P ACHOLDER H IGH Y IELD F UND, I NC.

 

 

Directors and Officers

 

Fergus Reid, III

Chairman and Director

 

William J. Armstrong

Director

 

John F. Finn

Director

 

Dr. Matthew Goldstein

Director

 

Robert J. Higgins

Director

 

Frankie D. Hughes

Director

 

Peter C. Marshall

Director

 

Marilyn McCoy

Director

 

William G. Morton, Jr.

Director

 

Robert A. Oden, Jr.

Director

 

Frederick W. Ruebeck

Director

 

James J. Schonbachler

Director

 

Leonard M. Spalding, Jr.

Director

 

George C.W. Gatch

President

 

Robert L. Young

Senior Vice President

 

Patricia A. Maleski

Vice President, Chief Administrative Officer and Treasurer

 

Stephen M. Ungerman

Chief Compliance Officer

 

Frank J. Nasta

Secretary

 

Investment Objective

A closed-end fund seeking a high level of total return

through current income and capital appreciation by

investing primarily in high-yield, fixed income securities

of domestic companies.

 

Investment Advisor

J.P. Morgan Investment Management Inc.

 

Administrator

JPMorgan Funds Management, Inc.

 

Custodian

JPMorgan Chase Bank, N.A.

 

Transfer Agent

Computershare Investor Services, LLC

 

Legal Counsel

Ropes & Gray LLP

 

Independent Registered Public Accounting Firm

PricewaterhouseCoopers LLP

 

Independent Directors’ Counsel

Kramer Levin Naftalis & Frankel LLP

 

Executive Offices

Pacholder High Yield Fund, Inc.

245 Park Avenue

New York, NY 10167

 

Shareholder Services

(877) 217-9502

 

Please visit our web site, www.phf-hy.com , for information on the Fund’s NAV, share price, news releases, and SEC filings. We created this site to provide stockholders quick and easy access to the timeliest information available regarding the Fund.

 

This report is for the information of stockholders of Pacholder High Yield Fund, Inc. It is not a prospectus, offering circular or other representation intended for use in connection with the purchase or sale of shares of the Fund or any securities mentioned in this report.

 

 

P ACHOLDER H IGH Y IELD F UND , I NC .

 

F IRST Q UARTER

M ARCH 31, 2009

(U NAUDITED )

 


P ACHOLDER H IGH Y IELD F UND, I NC.

 

(Unaudited)

 

Dear Stockholders:

 

First Quarter Review

 

The effects of the financial crisis spread rapidly through the broader economy in the first quarter, with large numbers of layoffs announced and economists revising growth estimates down significantly worldwide. Fixed income markets saw the initial optimism of early January fade in February and rebound in March, with some sectors increasingly influenced by government policy actions. Despite initial market skepticism about early policy statements from the new administration, the Treasury’s announcement of its Public-Private Investment Program (PPIP) and the Federal Reserve’s (Fed) announced purchase of Treasuries and additional purchases of agency mortgage-backed securities (MBS) and agency debt seemed to have important impacts on fixed income markets.

 

For the quarter ended March 31, 2009, the Pacholder High Yield Fund, Inc. returned 8.56%, based on Net Asset Value (“NAV”) compared to the 1.82% average total return of the Morningstar Closed–End High Yield Category, and the 5.84% return of the Credit Suisse High Yield Index, Developed Countries Only (the “Index”).

 

The Fund’s relative outperformance in the first quarter was due primarily to its leverage. Other contributors to the outperformance included the forest product/container, retail and auto/transportation market segments. Performance in the financial, consumer product and food/tobacco segments detracted from the overall performance.

 

Unlike the equity market, the high-yield market began the quarter on a very strong note, with the Index returning 5.94% in January. The negative momentum in equities carried into the high-yield market in February, as the Index returned -2.14%. The high-yield market followed stocks higher in March, as equity markets showed sustained upward moves for the first time in 2009. The Index ended March with a 2.09% return and a 5.84% return for the quarter. Results for the broad equity indexes during the first quarter reflected continued concern about the potential depth of the recession and questions about credit market conditions, particularly among financial stocks. The Russell 2000, S&P 500, NASDAQ Composite and Dow Indexes returned -14.95%, -11.01%, -2.79% and -12.48%, respectively.

 

The trailing 12-month default rate for below-investment-grade issuers, as measured by Moody’s Investors Services, rose from 4.0% at the end of 2007 to 7.4% in March 2009. Moody’s expects defaults to peak at 14.5% in the fourth quarter and gradually decline to 9.5% by April 2010.

 

The Fund is well diversified across issuers and industries, with investments in 200 issuers in 53 different industries. As of March 31, the largest industry sector concentration was in media, which accounted for 9.94% of its market value. For the quarter, the average price of the index rose 2.04 points from 61.59 to 63.66, the average yield dropped 186 basis points (bps) from 18.95% to 17.09% and the spread over the comparable Treasury tightened 207 bps from 1,707 bps to 1,500 bps.

 

Auction Rate Preferred Shares and Dividend

 

Since February 2008, most auctions for preferred shares of closed-end funds and auction rate securities of other issuers have failed. The weekly auction for the Auction Rate Preferred Shares (ARPS) has failed since February 13, 2008. Since that time, a number of broker-dealers have announced that they will offer to repurchase auction rate securities from certain of their clients. Any action taken by the Fund to provide liquidity to the ARPS must be in the best interest of the Fund as a whole. The Fund has not been able to identify financing to redeem the ARPS that satisfies this requirement. As indicated below, the Fund has made two voluntary redemptions totaling 920 shares of the 2640 outstanding shares of the ARPS. To the extent that the Fund determines that additional redemptions are in the best interest of the Fund as a whole, we will post additional information on the Fund’s website and keep shareholders informed.

 

On November 26, 2008, the Fund announced that it was not permitted to pay the November monthly dividend on December 9, 2008, because the Fund’s asset coverage was less than 200% for its ARPS. The Fund also indicated that it would be unable to resume the declaration and payment of dividends until the asset coverage requirements were met. During December, the Fund issued notices to redeem 920 shares of ARPS, allowing the Fund to resume the declaration and payment of monthly dividends. The Fund declared a dividend in the amount of $0.13 on December 11, 2008, consisting of $0.075 in lieu of the cancelled November dividend and $0.055 for the December dividend.

 

Since January 2009, the Fund has paid a monthly dividend of $0.055. The current Board of Directors has authorized the Fund to pay a monthly dividend of $0.055 subject to the Fund’s compliance with its asset coverage requirements. It is expected that the Fund would redeem additional shares of ARPS to the extent necessary for the Fund to maintain an asset coverage of at least 200% for the ARPS after payment of all dividends.

 

In the event that the Fund does not meet its asset coverage requirements and is not able to declare or pay a dividend, shareholders will be notified. The Fund has posted a Q&A on the Fund’s website at www.phf-hy.com, which is intended to provide shareholders with additional information concerning asset coverage requirements and the impact that such requirements have on the ability to declare and pay dividends.


P ACHOLDER H IGH Y IELD F UND, I NC.

 

(Unaudited)

 

Fund Strategy

 

We are continuing the Fund’s dual strategy of increasing positions that we expect will have lower credit volatility, such as senior secured loans (18.12% of the Fund) and investment-grade securities (BBB- or higher), which accounted for 2.33% of the Fund, while selectively investing in total return opportunities. The investment team continued to cull the Fund of issues with poor structure and sell credits that we believe are overvalued or that have unfavorable risk/reward characteristics.

 

Given the continued wide spreads in the credit markets, we have continued searching for oversold, total-return investments. While we think it remains too early in the cycle for a systematic increase in risk, we continue to selectively add incremental total-return investments to the Portfolio as our research discovers such opportunities.

 

As always, we appreciate your interest in the Fund and look forward to your continued support.

 

Sincerely,

 

LOGO

George C.W. Gatch

President

 

April 30, 2009

 

The performance quoted is past performance and is not a guarantee of future results. Closed-end funds are subject to certain market risks. Investment returns and principal value of an investment will fluctuate so that an investor’s shares, when sold, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data shown.

 

JPMorgan Asset Management is the marketing name for the asset management businesses of JPMorgan Chase & Co. Those businesses include, but are not limited to, J.P. Morgan Investment Management Inc., JPMorgan Investment Advisors, Inc., Security Capital Research & Management Incorporated and J.P. Morgan Alternative Asset Management, Inc.

 

 

Securities rated below investment grade are called “high-yield bonds,” “non-investment grade bonds,” “below investment-grade bonds,” or “junk bonds,” and are considered to be speculative. They generally are rated in the fifth or lower rating categories of Standard & Poor’s and Moody’s Investors Service. Although these securities tend to provide higher yields than higher rated securities, there is a greater risk that the Fund’s share value will decline. Because this Fund primarily invests in bonds, it is subject to interest rate risks. Bond prices generally fall when interest rates rise.

 

Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. We believe the information provided here is reliable, but do not warrant its accuracy or completeness. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The views and strategies described may

not be suitable for all investors. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting and legal or tax advice. References to future returns are not promises or even estimates of actual returns a client portfolio may achieve. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.

 

Portfolio Holdings Availability

 

No sooner than 10 days after the end of each month, the Fund’s uncertified complete schedule of its portfolio holdings will be available on our website (www.phf-hy.com). In addition, the Fund files its certified, complete schedule of its portfolio holdings with the U.S. Securities and Exchange Commission (“SEC”) for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Form N-Qs are available, without charge, on the SEC’s website at www.sec.gov. The Fund’s Form N-Qs may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.

 

No sooner than 10 calendar days after the end of each month, the Fund’s top ten holdings as of the last day of each month as well as certain other fund facts and statistical information will also be available on the Fund’s website.


P ACHOLDER H IGH Y IELD F UND, I NC.

 

Statement of Net Assets Applicable to Common Stockholders

As of March 31, 2009 (Unaudited)

   

 

 

Description   Par
(000)
  Value   Percent
of Net
Assets*
 
     

CORPORATE BONDS — 137.2%

 

AIRLINES — 4.3%

 

American Airlines, Inc., Nt,
3.363%, 10/18/09 3,9

  $ 369   $ 334,312   0.6 %

American Airlines, Pass Through Trust 1991, Collateral Trust Notes,
10.180%, 01/02/13 9

    1,054     590,136   1.0  

American Airlines, Pass Through Trust 1991, Private Placement, Nt,
10.320%, 07/30/14 2,9

    670     274,812   0.5  

Continental Airlines, Inc., Pass Thru Cert, 9.798%, 04/01/21 10

    1,401     770,608   1.4  

Continental Airlines, Inc., Unsubordinated, 8.750%, 12/01/11

    86     47,515   0.1  

Delta Air Lines, Inc.,

     

7.111%, 09/18/11

    300     261,000   0.5  

8.300%, 12/15/29 1,4,6

    1,145     6,985   0.0 12

10.125%, 05/15/10 1,4

    500     3,050   0.0 12

UAL Pass Through Trust, Series 2007-1, Private Placement, Nt, VAR,
4.025%, 07/02/14 2,9

    177     69,188   0.1  

7.336%, 07/02/19 2

    89     46,261   0.1  
             
      2,403,867   4.3  

AUTO COMPONENTS — 0.0% 12

 

Delphi Corp., 7.125%, 05/01/29 1,4

    725     10,875   0.0 12
             

AUTOMOBILES — 1.3%

 

Ford Motor Co., Debentures,

     

6.625%, 02/15/28

    120     36,000   0.1  

7.125%, 11/15/25

    400     120,000   0.2  

7.700%, 05/15/97

    650     175,500   0.3  

Ford Motor Co., Nt, 9.980%, 02/15/47

    400     120,000   0.2  

General Motors Corp., Debentures,

     

6.750%, 05/01/28

    50     5,750   0.0 12

8.100%, 06/15/24 10

    1,725     202,687   0.4  

8.375%, 07/15/33

    450     54,000   0.1  
             
      713,937   1.3  

BEVERAGES — 2.9%

 

Constellation Brands, Inc., Sr Nt,

     

7.250%, 05/15/17

    500     475,000   0.8  

8.375%, 12/15/14

    1,025     1,030,125   1.8  

FBG Finance Ltd., Private Placement, (Australia), 5.125%, 06/15/15 2

    175     148,953   0.3  
             
      1,654,078   2.9  
Description   Par
(000)
  Value   Percent
of Net
Assets*
 
     

BROADCASTING & CABLE TV — 2.8%

 

Adelphia Communications Corp.,
6.000%, 02/15/06 1,4

  $ 125   $ 12   0.0 % 12

Adelphia Communications Corp., Sr Nt,

     

8.125%, 07/15/03 1,4

    750     9,375   0.0 12

9.375%, 11/15/09 1,4

    560     7,000   0.0 12

Adelphia Recovery Trust, Contingent Value 1,4

    1,297     22,696   0.0 12

Cablevision Systems Corp., Nt,
8.000%, 04/15/12

    450     437,625   0.8  

DirecTV Holdings LLC/DirecTV Financing Co., Private Placement, 7.625%, 05/15/16 2

    250     245,000   0.4  

DirecTV Holdings LLC/DirecTV Financing Co., Sr Nt, 8.375%, 03/15/13

    500     505,625   0.9  

DISH DBS Corp.,

     

7.000%, 10/01/13

    150     139,125   0.3  

7.750%, 05/31/15

    250     230,000   0.4  
             
      1,596,458   2.8  

BUILDING PRODUCTS — 0.2%

 

AMH Holdings, Inc., Sr Nt, SUB,
11.250%, 03/01/14 7

    400     120,000   0.2  
             

CHEMICALS — 3.9%

 

Airgas, Inc., Private Placement,
7.125%, 10/01/18 2

    250     240,000   0.4  

Mosaic Co. (The), Private
Placement, Sr Nt,
7.375%, 12/01/14 2

    125     122,500   0.2  

7.625%, 12/01/16 2

    125     122,500   0.2  

PolyOne Corp., Nt, 8.875%, 05/01/12 10

    1,750     761,250   1.4  

Sterling Chemicals, Inc.,
10.250%, 04/01/15

    350     297,500   0.5  

Terra Capital, Inc., Sr Nt, 7.000%, 02/01/17

    525     483,000   0.9  

Westlake Chemical Corp.,
6.625%, 01/15/16

    250     175,000   0.3  
             
      2,201,750   3.9  

COMMERCIAL SERVICES & SUPPLIES — 2.8%

 

Cenveo Corp., Private Placement,
10.500%, 08/15/16 2

    1,000     561,250   1.0  

Cenveo Corp., Sr Sub Nt, 7.875%, 12/01/13

    325     169,000   0.3  

Harland Clarke Holdings Corp., VAR,
5.984%, 05/15/15

    200     70,000   0.1  

 

 

3


P ACHOLDER H IGH Y IELD F UND, I NC.

 

Statement of Net Assets Applicable to Common Stockholders (continued)

As of March 31, 2009 (Unaudited)

   

 

 

Description   Par
(000)
  Value   Percent
of Net
Assets*
 
     

COMMERCIAL SERVICES & SUPPLIES — (continued)

 

9.500%, 05/15/15

  $ 450   $ 198,563   0.4 %

Quebecor World Capital Corp., Sr Nt, (Canada),

     

6.125%, 11/15/13 1,4,10

    1,100     19,250   0.1  

8.750%, 03/15/16 1,2,4,10

    500     17,500   0.0 12

Quebecor World, Inc., Sr Nt, (Canada),
9.750%, 01/15/15 1,2,4,10

    450     15,750   0.0 12

Waste Management, Inc., 7.375%, 03/11/19

    500     509,962   0.9  
             
      1,561,275   2.8  

COMPUTERS & PERIPHERALS — 0.3%

 

Seagate Technology HDD Holdings, (Cayman Islands), 6.800%, 10/01/16

    250     145,000   0.3  
             

CONSTRUCTION ENGINEERING — 1.1%

 

United Rentals North America, Inc., Co Guar, 6.500%, 02/15/12

    750     600,000   1.1  
             

CONSTRUCTION MATERIALS — 0.7%

 

Hanson Australia Funding Ltd., (Australia),
5.250%, 03/15/13

    425     187,000   0.3  

Hanson Ltd., (United Kingdom),
6.125%, 08/15/16

    500     215,000   0.4  
             
      402,000   0.7  

CONSUMER FINANCE — 4.3%

 

ACE Cash Express, Inc., Private Placement, Sr Nt, 10.250%, 10/01/14 2,9

    1,000     250,000   0.4  

Ford Motor Credit Co. LLC, VAR,
4.010%, 01/13/12

    1,000     630,000   1.1  

Ford Motor Credit Co. LLC, Nt,

     

8.000%, 12/15/16 10

    700     460,062   0.8  

8.625%, 11/01/10 10

    555     442,058   0.8  

GMAC LLC, Private Placement, VAR,
3.461%, 12/01/14 2

    307     153,500   0.3  

6.625%, 05/15/12 2

    158     105,991   0.2  

8.000%, 11/01/31 2

    767     369,050   0.7  
             
      2,410,661   4.3  

CONSUMER PRODUCTS — 2.9%

 

Central Garden and Pet Co., 9.125%, 02/01/13

    175     138,250   0.2  

Jarden Corp., 7.500%, 05/01/17 6

    1,300     1,046,500   1.9  

Spectrum Brands, Inc., Sr Nt,

     

7.375%, 02/01/15 1,4

    1,075     268,750   0.5  
Description   Par
(000)
  Value   Percent
of Net
Assets*
 
     

CONSUMER PRODUCTS — (continued)

 

12.500%, 10/02/13 1,4,6

  $ 725   $ 199,375   0.3 %
             
      1,652,875   2.9  

CONTAINERS & PACKAGING — 2.5%

 

Berry Plastics Corp., VAR, 5.844%, 02/15/15

    400     290,000   0.5  

Berry Plastics Holding Corp., Nt,
8.875%, 09/15/14

    400     224,000   0.4  

Constar International, Inc., Co. Guar., VAR, 5.524%, 02/15/12

    750     480,000   0.8  

Constar International, Inc., Sr Sub Nt,
11.000%, 12/01/12 1,4,10

    790     15,800   0.0 12

Plastipak Holdings, Inc., Private Placement, Sr Nt, 8.500%, 12/15/15 2

    300     210,000   0.4  

Portola Packaging, Inc., Sr Nt,
8.250%, 02/01/12 1,3,4,9

    270     97,537   0.2  

Solo Cup Co., Sr Nt, 8.500%, 02/15/14

    150     109,500   0.2  
             
      1,426,837   2.5  

DISTRIBUTORS — 0.5%

 

American Tire Distributors, Inc., Nt,
10.750%, 04/01/13

    435     304,500   0.5  
             

DIVERSIFIED CONSUMER SERVICES — 5.9%

 

Allied Waste North America, Inc., Sr Nt,

     

6.125%, 02/15/14

    500     470,000   0.8  

6.875%, 06/01/17

    250     227,500   0.4  

Knowledge Learning Corp., Inc., Private Placement, Sr Sub Nt, 7.750%, 02/01/15 2

    700     563,500   1.1  

Mac-Gray Corp., Sr Nt, 7.625%, 08/15/15

    650     600,438   1.1  

Service Corp. International, 7.000%, 06/15/17

    750     637,500   1.1  

Sotheby’s, Private Placement, 7.750%, 06/15/15 2

    250     182,500   0.3  

Stewart Enterprises, Inc., Sr Nt,
6.250%, 02/15/13 10

    724     608,160   1.1  
             
      3,289,598   5.9  

DIVERSIFIED FINANCIAL SERVICES — 0.2%

 

Goldman Sachs Capital II, VAR,
5.793%, 06/01/12 14

    250     104,085   0.2  
             

DIVERSIFIED MANUFACTURING — 2.3%

 

Polypore, Inc., Sr Sub Nt, 8.750%, 05/15/12 10

    1,789     1,305,970   2.3  
             

 

 

4


P ACHOLDER H IGH Y IELD F UND, I NC.

 

Statement of Net Assets Applicable to Common Stockholders (continued)

As of March 31, 2009 (Unaudited)

   

 

 

Description   Par
(000)
  Value   Percent
of Net
Assets*
 
     

DIVERSIFIED TELECOMMUNICATION SERVICES — 6.1%

 

Level 3 Financing, Inc., Co. Guar, 9.250%, 11/01/14 10

  $ 800   $ 552,000   1.0 %

Level 3 Financing, Inc., Sr Nt, 12.250%, 03/15/13

    200     150,000   0.3  

Qwest Corp., Sr Nt, 7.625%, 06/15/15 10

    1,650     1,485,000   2.6  

Time Warner Telecom Holdings, Inc., Sr Nt, 9.250%, 02/15/14 10

    500     482,500   0.9  

Windstream Corp., 8.125%, 08/01/13

    750     738,750   1.3  
             
      3,408,250   6.1  

ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 2.0%

 

Flextronics International Ltd., Debentures, (Singapore), 6.250%, 11/15/14

    210     177,450   0.3  

Intcomex, Inc., Sec’d Nt, 11.750%, 01/15/11 9

    1,100     352,000   0.6  

Sanmina-SCI Corp., 6.750%, 03/01/13

    200     78,000   0.1  

Sanmina-SCI Corp., Private Placement, Sr Nt, VAR, 4.070%, 06/15/14 2

    300     165,000   0.3  

Smart Modular Technologies WWH, Inc., Sr Nt, (Cayman Islands), VAR, 6.935%, 04/01/12 3,9

    423     370,078   0.7  
             
      1,142,528   2.0  

ENERGY EQUIPMENT & SERVICES — 3.6%

 

Bristow Group, Inc., Co Guar, 6.125%, 06/15/13

    250     202,500   0.4  

Calfrac Holdings LP, Private Placement, Debentures, 7.750%, 02/15/15 2

    250     118,750   0.2  

Forbes Energy Services LLC/Forbes Energy Capital, Inc., 11.000%, 02/15/15

    750     446,250   0.8  

Helix Energy Solutions Group, Inc., Private Placement, 9.500%, 01/15/16 2

    1,000     590,000   1.0  

PHI, Inc., Co Guar, 7.125%, 04/15/13

    783     482,524   0.9  

Pride International, Inc., Sr Nt, 7.375%, 07/15/14

    200     197,000   0.3  
             
      2,037,024   3.6  

FOOD & STAPLES RETAILING — 4.2%

 

Golden State Foods Corp., Private Placement, Sr Sub Nt, 9.240%, 01/10/12 2,8,9

    1,550     1,571,312   2.8  

Rite Aid Corp., 10.375%, 07/15/16 6

    800     480,000   0.9  

Rite Aid Corp., Debentures, 7.500%, 03/01/17

    600     309,000   0.5  
             
      2,360,312   4.2  
Description   Par
(000)
  Value   Percent
of Net
Assets*
 
     

FOOD PRODUCTS — 2.3%

 

Chiquita Brands International, Inc., Sr Nt, 8.875%, 12/01/15 6

  $ 699   $ 524,250   1.0 %

Dole Food Co., Inc., Sr Nt, 13.875%, 03/15/14 2

    250     243,125   0.4  

Eurofresh, Inc., Private Placement, Nt, 11.500%, 01/15/13 1,4,9

    2,367     520,740   0.9  

Tom’s Foods, Inc., Sr Nt, 10.500%, 11/01/04 1,3,4,9

    872     8,718   0.0 12
             
      1,296,833   2.3  

GAMING — 3.6%

 

FireKeepers Development Authority, Private Placement, 13.875%, 05/01/15 2

    75     45,750   0.1  

Isle of Capri Casinos, Inc., Sr Nt, 7.000%, 03/01/14

    400     236,000   0.4  

Mandalay Resort Group, Sr Nt, 6.375%, 12/15/11

    500     175,000   0.3  

Mashantucket Western Pequot Tribe, Private Placement, 8.500%, 11/15/15 2

    1,320     224,400   0.4  

MGM Mirage, Co Guar, 7.625%, 01/15/17 6

    150     53,250   0.1  

MGM Mirage, Sr Nt, 6.750%, 09/01/12

    150     52,500   0.1  

Seminole Hard Rock Entertainment, Inc., Private Placement, VAR, 3.820%, 03/15/14 2

    500     260,000   0.5  

Shingle Springs Tribal Gaming Authority, Private Placement, Sr Nt, 9.375%, 06/15/15 2

    1,000     415,000   0.7  

Wynn Las Vegas Capital Corp., Nt, 6.625%, 12/01/14 6

    750     566,250   1.0  
             
      2,028,150   3.6  

HEALTH CARE EQUIPMENT & SUPPLIES — 0.4%

 

Biomet, Inc., Sr Nt, 10.000%, 10/15/17

    250     247,500   0.4  
             

HEALTH CARE PROVIDERS & SERVICES — 6.8%

 

CHS/Community Health Systems, Inc., 8.875%, 07/15/15 6

    800     756,000   1.3  

FMC Finance III S.A., (Luxembourg), 6.875%, 07/15/17

    500     488,750   0.9  

HCA, Inc., Sec’d Nt, 9.250%, 11/15/16

    1,000     910,000   1.6  

Multiplan, Inc., Private Placement, 10.375%, 04/15/16 2

    1,000     815,000   1.4  

 

 

5


P ACHOLDER H IGH Y IELD F UND, I NC.

 

Statement of Net Assets Applicable to Common Stockholders (continued)

As of March 31, 2009 (Unaudited)

   

 

 

Description   Par
(000)
  Value   Percent
of Net
Assets*
 
     

HEALTH CARE PROVIDERS & SERVICES — (continued)

 

TeamHealth, Inc., Sr Sub Nt, 11.250%, 12/01/13

  $ 225   $ 195,750   0.4 %

Tenet Healthcare Corp., Sr Nt, 9.875%, 07/01/14 10

    850     663,000   1.2  
             
      3,828,500   6.8  

HOTELS, RESTAURANTS & LEISURE — 1.2%

 

Six Flags Operations, Inc., Private Placement, 12.250%, 07/15/16 2

    872     470,880   0.8  

Speedway Motorsports, Inc., Sr Sub Nt, 6.750%, 06/01/13

    250     209,375   0.4  
             
      680,255   1.2  

HOUSEHOLD DURABLES — 1.3%

 

K Hovnanian Enterprises, Inc., Private Placement, Debentures, 11.500%, 05/01/13

    500     348,125   0.6  

KB Home, Sr Nt, 5.875%, 01/15/15

    250     193,625   0.4  

Meritage Homes Corp., Sr Nt, 7.000%, 05/01/14

    250     160,000   0.3  
             
      701,750   1.3  

INDEPENDENT POWER PRODUCERS & ENERGY TRADERS — 8.5%

 

Calpine Generating Co. LLC, Sec’d Nt, VAR, 4,823.931%, 04/01/11 1,4

    1,000     95,000   0.2  

Dynegy Holdings, Inc., Sr Unsec’d Nt, 7.125%, 05/15/18

    500     265,000   0.5  

Dynegy Roseton/Danskammer Pass Through Trust, 7.670%, 11/08/16

    500     378,750   0.7  

Edison Mission Energy, Sr Nt, 7.750%, 06/15/16

    1,000     760,000   1.3  

Mirant Americas Generation LLC, Sr Nt,
8.300%, 05/01/11 10

    1,250     1,212,500   2.1  

8.500%, 10/01/21

    500     370,000   0.7  

NRG Energy, Inc., Sr Nt,
7.250%, 02/01/14

    250     235,000   0.4  

7.375%, 01/15/17

    1,375     1,278,750   2.3  

Texas Competitive Electric Holdings Co. LLC, 10.250%, 11/01/15

    350     175,000   0.3  
             
      4,770,000   8.5  

INDUSTRIAL CONGLOMERATES — 3.4%

 

JB Poindexter & Co., Inc., Co Guar, 8.750%, 03/15/14 10

    2,084     1,250,400   2.2  
Description   Par
(000)
  Value   Percent
of Net
Assets*
 
     

INDUSTRIAL CONGLOMERATES — (continued)

 

Milacron Escrow Corp., Sec’d Nt, 11.500%, 05/15/11 1,3,4,10

  $ 1,445   $ 635,800   1.2 %
             
      1,886,200   3.4  

INDUSTRIAL MACHINERY — 2.3%

     

General Cable Corp., VAR, 3.810%, 04/01/15

    250     176,875   0.3  

RBS Global, Inc. & Rexnord Corp., Sr Nt, 8.875%, 09/01/16 10

    1,150     862,500   1.5  

RBS Global, Inc. & Rexnord Corp., Sr Sub Nt, 11.750%, 08/01/16 6

    410     250,100   0.5  
             
      1,289,475   2.3  

INSURANCE — 1.8%

 

Crum and Forster Holdings Corp., 7.750%, 05/01/17

    600     468,000   0.8  

HUB International Holdings, Inc., Private Placement, 9.000%, 12/15/14 2

    500     316,250   0.6  

10.250%, 06/15/15 2

    500     237,500   0.4  
             
      1,021,750   1.8  

IT SERVICES — 0.7%

 

Unisys Corp., Sr Nt,
8.000%, 10/15/12

    500     125,625   0.2  

12.500%, 01/15/16

    1,000     261,250   0.5  
             
      386,875   0.7  

LEISURE EQUIPMENT & PRODUCTS — 0.3%

 

Eastman Kodak Co., 7.250%, 11/15/13

    150     84,750   0.2  

True Temper Sports, Inc., Sr Nt, 8.375%, 09/15/11 1,4,9

    490     68,600   0.1  
             
      153,350   0.3  

MARINE — 0.8%

 

Ultrapetrol Bahamas Ltd., 1st Mtg, (Bahamas), 9.000%, 11/24/14

    700     451,500   0.8  
             

MEDIA — 12.2%

 

Barrington Broadcasting Group LLC and Barrington Broadcasting Capital Corp., Sr Sub Nt, 10.500%, 08/15/14

    700     134,750   0.2  

Block Communications, Inc., Private Placement, Sr Nt, 8.250%, 12/15/15 2

    800     594,000   1.1  

CanWest MediaWorks LP, Private Placement, Sr Nt, (Canada), 9.250%, 08/01/15 2

    750     52,500   0.1  

 

 

6


P ACHOLDER H IGH Y IELD F UND, I NC.

 

Statement of Net Assets Applicable to Common Stockholders (continued)

As of March 31, 2009 (Unaudited)

   

 

 

Description   Par
(000)
  Value   Percent
of Net
Assets*
 
     

MEDIA — (continued)

 

CCO Holdings LLC/CCO Holdings Capital Corp., 8.750%, 11/15/13 1,4

  $ 800   $ 668,000   1.2 %

Charter Communications Operating LLC/Charter Communications Operating Capital, Private Placement, Nt, 10.875%, 09/15/14 1,2,4

    500     485,000   0.9  

Fisher Communications, Inc., Sr Nt,
8.625%, 09/15/14

    500     425,000   0.7  

HSN, Inc., Private Placement, Sr Nt,
11.250%, 08/01/16 2

    150     102,000   0.2  

Idearc, Inc., Sr Nt, 8.000%, 11/15/16 1,4

    850     22,313   0.0 12

Intelsat Subsidiary Holding Co., Ltd., Private Placement, (Bermuda), 8.875%, 01/15/15 2

    1,250     1,165,625   2.1  

Lamar Media Corp., Sr Sub Nt,

     

6.625%, 08/15/15

    250     180,000   0.3  

7.250%, 01/01/13 6

    39     33,589   0.1  

LBI Media, Inc., Sr Disc Nt, SUB,
11.000%, 10/15/13 7

    625     210,937   0.4  

Nexstar Finance Holdings LLC/Nexstar Finance Holdings, Inc., Sr Disc Nt, SUB, 11.375%, 04/01/13 7

    479     172,579   0.3  

Quebecor Media, Inc., Sr Nt, (Canada),
7.750%, 03/15/16 10

    750     570,000   1.0  

Radio One, Inc., Sr Sub Nt, 6.375%, 02/15/13

    500     107,500   0.2  

RH Donnelley, Inc., Private Placement,
11.750%, 05/15/15 2

    795     103,350   0.2  

Valassis Communications, Inc., Private Placement, 8.250%, 03/01/15

    1,500     646,875   1.1  

Virgin Media Finance plc, Sr Nt, (United Kingdom), 9.125%, 08/15/16

    1,250     1,162,500   2.1  
             
      6,836,518   12.2  

METALS & MINING — 3.3%

 

AK Steel Corp., Co. Guar, Sr Nt,
7.750%, 06/15/12

    800     628,000   1.1  

FMG Finance Pty Ltd., Private Placement, (Australia), 10.625%, 09/01/16 2

    250     210,000   0.4  

Wolverine Tube, Inc., Sr Nt,
10.500%, 04/01/09

    1,145     984,700   1.8  
             
      1,822,700   3.3  
Description   Par
(000)
  Value   Percent
of Net
Assets*
 
     

MULTILINE RETAIL — 0.6%

 

Dollar General Corp., PIK, 11.875%, 07/15/17 6

  $ 100   $ 98,250   0.2 %

Dollar General Corp., Sr Nt, 10.625%, 07/15/15

    250     249,375   0.4  
             
      347,625   0.6  

MULTI-UTILITIES — 4.8%

 

AES Corp. (The), Private Placement,
8.750%, 05/15/13 2

    1,000     985,000   1.8  

Energy Future Holdings Corp., Private Placement, Nt, 10.875%, 11/01/17

    450     290,250   0.5  

Reliant Energy, Inc., 7.625%, 06/15/14

    500     405,000   0.7  

Reliant Energy, Inc., Sec’d Nt,
6.750%, 12/15/14 10

    1,100     1,012,000   1.8  
             
      2,692,250   4.8  

OIL, GAS & CONSUMABLE FUELS — 10.5%

 

Arch Western Finance LLC, 6.750%, 07/01/13

    250     228,750   0.4  

El Paso Corp., Sr Nt, 6.875%, 06/15/14

    150     133,608   0.2  

El Paso Performance-Linked Trust, Private Placement, Sr Nt, 7.750%, 07/15/11 2

    500     479,283   0.9  

Encore Acquisition Co., Sr Nt,
6.000%, 07/15/15 10

    1,000     735,000   1.3  

Forest Oil Corp., Nt, 7.250%, 06/15/19

    269     212,510   0.4  

Frontier Oil Corp., Debentures, 8.500%, 09/15/16

    500     492,500   0.9  

Massey Energy Co., Nt, 6.875%, 12/15/13

    450     391,500   0.7  

Newfield Exploration Co., Nt, 6.625%, 09/01/14

    200     181,000   0.3  

Northwest Pipeline Corp., Sr Nt,
7.000%, 06/15/16

    500     504,532   0.9  

Range Resources Corp., 7.250%, 05/01/18

    25     22,375   0.0 12

Range Resources Corp., Sr Sub Nt,
7.500%, 05/15/16

    267     246,307   0.4  

Swift Energy Co., Sr Nt, 7.125%, 06/01/17

    1,260     730,800   1.3  

Targa Resources Partners LP, Private Placement, 8.250%, 07/01/16 2

    280     203,000   0.4  

Tesoro Corp., 6.250%, 11/01/12

    571     498,197   0.9  

 

 

7


P ACHOLDER H IGH Y IELD F UND, I NC.

 

Statement of Net Assets Applicable to Common Stockholders (continued)

As of March 31, 2009 (Unaudited)

   

 

 

Description   Par
(000)
  Value   Percent
of Net
Assets*
 
     

OIL, GAS & CONSUMABLE FUELS — (continued)

 

W&T Offshore, Inc., Private Placement, Sr Nt, 8.250%, 06/15/14 2

  $ 1,000   $ 640,000   1.1 %

Williams Partners LP/Williams Partners Finance Corp., Sr Nt, 7.250%, 02/01/17

    250     212,500   0.4  
             
      5,911,862   10.5  

PAPER & FOREST PRODUCTS — 2.6%

 

Abitibi-Consolidated Co. of Canada,
Sr Nt, (Canada),

     

6.000%, 06/20/13 1,4

    630     56,700   0.1  

8.375%, 04/01/15 1,4

    1,395     111,600   0.2  

Abitibi-Consolidated, Inc., Sr Nt, (Canada), 8.850%, 08/01/30 1,4

    25     2,000   0.0 12

Bowater Canada Finance Corp., Nt, (Canada), 7.950%, 11/15/11 1,4

    500     45,000   0.1  

Cascades, Inc., Sr Nt, (Canada), 7.250%, 02/15/13

    168     93,660   0.2  

Domtar Corp., 7.125%, 08/15/15

    500     335,000   0.6  

Georgia-Pacific LLC, Private Placement, Co Guar, 7.000%, 01/15/15 2

    125     116,875   0.2  

7.125%, 01/15/17 2

    325     300,625   0.5  

Jefferson Smurfit Corp., Sr Nt,
8.250%, 10/01/12 1,4

    150     18,750   0.0 12

NewPage Corp., Sr Nt,

     

10.000%, 05/01/12

    200     69,500   0.1  

12.000%, 05/01/13

    800     168,000   0.3  

Smurfit-Stone Container Enterprises, Inc., Sr Nt, 8.000%, 03/15/17 1,4,10

    500     60,000   0.1  

Verso Paper Holdings LLC/Verso Paper, Inc., Sr Nt, 9.125%, 08/01/14

    250     93,750   0.2  
             
      1,471,460   2.6  

PHARMACEUTICALS — 2.8%

 

Celtic Pharma Phinco B.V., (Bermuda),
17.000%, 06/15/12 9

    1,345     874,540   1.6  

Elan Finance plc/Elan Finance Corp., Sr Nt, (Ireland), VAR, 5.234%, 11/15/11

    830     680,600   1.2  
             
      1,555,140   2.8  

REAL ESTATE INVESTMENT TRUSTS (REITS) — 0.1%

 

HRPT Properties Trust, 5.750%, 02/15/14

    63     41,534   0.1  
             
Description   Par
(000)
  Value   Percent
of Net
Assets*
 
     

ROAD & RAIL — 1.7%

 

Kansas City Southern Railway, Sr Nt,
8.000%, 06/01/15

  $ 500   $ 413,750   0.7 %

Quality Distribution LLC/QD Capital Corp., Co Guar, VAR,

     

5.594%, 01/15/12 9

    850     289,000   0.5  

9.000%, 11/15/10 9

    750     240,000   0.5  
             
      942,750   1.7  

SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 1.7%

 

Amkor Technology, Inc., Sr Nt, 7.750%, 05/15/13

    300     241,500   0.5  

MagnaChip Semiconductor S.A./MagnaChip Semiconductor Finance Co., Sec’d Nt, (Luxembourg), VAR, 0.000%, 12/15/11 1,4,9

    735     7,350   0.0 12

6.875%, 12/15/11 1,4,9

    750     7,500   0.0 12

NXP BV/NXP Funding LLC, Sr Nt, (Netherlands), VAR,
3.844%, 10/15/13

    400     67,500   0.1  

7.875%, 10/15/14

    1,640     381,300   0.7  

Spansion, Inc., Private Placement, VAR,
0.000%, 06/01/13 1,4

    1,000     225,000   0.4  
             
      930,150   1.7  

SPECIALTY RETAIL — 2.7%

 

ACE Hardware Corp., Private Placement, Sr Nt, 9.125%, 06/01/16 2

    250     205,000   0.4  

Collective Brands, Inc., 8.250%, 08/01/13

    500     395,000   0.7  

General Nutrition Centers, Inc., PIK,
6.404%, 03/15/14

    461     283,515   0.5  

PEP Boys-Manny Moe & Jack, Sr Nt,
7.500%, 12/15/14

    300     166,500   0.3  

Southern States Coop, Inc., Private Placement, Sr Nt, 11.000%, 11/01/10 2,9

    500     445,000   0.8  
             
      1,495,015   2.7  

TEXTILES, APPAREL & LUXURY GOODS — 0.8%

 

Broder Bros. Co., Sr Nt, 11.250%, 10/15/10 10

    835     129,425   0.2  

Hanesbrands, Inc., Sr Nt, VAR, 5.697%, 12/15/14

    500     332,500   0.6  
             
      461,925   0.8  

 

 

8


P ACHOLDER H IGH Y IELD F UND, I NC.

 

Statement of Net Assets Applicable to Common Stockholders (continued)

As of March 31, 2009 (Unaudited)

   

 

 

Description   Par
(000)
  Value   Percent
of Net
Assets*
 
     

TOBACCO — 1.7%

 

Alliance One International, Inc., Sr Nt,
11.000%, 05/15/12 10

  $ 900   $ 837,000   1.5 %

12.750%, 11/15/12

    150     126,000   0.2  
             
      963,000   1.7  

TRANSPORTATION SERVICES — 0.0% 12

 

IdleAire Technologies Corp., Sr Disc Nt, SUB, 13.000%, 12/15/12 1,3,4,7,9

    1,415     14,150   0.0 12
             

WIRELESS TELECOMMUNICATION SERVICES — 3.5%

 

iPCS, Inc., Sr Nt, VAR, 3.295%, 05/01/13

    440     330,000   0.6  

MetroPCS Wireless, Inc., Sr Nt, 9.250%, 11/01/14

    750     727,500   1.3  

Sprint Nextel Corp., Nt, 6.000%, 12/01/16

    1,300     929,500   1.6  
             
      1,987,000   3.5  
             

Total Corporate Bonds

 

(Cost $124,758,710)

      77,067,097   137.2  
             

LOAN PARTICIPATIONS & ASSIGNMENTS — 30.5%

 

AIRLINES — 0.7%

 

Delta Airlines, Inc., 1st Lien Term Loan,

     

0.269%, 04/30/14

    27     20,593   0.1  

2.508%, 04/30/14

    468     351,894   0.6  
             
      372,487   0.7  

AUTOMOBILES — 0.8%

     

Ford Motor Co., Term Loan B, 3.560%, 12/15/13

    960     459,692   0.8  
             

BUILDING PRODUCTS — 0.6%

     

Jacuzzi Brands, Inc., 1st Lien Term Loan B, 2.768%, 02/07/14 9

    444     166,446   0.3  

Jacuzzi Brands, Inc., 1st Lien Term Loan, Letter of Credit, 1.120%, 02/07/14 9

    40     14,924   0.0 12

Jacuzzi Brands, Inc., 2nd Lien Term Loan Tranche B2, 7.018%, 08/07/14 9

    1,110     166,495   0.3  
             
      347,865   0.6  

CHEMICALS — 1.8%

 

Cristal Inorganic Chemicals, 1st Lien Term Loan, 3.470%, 05/15/14 9

    897     524,774   1.0  

Cristal Inorganic Chemicals, 2nd Lien Term Loan, 6.970%, 05/15/14 9

    500     245,000   0.5  
Description   Par
(000)
  Value   Percent
of Net
Assets*
 
     

CHEMICALS — (continued)

 

Lyondell Chemical Co., Dutch Tranche A Dollar Term Loan, 5.750%, 12/22/14

  $ 14   $ 3,385   0.0 % 12

Lyondell Chemical Co., Dutch Tranche Revolving Credit Loan, 5.750%, 12/20/13

    6     1,421   0.0 12

Lyondell Chemical Co., German Tranche B-1 Euro Term Loan, 7.000%, 12/22/14

    17     4,079   0.0 12

Lyondell Chemical Co., German Tranche B-2 Euro Term Loan, 7.000%, 12/22/14

    17     4,079   0.0 12

Lyondell Chemical Co., German Tranche B-3 Euro Term Loan, 7.000%, 12/22/14

    17     4,079   0.0 12

Lyondell Chemical Co., New Money Dip Term Loan, 13.000%, 12/15/09

    89     88,547   0.2  

Lyondell Chemical Co., Roll-Up Dip Term Loan, 5.940%, 12/15/09

    134     70,892   0.1  

Lyondell Chemical Co., U.S. Tranche A Dollar Term Loan, 5.750%, 12/20/13

    43     10,153   0.0 12

Lyondell Chemical Co., U.S. Tranche B-2 Dollar Term Loan, 7.000%, 12/20/14

    75     17,702   0.0 12

Lyondell Chemical Co., U.S. Tranche B-3 Dollar Term Loan, 7.000%, 12/20/14

    75     17,702   0.0 12

Lyondell Chemical Co., U.S. Tranche Primary Revolving Credit Loan, 5.750%, 12/20/14

    23     5,329   0.0 12

Lyondell Chemical, U.S. Tranche B-1 Dollar Term Loan, 7.000%, 12/20/14

    75     17,702   0.0 12
             
      1,014,844   1.8  

COMMERCIAL SERVICES & SUPPLIES — 1.0%

 

Clarke American Corp., Term Loan B,

     

3.018%, 06/27/14

    478     284,972   0.5  

3.708%, 06/27/14

    84     49,791   0.1  

3.720%, 06/27/14

    423     252,277   0.4  
             
      587,040   1.0  

DIVERSIFIED MANUFACTURING — 1.3%

 

BOC Edwards, 1st Priority Lien, 2.518%, 05/31/14

    1,206     723,507   1.3  
             

ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS — 1.1%

 

Isola Group S.A.R.L., 1st Lien Term Loan, 9.270%, 12/18/12 1,4,9

    445     356,053   0.6  

 

 

9


P ACHOLDER H IGH Y IELD F UND, I NC.

 

Statement of Net Assets Applicable to Common Stockholders (continued)

As of March 31, 2009 (Unaudited)

   

 

 

Description   Par
(000)
  Value   Percent
of Net
Assets*
 
     

ELECTRONIC EQUIPMENT, INSTRUMENTS &
COMPONENTS — (continued)

  

Isola Group S.A.R.L., 2nd Lien Term Loan, 15.430%, 12/18/13 1,4,9

  $ 250   $ 50,000   0.1 %

Sirius Computer Solutions, 2nd Lien Term Loan, 7.220%, 05/30/13 9

    1,000     200,000   0.4  
             
      606,053   1.1  

FOOD & STAPLES RETAILING — 0.6%

     

Rite Aid Corp., Term Loan 3, 6.000%, 06/04/14

    499     352,863   0.6  
             

GAMING — 1.9%

 

Fontainebleau Las Vegas Holdings LLC, Delayed Draw, Term Loan B, 3.768%, 06/06/14

    167     25,562   0.0 12

Fontainebleau Las Vegas Holdings LLC, Initial Term Loan, 4.527%, 06/06/14

    333     51,103   0.1  

Harrah’s Operating Co., Inc., Term B-2 Loan, 4.159%, 01/28/15

    249     149,275   0.3  

Venetian Macau, Term Loan B, 2.770%, 05/25/13

    1,333     860,840   1.5  
             
      1,086,780   1.9  

HEALTH CARE PROVIDERS & SERVICES — 0.7%

 

HCA, Inc., Term Loan B, 3.470%, 11/18/13

    478     404,579   0.7  
             

HOTELS, RESTAURANTS & LEISURE — 1.0%

 

ARAMARK Corp., Letter of Credit, 1.000%, 01/26/14

    20     17,422   0.0 12

ARAMARK Corp., Term Loan, 3.095%, 01/26/14

    315     274,235   0.5  

Outback Steakhouse, Prefunded RC Commitment, 1.140%, 06/14/13

    5     2,571   0.0 12

Outback Steakhouse, Prerefunded RC Commitment, (Germany), 4.500%, 06/14/13

    1     351   0.0 12

Outback Steakhouse, Term Loan B, 2.813%, 06/14/14

    447     243,403   0.5  
             
      537,982   1.0  

HOUSEHOLD PRODUCTS — 0.9%

 

Spectrum Brands, Inc., Letter of Credit, 0.347%, 03/30/13 1,4

    24     17,147   0.0 12

Spectrum Brands, Inc., Term Loan B,

     

5.398%, 03/30/13 1,4

    155     109,681   0.2  
Description   Par
(000)
  Value   Percent
of Net
Assets*
 
     

HOUSEHOLD PRODUCTS — (continued)

 

6.250%, 03/30/13 1,4

  $ 515   $ 365,114   0.7 %
             
      491,942   0.9  

INDEPENDENT POWER PRODUCERS & ENERGY TRADERS — 5.1%

 

Calpine Corp., 1st Priority Term Loan, 4.095%, 03/29/14

    2,428     1,846,725   3.3  

Texas Competitive Electric Holdings Co. LLC, Initial Tranche B-2 Term Loan,

     

3.979%, 10/10/14

    5     3,287   0.0 12

4.018%, 10/10/14

    8     4,932   0.0 12

4.033%, 10/10/14

    975     641,063   1.2  

TPF Generation Holdings LLC, 2nd Lien Term Loan, 4.768%, 12/15/14

    500     350,000   0.6  
             
      2,846,007   5.1  

INSURANCE — 0.8%

 

HMSC Corp., First Lien, 2.768%, 11/16/11

    980     470,400   0.8  
             

IT SERVICES — 3.5%

 

Compucom Systems, Inc., Term Loan, 4.020%, 08/23/14 9

    914     712,632   1.3  

First Data Corp., Initial Tranche B-1
Term Loan,

     

3.268%, 09/24/14

    23     15,164   0.0 12

3.272%, 09/24/14

    371     249,951   0.4  

First Data Corp., Initial Tranche B-3
Term Loan,

     

3.268%, 09/24/14

    85     56,910   0.1  

3.272%, 09/24/14

    1,394     938,500   1.7  
             
      1,973,157   3.5  

LEISURE EQUIPMENT & PRODUCTS — 0.1%

 

True Temper Sports, Inc., 2nd Lien Term Loan, 6.625%, 06/30/11 1,4,9

    77     37,214   0.1  
             

MEDIA — 4.7%

 

CCO Holdings LLC, 3rd Lien Term Loan, 3.959%, 09/06/14

    279     182,840   0.3  

High Plains Broadcasting Operating Co. LLC, Term Loan, 7.250%, 09/14/16

    194     77,670   0.1  

Idearc, Inc., Term Loan B, 3.220%, 11/17/14

    494     192,385   0.4  

Newport Television LLC, Term Loan, 8.000%, 09/14/16

    734     293,580   0.5  

 

 

10


P ACHOLDER H IGH Y IELD F UND, I NC.

 

Statement of Net Assets Applicable to Common Stockholders (continued)

As of March 31, 2009 (Unaudited)

   

 

 

Description   Par
(000)
  Value   Percent
of Net
Assets*
 
     

MEDIA — (continued)

 

Sirius Satellite Radio, Term Loan, 2.813%, 12/01/12

  $ 493   $ 354,600   0.6 %

Univision Communications, Inc., 1st Lien Term Loan, 2.768%, 09/20/14

    91     45,579   0.1  

2.768%, 09/20/14

    1,409     709,011   1.3  

WMG Acquisition Corp., Term Loan,

     

2.508%, 02/28/11

    65     57,058   0.1  

2.518%, 02/28/11

    60     52,242   0.1  

2.533%, 02/28/11

    82     71,323   0.1  

2.564%, 02/28/11

    102     89,535   0.2  

3.125%, 02/28/11

    65     57,056   0.1  

3.159%, 02/28/11

    129     112,405   0.2  

3.249%, 02/28/11

    196     171,176   0.3  

3.256%, 02/28/11

    196     171,176   0.3  
             
      2,637,636   4.7  

MULTILINE RETAIL — 1.6%

 

Dollar General Corp., Tranche B-1
Term Loan, 3.268%, 07/07/14

    248     218,755   0.4  

3.296%, 07/07/14

    56     47,650   0.1  

3.306%, 07/07/14

    64     54,835   0.1  

3.924%, 07/07/14

    383     338,466   0.6  

Dollar General Corp., Tranche B-2 Term Loan, 3.268%, 07/07/14

    250     214,298   0.4  
             
      874,004   1.6  

PAPER & FOREST PRODUCTS — 1.8%

 

Abitibi-Consolidated Co. of Canada, Term Loan, (Canada), 11.500%, 03/30/09

    694     503,003   0.9  

NewPage Corp., Term Loan,
5.000%, 12/21/14

    743     507,024   0.9  
             
      1,010,027   1.8  

SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT — 0.5%

 

Freescale Semiconductor, Inc., Incremental Term Loan, 12.500%, 12/15/14

    151     78,772   0.1  

Freescale Semiconductor, Inc., Term Loan, 2.259%, 11/29/13

    494     201,568   0.4  
             
      280,340   0.5  

Total Loan Participations & Assignments

 

(cost $27,017,181)

      17,114,419   30.5  
             
Description   Par
(000)
    Value   Percent
of Net
Assets*
 
     

ASSET-BACKED SECURITIES — 2.6%

 

Countrywide Asset-Backed Certificates, Series 2004-13, Class MV8, VAR,
2.222%, 01/25/35 9

  $ 115     $ 8,541   0.0 % 12

Long Beach Mortgage Loan Trust, Series 2004-5, Class M6, VAR,
3.022%, 09/25/34 9

    73       11,693   0.0 12

Unipac IX LLC, 13.000%, 04/11/13 3,9

    1,500       1,461,038   2.6  
             

Total Asset-Backed Securities

     

(cost $1,641,432)

      1,481,272   2.6  
             

Total Fixed Income Investments

     

(cost $153,417,323)

      95,662,788   170.3  
             

COMMON STOCKS — 0.5%

 

AIRLINES — 0.0% 12

 

Delta Air Lines, Inc. 1

    3       14,283   0.0 12
             

BUILDING PRODUCTS — 0.1%

 

Lexington Coal Co. 1,3

    25       26,323   0.1  
             

CONTAINERS & PACKAGING — 0.0%

 

Glasstech, Inc., Class C 1,3

    —   11     —     0.0  
             

DIVERSIFIED TELECOMMUNICATION SERVICES — 0.2%

 

AboveNet, Inc. 1

    3       115,335   0.2  

XO Holdings, Inc. 1

    1       101   0.0 12
             
      115,436   0.2  

INDEPENDENT POWER PRODUCERS & ENERGY TRADERS — 0.0% 12

 

Mirant Corp. 1

    1       10,648   0.0 12
             

MEDIA — 0.2%

 

Adelphia Recovery Trust 1,3

    157       1   0.0 12

Time Warner Cable, Inc., Class A 6

    5       127,274   0.2  
             
      127,275   0.2  

TEXTILES, APPAREL & LUXURY GOODS — 0.0%

 

Westpoint Stevens, Inc. 1,3

    14       —     0.0  
             

Total Common Stocks

     

(cost $2,133,847)

      293,965   0.5  
             

PREFERRED STOCKS — 0.9%

 

AUTOMOBILES — 0.0% 12

 

General Motors Corp., Pfd,
Series B, 5.250%

    4       10,250   0.0 12
             

 

 

11


P ACHOLDER H IGH Y IELD F UND, I NC.

 

Statement of Net Assets Applicable to Common Stockholders (continued)

As of March 31, 2009 (Unaudited)

   

 

 

Description   Par
(000)
    Value   Percent
of Net
Assets*
 
     

COMMERCIAL BANKS — 0.4%

 

Royal Bank of Scotland Group plc, Pfd, (United Kingdom), Series 1, ADR,
9.118%, 03/31/10 14

  $ 500     $ 245,000   0.4 %
             

CONTAINERS & PACKAGING — 0.0%

 

Glasstech, Inc., Pfd, Series C 3

       11     —     0.0  
             

DIVERSIFIED FINANCIAL SERVICES — 0.3%

 

Bank of America Corp., Pfd, Series L,
7.250%, 01/30/13 14

       11     163,000   0.3  
             

MEDIA — 0.2%

 

Spanish Broadcasting System, Inc., Pfd, Series B, PIK, 10.750%, 05/04/09 3,14

    482       77,723   0.2  

Total Preferred Stocks

     

(cost $1,121,159)

      495,973   0.9  
             

RIGHT — 0.0%

 

TEXTILES, APPAREL & LUXURY GOODS — 0.0%

 

Westpoint Stevens, Inc., expiring 04/25/14 1,3
(cost $184,476)

    13       —     0.0  
             

WARRANTS — 0.0% 12

 

DIVERSIFIED TELECOMMUNICATION SERVICES — 0.0% 12

 

AboveNet, Inc., expiring 09/08/10
(Strike Price $24.00) 1,3,9

    1       16,443   0.0 12

XO Holdings, Inc., Series A, expiring 01/16/10 (Strike Price $6.25) 1

    1       6   0.0 12

XO Holdings, Inc., Series B, expiring 01/16/10 (Strike Price $7.50) 1

    1       6   0.0 12

XO Holdings, Inc., Series C, expiring 01/16/10
(Strike Price $10.00) 1

    1       2   0.0 12
             
      16,457   0.0 12

TRANSPORTATION SERVICES — 0.0%

 

IdleAire Technologies Corp., expiring 12/15/15
(Strike Price $1.00) 1,3

    1       —     0.0  
             

Total Warrants

     

(cost $208,600)

      16,457   0.0 12
             

Total Equity Investments

     

(cost $3,648,082)

      806,395   1.4  
             
Description   Par
(000)
  Value     Percent
of Net
Assets*
 
     

SHORT-TERM INVESTMENT — 1.7%

 

 

INVESTMENT COMPANY — 1.7%

 

 

JPMorgan Prime Money Market Fund, Institutional Class Shares, 0.740% 5,13 (cost 952,067)

  $ 952   $ 952,067     1.7 %
               

INVESTMENTS OF CASH COLLATERAL
FOR SECURITIES ON LOAN — 6.8%

  

 

INVESTMENT COMPANY — 6.8%

     

JPMorgan Prime Money Market Fund, Capital Shares, 0.780% 5,13
(cost $3,817,220)

    3,817     3,817,220     6.8  
               

TOTAL INVESTMENTS

     

(cost $161,834,692)

      101,238,470     180.2  
               

Payable Upon Return of Securities Loaned

    (3,817,220 )   (6.8 )

Payable to Advisor

    (66,241 )   (0.1 )

Payable to Directors

    (3,188 )   (0.0 ) 12

Custody Fees Payable

    (5,071 )   (0.0 ) 12

Unrealized Appreciation on Unfunded Commitments

    51,864     0.1  

Unrealized Depreciation on Unfunded Commitments

    (424 )   (0.0 ) 12

Unrealized Depreciation on Swap Agreements

    (1,142,465 )   (2.1 )

Assets in Excess of Other Liabilities

    2,928,717     5.2  

Less: Outstanding Preferred Stock
(1,720 shares at $25,000 per share) at liquidation value.

    (43,000,000 )   (76.5 )
               

Net Assets Applicable to Common Stockholders

  $ 56,184,442     100.0  
               

Net Asset Value Per Common Share ($56,184,442/12,950,905)

  $ 4.34    
           

 

Cert   Certificate
Co   Company
Disc   Discount
Guar   Guaranteed
Mtg   Mortgage
Nt   Note
Pfd   Preferred
PIK   Payment in-kind
Sec’d   Secured
Sr   Senior
Sub   Subordinate
Unsec’d   Unsecured
VAR   Variable Rate Security. The interest rate shown is the rate in effect as of March 31, 2009.

 

 

12


P ACHOLDER H IGH Y IELD F UND, I NC.

 

Statement of Net Assets Applicable to Common Stockholders (concluded)

As of March 31, 2009 (Unaudited)

   

 

 

*   Applicable to common stockholders.

1

 

Non-income producing security.

2

 

Security is exempt from registration under Rule 144A of the Securities Act of 1933. Unless otherwise indicated, this security has been determined to be liquid under procedures established by the Board of Directors and may be resold in transactions exempt from registration, normally to qualified institutional buyers. These securities amounted to $15,258,480 and 27.2% of net assets applicable to common stockholders.

3

 

Fair valued security. These securities amounted to $3,042,123 and 5.4% of net assets applicable to common stockholders.

4

 

Security in default.

5

 

Investment in affiliate. Money market fund registered under the Investment Company Act of 1940, as amended, and advised by J.P. Morgan Investment Management Inc.

6

 

All or a portion of the security is on loan. Securities on loan have a fair market value of $3,754,187.

7

 

Step-up bond. Interest rate is effective rate as of March 31, 2009.

8

 

Restricted security. These securities amounted to $1,571,312 and 2.8% of net assets applicable to common stockholders.

9

 

Security deemed to be illiquid. These securities amounted to $10,356,227 and 18.4% of net assets applicable to common stockholders.

10

 

All or a portion of the security is reserved for current or potential holdings of swaps, TBAs, when-issued securities and delayed delivery securities.

11

 

Amount rounds to less than 1,000 shares.

12

 

Amount rounds to less than 0.1%.

13

 

The rate shown is the current yield as of March 31, 2009.

14

 

Security is perpetual and, thus, does not have a predetermined maturity date. The coupon rate for this security is fixed for a period of time and may be structured to adjust thereafter. The date shown reflects the next call date. The coupon rate shown is the rate in effect as of March 31, 2009.

 

As of March 31, 2009, the gross unrealized appreciation (depreciation) of investments based on the aggregate cost of investments for federal income tax purposes was as follows:

 

Aggregate gross unrealized appreciation

  $ 609,472  

Aggregate gross unrealized depreciation

    (61,205,694 )
       

Net unrealized appreciation/depreciation

  $ (60,596,222 )
       

Federal income tax cost of investments

  $ 161,834,692  
       

 

INTEREST RATE SWAPS — The Fund entered into interest payment swap arrangements with Citibank, N. A. New York (Citibank) for the purpose of partially hedging its dividend payment obligations with respect to the Auction Rate Preferred Shares (ARPS). Pursuant to each of the swap arrangements, the Fund makes payments to Citibank on a monthly basis at fixed annual rates. In exchange for such payments Citibank makes payments to the Fund on a monthly basis at a variable rate determined with reference to the one month London Interbank Offered Rate (LIBOR). The variable rates ranged from 0.329% to 0.564% for the period ended March 31, 2009. The effective date, upfront premiums, notional contract amount, maturity, fixed and floating annual rates and unrealized appreciation/depreciation of the swaps are as follows:

 

Effective Date

  Upfront
Premiums
(Paid)/ Received
   Notional
Contract
Amount
   Maturity   

Payments
Made by
the Fund

  

Payments
Received by
the Fund

   Floating
Annual
Rate*
    Unrealized
Appreciation/
(Depreciation)
 
  6/1/2005      $ 5 million    06/01/09    4.150%
monthly
   1 month LIBOR monthly    0.501 %   $ (44,463 )
12/1/2005      $ 5 million    12/01/09    4.740%
monthly
   1 month LIBOR monthly    0.501       (153,692 )
8/14/2006      $ 5 million    06/01/10    5.255%
monthly
   1 month LIBOR monthly    0.501       (275,200 )
12/1/2006      $ 5 million    12/01/10    5.010%
monthly
   1 month LIBOR monthly    0.501       (349,277 )
11/30/2007      $ 5 million    06/01/11    4.000%
monthly
   1 month LIBOR monthly    0.501       (319,833 )
                        
                   $ (1,142,465 )
                        

 

*   Represents rate in effect at March 31, 2009.

 

 

13


P ACHOLDER H IGH Y IELD F UND, I NC.

 

   

 

 

Statement of Financial Accounting Standards No. 157 — Fair Value Measurements — (“SFAS 157”) defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.

 

SFAS 157 requires disclosure surrounding the various inputs that are used in determining the value of the Fund’s investments. These inputs are summarized into the three broad levels listed below.

 

   

Level 1 — quoted prices in active markets for identical securities

 

   

Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)

 

   

Level 3 — significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

 

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

 

The following is a summary of the inputs used as of March 31, 2009, in valuing the Fund’s assets and liabilities carried at fair value:

 

Valuation Inputs

  Investments in
Securities
  Appreciation in
Other Financial
Instruments*
  Depreciation in
Other Financial
Instruments*
 

Level 1 — Quoted prices

  $ 5,036,941   $ —     $ —    

Level 2 — Other significant observable inputs

    93,159,406     —       (1,142,465 )

Level 3 — Significant unobservable inputs

    3,042,123     —       —    
                   

Total

  $ 101,238,470   $ —     $ (1,142,465 )
                   

 

*   Other financial instruments may include futures, forwards and swap contracts.

 

SFAS 157 also requires a reconciliation of assets and liabilities for which significant unobservable inputs (Level 3) were used in determining fair value:

 

      Investments in
Securities
    Other Financial
Instruments*

Balance as of 12/31/08

  $ 2,386,844     $ —  
             

Realized gain (loss)

    (75,160 )     —  

Change in unrealized appreciation (depreciation)

    182,075       —  

Net Amortization/Accretion

    7,564       —  

Net purchases (sales)

    —         —  

Net transfers in (out) of Level 3

    540,800       —  
             

Balance as of 03/31/09

  $ 3,042,123     $ —  
             

 

*   Other financial instruments may include futures, forwards and swap contracts.

 

Transfers into Level 3 are valued utilizing values as of the end of the period and transfers out of Level 3 are valued utilizing values as of the beginning of the period.

 

The change in unrealized appreciation (depreciation) attributable to securities owned at March 31, 2009, which were valued using significant unobservable inputs (Level 3) amounted to $(222,333).

 

 

14

Pacholder HI Yld (AMEX:PHF)
Historical Stock Chart
From Jun 2024 to Jul 2024 Click Here for more Pacholder HI Yld Charts.
Pacholder HI Yld (AMEX:PHF)
Historical Stock Chart
From Jul 2023 to Jul 2024 Click Here for more Pacholder HI Yld Charts.