |
|
560,000 |
|
6.13%, due
4/1/2029 |
|
|
529,911 |
(d) |
|
|
|
|
|
|
6,264,520 |
|
| |
|
Oil Field Equipment & Services
0.7% |
|
|
|
|
|
635,000 |
|
Nabors Industries, Inc., 7.38%, due 5/15/2027 |
|
|
647,827 |
(d) |
|
347,000 |
|
TechnipFMC PLC, 6.50%, due 2/1/2026 |
|
|
359,145 |
(d) |
|
|
|
|
|
|
1,006,972 |
|
| See Notes to Financial Statements |
14 |
|
| |
| Schedule of Investments High Yield Strategies Fund
Inc.^ |
| (Unaudited) (cont’d) |
|
PRINCIPAL AMOUNT |
|
|
VALUE |
|
| |
|
Packaging 2.5% |
|
|
|
|
| $ |
690,000 |
|
Ardagh Packaging Finance PLC/Ardagh Holdings USA, Inc.,
5.25%, due 8/15/2027 |
|
$ |
592,537 |
(d) |
|
335,000 |
|
BWAY Holding Co., 7.25%, due 4/15/2025 |
|
|
317,413 |
(d) |
|
270,000 |
|
Graham Packaging Co., Inc., 7.13%, due
8/15/2028 |
|
|
243,454 |
(d) |
|
495,000 |
|
Intelligent Packaging Ltd. Finco, Inc./Intelligent
Packaging Ltd. Co-Issuer LLC, 6.00%, due |
|
|
|
|
|
|
|
9/15/2028 |
|
|
465,300 |
(d) |
|
410,000 |
|
Pactiv Evergreen Group Issuer LLC/Pactiv Evergreen Group
Issuer, Inc., 4.38%, due 10/15/2028 |
|
|
361,825 |
(d) |
|
1,270,000 |
|
Trident TPI Holdings, Inc., 9.25%, due 8/1/2024 |
|
|
1,247,775 |
(d) |
|
690,000 |
|
Trivium Packaging Finance BV, 8.50%, due
8/15/2027 |
|
|
681,375 |
(d) |
|
|
|
|
|
|
3,909,679 |
|
| |
|
Personal & Household Products
0.5% |
|
|
|
|
|
335,000 |
|
Diamond BC BV, 4.63%, due 10/1/2029 |
|
|
288,177 |
(d) |
|
575,000 |
|
Energizer Holdings, Inc., 4.75%, due 6/15/2028 |
|
|
505,552 |
(d) |
|
|
|
|
|
|
793,729 |
|
| |
|
Pharmaceuticals 1.7% |
|
|
|
|
|
305,000 |
|
Bausch Health Cos., Inc., 5.25%, due 2/15/2031 |
|
|
211,975 |
(d) |
|
335,000 |
|
Grifols Escrow Issuer SA, 4.75%, due 10/15/2028 |
|
|
305,654 |
(d) |
|
590,000 |
|
Organon & Co./Organon Foreign Debt Co-Issuer BV, 5.13%,
due 4/30/2031 |
|
|
533,212 |
(d) |
|
|
|
Valeant Pharmaceuticals Int'l, Inc. |
|
|
|
|
|
858,000 |
|
6.13%, due
4/15/2025 |
|
|
860,523 |
(d) |
|
760,000 |
|
5.50%, due
11/1/2025 |
|
|
735,300 |
(d) |
|
|
|
|
|
|
2,646,664 |
|
| |
|
Rail 0.1% |
|
|
|
|
|
145,000 |
|
Watco Cos. LLC/Watco Finance Corp., 6.50%, due
6/15/2027 |
|
|
139,925 |
(d) |
| |
|
Real Estate Development &
Management 1.5% |
|
|
|
|
|
|
|
Realogy Group LLC/Realogy Co-Issuer Corp. |
|
|
|
|
|
1,646,000 |
|
5.75%, due
1/15/2029 |
|
|
1,379,792 |
(d) |
|
1,225,000 |
|
5.25%, due
4/15/2030 |
|
|
992,483 |
(d) |
|
|
|
|
|
|
2,372,275 |
|
| |
|
Real Estate Investment Trusts
8.9% |
|
|
|
|
|
1,250,000 |
|
American Finance Trust, Inc./American Finance Operating
Partner L.P., 4.50%, due 9/30/2028 |
|
|
1,064,300 |
(d) |
|
|
|
EPR Properties |
|
|
|
|
|
430,000 |
|
4.50%, due
6/1/2027 |
|
|
413,617 |
|
|
180,000 |
|
3.75%, due
8/15/2029 |
|
|
159,385 |
|
|
|
|
Hospitality Properties Trust |
|
|
|
|
|
142,000 |
|
4.65%, due
3/15/2024 |
|
|
133,835 |
|
|
683,000 |
|
4.35%, due
10/1/2024 |
|
|
632,759 |
|
|
300,000 |
|
4.95%, due
2/15/2027 |
|
|
259,972 |
|
|
115,000 |
|
3.95%, due
1/15/2028 |
|
|
91,137 |
|
|
325,000 |
|
4.38%, due
2/15/2030 |
|
|
249,431 |
|
| See Notes to Financial Statements |
15 |
|
| |
| Schedule of Investments High Yield Strategies Fund
Inc.^ |
| (Unaudited) (cont’d) |
|
PRINCIPAL AMOUNT |
|
|
VALUE |
|
|
|
|
|
|
|
|
|
|
Iron Mountain, Inc. |
|
|
|
|
| $ |
2,605,000 |
|
5.25%, due
3/15/2028 |
|
$ |
2,481,341 |
(d) |
|
245,000 |
|
5.00%, due
7/15/2028 |
|
|
232,096 |
(d) |
|
2,120,000 |
|
4.88%, due
9/15/2029 |
|
|
1,942,015 |
(d) |
|
905,000 |
|
5.63%, due
7/15/2032 |
|
|
818,319 |
(d) |
|
1,345,000 |
|
RHP Hotel Properties L.P./RHP Finance Corp., 4.75%, due
10/15/2027 |
|
|
1,254,159 |
|
|
650,000 |
|
RLJ Lodging Trust L.P., 4.00%, due 9/15/2029 |
|
|
580,274 |
(d) |
|
1,285,000 |
|
Uniti Group L.P./Uniti Fiber Holdings, Inc./CSL Capital
LLC, 7.88%, due 2/15/2025 |
|
|
1,307,487 |
(d) |
|
2,280,000 |
|
Uniti Group L.P./Uniti Group Finance, Inc./CSL Capital LLC,
6.50%, due 2/15/2029 |
|
|
1,967,435 |
(d) |
|
166,000 |
|
VICI Properties L.P./VICI Note Co., Inc., 4.25%, due
12/1/2026 |
|
|
157,307 |
(d) |
|
|
|
|
|
|
13,744,869 |
|
| |
|
Recreation & Travel
5.8% |
|
|
|
|
|
|
|
Carnival Corp. |
|
|
|
|
|
205,000 |
|
7.63%, due
3/1/2026 |
|
|
200,644 |
(d) |
|
990,000 |
|
5.75%, due
3/1/2027 |
|
|
896,460 |
(d) |
|
1,095,000 |
|
9.88%, due
8/1/2027 |
|
|
1,180,131 |
(d) |
|
1,005,000 |
|
Cedar Fair L.P./Canada's Wonderland Co./Magnum Management
Corp./Millennium Op, 5.50%, |
|
|
|
|
|
|
|
due 5/1/2025 |
|
|
1,010,025 |
(d) |
|
315,000 |
|
Lindblad Expeditions LLC, 6.75%, due 2/15/2027 |
|
|
309,094 |
(d) |
|
900,000 |
|
Motion Bondco Designated Activity Co., 6.63%, due
11/15/2027 |
|
|
825,750 |
(d) |
|
|
|
NCL Corp. Ltd. |
|
|
|
|
|
1,005,000 |
|
5.88%, due
3/15/2026 |
|
|
928,429 |
(d) |
|
405,000 |
|
5.88%, due
2/15/2027 |
|
|
386,062 |
(d) |
|
1,085,000 |
|
NCL Finance Ltd., 6.13%, due 3/15/2028 |
|
|
976,500 |
(d) |
|
1,340,000 |
|
Royal Caribbean Cruises Ltd., 5.50%, due
4/1/2028 |
|
|
1,222,750 |
(d) |
|
925,000 |
|
Six Flags Theme Parks, Inc., 7.00%, due
7/1/2025 |
|
|
960,843 |
(d) |
|
|
|
|
|
|
8,896,688 |
|
| |
|
Software - Services
3.7% |
|
|
|
|
|
530,000 |
|
Ahead DB Holdings LLC, 6.63%, due 5/1/2028 |
|
|
466,400 |
(d) |
|
1,535,000 |
|
Condor Merger Sub, Inc., 7.38%, due 2/15/2030 |
|
|
1,373,364 |
(d) |
|
975,000 |
|
Endurance Int'l Group Holdings, Inc., 6.00%, due
2/15/2029 |
|
|
789,146 |
(d) |
|
645,000 |
|
Open Text Corp., 3.88%, due 12/1/2029 |
|
|
573,186 |
(d) |
|
435,000 |
|
Open Text Holdings, Inc., 4.13%, due 12/1/2031 |
|
|
377,071 |
(d) |
|
995,000 |
|
Presidio Holdings, Inc., 8.25%, due 2/1/2028 |
|
|
966,314 |
(d) |
|
1,415,000 |
|
Rackspace Technology Global, Inc., 5.38%, due
12/1/2028 |
|
|
1,152,843 |
(d) |
|
|
|
|
|
|
5,698,324 |
|
| |
|
Specialty Retail
3.1% |
|
|
|
|
|
|
|
Asbury Automotive Group, Inc. |
|
|
|
|
|
275,000 |
|
4.63%, due
11/15/2029 |
|
|
247,536 |
(d) |
|
185,000 |
|
5.00%, due
2/15/2032 |
|
|
164,188 |
(d) |
|
|
|
Carvana Co. |
|
|
|
|
|
400,000 |
|
5.63%, due
10/1/2025 |
|
|
346,424 |
(d) |
|
1,080,000 |
|
5.50%, due
4/15/2027 |
|
|
864,270 |
(d) |
|
865,000 |
|
4.88%, due
9/1/2029 |
|
|
631,277 |
(d) |
| See Notes to Financial Statements |
16 |
|
| |
| Schedule of Investments High Yield Strategies Fund
Inc.^ |
| (Unaudited) (cont’d) |
| PRINCIPAL AMOUNT |
|
|
VALUE |
|
| |
|
|
|
|
| $ |
525,000 |
|
Crocs, Inc., 4.13%, due 8/15/2031 |
|
$ |
418,982 |
(d) |
|
|
|
Gap, Inc. |
|
|
|
|
|
265,000 |
|
3.63%, due
10/1/2029 |
|
|
215,552 |
(d) |
|
310,000 |
|
3.88%, due
10/1/2031 |
|
|
247,132 |
(d) |
|
645,000 |
|
L Brands, Inc., 6.63%, due 10/1/2030 |
|
|
641,520 |
(d) |
|
720,000 |
|
LCM Investments Holdings II LLC, 4.88%, due
5/1/2029 |
|
|
630,950 |
(d) |
|
365,000 |
|
Petsmart, Inc./Petsmart Finance Corp., 4.75%, due
2/15/2028 |
|
|
339,450 |
(d) |
|
|
|
|
|
|
4,747,281 |
|
| |
|
Steel Producers - Products
1.2% |
|
|
|
|
|
420,000 |
|
Allegheny Technologies, Inc., 4.88%, due
10/1/2029 |
|
|
382,162 |
|
|
440,000 |
|
Carpenter Technology Corp., 7.63%, due
3/15/2030 |
|
|
448,018 |
|
|
409,000 |
|
Joseph T Ryerson & Son, Inc., 8.50%, due
8/1/2028 |
|
|
439,675 |
(d) |
|
670,000 |
|
TMS Int'l Corp., 6.25%, due 4/15/2029 |
|
|
582,900 |
(d) |
|
|
|
|
|
|
1,852,755 |
|
| |
|
|
|
|
|
|
|
|
Support - Services
14.3% |
|
|
|
|
|
830,000 |
|
Allied Universal Holdco LLC/Allied Universal Finance Corp.,
6.00%, due 6/1/2029 |
|
|
686,825 |
(d) |
|
|
|
Allied Universal Holdco LLC/Allied Universal Finance
Corp./Atlas Luxco 4 S.a.r.l. |
|
|
|
|
|
565,000 |
|
4.63%, due
6/1/2028 |
|
|
500,025 |
(d) |
|
415,000 |
|
4.63%, due
6/1/2028 |
|
|
364,163 |
(d) |
|
|
|
APX Group, Inc. |
|
|
|
|
|
2,090,000 |
|
6.75%, due
2/15/2027 |
|
|
2,071,712 |
(d) |
|
855,000 |
|
5.75%, due
7/15/2029 |
|
|
700,544 |
(d) |
|
|
|
Aramark Services, Inc. |
|
|
|
|
|
1,660,000 |
|
6.38%, due
5/1/2025 |
|
|
1,690,494 |
(d) |
|
300,000 |
|
5.00%, due
2/1/2028 |
|
|
279,765 |
(d) |
|
1,405,000 |
|
BCPE Empire Holdings, Inc., 7.63%, due 5/1/2027 |
|
|
1,316,808 |
(d) |
|
530,000 |
|
Clarivate Science Holdings Corp., 4.88%, due
7/1/2029 |
|
|
467,078 |
(d) |
|
880,000 |
|
Garda World Security Corp., 6.00%, due 6/1/2029 |
|
|
729,159 |
(d) |
|
|
|
Hertz Corp. |
|
|
|
|
|
605,000 |
|
4.63%, due
12/1/2026 |
|
|
551,470 |
(d) |
|
585,000 |
|
5.00%, due
12/1/2029 |
|
|
511,875 |
(d) |
|
785,000 |
|
IAA Spinco, Inc., 5.50%, due 6/15/2027 |
|
|
767,338 |
(d) |
|
1,025,000 |
|
KAR Auction Services, Inc., 5.13%, due 6/1/2025 |
|
|
1,036,531 |
(d) |
|
530,000 |
|
Korn/Ferry Int'l, 4.63%, due 12/15/2027 |
|
|
502,175 |
(d) |
|
|
|
McGraw-Hill Ed., Inc. |
|
|
|
|
|
675,000 |
|
5.75%, due
8/1/2028 |
|
|
602,438 |
(d) |
|
445,000 |
|
8.00%, due
8/1/2029 |
|
|
398,275 |
(d) |
|
|
|
Nielsen Finance LLC/Nielsen Finance Co. |
|
|
|
|
|
1,755,000 |
|
5.63%, due
10/1/2028 |
|
|
1,700,648 |
(d) |
|
805,000 |
|
5.88%, due
10/1/2030 |
|
|
772,027 |
(d) |
|
150,000 |
|
PECF USS Intermediate Holding III Corp., 8.00%, due
11/15/2029 |
|
|
138,375 |
(d) |
|
|
|
Prime Security Services Borrower LLC/Prime Finance,
Inc. |
|
|
|
|
|
345,000 |
|
5.75%, due
4/15/2026 |
|
|
330,769 |
(d) |
|
990,000 |
|
6.25%, due
1/15/2028 |
|
|
887,387 |
(d) |
|
270,000 |
|
Ritchie Bros Holdings, Inc., 4.75%, due
12/15/2031 |
|
|
270,000 |
(d) |
| See Notes to Financial Statements |
17 |
|
| |
|
Schedule of Investments
High Yield Strategies Fund Inc.^ (Unaudited) (cont’d)
|
|
PRINCIPAL AMOUNT |
|
VALUE |
|
|
|
|
|
|
|
|
|
|
SRS Distribution, Inc. |
|
|
|
|
|
$ |
475,000 |
|
4.63%,
due 7/1/2028 |
|
$ |
434,867 |
(d) |
|
|
265,000 |
|
6.13%, due
7/1/2029 |
|
|
233,857 |
(d) |
|
505,000 |
|
Summer BC Bidco B LLC, 5.50%, due 10/31/2026 |
|
|
484,901 |
(d) |
|
|
|
|
United Rentals N.A., Inc. |
|
|
|
|
|
|
250,000 |
|
5.25%, due
1/15/2030 |
|
|
242,500 |
|
|
|
1,630,000 |
|
3.75%, due
1/15/2032 |
|
|
1,418,100 |
|
|
735,000 |
|
Univar Solutions USA, Inc., 5.13%, due
12/1/2027 |
|
|
704,556 |
(d) |
|
|
860,000 |
|
White Cap Buyer LLC, 6.88%, due
10/15/2028 |
|
|
787,975 |
(d) |
|
380,000 |
|
ZipRecruiter, Inc., 5.00%, due 1/15/2030 |
|
|
355,300 |
(d) |
|
|
|
|
|
|
|
21,937,937 |
|
| |
| Technology Hardware
& Equipment 2.6% |
|
|
|
|
|
925,000 |
|
CommScope Finance LLC, 8.25%, due 3/1/2027 |
|
|
786,250 |
(d) |
|
|
|
|
CommScope Technologies LLC |
|
|
|
|
|
|
929,000 |
|
6.00%, due
6/15/2025 |
|
|
812,875 |
(d) |
|
|
1,375,000 |
|
5.00%, due
3/15/2027 |
|
|
1,079,375 |
(d) |
|
|
|
CommScope, Inc. |
|
|
|
|
|
660,000 |
|
7.13%, due
7/1/2028 |
|
|
526,350 |
(d) |
|
305,000 |
|
4.75%, due
9/1/2029 |
|
|
255,007 |
(d) |
|
|
550,000 |
|
Imola Merger Corp., 4.75%, due
5/15/2029 |
|
|
511,500 |
(d) |
|
|
|
|
|
|
3,971,357 |
|
| |
| Telecom - Wireless
1.6% |
|
|
|
|
|
|
|
Sprint Capital Corp. |
|
|
|
|
|
885,000 |
|
6.88%, due
11/15/2028 |
|
|
971,367 |
|
|
180,000 |
|
8.75%, due
3/15/2032 |
|
|
228,749 |
|
|
|
70,000 |
|
Sprint Corp., 7.63%, due
2/15/2025 |
|
|
74,463 |
|
|
|
|
T-Mobile USA, Inc. |
|
|
|
|
|
410,000 |
|
2.25%, due
2/15/2026 |
|
|
377,200 |
|
|
405,000 |
|
2.63%, due
4/15/2026 |
|
|
375,637 |
|
|
575,000 |
|
2.63%, due
2/15/2029 |
|
|
497,064 |
|
|
|
|
|
|
|
|
2,524,480 |
|
| |
| Telecom - Wireline
Integrated & Services 12.6% |
|
|
|
|
|
2,355,000 |
|
Altice France Holding SA, 6.00%, due 2/15/2028 |
|
|
1,944,830 |
(d) |
|
|
|
|
Altice France SA |
|
|
|
|
|
|
1,960,000 |
|
8.13%, due
2/1/2027 |
|
|
1,974,700 |
(d) |
|
|
675,000 |
|
5.50%, due
1/15/2028 |
|
|
594,844 |
(d) |
|
|
|
Consolidated Communications, Inc. |
|
|
|
|
|
540,000 |
|
5.00%, due
10/1/2028 |
|
|
441,288 |
(d) |
|
500,000 |
|
6.50%, due
10/1/2028 |
|
|
435,671 |
(d) |
|
|
|
|
Frontier Communications
Corp. |
|
|
|
|
|
|
3,215,000 |
|
5.88%, due
10/15/2027 |
|
|
3,078,362 |
(d) |
|
|
235,000 |
|
6.75%, due
5/1/2029 |
|
|
211,759 |
(d) |
|
|
1,145,000 |
|
5.88%, due
11/1/2029 |
|
|
994,003 |
|
|
|
650,000 |
|
6.00%, due
1/15/2030 |
|
|
565,559 |
(d)(e) |
| See Notes to Financial Statements |
18 |
|
| |
|
Schedule of
Investments High Yield Strategies Fund Inc.^ (Unaudited)
(cont’d)
|
| PRINCIPAL AMOUNT |
|
VALUE |
|
| |
|
|
|
|
Iliad Holding SASU |
|
|
|
|
|
$ |
250,000 |
|
6.50%,
due 10/15/2026 |
|
$ |
240,303 |
(d) |
|
|
225,000 |
|
7.00%, due
10/15/2028 |
|
|
212,625 |
(d) |
|
|
|
Level 3 Financing, Inc. |
|
|
|
|
|
1,845,000 |
|
4.63%, due
9/15/2027 |
|
|
1,658,194 |
(d) |
|
1,395,000 |
|
3.75%, due
7/15/2029 |
|
|
1,133,437 |
(d) |
|
|
|
|
Lumen Technologies, Inc. |
|
|
|
|
|
|
1,645,000 |
|
4.50%, due
1/15/2029 |
|
|
1,299,797 |
(d) |
|
|
1,275,000 |
|
5.38%, due
6/15/2029 |
|
|
1,038,245 |
(d) |
|
|
|
Northwest Fiber LLC/Northwest Fiber Finance Sub,
Inc. |
|
|
|
|
|
615,000 |
|
6.00%, due
2/15/2028 |
|
|
514,571 |
(d) |
|
375,000 |
|
10.75%, due
6/1/2028 |
|
|
384,375 |
(d) |
|
|
800,000 |
|
Virgin Media Finance PLC, 5.00%, due
7/15/2030 |
|
|
696,000 |
(d) |
|
1,570,000 |
|
Virgin Media Vendor Financing Notes IV Designated Activity
Co., 5.00%, due 7/15/2028 |
|
|
1,426,282 |
(d) |
|
|
645,000 |
|
Zayo Group Holdings, Inc., 6.13%, due
3/1/2028 |
|
|
540,187 |
(d) |
|
|
|
|
|
|
19,385,032 |
|
| |
| Theaters &
Entertainment 0.9% |
|
|
|
|
|
|
|
Live Nation Entertainment, Inc. |
|
|
|
|
|
655,000 |
|
6.50%, due
5/15/2027 |
|
|
679,432 |
(d) |
|
770,000 |
|
4.75%, due
10/15/2027 |
|
|
723,415 |
(d) |
|
|
|
|
|
|
1,402,847 |
|
|
|
|
|
Total Corporate Bonds (Cost
$250,451,879) |
|
|
230,757,587 |
|
| |
| Convertible Bonds 1.0% |
|
|
|
|
| |
| Media
1.0% |
|
|
|
|
|
|
|
1,862,000 |
|
DISH Network Corp., 3.38%, due 8/15/2026
(Cost $1,762,060) |
|
|
1,596,665 |
|
| |
| Asset-Backed
Securities 4.6% |
|
|
|
|
|
500,000 |
|
AIG CLO Ltd., Ser. 2019-2A, Class ER, (3M USD LIBOR +
6.40%), 7.58%, due 10/25/2033 |
|
|
481,254 |
(a)(d)(j) |
|
|
500,000 |
|
Ares LIV CLO Ltd., Ser. 2019-54A, Class
E, (3M USD LIBOR + 7.34%), 8.38%, due 10/15/2032 |
|
|
495,515 |
(a)(d)(j) |
|
500,000 |
|
Balboa Bay Loan Funding Ltd., Ser. 2021-2A, Class E, (3M
USD LIBOR + 6.60%), 6.81%, due |
|
|
|
|
|
|
|
1/20/2035 |
|
|
486,520 |
(a)(d)(j) |
|
|
250,000 |
|
Barings CLO Ltd., Ser. 2017-1A, Class
E, (3M USD LIBOR + 6.00%), 7.04%, due 7/18/2029 |
|
|
239,561 |
(a)(d)(j) |
|
500,000 |
|
Carlyle U.S. CLO Ltd., Ser. 2020-2A, Class DR, (3M USD
LIBOR + 6.70%), 7.88%, due 1/25/2035 |
|
|
489,794 |
(a)(d)(j) |
|
|
500,000 |
|
Catskill Park CLO Ltd., Ser. 2017-1A,
Class D, (3M USD LIBOR + 6.00%), 7.06%, due 4/20/2029 |
|
|
469,370 |
(a)(d)(j) |
|
350,000 |
|
Cedar Funding X CLO Ltd., Ser. 2019-10A, Class ER, (3M USD
LIBOR + 6.50%), 7.56%, due |
|
|
|
|
|
|
|
10/20/2032 |
|
|
335,176 |
(a)(d)(j) |
|
|
250,000 |
|
Crown City CLO II, Ser. 2020-2A, Class
DR, (3M CME Term SOFR + 7.11%), 7.96%, due |
|
|
|
|
|
|
|
|
4/20/2035 |
|
|
230,399 |
(a)(d)(j) |
|
250,000 |
|
Galaxy XXIV CLO Ltd., Ser. 2017-24A, Class E, (3M USD LIBOR
+ 5.50%), 6.54%, due |
|
|
|
|
|
|
|
1/15/2031 |
|
|
227,439 |
(a)(d)(j) |
|
|
1,000,000 |
|
Magnetite XV Ltd., Ser. 2015-15A, Class
ER, (3M USD LIBOR + 5.20%), 6.38%, due 7/25/2031 |
|
|
931,908 |
(a)(d)(j) |
|
500,000 |
|
OCP CLO Ltd., Ser. 2019-17A, Class ER, (3M USD LIBOR +
6.50%), 7.56%, due 7/20/2032 |
|
|
472,882 |
(a)(d)(j) |
|
|
1,000,000 |
|
Octagon Investment Partners 48 Ltd.,
Ser. 2020-3A, Class ER, (3M USD LIBOR + 6.70%), 7.76%, |
|
|
|
|
|
|
|
|
due 10/20/2034 |
|
|
979,811 |
(a)(d)(j) |
|
1,000,000 |
|
Parallel 2021-2 Ltd., Ser. 2021-2A, Class D, (3M USD LIBOR
+ 7.20%), 8.26%, due 10/20/2034 |
|
|
930,700 |
(a)(d)(j) |
| See Notes to Financial Statements |
19 |
|
| |
|
Schedule of
Investments High Yield Strategies Fund Inc.^ (Unaudited)
(cont’d)
|
|
PRINCIPAL AMOUNT |
|
VALUE |
|
| |
|
$ |
250,000 |
|
Voya CLO Ltd., Ser. 2019-2A, Class E,
(3M USD LIBOR + 6.60%), 7.66%, due 7/20/2032 |
|
$ |
241,075 |
(a)(d)(j) |
|
|
|
Total Asset-Backed Securities (Cost
$7,103,205) |
|
|
7,011,404 |
|
| |
|
NUMBER OF SHARES |
|
|
|
|
|
|
|
|
|
|
|
Short-Term Investments 0.8% |
|
|
|
|
|
Investment Companies
0.8% |
|
|
|
|
|
|
1,208,367 |
|
State Street Institutional U.S.
Government Money Market Fund Premier Class,
0.29%(k) |
|
|
|
|
|
|
|
(Cost $1,208,367) |
|
|
1,208,367 |
(e) |
|
|
|
|
Total Investments 161.4% (Cost
$268,230,778) |
|
|
248,153,468 |
|
|
|
|
Liabilities Less Other Assets (12.0)% |
|
|
(18,389,067) |
(l) |
|
|
|
|
Liquidation Preference of Mandatory
Redeemable Preferred Shares (49.4)% |
|
|
(76,000,000) |
|
|
|
|
Net Assets Applicable to Common Stockholders
100.0% |
|
$ |
153,764,401 |
|
|
(a) |
Variable or floating rate security. The interest
rate shown was the current rate as of April 30, 2022 and changes
periodically. |
|
(b) |
All or a portion of this security was purchased
on a delayed delivery basis.
|
|
(c) |
All or a portion of this security had not settled
as of April 30, 2022 and thus may not have an interest rate in
effect. Interest rates do not take effect until
settlement.
|
|
(d) |
Securities were purchased under Rule 144A of the
Securities Act of 1933, as amended, or are otherwise restricted
and, unless registered under the Securities Act of 1933 or exempted
from registration, may only be sold to qualified institutional
investors or may have other restrictions on resale. At April 30,
2022, these securities amounted to $198,158,251, which represents
128.9% of net assets applicable to common stockholders of the
Fund.
|
|
(e) |
All or a portion of this security is segregated
in connection with obligations for swap contracts and/or delayed
delivery securities with a total value of $3,273,935.
|
|
(f) |
Security issued at a fixed coupon rate, which
converts to a variable rate at a future date. Rate shown is the
rate in effect as of period end.
|
|
(g) |
Payment-in-kind (PIK) security.
|
|
(h) |
Perpetual security. Perpetual securities have no
stated maturity date, but they may be called/redeemed by the
issuer. The date shown reflects the next call date.
|
|
(i) |
Step Bond. Coupon rate is a fixed rate for an
initial period that either resets at a specific date or may reset
in the future contingent upon a predetermined trigger. The interest
rate shown was the current rate as of April 30, 2022. (j) Value
determined using significant unobservable inputs.
|
|
(j) |
Value determined using significant unobservable
inputs.
|
|
(k) |
Represents 7-day effective yield as of April 30,
2022.
|
|
(l) |
Includes the impact of the Fund's open positions
in derivatives at April 30, 2022.
|
| See Notes to Financial Statements |
20 |
|
| |
|
Schedule of
Investments High Yield Strategies Fund Inc.^ (Unaudited)
(cont’d)
|
| Positions By Country |
|
|
|
|
|
|
|
Investments |
|
|
Percentage of |
| Country |
|
at Value |
|
|
Net Assets |
| United States |
|
$216,680,267 |
|
|
140.9% |
| Cayman Islands |
|
8,898,767 |
|
|
5.8% |
| Canada |
|
5,337,713 |
|
|
3.5% |
| United Kingdom |
|
3,504,614 |
|
|
2.3% |
| France |
|
3,022,472 |
|
|
2.0% |
| Luxembourg |
|
2,193,385 |
|
|
1.4% |
| Zambia |
|
1,992,513 |
|
|
1.3% |
| Switzerland |
|
1,493,260 |
|
|
0.9% |
| Australia |
|
1,270,606 |
|
|
0.8% |
| Ireland |
|
693,550 |
|
|
0.5% |
| Netherlands |
|
681,375 |
|
|
0.4% |
| Finland |
|
533,670 |
|
|
0.4% |
| Germany |
|
337,255 |
|
|
0.2% |
| Spain |
|
305,654 |
|
|
0.2% |
| Liquidation Preference of Mandatory Redeemable Preferred
Shares |
|
(76,000,000 |
) |
|
(49.4)% |
| Short-Term Investments and Other
Liabilities-Net |
|
(17,180,700 |
) |
|
(11.2)% |
|
|
$153,764,401 |
|
|
100.0% |
| See Notes to Financial Statements |
21 |
|
| |
|
Schedule of
Investments High Yield Strategies Fund Inc.^ (Unaudited)
(cont’d)
|
Derivative Instruments
Interest rate swap contracts ("interest rate
swaps")
At April 30, 2022, the Fund had outstanding
interest rate swaps as follows:
|
Centrally cleared interest rate
swaps |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund |
|
|
|
|
|
|
|
|
|
|
|
|
Accrued |
|
|
|
|
|
|
|
Receives/ |
|
|
|
|
|
Frequency |
|
|
|
|
|
|
Net |
|
|
|
|
|
|
|
Pays |
|
|
|
|
|
of Fund |
|
|
|
Unrealized |
|
|
Interest |
|
|
|
|
|
Notional |
|
Floating |
|
Floating Rate |
|
Annual |
|
Receipt/ |
|
Maturity |
|
Appreciation/ |
|
|
Receivable/ |
|
|
|
| Clearinghouse |
|
Amount |
|
Rate |
|
Index |
|
Fixed-Rate |
|
Payment |
|
Date |
|
(Depreciation) |
|
|
(Payable) |
|
Value |
|
CME |
|
USD 25,000,000 |
|
Receive |
|
3M LIBOR |
|
0.29% |
|
3M/6M |
|
6/21/2023 |
|
$ |
662,276 |
|
$ |
373 |
|
$ |
662,649 |
| CME |
|
USD 20,000,000 |
|
Receive |
|
3M LIBOR |
|
0.33% |
|
3M/6M |
|
7/3/2023 |
|
|
539,935 |
|
|
(5,596) |
|
|
534,339 |
| Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,202,211 |
|
$ |
(5,223) |
|
$ |
1,196,988 |
For the six months ended April 30, 2022, the
average notional value for the months where the Fund had interest
rate swaps outstanding was $45,000,000 when the Fund paid the fixed
rate.
The following is a summary, categorized by Level
(see Note A of the Notes to Financial Statements), of inputs used
to value the Fund's investments as of April 30, 2022:
| Asset Valuation Inputs |
|
Level 1 |
|
Level 2 |
|
Level 3(b) |
|
Total |
| Investments: |
|
|
|
|
|
|
|
|
|
|
|
| Loan Assignments(a) |
|
$— |
|
$ |
7,579,445 |
|
$ |
— |
|
$ |
7,579,445 |
| Corporate Bonds(a) |
|
— |
|
|
230,757,587 |
|
|
— |
|
|
230,757,587 |
| Convertible Bonds(a) |
|
— |
|
|
1,596,665 |
|
|
— |
|
|
1,596,665 |
| Asset-Backed Securities |
|
— |
|
|
— |
|
|
7,011,404 |
|
|
7,011,404 |
| Short-Term Investments |
|
— |
|
|
1,208,367 |
|
|
— |
|
|
1,208,367 |
| Total Investments |
|
$— |
|
$ |
241,142,064 |
|
$ |
7,011,404 |
|
$ |
248,153,468 |
| (a) |
The Schedule of Investments provides information
on the industry or sector categorization as well as a Positions by
Country summary.
|
| See Notes to Financial Statements |
22 |
|
|
|
Schedule of Investments High Yield Strategies Fund
Inc.^
(Unaudited)(cont’d) |
|
(b) |
The following is a reconciliation between the
beginning and ending balances of investments in which unobservable
inputs (Level 3) were used in determining value: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
in unrealized |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
appreciation/ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(depreciation) |
|
|
Beginning |
|
|
|
|
|
Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from |
|
|
balance, |
|
Accrued |
|
|
|
in unrealized |
|
|
|
|
|
|
Transfers |
|
Transfers |
|
Balance, |
|
investments |
|
|
as of |
|
discounts/ |
|
Realized |
|
appreciation/ |
|
|
|
|
|
|
into |
|
out of |
|
as of |
|
still held as of |
|
|
11/1/2021 |
|
(premiums) |
|
gain/(loss) |
|
(depreciation) |
|
Purchases |
|
Sales |
|
Level 3 |
|
Level 3 |
|
4/30/2022 |
|
4/30/2022 |
|
Investments in |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Asset-Backed |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Securities(c) |
|
$— |
|
$— |
|
$— |
|
$ |
(262,948 |
) |
|
$ |
747,500 |
|
$— |
|
$ |
6,526,852 |
|
$— |
|
$ |
7,011,404 |
|
$ |
(262,948 |
) |
|
Total |
|
$— |
|
$— |
|
$— |
|
$ |
(262,948 |
) |
|
$ |
747,500 |
|
$— |
|
$ |
6,526,852 |
|
$— |
|
$ |
7,011,404 |
|
$ |
(262,948 |
) |
|
(c) |
Asset-Backed Collateralized Loan Obligations
rated below investment grade are generally deemed Level 3 by
Management. |
The following is a summary, categorized by Level
(see Note A of the Notes to Financial Statements), of inputs used
to value the Fund's derivatives as of April 30, 2022:
| Other Financial Instruments |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
Total |
| Swaps |
|
|
|
|
|
|
|
|
|
|
|
Assets |
|
$— |
|
$ |
1,196,988 |
|
$— |
|
$ |
1,196,988 |
| Total |
|
$— |
|
$ |
1,196,988 |
|
$— |
|
$ |
1,196,988 |
|
^ |
A balance indicated with a "—", reflects either a
zero balance or an amount that rounds to less than 1. |
| See Notes to Financial Statements |
23 |
|
|
|
| Statement of Assets and Liabilities
(Unaudited) |
Neuberger Berman
|
|
HIGH YIELD |
|
|
STRATEGIES |
|
|
FUND
INC. |
|
|
April 30,
2022 |
| Assets |
|
|
|
|
| Investments in securities, at value* (Note A)—see Schedule
of Investments: |
|
|
|
|
| Unaffiliated issuers(a) |
|
$ |
248,153,468 |
|
| Interest receivable |
|
|
3,842,773 |
|
| Receivable for securities sold |
|
|
28,590 |
|
| Receivable for accumulated variation margin on centrally
cleared swap contracts (Note A) |
|
|
1,196,988 |
|
| Prepaid expenses and other assets |
|
|
4,618 |
|
| Total Assets |
|
|
253,226,437 |
|
| |
|
|
|
|
| Liabilities |
|
|
|
|
| Notes payable (net of unamortized deferred issuance costs
of $175,930) (Note A) |
|
|
19,324,070 |
|
| Mandatory Redeemable Preferred Shares, Series C ($12.50
liquidation preference per share; 6,080,000 shares |
|
|
|
|
| issued and outstanding) (Note A) |
|
|
76,000,000 |
|
| Distributions payable—preferred shares |
|
|
450,481 |
|
| Distributions payable—common stock |
|
|
13,950 |
|
| Cash collateral segregated for centrally cleared swap
contracts due to broker (Note A) |
|
|
737,360 |
|
| Payable to investment manager (Note B) |
|
|
126,081 |
|
| Payable for securities purchased |
|
|
2,436,761 |
|
| Payable to administrator (Note B) |
|
|
10,507 |
|
| Payable to directors |
|
|
2,682 |
|
| Interest payable (Note A) |
|
|
37,043 |
|
| Other accrued expenses and payables |
|
|
323,101 |
|
| Total Liabilities |
|
|
99,462,036 |
|
| Net Assets applicable to Common Stockholders |
|
$ |
153,764,401 |
|
| |
|
|
|
|
| Net Assets applicable to Common Stockholders consist
of: |
|
|
|
|
| Paid-in capital—common stock |
|
$ |
202,137,609 |
|
| Total distributable earnings/(losses) |
|
|
(48,373,208 |
) |
| Net Assets applicable to Common Stockholders |
|
$ |
153,764,401 |
|
| Shares of Common Stock Outstanding ($0.0001 par value;
992,397,100 shares authorized) |
|
|
14,668,559 |
|
| Net Asset Value Per Share of Common Stock
Outstanding |
|
$ |
10.48 |
|
| |
|
|
|
|
| * Cost of Investments: |
|
|
|
|
| (a) Unaffiliated Issuers |
|
$ |
268,230,778 |
|
| See Notes to Financial Statements |
24 |
|
|
|
| Statement of Operations (Unaudited) |
Neuberger Berman
|
|
HIGH YIELD |
|
|
STRATEGIES |
|
|
FUND
INC. |
|
|
For the Six |
|
|
Months Ended |
|
|
April 30, 2022 |
|
Investment Income: |
|
|
|
|
| Income (Note A): |
|
|
|
|
| Interest and other income-unaffiliated
issuers |
|
$ |
7,459,733 |
|
| Income from securities loaned-net |
|
|
42,002 |
|
| Total income |
|
$ |
7,501,735 |
|
| Expenses: |
|
|
|
|
| Investment management fees (Note B) |
|
|
795,039 |
|
| Administration fees (Note B) |
|
|
66,253 |
|
| Audit fees |
|
|
36,234 |
|
| Basic maintenance (Note A) |
|
|
6,199 |
|
| Custodian and accounting fees |
|
|
57,219 |
|
| Insurance |
|
|
3,729 |
|
| Legal fees |
|
|
160,141 |
|
| Stockholder reports |
|
|
117,590 |
|
| Stock exchange listing fees |
|
|
4,164 |
|
| Stock transfer agent fees |
|
|
14,730 |
|
| Distributions to mandatory redeemable preferred
shareholders (Note A) |
|
|
904,996 |
|
| Directors’ fees and expenses |
|
|
22,306 |
|
| Interest |
|
|
217,535 |
|
| Miscellaneous |
|
|
24,140 |
|
| Total expenses |
|
|
2,430,275 |
|
| Net investment income/(loss) |
|
$ |
5,071,460 |
|
| Realized and Unrealized Gain/(Loss) on Investments
(Note A): |
|
|
|
|
| Net realized gain/(loss) on: |
|
|
|
|
| Transactions in investment securities of unaffiliated
issuers |
|
|
(1,288,682 |
) |
| Expiration or closing of swap contracts |
|
|
(32,114 |
) |
| Change in net unrealized appreciation/(depreciation)
in value of: |
|
|
|
|
| Investment securities of unaffiliated
issuers |
|
|
(24,231,541 |
) |
| Swap contracts |
|
|
1,057,765 |
|
| Net gain/(loss) on investments |
|
|
(24,494,572 |
) |
| Net increase/(decrease) in net assets applicable to
Common Stockholders resulting from operations |
|
$ |
(19,423,112 |
) |
| See Notes to Financial Statements |
25 |
|
|
|
| Statements of Changes in Net Assets |
Neuberger Berman
|
|
HIGH YIELD |
|
|
STRATEGIES FUND
INC. |
|
|
Six Months Ended |
|
Fiscal Year Ended |
|
|
April 30, 2022 |
|
October 31, |
|
|
(Unaudited) |
|
2021 |
|
Increase/(Decrease) in Net Assets
Applicable to Common Stockholders: |
|
|
|
|
|
|
|
|
| From Operations (Note A): |
|
|
|
|
|
|
|
|
| Net investment income/(loss) |
|
$ |
5,071,460 |
|
|
$ |
11,439,916 |
|
| Net realized gain/(loss) on investments |
|
|
(1,320,796 |
) |
|
|
15,377,349 |
|
| Change in net unrealized appreciation/(depreciation)
of investments |
|
|
(23,173,776 |
) |
|
|
(18,561 |
) |
| Net increase/(decrease) in net assets applicable to
Common Stockholders resulting |
|
|
|
|
|
|
|
|
| from operations |
|
|
(19,423,112 |
) |
|
|
26,798,704 |
|
| Distributions to Common Stockholders From (Note
A): |
|
|
|
|
|
|
|
|
| Distributable earnings |
|
|
(7,964,107 |
) |
|
|
(11,528,512 |
) |
| Tax return of capital |
|
|
— |
|
|
|
(4,832,395 |
) |
| Total distributions to Common Stockholders |
|
|
(7,964,107 |
) |
|
|
(16,360,907 |
) |
| From Capital Share Transactions (Note
D): |
|
|
|
|
|
|
|
|
| Proceeds from reinvestment of dividends and
distributions |
|
|
59,569 |
|
|
|
103,128 |
|
| Payments for shares repurchased in connection with
common stock tender offer (Note E) |
|
|
— |
|
|
|
(58,768,306 |
) |
| Net increase/(decrease) from capital share
transactions |
|
|
59,569 |
|
|
|
(58,665,178 |
) |
| Net Increase/(Decrease) in Net Assets Applicable to
Common Stockholders |
|
|
(27,327,650 |
) |
|
|
(48,227,381 |
) |
| Net Assets Applicable to Common
Stockholders: |
|
|
|
|
|
|
|
|
| Beginning of period |
|
|
181,092,051 |
|
|
|
229,319,432 |
|
| End of period |
|
$ |
153,764,401 |
|
|
$ |
181,092,051 |
|
| See Notes to Financial Statements |
26 |
|
|
|
| Statement of Cash Flows (Unaudited) |
Neuberger Berman
|
|
HIGH YIELD |
|
|
STRATEGIES |
|
|
FUND
INC. |
|
|
For the |
|
|
Six Months Ended |
|
|
April 30, 2022 |
|
Increase/(Decrease) in
cash: |
|
|
|
|
| Cash flows from operating activities: |
|
|
|
|
| Net decrease in net assets applicable to Common
Stockholders resulting from operations |
|
$ |
(19,423,112 |
) |
| Adjustments to reconcile net increase in net assets
applicable to Common Stockholders resulting from |
|
|
|
|
| operations to net cash provided by operating
activities: |
|
|
|
|
|
Changes in assets and
liabilities: |
|
|
|
|
|
Purchase of investment
securities |
|
|
(60,029,482 |
) |
|
Proceeds from disposition of investment
securities |
|
|
52,802,685 |
|
|
Purchase/sale of short-term investment
securities, net |
|
|
21,417,568 |
|
|
Increase/decrease in receivable/payable
for accumulated variation margin on centrally cleared swap
contracts |
|
|
(1,057,765 |
) |
|
Increase in interest
receivable |
|
|
(223,581 |
) |
|
Decrease in unamortized deferred
issuance costs |
|
|
67,486 |
|
|
Decrease in receivable for securities
lending income |
|
|
5,059 |
|
|
Decrease in prepaid expenses and other
assets |
|
|
13,986 |
|
|
Decrease in receivable for securities
sold |
|
|
349,489 |
|
|
Decrease in payable for collateral on
loaned securities |
|
|
(9,778,010 |
) |
|
Increase in distributions payable on
preferred shares |
|
|
19,609 |
|
|
Decrease in payable for securities
purchased |
|
|
(3,197,585 |
) |
|
Increase in interest
payable |
|
|
13,963 |
|
|
Net amortization/(accretion) of
premium/(discount) on investments |
|
|
295,841 |
|
|
Decrease in payable to investment
manager |
|
|
(15,366 |
) |
|
Decrease in payable to
directors |
|
|
(11,207 |
) |
|
Decrease in payable to
administrator |
|
|
(1,280 |
) |
|
Increase in other accrued expenses and
payables |
|
|
87,369 |
|
|
Unrealized depreciation on investment
securities of unaffiliated issuers |
|
|
24,231,541 |
|
|
Net realized loss from transactions in
investment securities of unaffiliated issuers |
|
|
1,288,682 |
|
| Net cash provided by (used in) operating
activities |
|
$ |
6,855,890 |
|
| Cash flows from financing activities: |
|
|
|
|
|
Cash distributions paid on common
stock |
|
|
(7,905,059 |
) |
| Net cash provided by (used in) financing
activities |
|
|
|
|
| Net increase/(decrease) in cash and restricted
cash |
|
|
(1,049,169 |
) |
| Cash: |
|
|
|
|
| Cash and restricted cash at beginning of
period |
|
|
311,809 |
|
| Cash and restricted cash at end of period |
|
$ |
(737,360 |
) |
| Supplemental disclosure |
|
|
|
|
| Cash paid for interest |
|
$ |
203,572 |
|
The following table provides a reconciliation of
cash and restricted cash, if any, reported within the Statement of
Assets and Liabilities that sum to the total of such amounts shown
on the Statement of Cash Flows.
|
|
April 30, 2022 |
|
October 31, 2021 |
|
Cash |
|
$ |
— |
|
|
$ — |
| Deposit for derivative collateral |
|
|
|
|
|
|
|
Cash collateral segregated for
centrally cleared swap contracts due from/(to) broker |
|
|
(737,360 |
) |
|
311,809 |
| Total cash and restricted cash as shown in the
Statement of Cash Flows |
|
$ |
(737,360 |
) |
|
$311,809 |
| See Notes to Financial Statements |
27 |
|
|
|
| Notes to Financial Statements High Yield Strategies
Fund Inc. |
| (Unaudited) |
Note
A—Summary of Significant Accounting Policies:
|
1 |
General: Neuberger Berman High Yield Strategies Fund Inc.
(the “Fund”) was organized as a Maryland corporation on March 18,
2010, and registered under the Investment Company Act of 1940, as
amended (the “1940 Act”), as a non-diversified, closed-end
management investment company. Under the 1940 Act, the status of a
fund that was registered as non-diversified may, under certain
circumstances, change to that of a diversified fund. The Fund is
currently a diversified fund. The Fund’s Board of Directors (the
“Board”) may classify or re-classify any unissued shares of capital
stock into one or more classes of preferred stock without the
approval of stockholders.
A
balance indicated with a “—”, reflects either a zero balance or a
balance that rounds to less than 1.
The Fund is an investment company and accordingly
follows the investment company accounting and reporting guidance of
the Financial Accounting Standards Board (“FASB”) Accounting
Standards Codification (“ASC”) Topic 946 “Financial
Services—Investment Companies.”
The preparation of financial statements in
accordance with U.S. generally accepted accounting principles
(“GAAP”) requires Management to make estimates and assumptions at
the date of the financial statements. Actual results could differ
from those estimates.
|
|
|
|
|
2 |
Portfolio valuation: In accordance with ASC 820 “Fair Value
Measurement” (“ASC 820”), all investments held by the Fund are
carried at the value that Management believes the Fund would
receive upon selling an investment in an orderly transaction to an
independent buyer in the principal or most advantageous market for
the investment under current market conditions. Various inputs,
including the volume and level of activity for the asset or
liability in the market, are considered in valuing the Fund’s
investments, some of which are discussed below. Significant
Management judgment may be necessary to value investments in
accordance with ASC 820.
ASC 820 established a three-tier hierarchy of
inputs to create a classification of value measurements for
disclosure purposes. The three-tier hierarchy of inputs is
summarized in the three broad Levels listed below.
|
|
|
|
|
|
●Level 1 – unadjusted quoted prices in active
markets for identical investments
|
|
|
●Level 2 – other observable inputs (including
quoted prices for similar investments, interest rates, prepayment
speeds, credit risk, amortized cost, etc.)
|
|
|
●Level 3 – unobservable inputs (including the
Fund’s own assumptions in determining the fair value of
investments)
|
|
|
|
The inputs or methodology used for valuing an
investment are not necessarily an indication of the risk associated
with investing in those securities.
The value of the Fund’s investments in debt
securities is determined by Management primarily by obtaining
valuations from independent pricing services based on readily
available bid quotations, or if quotations are not available, by
methods which include various considerations based on security type
(generally Level 2 inputs). In addition to the consideration of
yields or prices of securities of comparable quality, coupon,
maturity and type, indications as to values from dealers, and
general market conditions, the following is a description of other
Level 2 inputs and related valuation techniques used by independent
pricing services to value certain types of debt securities held by
the Fund:
|
|
|
|
|
Corporate Bonds. Inputs used to value
corporate debt securities generally include relevant credit
information, observed market movements, sector news, U.S. Treasury
yield curve or relevant benchmark curve, and other market
information, which may include benchmark yield curves, reported
trades, broker-dealer quotes, issuer spreads, comparable
securities, and reference data, such as market research
publications, when available (“Other Market
Information”).
|
|
|
Asset-Backed Securities. Inputs used to
value asset-backed securities generally include models that
consider a number of factors, which may include the following:
prepayment speeds, cash flows, spread adjustments and Other Market
Information.
Collateralized Loan Obligations (CLOs).
The value of collateralized loan obligations is primarily
determined by cash flow data, relevant loan pricing data and market
color, and research from market participants and trading desks
(Level 2 or 3 inputs).
Convertible Bonds. Inputs used to value
convertible bonds generally include underlying stock data,
conversion rates, credit specific details, relevant listed bond and
preferred stock prices and Other Market Information.
High Yield Securities. Inputs used to
value high yield securities generally include a number of
observations of equity and credit default swap curves related to
the issuer and Other Market Information.
|
|
|
|
|
|
The value of loan assignments is determined by
Management primarily by obtaining valuations from independent
pricing services based on broker quotes (generally Level 2 or Level
3 inputs depending on the number of quotes available).
The value of interest rate swaps is determined by
Management primarily by obtaining valuations from independent
pricing services based on references to the underlying rates
including the local overnight index swap rate and the respective
interbank offered forward rate to produce the daily price. The
present value is calculated based off of expected cash flows based
on swap parameters along with reference to the underlying yield
curve and reference rate (Level 2 inputs).
Management has developed a process to
periodically review information provided by independent pricing
services for all types of securities.
Investments in non-exchange traded investment
companies with a readily determinable fair value are valued using
the respective fund’s daily calculated net asset value (“NAV”) per
share (Level 2 inputs).
If a valuation is not available from an
independent pricing service, or if Management has reason to believe
that the valuation received does not represent the amount the Fund
might reasonably expect to receive on a current sale in an orderly
transaction, Management seeks to obtain quotations from brokers or
dealers (generally considered Level 2 or Level 3 inputs depending
on the number of quotes available). If such quotations are not
readily available, the security is valued using methods the Fund’s
Board has approved in the good-faith belief that the resulting
valuation will reflect the fair value of the security. Inputs and
assumptions considered in determining the fair value of a security
based on Level 2 or Level 3 inputs may include, but are not limited
to, the type of the security; the initial cost of the security; the
existence of any contractual restrictions on the security’s
disposition; the price and extent of public trading in similar
securities of the issuer or of comparable companies; quotations or
evaluated prices from broker-dealers and/or pricing services;
information obtained from the issuer and/or analysts; an analysis
of the company’s or issuer’s financial statements; an evaluation of
the inputs that influence the issuer and the market(s) in which the
security is purchased and sold.
Fair value prices are necessarily estimates, and
there is no assurance that such a price will be at or close to the
price at which the security is next quoted or next
trades.
In December 2020, the Securities and Exchange
Commission (“SEC”) adopted Rule 2a-5 under the 1940 Act, which
establishes requirements for determining fair value in good faith
for purposes of the 1940 Act, including related oversight and
reporting requirements. The rule also defines when market
quotations are “readily available” for purposes of the 1940 Act,
which is the threshold for determining whether a fund must fair
value a security. The rule became effective on March 8, 2021,
however, the SEC adopted an eighteen-month transition period
beginning from the effective date. Management is currently
evaluating the rule.
|
|
3 |
Securities transactions and investment income:
Securities transactions are
recorded on trade date for financial reporting purposes. Dividend
income is recorded on the ex-dividend date. Interest income,
including accretion of discount (adjusted for original issue
discount, where applicable) and amortization of premium, where
applicable, is recorded on the accrual basis. Realized gains and
losses from securities transactions are recorded on the basis of
identified cost and stated separately in the Statement of
Operations.
|
|
|
|
|
4 |
Income
tax information: It is the policy of the Fund to continue to
qualify for treatment as a regulated investment company (“RIC”) by
complying with the requirements of the U.S. Internal Revenue Code
applicable to RICs and to distribute substantially all of its net
investment income and net realized capital gains to its
stockholders. To the extent the Fund distributes substantially all
of its net investment income and net realized capital gains to
stockholders, no federal income or excise tax provision is
required.
ASC 740 “Income Taxes” sets forth a minimum
threshold for financial statement recognition of a tax position
taken, or expected to be taken, in a tax return. The Fund
recognizes interest and penalties, if any, related to unrecognized
tax positions as an income tax expense in the Statement of
Operations. The Fund is subject to examination by U.S. federal and
state tax authorities for returns filed for the tax years for which
the applicable statutes of limitations have not yet expired. As of
April 30, 2022, the Fund did not have any unrecognized tax
positions.
For federal income tax purposes, the estimated
cost of investments held at April 30, 2022 was $268,551,950. The
estimated gross unrealized appreciation was $2,468,492 and
estimated gross unrealized depreciation was $21,488,231 resulting
in net unrealized depreciation in value of investments of
$19,019,739 based on cost for U.S. federal income tax
purposes.
Income distributions and capital gain
distributions are determined in accordance with income tax
regulations, which may differ from GAAP. These differences are
primarily due to differing treatments of income and gains on
various investment securities held by the Fund, timing differences
and differing characterization of distributions made by the
Fund.
Any permanent differences resulting from
different book and tax treatment are reclassified at year-end and
have no impact on net income, NAV or NAV per share of common stock
of the Fund. For the year ended October 31, 2021, the Fund recorded
permanent reclassifications primarily related to nondeductible
restructuring costs. For the year ended October 31, 2021, the Fund
recorded the following permanent reclassifications:
|
|
|
|
|
|
Total |
|
|
Distributable |
| Paid-in Capital |
|
Earnings/(Losses) |
| $(136,090) |
|
$136,090 |
The tax character of distributions paid during
the years ended October 31, 2021, and October 31, 2020, was as
follows:
| Distributions Paid From: |
|
Ordinary Income |
|
Long-Term Capital
Gain |
|
Return of Capital |
|
Total |
| 2021 |
|
2020 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
| $13,351,098 |
|
$16,669,919 |
|
$— |
|
$— |
|
$4,832,395 |
|
$6,171,475 |
|
$18,183,493 |
|
$22,841,394 |
As of October 31, 2021, the components of
distributable earnings (accumulated losses) on a U.S. federal
income tax basis were as follows:
| Undistributed |
|
Undistributed |
|
Unrealized |
|
Loss |
|
Other |
|
|
| Ordinary |
|
Long-Term |
|
Appreciation/ |
|
Carryforwards |
|
Temporary |
|
|
| Income |
|
Capital Gain |
|
(Depreciation) |
|
and Deferrals |
|
Differences |
|
Total |
| $— |
|
$— |
|
$4,014,813 |
|
$(24,553,057) |
|
$(447,745) |
|
$(20,985,989) |
|
The temporary differences between book basis and
tax basis distributable earnings are primarily due to: losses
disallowed and recognized on wash sales, timing differences of fund
level distributions, tax adjustments related to swap contracts and
amortization of bond premium.
To the extent the Fund’s net realized capital
gains, if any, can be offset by capital loss carryforwards, it is
the policy of the Fund not to distribute such gains. Capital loss
carryforward rules allow for RICs to carry forward capital losses
indefinitely and to retain the character of capital loss
carryforwards as short-term or long-term. As determined at October
31, 2021, the Fund had unused capital loss carryforwards available
for federal income tax purposes to offset future net realized
capital gains, if any, as follows:
|
|
|
|
| Capital Loss Carryforwards |
| Long-Term |
|
Short-Term |
| $24,553,057 |
|
$— |
|
During the year ended October 31, 2021, the Fund
utilized capital loss carryforwards of $15,527,383.
|
|
|
|
|
5 |
Foreign
taxes: Foreign
taxes withheld, if any, represent amounts withheld by foreign tax
authorities, net of refunds recoverable.
|
|
|
|
|
6 |
Distributions to common stockholders:
The Fund earns income, net of
expenses, daily on its investments. It is the policy of the Fund to
declare and pay monthly distributions to common stockholders. The
Fund has adopted a policy to pay common stockholders a stable
monthly distribution. The Fund’s ability to satisfy its policy will
depend on a number of factors, including the amount and stability
of income received from its investments, the availability of
capital gains, distributions paid on any preferred shares, interest
paid on any notes and the level of other Fund fees and expenses. In
an effort to maintain a stable monthly distribution amount, the
Fund may pay distributions consisting of net investment income, net
realized gains and paid-in capital. There is no assurance that the
Fund will always be able to pay distributions of a particular size,
or that distributions will consist solely of net investment income
and net realized capital gains. The composition of the Fund’s
distributions for the calendar year 2022 will be reported to Fund
stockholders on IRS Form 1099-DIV. The Fund may pay distributions
in excess of those required by its stable distribution policy to
avoid excise tax or to satisfy the requirements of Subchapter M of
the U.S. Internal Revenue Code. Distributions to common
stockholders are recorded on the ex-date. Net realized capital
gains, if any, will be offset to the extent of any available
capital loss carryforwards. Any such offset will not reduce the
level of the stable distribution paid by the Fund. Distributions to
preferred stockholders are accrued and determined as described in
Note A-8.
On April 7, 2022, the Fund declared a monthly
distribution to common stockholders in the amount of $0.0905 per
share, payable on May 31, 2022 to stockholders of record on May 4,
2022, with an ex-date of May 3, 2022. Subsequent to April 30, 2022,
the Fund declared a monthly distribution on May 31, 2022 to common
stockholders in the amount of $0.0905 per share, payable on June
30, 2022 to stockholders of record on June 15, 2022, with an
ex-date of June 14, 2022.
|
|
|
|
|
7 |
Expense
allocation: Certain expenses are applicable to multiple funds
within the complex of related investment companies, which includes
open-end and closed-end investment companies for which NBIA serves
as investment manager. Expenses directly attributable to the Fund
are charged to the Fund. Expenses borne by the complex of related
investment companies that are not directly attributable to a
particular investment company (e.g., the Fund) are allocated among
the Fund and the other investment companies or series thereof in
the complex on the basis of relative net assets, except where a
more appropriate allocation of expenses to each of the investment
companies or series thereof in the complex can otherwise be made
fairly.
|
|
|
|
|
8 |
Financial leverage: In September 2013, the Fund issued privately
placed notes (“PNs”) with an aggregate principal value of
$90,000,000 and Mandatory Redeemable Preferred Shares, Series B
with an aggregate liquidation preference of $35,000,000. In August
2020, the Fund issued Mandatory Redeemable Preferred Shares, Series
C
|
|
|
|
(“MRPS” and, together with the PNs, “Private
Securities”) with an aggregate liquidation preference of
$95,000,000. The Fund used the proceeds from the issuance of the
MRPS to repurchase the outstanding Mandatory Redeemable Preferred
Shares, Series B and to prepay $60,000,000 of the aggregate
principal balance of the PNs. In December 2020, in connection with
the reduction in the Fund’s asset level following the tender offer
(Note E), the Fund prepaid $10,500,000 of the outstanding PNs and
redeemed $19,000,000 of the MRPS, reducing the PNs aggregate
principal value to $19,500,000 and the MRPS aggregate liquidation
preference to $76,000,000. The PNs have a maturity date of
September 18, 2023 and the MRPS have a maturity date of August 3,
2023. The interest on the PNs is accrued daily and paid quarterly.
The MRPS have a liquidation preference of $12.50 per share plus any
accumulated unpaid distributions, whether or not earned or declared
by the Fund, but excluding interest thereon (“Liquidation Value”).
Distributions on the MRPS are accrued daily and paid quarterly. For
financial reporting purposes only, the liquidation preference of
the MRPS is recognized as a liability in the Statement of Assets
and Liabilities.
During the six months ended April 30, 2022, the
average principal balance outstanding and average annualized
interest rate of the PNs were $19,500,000 and 1.55%, respectively.
During the six months ended April 30, 2022, the average aggregate
liquidation preference outstanding and average annualized
distribution rate of the MRPS were $76,000,000 and
2.40%.
The table below sets forth key terms of the
MRPS.
|
|
|
|
|
|
Mandatory |
|
|
|
|
|
Aggregate |
|
|
Redemption |
|
Interest |
|
Shares |
|
Liquidation |
| Series |
|
Date |
|
Rate |
|
Outstanding |
|
Preference |
| Series C |
|
8/3/23 |
|
2.45%* |
|
6,080,000 |
|
$76,000,000 |
|
*Current floating rate as of April 30,
2022.
The Fund has paid organizational expenses which
are being amortized over the life of the PNs and MRPS. The expenses
are included in the Interest expense that is reflected in the
Statement of Operations.
The Fund may redeem the MRPS or prepay the PNs,
in whole or in part, at its option after giving notice to the
relevant holders of the Private Securities but may incur additional
expenses on the MRPS if it chooses to so redeem. The Fund is also
subject to certain restrictions relating to the Private Securities.
Failure to comply with these restrictions could preclude the Fund
from declaring any distributions to common stockholders or
repurchasing shares of common stock and/or could trigger the
mandatory redemption of the MRPS at Liquidation Value and certain
expenses and/or mandatory prepayment of the PNs at par plus accrued
but unpaid interest and certain expenses. The holders of the MRPS
are entitled to one vote per share and will vote with holders of
shares of common stock as a single class, except that the holders
of the MRPS will vote separately as a class on certain matters, as
required by law or the Fund’s organizational documents. The holders
of the MRPS, voting as a separate class, are entitled at all times
to elect two Directors of the Fund, and to elect a majority of the
Directors of the Fund if the Fund fails to pay distributions on the
MRPS for two consecutive years.
Subsequent to April 30, 2022, on June 3, 2022, in
connection with the increase in the Fund’s asset level following
the rights offering (Note F), the Fund issued a privately placed
note with a principal value of $26,500,000 (“Series B Note”). The
Series B Note has a maturity date of September 18, 2023 and
interest on the Series B Note is accrued daily and paid
quarterly.
|
|
|
|
|
9 |
Concentration of credit risk: The Fund will normally invest at least 80%
of its total assets in high yield debt securities of U.S. and
foreign issuers, which include securities that are rated below
investment grade by a rating agency or are unrated debt securities
determined to be of comparable quality by the Fund’s investment
manager.
Due to the likelihood of volatility and potential
illiquidity of the high yield securities in which the Fund invests
and the real or perceived difficulty of issuers of those high yield
securities to meet their payment obligations during economic
downturns or because of negative business developments relating to
the issuer or its industry in general,
|
|
|
the value and/or price of the Fund’s shares of
common stock may fluctuate more than would be the case if the Fund
did not concentrate in high yield securities.
|
|
|
|
|
10 |
Derivative instruments: The Fund’s use of derivatives during the six
months ended April 30, 2022, is described below. Please see the
Schedule of Investments for the Fund’s open positions in
derivatives, at April 30, 2022. The disclosure requirements of ASC
815 “Derivatives and Hedging” (“ASC 815”) distinguish between
derivatives that qualify for hedge accounting and those that do
not. Because investment companies value their derivatives at fair
value and recognize changes in fair value through the Statement of
Operations, they do not qualify for hedge accounting. Accordingly,
even though the Fund’s investments in derivatives may represent
economic hedges, they are considered non-hedge transactions for
purposes of this disclosure.
In October 2020, the SEC adopted new regulations
governing the use of derivatives by registered investment
companies. Rule 18f-4 will impose limits on the amount of
derivatives a fund could enter into, eliminate the asset
segregation framework currently used by funds to comply with
Section 18 of the 1940 Act, and require funds whose use of
derivatives is more than a limited specified exposure to establish
and maintain a derivatives risk management program and appoint a
derivatives risk manager. While the new rule became effective
February 19, 2021, funds will not be required to fully comply with
the new rule until August 19, 2022. It is not currently clear what
impact, if any, the new rule will have on the availability,
liquidity or performance of derivatives. When fully implemented,
the new rule may require changes in how the Fund will use
derivatives, may adversely affect the Fund’s performance and may
increase costs related to the Fund’s use of derivatives.
Interest
rate swap contracts: During the six months ended April 30, 2022, the
Fund used interest rate swaps to reduce the risk that an increase
in short-term interest rates could reduce common share net earnings
as a result of leverage. Under the terms of the interest rate
swaps, the Fund agrees to pay the swap counterparty a fixed-rate
payment in exchange for the counterparty’s paying the Fund a
variable-rate payment that is intended to approximate all or a
portion of the Fund’s variable-rate payment obligations on the
Fund’s Private Securities. The fixed-rate and variable rate payment
flows are paid by one party to the other on a periodic basis and
netted against each other when applicable. The Fund segregates cash
or liquid securities having a value at least equal to the Fund’s
net payment obligations under any interest rate swap transaction,
marked to market daily. There is no guarantee that these interest
rate swap transactions will be successful in reducing or limiting
risk.
Risks may arise if the counterparty to a swap
contract fails to comply with the terms of its contract. The loss
incurred by the failure of a counterparty is generally limited to
the net interest payment to be received by the Fund and/or the
termination value at the end of the contract. Additionally, risks
may arise if there is no liquid market for these agreements or from
movements in interest rates unanticipated by Management.
Periodic expected interim net interest payments
or receipts on the swaps are recorded as an adjustment to
unrealized gains/losses, along with the fair value of the future
periodic payment or receivable streams on the swaps. The unrealized
gains/losses associated with the periodic interim net interest
payments or receipts are reclassified to realized gains/ losses in
conjunction with the actual net receipt or payment of such amounts.
The reclassifications do not impact the Fund’s total net assets
applicable to common stockholders or its total net increase
(decrease) in net assets applicable to common stockholders
resulting from operations.
Certain clearinghouses currently offer clearing
for limited types of derivative transactions. In a cleared
derivative transaction, the Fund typically enters into the
transaction with a financial institution counterparty that is then
cleared through a central clearinghouse. Upon acceptance of a swap
by a central clearinghouse, the original swap is extinguished and
replaced with a swap with the clearinghouse, thereby reducing or
eliminating the Fund’s exposure to the credit risk of the original
counterparty. The Fund typically will be required to post specified
levels of both initial and variation margin with the clearinghouse
or at the instruction of the clearinghouse. The daily change in
valuation is recorded as a receivable or payable for variation
margin and settled in cash with the central clearing party. For
financial reporting purposes, unamortized upfront payments, if any,
are netted with unrealized appreciation or depreciation and net
interest received or paid on swap contracts to determine the fair
value of swaps.
|
|
|
At April 30, 2022, the Fund had the following
derivatives (which did not qualify as hedging instruments under ASC
815), grouped by primary risk exposure: |
| Asset Derivatives |
|
Interest Rate Risk |
|
Statement of Assets and Liabilities
Location |
| Centrally cleared swaps(a) |
|
$1,196,988 |
|
Receivable for accumulated variation margin on centrally
cleared swap contracts |
| |
|
|
|
|
| Total Value - Assets |
|
$1,196,988 |
|
|
|
|
(a) |
“Centrally cleared swaps” reflect the cumulative
unrealized appreciation/(depreciation) of the centrally cleared
swap contracts plus accrued interest as of April 30,
2022. |
|
|
The impact of the use of these derivative
instruments on the Statement of Operations during the six months
ended April 30, 2022, was as follows: |
| Realized Gain/(Loss) |
|
|
|
|
|
|
Interest Rate Risk |
|
Statement of Operations Location |
|
Swaps |
|
$(32,114) |
|
Net realized gain/(loss)
on: |
| Total Realized Gain/(Loss) |
|
$(32,114) |
|
Expiration or closing of swap contracts |
| |
|
|
|
|
| Change in Appreciation/(Depreciation) |
|
|
|
|
|
|
Interest Rate Risk |
|
Statement of Operations Location |
|
Swaps |
|
$1,057,765 |
|
Change in net unrealized
appreciation/ |
| Total Change in
Appreciation/(Depreciation) |
|
$1,057,765 |
|
(depreciation) in value of: Swap contracts |
|
11 |
Securities lending: The Fund, using State Street Bank and Trust
Company (“State Street”) as its lending agent, may loan securities
to qualified brokers and dealers in exchange for negotiated
lender’s fees. These fees, if any, would be disclosed within the
Statement of Operations under the caption “Income from securities
loaned-net” and are net of expenses retained by State Street as
compensation for its services as lending agent.
The initial cash collateral received by the Fund
at the beginning of each transaction shall have a value equal to at
least 102% of the prior day’s market value of the loaned securities
(105% in the case of international securities). Thereafter, the
value of the cash collateral is monitored on a daily basis, and
cash collateral is moved daily between a counterparty and the Fund
until the close of the transaction. The Fund may only receive
collateral in the form of cash (U.S. dollars). Cash collateral is
generally invested in a money market fund registered under the 1940
Act that is managed by an affiliate of State Street. The risks
associated with lending portfolio securities include, but are not
limited to, possible delays in receiving additional collateral or
in the recovery of the loaned securities. Any increase or decrease
in the fair value of the securities loaned and any interest earned
or dividends paid or owed on those securities during the term of
the loan would accrue to the Fund.
As of April 30, 2022, the Fund did not have any
outstanding loans of securities.
|
|
|
|
|
12 |
When-issued/delayed delivery securities:
The Fund may purchase
securities with delivery or payment to occur at a later date beyond
the normal settlement period. At the time the Fund enters into a
commitment to purchase a security, the transaction is recorded and
the value of the security is reflected in the NAV. The price of
such security and the date when the security will be delivered and
paid for are fixed at the time the transaction is negotiated. The
value of the security may vary with market fluctuations. No
interest accrues to the Fund until payment takes place. At the time
the Fund enters into this type of transaction it is required to
segregate cash or other liquid assets at least equal to the amount
of the commitment. When-issued and delayed delivery transactions
can have a leverage-like effect on the Fund, which can increase
fluctuations in the Fund’s NAV. Certain risks may arise upon
entering into when-issued or delayed delivery securities
transactions from the potential inability of counterparties to meet
the terms of their contracts or if the issuer does not issue the
securities due to political, economic, or other factors.
Additionally, losses may arise due to changes in the value of the
underlying securities.
|
|
13 |
Indemnifications: Like many other companies, the Fund’s
organizational documents provide that its officers (“Officers”) and
directors (“Directors”) are indemnified against certain liabilities
arising out of the performance of their duties to the Fund. In
addition, both in some of its principal service contracts and in
the normal course of its business, the Fund enters into contracts
that provide indemnifications to other parties for certain types of
losses or liabilities. The Fund’s maximum exposure under these
arrangements is unknown as this could involve future claims against
the Fund.
|
|
|
|
|
14 |
Arrangements with certain non-affiliated service
providers: In
order to satisfy rating agency requirements and the terms of the
Private Securities, the Fund is required to provide the rating
agency and holders of Private Securities a report on a monthly
basis verifying that the Fund is maintaining eligible assets having
a discounted value equal to or greater than the basic maintenance
amount, which is the minimum level set by the rating agency as one
of the conditions to maintain the rating on the PNs and the MRPS.
“Discounted value” refers to the fact that the rating agency
requires the Fund, in performing this calculation, to discount
portfolio securities below their face value, at rates determined by
the rating agency. The Fund pays State Street for the preparation
of this report, which is reflected in the Statement of Operations
under the caption “Basic maintenance (Note A).”
|
|
|
|
|
15 |
Unfunded
loan commitments: 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. As of April
30, 2022, the Fund had no outstanding unfunded loan
commitments.
|
Note
B—Investment Management Fees, Administration Fees, and Other
Transactions with Affiliates:
|
|
The Fund retains NBIA as its investment manager
under a Management Agreement. For such investment management
services, the Fund pays NBIA an investment management fee computed
at an annual rate of 0.60% of the Fund’s average daily Managed
Assets. Managed Assets equal the total assets of the Fund, less
liabilities other than the aggregate indebtedness entered into for
purposes of leverage. For purposes of calculating Managed Assets,
the liquidation preference of any MRPS outstanding and principal
amount of the PNs are not considered liabilities.
The Fund retains NBIA as its administrator under
an Administration Agreement. The Fund pays NBIA an administration
fee at an annual rate of 0.05% of its average daily Managed Assets
under this agreement. Additionally, NBIA retains State Street as
its sub-administrator under a Sub-Administration Agreement. NBIA
pays State Street a fee for all services received under the
Sub-Administration Agreement.
|
Note
C—Securities Transactions:
|
|
During the six months ended April 30, 2022, there
were purchase and sale transactions of long-term securities
(excluding swap contracts) of $56,342,951 and $49,116,176,
respectively.
|
Note
D—Capital:
|
|
Transactions in shares of common stock for the
six months ended April 30, 2022, and for the year ended October 31,
2021 were as follows:
|
| For the Six Months Ended
April 30, 2022 |
|
For the Year Ended
October 31, 2021 |
Stock Issued on
Reinvestment of
Dividends and
Distributions |
|
Net Increase/
(Decrease) In
Common Stock
Outstanding |
|
Stock Issued on
Reinvestment of
Dividends and
Distributions |
|
Repurchase of Common
Stock in connection with
Tender Offer (Note E) |
|
Net Increase/
(Decrease) In
Common Stock
Outstanding |
| 4,957 |
|
4,957 |
|
8,163 |
|
(4,885,146) |
|
(4,876,983) |
Note E—Common Stock Tender Offer:
|
|
On November 10, 2020, the Fund commenced a tender
offer to purchase up to 25% of its outstanding shares of common
stock for cash at a price equal to 96% of its NAV per share
determined on December 10, 2020. The Fund’s tender offer expired on
December 10, 2020 at 5:00 p.m., New York City time.
In accordance with the terms of the tender offer,
since the tender offer was oversubscribed, the Fund purchased 25%
of its outstanding shares of common stock on a pro-rata basis, with
appropriate adjustment to avoid purchase of fractional shares of
common stock, based on the number of shares properly tendered. The
Fund purchased 4,885,146 shares of common stock at a purchase price
of $12.03 per share, representing 96% of the NAV per share as of
the close of the regular trading session of the NYSE on December
10, 2020. Shares of the Fund’s common stock that were tendered but
were not purchased remain outstanding.
|
Note
F—Common Stock Rights Offering:
|
|
On April 19, 2022 (the “Record Date”), the Fund
commenced a transferable rights offering (the “Offer”) whereby the
Fund issued one transferable right (a “Right”) for each share of
common stock of the Fund held by stockholders of record as of the
Record Date. Pursuant to the Offer, holders of Rights were entitled
to purchase shares of common stock by submitting three Rights and
the subscription price per share for each share purchased. The
Offer expired at 5:00 p.m. Eastern Time on May 17, 2022 (the
“Expiration Date”). The final subscription price of $8.60 per share
of common stock was equal to 87% of the Fund’s NAV per share of
common stock at the close of trading on the NYSE American on the
Expiration Date. The Offer resulted in the issuance of 4,763,981
shares of common stock and the gross proceeds of the Offer were
approximately $40.9 million.
|
Note
G—Recent Accounting Pronouncement:
|
|
In January 2021, the FASB issued Accounting
Standards Update No. 2021-01 (“ASU 2021-01”), “Reference Rate
Reform (Topic 848)”. ASU 2021-01 is an update of ASU 2020-04, which
is in response to concerns about structural risks of interbank
offered rates, and particularly the risk of cessation of LIBOR,
regulators have undertaken reference rate reform initiatives to
identify alternative reference rates that are more observable or
transaction based and less susceptible to manipulation. ASU 2020-04
provides optional guidance for a limited period of time to ease the
potential burden in accounting for (or recognizing the effects of)
reference rate reform on financial reporting. ASU 2020-04 is
elective and applies to all entities, subject to meeting certain
criteria, that have contracts, hedging relationships, and other
transactions that reference LIBOR or another reference rate
expected to be discontinued because of reference rate reform. The
ASU 2021-01 update clarifies that certain optional expedients and
exceptions in Topic 848 for contract modifications and hedge
accounting apply to derivatives that are affected by the
discounting transition. The amendments in this update are effective
immediately through December 31, 2022, for all entities. Management
is currently evaluating the implications, if any, of the additional
requirements and its impact on the Fund’s financial
statements.
|
Note
H—Other Matters:
|
|
Coronavirus: The outbreak of the novel coronavirus in many
countries has, among other things, disrupted global travel and
supply chains, and adversely impacted global commercial activity,
the transportation industry and commodity prices in the energy
sector. The impact of this virus has negatively affected and may
continue to affect the economies of many nations, individual
companies and the global securities and commodities markets,
including liquidity and volatility. The development and fluidity of
this situation precludes any prediction as to its ultimate impact,
which may have a continued adverse effect on global economic and
market conditions. Such conditions (which may be across industries,
sectors or geographies) have impacted and may continue to impact
certain issuers of the securities held by the Fund and in turn, may
impact the financial performance of the Fund.
|
|
|
Russia’s Invasion of Ukraine: Russia’s invasion of Ukraine, and
corresponding events in late February 2022, have had, and could
continue to have, severe adverse effects on regional and global
economic markets for securities and commodities. Following Russia’s
actions, various governments, including the United States, have
issued broad-ranging economic sanctions against Russia. The current
events have had, and could continue to have, an adverse effect on
global markets performance and liquidity, thereby negatively
affecting the value of the Fund’s investments beyond any direct
exposure to Russian or Ukrainian issuers. The duration of ongoing
hostilities and the vast array of sanctions and related events
cannot be predicted. Those events present material uncertainty and
risk with respect to markets globally and the performance of the
Fund and its investments or operations could be negatively
impacted.
|
Note
I—Unaudited Financial Information:
|
|
The financial information included in this
interim report is taken from the records of the Fund without audit
by an independent registered public accounting firm. Annual reports
contain audited financial statements.
|
High Yield
Strategies Fund Inc.
The following table includes selected data for a
share of common stock outstanding throughout each period and other
performance information derived from the Financial Statements.
Amounts that do not round to $0.01 or $(0.01) per share are
presented as $0.00 or $(0.00), respectively. Ratios that do not
round to 0.01% or (0.01)% are presented as 0.00% or (0.00)%,
respectively. A “—” indicates that the line item was not applicable
in the corresponding period.
|
|
Six Months |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ended |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
April 30, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
Year Ended October
31, |
|
|
(Unaudited) |
|
2021 |
|
|
2020 |
|
|
2019 |
|
|
2018 |
|
|
2017 |
|
|
Common Stock Net Asset
Value, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of Period |
|
$ |
12.35 |
|
|
$ |
11.74 |
|
|
$ |
12.67 |
|
|
$ |
12.45 |
|
|
$ |
13.43 |
|
|
$ |
13.12 |
|
| Income From Investment Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Applicable to Common Stockholders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment
Income/(Loss)@ |
|
|
0.35 |
|
|
|
0.75 |
|
|
|
0.73 |
|
|
|
0.78 |
|
|
|
0.76 |
|
|
|
0.87 |
|
| Net Gains or (Losses) on Securities (both |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| realized and unrealized) |
|
|
(1.68 |
) |
|
|
0.78 |
|
|
|
(0.57 |
) |
|
|
0.38 |
|
|
|
(0.92 |
) |
|
|
0.35 |
|
|
Total From Investment
Operations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Applicable to Common
Stockholders |
|
|
(1.33 |
) |
|
|
1.53 |
|
|
|
0.16 |
|
|
|
1.16 |
|
|
|
(0.16 |
) |
|
|
1.22 |
|
| Less Distributions to Common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stockholders From: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income |
|
|
(0.54 |
) |
|
|
(0.77 |
) |
|
|
(0.77 |
) |
|
|
(0.82 |
) |
|
|
(0.79 |
) |
|
|
(0.87 |
) |
| Tax Return of Capital |
|
|
— |
|
|
|
(0.32 |
) |
|
|
(0.32 |
) |
|
|
(0.12 |
) |
|
|
(0.03 |
) |
|
|
(0.04 |
) |
|
Total Distributions
to |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stockholders |
|
|
(0.54 |
) |
|
|
(1.09 |
) |
|
|
(1.09 |
) |
|
|
(0.94 |
) |
|
|
(0.82 |
) |
|
|
(0.91 |
) |
| Accretive Effect of Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Tender Offer |
|
|
— |
|
|
|
0.17 |
d |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Common Stock Net Asset
Value, |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| End of Period |
|
$ |
10.48 |
|
|
$ |
12.35 |
|
|
$ |
11.74 |
|
|
$ |
12.67 |
|
|
$ |
12.45 |
|
|
$ |
13.43 |
|
|
Common Stock Market Value, End of
Period |
|
$ |
9.76 |
|
|
$ |
13.16 |
|
|
$ |
10.75 |
|
|
$ |
11.93 |
|
|
$ |
10.33 |
|
|
$ |
12.13 |
|
|
Total Return, Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Asset Value † |
|
|
(10.97 |
)%* |
|
|
14.81 |
%a |
|
|
2.28 |
% |
|
|
10.43 |
% |
|
|
(0.20 |
)%a |
|
|
10.41 |
%ab |
|
Total Return, Common Stock Market Value
† |
|
|
(22.19 |
)%* |
|
|
33.61 |
%a |
|
|
(0.53 |
)% |
|
|
25.32 |
% |
|
|
(8.32 |
)%a |
|
|
12.70 |
%ab |
| Supplemental Data/Ratios |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets Applicable to
Common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders, End of Period (in
millions) |
|
$ |
153.8 |
|
|
$ |
181.1 |
|
|
$ |
229.3 |
|
|
$ |
247.5 |
|
|
$ |
243.3 |
|
|
$ |
262.5 |
|
| Preferred Stock Outstanding, End of Period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (in millions)^^ |
|
$ |
76.0 |
|
|
$ |
76.0 |
|
|
$ |
95.0 |
|
|
$ |
35.0 |
|
|
$ |
35.0 |
|
|
$ |
35.0 |
|
|
Preferred Stock Liquidation
Preference |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share^^ |
|
$ |
12.50 |
|
|
$ |
12.50 |
|
|
$ |
12.50 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
|
$ |
25,000 |
|
| Ratios are Calculated Using Average |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net Assets Applicable to Common |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio of Gross
ExpensesØØ |
|
|
2.85 |
%** |
|
|
2.55 |
% |
|
|
3.17 |
% |
|
|
3.52 |
% |
|
|
2.96 |
% |
|
|
2.47 |
% |
| Ratio of Net ExpensesØØ |
|
|
2.85 |
%** |
|
|
2.55 |
% |
|
|
3.17 |
% |
|
|
3.52 |
% |
|
|
2.96 |
% |
|
|
2.45 |
%c |
|
Ratio of Net Investment
Income/(Loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excluding Preferred Stock
Distributions |
|
|
5.96 |
%** |
|
|
5.96 |
% |
|
|
6.21 |
% |
|
|
6.20 |
% |
|
|
5.88 |
% |
|
|
6.56 |
%c |
| Portfolio Turnover Rate |
|
|
19 |
%* |
|
|
66 |
% |
|
|
102 |
% |
|
|
89 |
% |
|
|
62 |
% |
|
|
65 |
% |
|
Asset Coverage Per Share
of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock, End of
Period¢ |
|
$ |
38 |
|
|
$ |
42 |
|
|
$ |
43 |
|
|
$ |
201,899 |
|
|
$ |
198,912 |
|
|
$ |
212,582 |
|
| Notes Payable (in millions) |
|
$ |
19.3 |
^ |
|
$ |
19.3 |
^ |
|
$ |
29.6 |
^ |
|
$ |
89.9 |
^ |
|
$ |
89.9 |
^ |
|
$ |
89.9 |
^ |
|
Asset Coverage Per $1,000
of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes Payable¢¢ |
|
$ |
12,915 |
|
|
$ |
14,374 |
|
|
$ |
11,969 |
|
|
$ |
4,147 |
|
|
$ |
4,103 |
|
|
$ |
4,308 |
|
| See Notes to Financial Highlights |
38 |
|
|
|
| Notes to Financial Highlights |
| High Yield Strategies Fund Inc. (Unaudited) |
|
@ |
Calculated based on the average number of shares
of common stock outstanding during each fiscal period.
|
|
|
|
|
† |
Total return based on per share NAV reflects the
effects of changes in NAV on the performance of the Fund during
each fiscal period. Total return based on per share market value
assumes the purchase of shares of common stock at the market price
on the first day and sale of common stock at the market price on
the last day of the period indicated. Distributions, if any, are
assumed to be reinvested at prices obtained under the Fund’s
distribution reinvestment plan. Results represent past performance
and do not indicate future results. Current returns may be lower or
higher than the performance data quoted. Investment returns will
fluctuate and shares of common stock, when sold, may be worth more
or less than original cost.
|
|
|
|
|
^ |
Net of unamortized deferred issuance costs. The
unamortized deferred issuance costs were:
|
| Six Months Ended April 30, |
|
Year Ended October
31, |
| 2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
$175,930 |
|
$243,416 |
|
$379,506 |
|
$88,436 |
|
$110,770 |
|
$133,104 |
|
* |
Not annualized.
|
|
|
|
|
** |
Annualized. |
|
|
|
|
^^ |
From September 18, 2013 to August 4, 2020, the
Fund had 1,400 Mandatory Redeemable Preferred Shares, Series B
outstanding. From August 5, 2020 to December 13, 2020, the Fund had
7,600,000 MRPS outstanding. Effective December 14, 2020, the Fund
has 6,080,000 MRPS outstanding (see Note A of the Notes to
Financial Statements).
|
|
|
|
|
ØØ |
Distributions to mandatory redeemable preferred
stockholders and interest expense is included in expense ratios.
The annualized ratios of distributions to mandatory redeemable
preferred stockholders and interest expense to average net assets
applicable to common stockholders were:
|
|
|
Six Months Ended April 30, |
|
Year Ended October
31, |
|
|
2022 |
|
2021 |
|
2020 |
|
2019 |
|
2018 |
|
2017 |
|
Distributions to mandatory
redeemable |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
preferred stockholders |
|
0.18% |
|
0.15 |
% |
|
0.71 |
% |
|
0.71 |
% |
|
0.62 |
% |
|
0.48 |
% |
| Interest |
|
1.06% |
|
0.95 |
% |
|
0.89 |
% |
|
1.38 |
% |
|
1.16 |
% |
|
0.81 |
% |
|
¢ |
Calculated by subtracting the Fund’s total
liabilities (excluding the liquidation preference of mandatory
redeemable preferred shares and accumulated unpaid distributions on
mandatory redeemable preferred shares) from the Fund’s total assets
and dividing by the number of mandatory redeemable preferred shares
outstanding.
|
|
|
|
|
¢¢ |
Calculated by subtracting the Fund’s total
liabilities (excluding the liquidation preference of mandatory
redeemable preferred shares, the outstanding principal of the PNs
and accumulated unpaid liabilities on the PNs and the mandatory
redeemable preferred shares) from the Fund’s total assets and
dividing by the outstanding Notes Payable balance.
|
|
|
|
|
a |
The class action proceeds received in 2021, 2018
and 2017 had no impact on the Fund’s total returns for the years
ended October 31, 2021, 2018 or 2017.
|
|
|
|
|
b |
In May 2016, the Fund’s custodian, State Street,
announced that it had identified inconsistencies in the way in
which the Fund was invoiced for categories of expenses,
particularly those deemed “out-of-pocket” costs, from 1998 through
November 2015, and refunded to the Fund certain expenses, plus
interest, determined to be payable to the Fund for the period.
These amounts had no impact on the Fund’s total return for the year
ended October 31, 2017.
|
|
|
|
|
c |
The custodian expenses refund noted in (b) above
is non-recurring and is included in these ratios. Had the Fund not
received the refund, the annualized ratio of net expenses to
average net assets applicable to common stockholders and the
annualized ratio of net investment income/(loss) to average net
assets applicable to common stockholders would have
been:
|
| Ratio of |
|
Ratio of Net Investment Income/(Loss) |
| Net Expenses to Average Net Assets |
|
to Average Net Assets Applicable to |
| Applicable to Common Stockholders |
|
Common Stockholders |
| Year Ended October 31, 2017 |
|
Year Ended October 31, 2017 |
|
2.47% |
|
6.54% |
|
d |
During the year ended October
31, 2021, the Fund conducted a tender offer and repurchased 25% of
its outstanding shares of common stock at a price equal to 96% of
the Fund’s NAV per share. During the year ended October 31, 2021,
final payment for the tender offer was made at $12.03 per share
representing 96% of the NAV per share on December 10,
2020. |
|
|
| Distribution Reinvestment Plan for the Fund |
American Stock Transfer & Trust Company, LLC
(the “Plan Agent”) will act as Plan Agent for stockholders who have
not elected in writing to receive dividends and distributions in
cash (each a “Participant”), will open an account for each
Participant under the Distribution Reinvestment Plan (“Plan”) in
the same name as their then-current shares of the Fund’s common
stock (“Shares”) are registered, and will put the Plan into effect
for each Participant as of the first record date for a dividend or
capital gains distribution.
Whenever the Fund declares a dividend or
distribution with respect to the Shares, each Participant will
receive such dividends and distributions in additional Shares,
including fractional Shares acquired by the Plan Agent and credited
to each Participant’s account. If on the payment date for a cash
dividend or distribution, the net asset value is equal to or less
than the market price per Share plus estimated brokerage
commissions, the Plan Agent shall automatically receive such
Shares, including fractions, for each Participant’s account. Except
in the circumstances described in the next paragraph, the number of
additional Shares to be credited to each Participant’s account
shall be determined by dividing the dollar amount of the dividend
or distribution payable on their Shares by the greater of the net
asset value per Share determined as of the date of purchase or 95%
of the then-current market price per Share on the payment
date.
Should the net asset value per Share exceed the
market price per Share plus estimated brokerage commissions on the
payment date for a cash dividend or distribution, the Plan Agent or
a broker-dealer selected by the Plan Agent shall endeavor, for a
purchase period lasting until the last business day before the next
date on which the Shares trade on an “ex-dividend” basis, but in no
event, except as provided below, more than 30 days after the
payment date, to apply the amount of such dividend or distribution
on each Participant’s Shares (less their pro rata share of
brokerage commissions incurred with respect to the Plan Agent’s
open-market purchases in connection with the reinvestment of such
dividend or distribution) to purchase Shares on the open market for
each Participant’s account. No such purchases may be made more than
30 days after the payment date for such dividend or distribution
except where temporary curtailment or suspension of purchase is
necessary to comply with applicable provisions of federal
securities laws. If, at the close of business on any day during the
purchase period the net asset value per Share equals or is less
than the market price per Share plus estimated brokerage
commissions, the Plan Agent will not make any further open-market
purchases in connection with the reinvestment of such dividend or
distribution. If the Plan Agent is unable to invest the full
dividend or distribution amount through open-market purchases
during the purchase period, the Plan Agent shall request that, with
respect to the uninvested portion of such dividend or distribution
amount, the Fund issue new Shares at the close of business on the
earlier of the last day of the purchase period or the first day
during the purchase period on which the net asset value per Share
equals or is less than the market price per Share, plus estimated
brokerage commissions, such Shares to be issued in accordance with
the terms specified in the third paragraph hereof. These newly
issued Shares will be valued at the then-current market price per
Share at the time such Shares are to be issued.
For purposes of making the reinvestment purchase
comparison under the Plan, (a) the market price of the Shares on a
particular date shall be the last sales price on the New York Stock
Exchange (or if the Shares are not listed on the New York Stock
Exchange, such other exchange on which the Shares are principally
traded) on that date, or, if there is no sale on such Exchange (or
if not so listed, in the over-the-counter market) on that date,
then the mean between the closing bid and asked quotations for such
Shares on such Exchange on such date and (b) the net asset value
per Share on a particular date shall be the net asset value per
Share most recently calculated by or on behalf of the Fund. All
dividends, distributions and other payments (whether made in cash
or Shares) shall be made net of any applicable withholding
tax.
Open-market purchases provided for above may be
made on any securities exchange where the Fund’s Shares are traded,
in the over-the-counter market or in negotiated transactions and
may be on such terms as to price, delivery and otherwise as the
Plan Agent shall determine. Each Participant’s uninvested funds
held by the Plan Agent will not bear interest, and it is understood
that, in any event, the Plan Agent shall have no liability in
connection with any inability to purchase Shares within 30 days
after the initial date of such purchase as herein provided, or with
the timing of any purchases effected. The Plan Agent shall have no
responsibility as to the value of the Shares acquired for
each
Participant’s account. For the purpose of cash
investments, the Plan Agent may commingle each Participant’s funds
with those of other stockholders of the Fund for whom the Plan
Agent similarly acts as agent, and the average price (including
brokerage commissions) of all Shares purchased by the Plan Agent as
Plan Agent shall be the price per Share allocable to each
Participant in connection therewith.
The Plan Agent may hold each Participant’s Shares
acquired pursuant to the Plan together with the Shares of other
stockholders of the Fund acquired pursuant to the Plan in
noncertificated form in the Plan Agent’s name or that of the Plan
Agent’s nominee. The Plan Agent will forward to each Participant
any proxy solicitation material and will vote any Shares so held
for each Participant only in accordance with the instructions set
forth on proxies returned by the Participant to the
Fund.
The Plan Agent will confirm to each Participant
each acquisition made for their account as soon as practicable but
not later than 60 days after the date thereof. Although each
Participant may from time to time have an undivided fractional
interest (computed to three decimal places) in a Share, no
certificates for a fractional Share will be issued. However,
dividends and distributions on fractional Shares will be credited
to each Participant’s account. In the event of termination of a
Participant’s account under the Plan, the Plan Agent will adjust
for any such undivided fractional interest in cash at the market
value of the Shares at the time of termination, less the pro rata
expense of any sale required to make such an adjustment.
Any Share dividends or split Shares distributed
by the Fund on Shares held by the Plan Agent for Participants will
be credited to their accounts. In the event that the Fund makes
available to its stockholders rights to purchase additional Shares
or other securities, the Shares held for each Participant under the
Plan will be added to other Shares held by the Participant in
calculating the number of rights to be issued to each
Participant.
The Plan Agent’s service fee for handling capital
gains and other distributions or income dividends will be paid by
the Fund. Participants will be charged their pro rata share of
brokerage commissions on all open-market purchases.
Each Participant may terminate their account
under the Plan by notifying the Plan Agent in writing. Such
termination will be effective immediately if the Participant’s
notice is received by the Plan Agent not less than ten days prior
to any dividend or distribution record date, otherwise such
termination will be effective the first trading day after the
payment date for such dividend or distribution with respect to any
subsequent dividend or distribution. The Plan may be terminated by
the Plan Agent or the Fund upon notice in writing mailed to each
Participant at least 30 days prior to any record date for the
payment of any dividend or distribution by the Fund.
These terms and conditions may be amended or
supplemented by the Plan Agent or the Fund at any time or times
but, except when necessary or appropriate to comply with applicable
law or the rules or policies of the Securities and Exchange
Commission or any other regulatory authority, only by mailing to
each Participant appropriate written notice at least 30 days prior
to the effective date thereof. The amendment or supplement shall be
deemed to be accepted by each Participant unless, prior to the
effective date thereof, the Plan Agent receives written notice of
the termination of their account under the Plan. Any such amendment
may include an appointment by the Plan Agent in its place and stead
of a successor Plan Agent under these terms and conditions, with
full power and authority to perform all or any of the acts to be
performed by the Plan Agent under these terms and conditions. Upon
any such appointment of any Plan Agent for the purpose of receiving
dividends and distributions, the Fund will be authorized to pay to
such successor Plan Agent, for each Participant’s account, all
dividends and distributions payable on Shares held in their name or
under the Plan for retention or application by such successor Plan
Agent as provided in these terms and conditions.
The Plan Agent shall at all times act in good
faith and agrees to use its best efforts within reasonable limits
to ensure the accuracy of all services performed under this
Agreement and to comply with applicable law, but assumes no
responsibility and shall not be liable for loss or damage due to
errors unless such error is caused by the Plan Agent’s negligence,
bad faith, or willful misconduct or that of its employees. These
terms and conditions are governed by the laws of the State of
Maryland.
Reinvested dividends and distributions are taxed
in the same manner as cash dividends and distributions — i.e.,
reinvestment in additional Shares does not relieve stockholders of,
or defer the need to pay, any income tax that may be payable (or
that is required to be withheld) on Fund dividends and
distributions. Participants should contact their tax professionals
for information on how the Plan impacts their personal tax
situation. For additional information about the Plan, please
contact the Plan Agent by telephone at 1-866-227-2136 or by mail at
6201 15th Avenue, Brooklyn, NY, 11219 or online at
www.astfinancial.com.
|
Investment Manager and
Administrator
Neuberger
Berman Investment Advisers LLC
1290 Avenue of the Americas
New York, NY 10104-0002
877.461.1899
|
Plan Agent
American Stock Transfer & Trust
Company, LLC
Plan Administration Department
P.O. Box 922
Wall Street Station
New York, NY 10269-0560
|
| |
|
|
Custodian
State Street Bank and Trust Company
One Lincoln Street
Boston, MA 02111
|
Overnight correspondence should be
sent to:
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
|
| |
|
|
Transfer Agent
American Stock Transfer & Trust
Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
Shareholder Services 866.227.2136
|
Legal Counsel
K&L Gates LLP
1601 K Street, NW
Washington, DC 20006-1600
Independent Registered Public
Accounting Firm
Ernst
& Young LLP
200 Clarendon Street
Boston, MA 02116
|
Proxy
Voting Policies and Procedures
A
description of the policies and procedures that the Fund uses to
determine how to vote proxies relating to portfolio securities is
available, without charge, by calling 800-877-9700 (toll-free) and
on the SEC’s website at www.sec.gov. Information regarding how the
Fund voted proxies relating to portfolio securities during the most
recent 12-month period ended June 30 is also available upon
request, without charge, by calling 800-877-9700 (toll-free), on
the SEC’s website at www.sec.gov, and on Neuberger Berman’s website
at www.nb.com.
Quarterly
Portfolio Schedule
The Fund files a complete schedule of portfolio
holdings with the SEC for the first and third quarters of each
fiscal year as an exhibit to its report on Form N-PORT. The Fund’s
Forms N-PORT are available on the SEC’s website at www.sec.gov. The
portfolio holdings information on Forms N-PORT are available upon
request, without charge, by calling 800-877-9700
(toll-free).
|
FACTS
|
|
WHAT DOES NEUBERGER BERMAN
DO WITH YOUR PERSONAL INFORMATION?
|
|
|
|
|
|
Why?
|
|
Financial
companies choose how they share your personal information. Federal
law gives consumers the right to limit some but not all sharing.
Federal law also requires us to tell you how we collect, share, and
protect your personal information. Please read this notice
carefully to understand what we do.
|
|
|
|
|
|
What?
|
|
The types
of personal information we collect and share depend on the product
or service you have with us. This information can
include:
■Social Security numbers, dates
of birth and other numerical identifiers
■Names and
addresses
■Driver’s licenses, passports
and other identification documents
■Usernames and
passwords
■Internet protocol addresses and
other network activity information
■Income, credit history, credit
scores, assets, transaction history and other financial
information
When you
are no longer our customer, we continue to share your
information as described in this notice.
|
|
|
|
|
|
How?
|
|
All
financial companies need to share customers’ personal information
to run their everyday business. In the section below, we list the
reasons financial companies can share their customers’ personal
information; the reasons Neuberger Berman chooses to share; and
whether you can limit this sharing.
|
|
Reasons we can share
your personal information
|
Does Neuberger
Berman share?
|
Can you limit this
sharing?
|
|
For our
everyday business purposes—
such as to process your transactions,
maintain your account(s), respond to court orders and legal
investigations, or report to credit bureaus
|
Yes
|
No
|
|
For our
marketing purposes—
to offer our products and services to
you
|
Yes
|
No
|
|
For
joint marketing with other financial companies
|
No
|
We don’t
share
|
|
For our
affiliates’ everyday business purposes—
information about your transactions and
experiences
|
Yes
|
No
|
|
For our
affiliates’ everyday business purposes—
information about your
creditworthiness
|
No
|
We don’t
share
|
|
For
nonaffiliates to market to you
|
No
|
We don’t
share
|
|
|
|
|
|
Questions?
|
|
Call 646.497.4003 or 866.483.1046
(toll-free)
Email NBPrivacyOfficer@nb.com
|
|
Who we are
|
|
|
Who is providing this
notice?
|
Entities
within the Neuberger Berman family of companies, mutual funds, and
private investment funds.
|
|
|
|
|
What we do
|
|
|
How does Neuberger Berman protect
my personal information?
|
To protect
your personal information from unauthorized access and use, we use
security measures that comply with federal law. These measures
include physical, electronic and procedural safeguards, including
secured files and buildings.
We restrict
access to customer information to those employees who need to know
such information in order to perform their job
responsibilities.
|
|
How does Neuberger Berman collect
my personal information?
|
We collect
your personal information directly from you or your
representatives, for example, when you
■seek advice about your
investments
■give us your contact or income
information
■provide account information or open an
account
■direct us to buy or sell
securities, or complete other transactions
■visit one of our websites,
portals or other online locations
We may also
collect your personal information from others, such as credit
bureaus, affiliates, or other companies.
|
|
Why can’t I limit all
sharing?
|
Federal law
gives you the right to limit only
■sharing for affiliates’
everyday business purposes—information about your
creditworthiness
■affiliates from using your
information to market to you
■sharing for nonaffiliates to
market to you
State laws
and individual companies may give you additional rights to limit
sharing.
|
|
|
|
|
Definitions
|
|
|
Affiliates
|
Companies
related by common ownership or control. They can be financial and
nonfinancial companies.
■Our affiliates include
companies with a Neuberger Berman name; financial companies, such
as investment advisers or broker dealers; mutual funds, and private
investment funds.
|
|
Nonaffiliates
|
Companies
not related by common ownership or control. They can be financial
and nonfinancial companies.
■Nonaffiliates we share with
can include companies that perform administrative services on our
behalf (such as vendors that provide data processing, transaction
processing, and printing services) or other companies such as
brokers, dealers, or counterparties in connection with servicing
your account.
|
|
Joint marketing
|
A formal
agreement between nonaffiliated financial companies that together
market financial products or services to you.
■Neuberger Berman doesn’t jointly
market.
|
|
|
|
|
 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
Neuberger Berman
Investment Advisers LLC
1290 Avenue of the Americas
New York, NY 10104-0002
Internal Sales & Services
877.461.1899
www.nb.com
|
|
|
|
|
|
|
|
|
|
Statistics and projections in
this report are derived from sources deemed to be reliable but
cannot be regarded as a representation of future results of the
Fund. This report is prepared for the general information of
stockholders and is not an offer for shares of the
Fund.
|
| |
|
|
|
|
|
|
|
|
 H0547
06/22 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) Not
applicable to the Registrant.
Item 2. Code of Ethics.
The Board of Directors (“Board”) of Neuberger Berman High Yield
Strategies Fund Inc. (“Registrant” or “Fund”) has adopted a code of
ethics that applies to the Registrant’s principal executive
officer, principal financial officer, principal accounting officer
or controller, or persons performing similar functions (“Code of
Ethics”). During the period covered by this Form N-CSR, there
were no substantive amendments to the Code of Ethics and there were
no waivers from the Code of Ethics granted to the Registrant’s
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions.
Item 3. Audit Committee Financial Expert.
Not applicable to semi-annual reports on Form N-CSR.
Item 4. Principal Accountant Fees and Services.
Not applicable to semi-annual reports on Form N-CSR.
Item 5. Audit Committee of Listed Registrants.
Not applicable to semi-annual reports on Form N-CSR.
Item 6. Schedule of Investments.
|
(a)
|
The complete schedule of investments for the Registrant is
disclosed in the Registrant’s semi-annual report, which is included
as Item 1 of this Form N-CSR.
|
Item 7. Disclosure of Proxy Voting Policies and Procedures
for Closed-End Management Investment Companies.
Not applicable to semi-annual reports on Form N-CSR.
Item 8. Portfolio Managers of Closed-End Management
Investment Companies.
|
(a)
|
Not applicable to semi-annual reports on Form N-CSR.
|
|
(b)
|
There
have been no changes in any of the Portfolio Managers since the
Registrant’s most recent annual report on Form N-CSR.
|
Item 9. Purchases of Equity Securities by Closed-End
Management Investment Company and Affiliated Purchasers.
No reportable purchases for the period covered by this
report.
Item 10. Submission of Matters to a Vote of Security
Holders.
There were no material changes to the procedures by which
stockholders may recommend nominees to the Board.
Item 11. Controls and Procedures.
|
(a) |
Based on an
evaluation of the disclosure controls and procedures (as defined in
Rule 30a-3(c) under the Act) as of a date within 90 days of the
filing date of this report, the Chief Executive Officer and
President and the Treasurer and Principal Financial and Accounting
Officer of the Registrant have concluded that such disclosure
controls and procedures are effectively designed to ensure that
information required to be disclosed by the Registrant on Form
N-CSR is accumulated and communicated to the Registrant’s
management to allow timely decisions regarding required
disclosure.
|
|
(b) |
There were no
significant changes in the Registrant’s internal controls over
financial reporting (as defined in Rule 30a-3(d) under the Act)
that occurred during the Registrant’s most recent fiscal half-year
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.
|
(a) |
The Fund
engaged in securities lending activity during the fiscal year ended
October 31, 2021.
|
|
Gross income from securities lending activities
|
$46,591
|
|
Fees and/or compensation paid by the Fund for securities lending
activities and related services
|
|
Fees paid to securities lending agent from a revenue split
|
$4,451
|
|
Fees paid for any cash collateral management service (including
fees deducted from a pooled cash collateral reinvestment vehicle)
that are not included in the revenue split
|
$1,997
|
|
Administrative fees not included in revenue split
|
$0
|
|
Indemnification fees not included in revenue split
|
$0
|
|
Rebate (paid to borrower)
|
$0
|
|
Other fees relating to the securities lending program that are not
included in the revenue split
|
$0
|
|
Aggregate fees/compensation for securities lending activities
|
$6,448
|
|
Net income from securities lending activities
|
$40,143
|
|
(b) |
The Fund
engaged in securities lending activity during the fiscal year ended
October 31, 2021. State Street Bank and Trust Company,
as the Fund’s securities lending agent, effected loans of available
securities of the Fund to qualified brokers and dealers in exchange
for negotiated lender’s fees.
|
Item 13. Exhibits.
|
(a)(3) |
Not applicable
to the Registrant.
|
|
(a)(4) |
Not applicable
to the Registrant.
|
The certification furnished pursuant to Rule 30a-2(b) under the Act
and Section 906 of the Sarbanes-Oxley Act will not be deemed
“filed” for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended (“Exchange Act”), or otherwise subject to the
liability of that section. Such certification will not be
deemed to be incorporated by reference into any filing under the
Securities Act of 1933, as amended, or the Exchange Act, except to
the extent that the Registrant specifically incorporates it by
reference.
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.
Neuberger Berman High Yield Strategies Fund Inc.
By:
|
/s/ Joseph V.
Amato |
|
|
|
Joseph V. Amato |
|
|
|
Chief Executive Officer and President |
|
Date: July 6, 2022
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/ Joseph V.
Amato |
|
|
|
Joseph V. Amato |
|
|
|
Chief Executive Officer and President |
|
Date: July 6, 2022
By:
|
/s/ John M.
McGovern |
|
|
|
John M. McGovern |
|
|
|
Treasurer and Principal Financial
|
|
|
|
and Accounting Officer |
|
Date: July 6, 2022