Notes to Financial Statements
PGIM High Yield Bond Fund, Inc. (the Fund) is registered under the Investment Company Act of 1940, as amended (1940
Act), as a diversified, closed-end management investment company. The Fund was incorporated as a Maryland corporation on November 14, 2011.
The investment objective of the Fund is to provide a high level of current income.
1. Accounting Policies
The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB)
Accounting Standard Codification (ASC) Topic 946 Financial Services - Investment Companies. The following accounting policies conform to U.S. generally accepted accounting principles. The Fund consistently follows such policies in
the preparation of its financial statements.
Securities Valuation:
The Fund holds securities and other assets and liabilities that are fair valued at the close of each day (generally, 4:00 PM Eastern time) the New York Stock Exchange (NYSE) is open for trading. Fair value is the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Funds Board of Directors (the Board) has adopted valuation procedures for security
valuation under which fair valuation responsibilities have been delegated to PGIM Investments LLC (PGIM Investments or the Manager). Pursuant to the Boards delegation, the Manager has established a Valuation Committee
responsible for supervising the fair valuation of portfolio securities and other assets and liabilities. The valuation procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative
valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committees actions is subject to the Boards review, approval, and ratification at its next
regularly scheduled quarterly meeting.
For the fiscal reporting year-end, securities and other assets and liabilities were fair valued at the close of the last U.S. business day. Trading in certain foreign securities may occur when the NYSE is closed (including weekends and
holidays). Because such foreign securities trade in markets that are open on weekends and U.S. holidays, the values of some of the Funds foreign investments may change on days when investors cannot purchase or redeem Fund shares.
Various inputs determine how the Funds investments are valued, all of which are
categorized according to the three broad levels (Level 1, 2, or 3) detailed in the Schedule of Investments and referred to herein as the fair value hierarchy in accordance with FASB ASC Topic 820 - Fair Value Measurements and
Disclosures.
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Notes to Financial Statements
(continued)
Investments in open-end, non-exchange-traded mutual funds are valued at their net
asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.
Fixed income securities traded in the OTC market are generally classified as
Level 2 in the fair value hierarchy. Such fixed income securities are typically valued using the market approach which generally involves obtaining data from an approved independent third-party vendor source. The Fund utilizes the market
approach as the primary method to value securities when market prices of identical or comparable instruments are available. The third-party vendors valuation techniques used to derive the evaluated bid price are based on evaluating observable
inputs, including but not limited to, yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations and reported trades. Certain Level 3 securities are
also valued using the market approach when obtaining a single broker quote or when utilizing transaction prices for identical securities that have been used in excess of five business days. During the reporting period, there were no changes to
report with respect to the valuation approach and/or valuation techniques discussed above.
Bank loans are generally valued at prices provided by approved independent pricing vendors. The pricing vendors utilize broker/dealer quotations and provide prices based on the average of such quotations. Bank
loans valued using such vendor prices are generally classified as Level 2 in the fair value hierarchy. Bank loans valued based on a single broker quote or at the original transaction price in excess of five business days are classified as
Level 3 in the fair value hierarchy.
OTC and centrally cleared
derivative instruments are generally classified as Level 2 in the fair value hierarchy. Such derivative instruments are typically valued using the market approach and/or income approach which generally involves obtaining data from an approved
independent third-party vendor source. The Fund utilizes the market approach when quoted prices in broker-dealer markets are available but also includes consideration of alternative valuation approaches, including the income approach. In the absence
of reliable market quotations, the income approach is typically utilized for purposes of valuing derivatives such as interest rate swaps based on a discounted cash flow analysis whereby the value of the instrument is equal to the present value of
its future cash inflows or outflows. Such analysis includes projecting future cash flows and determining the discount rate (including the present value factors that affect the discount rate) used to discount the future cash flows. In addition, the
third-party vendors valuation techniques used to derive the evaluated derivative price is based on evaluating observable inputs, including but not limited to, underlying asset prices, indices, spreads, interest rates and exchange rates.
Certain derivatives may be classified as Level 3 when valued using the market approach by
obtaining a single broker quote or when utilizing unobservable inputs in the income approach. During the reporting period, there were no changes to report with respect to the valuation approach
and/or valuation techniques discussed above.
Securities and other assets
that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that unobservable inputs are used when determining such valuations, the securities will be classified as
Level 3 in the fair value hierarchy.
When determining the fair value
of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuers financial condition and the markets in
which it does business; the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or
other reports or information deemed reliable by the Manager regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a securitys most recent closing
price and from the price used by other unaffiliated mutual funds to calculate their net asset values.
Illiquid Securities: Subject to guidelines adopted by the Board, the Fund may invest without limit in illiquid securities. Illiquid securities are those that, because of the absence of a readily available
market or due to legal or contractual restrictions on resale, may not reasonably be expected to be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market
value of the investment. The Fund may find it difficult to sell illiquid securities at the time considered most advantageous by its subadviser and may incur transaction costs that would not be incurred in the sale of securities that were freely
marketable.
Restricted Securities: Securities acquired in
unregistered, private sales from the issuing company or from an affiliate of the issuer are considered restricted as to disposition under federal securities law (restricted securities). Such restricted securities are valued pursuant to
the valuation procedures noted above. Restricted securities that would otherwise be considered illiquid investments because of legal restrictions on resale to the general public may be traded among qualified institutional buyers under Rule 144A of
the Securities Act of 1933. Therefore, these Rule 144A securities, as well as commercial paper that is sold in private placements under Section 4(2) of the Securities Act of 1933, may be deemed liquid by the Funds subadviser under the
guidelines adopted by the Directors. However, the liquidity of the Funds investments in restricted securities could be impaired if trading does not develop or declines.
Bank Loans: The Fund invested in bank loans. Bank loans include fixed and
floating rate loans that are privately negotiated between a corporate borrower and one or more financial institutions, including, but not limited to, term loans, revolvers, and other instruments issued in the bank loan market. The Fund acquired
interests in loans directly (by way of
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Notes to Financial Statements
(continued)
assignment from the selling institution) or indirectly (by way of the purchase of a participation interest from the selling institution). Under a bank loan
assignment, the Fund generally will succeed to all the rights and obligations of an assigning lending institution and becomes a lender under the loan agreement with the relevant borrower in connection with that loan. Under a bank loan participation,
the Fund generally will have a contractual relationship only with the lender, not with the relevant borrower. As a result, the Fund generally will have the right to receive payments of principal, interest, and any fees to which it is entitled only
from the lender selling the participation and only upon receipt by the lender of the payments from the relevant borrower. The Fund may not directly benefit from the collateral supporting the debt obligation in which it has purchased the
participation. As a result, the Fund will assume the credit risk of both the borrower and the institution selling the participation to the Fund.
Swap Agreements: The Fund entered into certain types of swap agreements detailed in the disclosures below. A swap agreement is an agreement to exchange the
return generated by one instrument for the return generated by another instrument. Swap agreements are negotiated in the OTC market and may be executed either directly with a counterparty
(OTC-traded) or through a central clearing facility, such as a registered exchange. Swap agreements are valued daily at current market value and any change in value is included in the net
unrealized appreciation (depreciation) on swap agreements. Centrally cleared swaps pay or receive an amount known as variation margin, based on daily changes in the valuation of the swap contract. For
OTC-traded, upfront premiums paid and received are shown as swap premiums paid and swap premiums received in the Statement of Assets and Liabilities. Risk of loss may exceed amounts recognized on the Statement
of Assets and Liabilities. Swap agreements outstanding at period end, if any, are listed on the Schedule of Investments. The cash amounts pledged for swaps contracts are considered restricted cash and are included in deposit with broker for
centrally cleared/exchange-traded derivatives in the Statement of Assets and Liabilities.
Credit Default Swaps (CDS): CDS involve one party (the protection buyer) making a stream of payments to another party (the protection seller) in exchange for the right to receive a specified
payment in the event of a default or as a result of a default (collectively a credit event) for the referenced entity (typically corporate issues or sovereign issues of an emerging country) on its obligation; or in the event of a
write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising a credit index.
The Fund is subject to credit risk in the normal course of pursuing its investment objectives, and as such, has entered into CDS contracts to provide a measure of
protection against defaults or to take an active long or short position with respect to the likelihood of a particular issuers default or the reference entitys credit soundness. CDS contracts generally trade based on a spread which
represents the cost a protection buyer has to pay the
protection seller. The protection buyer is said to be short the credit as the value of the contract rises the more the credit deteriorates. The value of the CDS contract increases for the
protection buyer if the spread increases. The Funds maximum risk of loss from counterparty credit risk for purchased CDS is the inability of the counterparty to honor the contract up to the notional value due to a credit event.
As a seller of protection on credit default swap agreements, the Fund generally
receives an agreed upon payment from the buyer of protection throughout the term of the swap, provided no credit event occurs. As the seller, the Fund effectively increases its investment risk because, in addition to its total net assets, the Fund
may be subject to investment exposure on the notional amount of the swap.
The maximum amount of the payment that the Fund, as a seller of protection, could be required to make under a credit default swap agreement would be equal to the
notional amount of the underlying security or index contract as a result of a credit event. This potential amount will be partially offset by any recovery values of the respective referenced obligations, or net amounts received from the settlement
of buy protection credit default swap agreements which the Fund entered into for the same referenced entity or index. As a buyer of protection, the Fund generally receives an amount up to the notional value of the swap if a credit event occurs.
Implied credit spreads, represented in absolute terms, utilized in
determining the market value of credit default swap agreements where the Fund is the seller of protection as of period end are disclosed in the footnotes to the Schedule of Investments, if applicable. These spreads serve as indicators of the current
status of the payment/performance risk and represent the likelihood of default risk for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront
payments required to enter into the agreement. Wider credit spreads and increased market value in absolute terms, when compared to the notional amount of the swap, represent a deterioration of the referenced entitys credit soundness and a
greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.
Payment-In-Kind: The Fund invested in the open market or receive pursuant to debt restructuring, securities that pay-in-kind (PIK) the interest due on such debt instruments. The PIK interest, computed at the contractual rate specified, is added to the existing principal balance of the
debt when issued bonds have same terms as the bond or recorded as a separate bond when terms are different from the existing debt, and is recorded as interest income.
Securities Transactions and Net Investment Income: Securities transactions are
recorded on the trade date. Realized gains (losses) from investment and currency transactions are calculated on the specific identification method. Dividend income is recorded on the ex-date, or for certain
foreign securities, when the Fund becomes aware of such dividends. Interest income, including amortization of premium and accretion of discount on debt
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Notes to Financial Statements
(continued)
securities, as required, is recorded on the accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management
that may differ from actual.
Taxes: It is the Funds policy to
continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its stockholders. Therefore, no federal income tax
provision is required. Withholding taxes on foreign dividends, interest and capital gains, if any, are recorded, net of reclaimable amounts, at the time the related income is earned. However, due to the timing of when distributions are made by the
Fund, the Fund may be subject to an excise tax of 4% of the amount by which 98% of the Funds annual taxable income for the calendar year and 98.2% of its net capital gains for a one-year period ending on
October 31 exceed the distributions from such taxable income and net capital gains for the calendar year.
Dividends and Distributions: The Fund intends to make a level dividend distribution each month to the holders of Common Stock. The level dividend rate may be modified by the Board from time to time, and will
be based upon the past and projected performance and expenses of the Fund. The Fund intends to also make a distribution during or with respect to each calendar year (which may be combined with a regular monthly distribution), which will generally
include any net investment income and net realized capital gain for the year not otherwise distributed.
PGIM Investments has received an order from the Securities and Exchange Commission (the SEC) granting the Fund an exemption from Section 19(b) of the 1940 Act and Rule 19b-1 thereunder to permit certain closed-end funds managed by PGIM Investments to include realized long-term capital gains as a part of their respective regular distributions
to the holders of Common Stock more frequently than would otherwise be permitted by the 1940 Act (generally once per taxable year). The Fund intends to rely on this exemptive order. The Board may, at the request of PGIM Investments, adopt a managed
distribution policy.
Dividends and distributions to stockholders, which are
determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-date. Permanent book/tax differences relating to income
and gain (loss) are reclassified amongst total distributable earnings (loss) and paid-in capital in excess of par, as appropriate.
Estimates: The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.
2. Agreements
The Fund has a management agreement with PGIM Investments. Pursuant to this agreement, PGIM Investments has responsibility for all investment advisory services and
supervises the subadvisers performance of such services. PGIM Investments has entered into a subadvisory agreement with PGIM, Inc., which provides subadvisory services to the Fund through its PGIM Fixed Income unit. The subadvisory agreement
provides that PGIM, Inc. will furnish investment advisory services in connection with the management of the Fund. In connection therewith, PGIM, Inc. is obligated to keep certain books and records of the Fund. PGIM Investments pays for the services
of PGIM, Inc., the cost of compensation of officers of the Fund, occupancy and certain clerical and bookkeeping costs of the Fund. The Fund bears all other costs and expenses.
The management fee paid to the Manager is accrued daily and payable monthly, at an
annual rate of 0.80% of the average daily value of the Funds investable assets. Investable assets refers to the net assets attributable to the outstanding common stock of the Fund plus the liquidation preference of any outstanding
preferred stock issued by the Fund, the principal amount of any borrowings and the principal on any debt securities issued by the Fund
PGIM Investments and PGIM, Inc. are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (Prudential).
3. Other Transactions with Affiliates
The Fund may invest its overnight sweep cash in the PGIM Core Ultra Short Bond Fund
(the Core Fund), a series of Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PGIM Investments. Through the Funds investments in the mentioned underlying funds, PGIM Investments and/or its affiliates
are paid fees or reimbursed for providing their services. In addition to the realized and unrealized gains on investments in the Core Fund, earnings from such investments are disclosed on the Statement of Operations as Affiliated dividend
income.
The Fund may enter into certain securities purchase or sale
transactions under Board approved Rule 17a-7 procedures. Rule 17a-7 is an exemptive rule under the 1940 Act, that subject to certain conditions, permits purchase and
sale transactions among affiliated investment companies, or between an investment company and a person that is affiliated solely by reason of having a common (or affiliated) investment adviser, common directors, and/or common officers. Pursuant to
the Rule 17a-7 procedures and consistent with guidance issued by the SEC, the Funds Chief Compliance Officer (CCO) prepares a quarterly summary of all such transactions for submission to the
Board, together with the CCOs written representation that all such 17a-7 transactions were effected in accordance with the Funds Rule 17a-7 procedures. For
the year ended May 31, 2020, no 17a-7 transactions were entered into by the Fund.
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Notes to Financial Statements
(continued)
4. Portfolio Securities
The aggregate cost of purchases and proceeds from sales of portfolio securities (excluding short-term investments and U.S. Government securities) for the year ended
May 31, 2020, were $414,302,214 and $405,419,292, respectively.
A
summary of the cost of purchases and proceeds from sales of shares of an affiliated investment for the year ended May 31, 2020, is presented as follows:
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Value,
Beginning
of Year
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Cost of
Purchases
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Proceeds
from Sales
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Change in
Unrealized
Gain
(Loss)
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Realized
Gain
(Loss)
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Value,
End of Year
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Shares,
End
of Year
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Income
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PGIM Core Ultra Short Bond Fund*
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$20,416,725
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$273,354,935
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$284,700,056
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$
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$
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$9,071,604
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9,071,604
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$636,656
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*
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The Fund did not have any capital gain distributions during the reporting period.
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5. Distributions and Tax Information
Distributions to shareholders, which are determined in accordance with federal income
tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-date.
For the year ended May 31, 2020, the tax character of dividends paid by the Fund was $40,696,044 of ordinary income and $708,577 of tax return of capital. For
the year ended May 31, 2019, the tax character of dividends paid by the Fund was $35,418,411 of ordinary income.
As of May 31, 2020, there were no undistributed earnings on a tax basis.
The United States federal income tax basis of the Funds investments and the net
unrealized depreciation as of May 31, 2020 were as follows:
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Tax Basis
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Gross
Unrealized
Appreciation
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Gross
Unrealized
Depreciation
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Net
Unrealized
Depreciation
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$717,398,714
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$13,461,669
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$(64,957,812)
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$(51,496,143)
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The difference between book basis and tax basis is
primarily attributable to deferred losses on wash sales, swaps, differences in the treatment of premium amortization for book and tax purposes and other book to tax differences.
For federal income tax purposes, the Fund had a capital loss carryforward as of May 31, 2020 of approximately
$80,888,000 which can be carried forward for an unlimited period. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses. The Fund utilized approximately $7,055,000 of its
capital loss carryforward to offset net taxable gains realized in the fiscal year ended May 31, 2020.
The Manager has analyzed the Funds tax positions taken on federal, state and local income tax returns for all open tax years and has concluded that no provision for income tax is required in the Funds
financial statements for the current reporting period. Since tax authorities can examine previously filed tax returns, the Funds U.S. federal and state tax returns for each of the four fiscal years up to the most recent fiscal year ended
May 31, 2020 are subject to such review.
6. Capital and Ownership
There are 1 billion shares of $0.001 par value common stock
authorized. As of May 31, 2020,
Prudential owned 10,085 shares of the
Fund.
For the year ended May 31, 2020, the Fund did not issue any
shares of common stock in connection with the Funds dividend reinvestment plan.
7. Borrowings and Re-hypothecation
The Fund currently is a party to a committed credit facility (the credit facility) with a financial institution. The credit facility provides for a
maximum commitment of $240 million. Interest on any borrowings under the credit facility is payable at the negotiated rates. The Funds obligations under the credit facility are secured by the assets of the Fund segregated for the purpose
of securing the amount borrowed. The purpose of the credit facility is to provide the Fund with portfolio leverage and to meet its general cash flow requirements.
The Fund utilized the credit facility during the year ended May 31, 2020. The
average daily outstanding loan balance for the 366 days that the Fund utilized the facility during the period was $180,000,000, borrowed at a weighted average interest rate of 2.41%. The maximum loan balance outstanding during the period was
$180,000,000. At May 31, 2020, the Fund had an outstanding loan balance of $180,000,000.
Re-hypothecation: The credit facility agreement permits, subject to certain conditions, the financial institution to
re-hypothecate, up to the amount outstanding under the facility, portfolio securities segregated by the Fund as collateral. The Fund continues to receive interest on
re-hypothecated securities. The Fund also has the right under the agreement to recall the re-hypothecated securities from the financial institution on demand. If the
financial institution fails to deliver the recalled security in a timely manner, the Fund will be compensated by the financial institution for any fees or losses related to the failed delivery or, in the event a recalled security will not be
returned by the financial institution, the Fund, upon notice to the financial institution, may reduce the loan balance outstanding by the
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Notes to Financial Statements
(continued)
value of the recalled security failed to be returned plus accrued interest. The Fund will receive a portion of the fees earned by the financial institution in
connection with the rehypothecation of portfolio securities. Such earnings are disclosed in the Statement of Operations under Other income. As of May 31, 2020, there were no earnings to be disclosed.
8. Risks of Investing in the Fund
The Funds risks include, but are not limited to, some or all of the risks
discussed below:
Bond Obligations Risk: The Funds holdings,
share price, yield and total return may fluctuate in response to bond market movements. The value of bonds may decline for issuer-related reasons, including management performance, financial leverage and reduced demand for the issuers goods
and services. Certain types of fixed-income obligations also may be subject to call and redemption risk, which is the risk that the issuer may call a bond held by the Fund for redemption before it matures and the Fund may not be able to
reinvest at the same level and therefore would earn less income.
Derivatives Risk: Derivatives involve special risks and costs and may result in losses to the Fund. The successful use of derivatives requires sophisticated
management, and, to the extent that derivatives are used, the Fund will depend on the subadvisers ability to analyze and manage derivative transactions. The prices of derivatives may move in unexpected ways, especially in abnormal market
conditions. Some derivatives are leveraged and therefore may magnify or otherwise increase investment losses to the Fund. Other risks arise from the potential inability to terminate or sell derivatives positions. A liquid secondary
market may not always exist for the Funds derivatives positions. In fact, many OTC derivative instruments will not have liquidity beyond the counterparty to the instrument. OTC derivative instruments also involve the risk that the other party
will not meet its obligations to the Fund.
Interest Rate Risk: The
value of an investment may go down when interest rates rise. A rise in rates tends to have a greater impact on the prices of longer term or duration securities. When interest rates fall, the issuers of debt obligations may prepay principal more
quickly than expected, and the Fund may be required to reinvest the proceeds at a lower interest rate. This is referred to as prepayment risk. When interest rates rise, debt obligations may be repaid more slowly than expected, and the
value of the Funds holdings may fall sharply. This is referred to as extension risk. The Fund may face a heightened level of interest rate risk as a result of the U.S. Federal Reserve Boards policies. The Funds
investments may lose value if short-term or long-term interest rates rise sharply or in a manner not anticipated by the subadviser.
Junk Bonds Risks: High-yield, high-risk bonds have predominantly speculative characteristics, including
particularly high credit risk. Junk bonds tend to be less liquid than higher-rated securities. The liquidity of particular issuers or industries within a particular investment category may shrink or disappear suddenly and without warning. The non-investment grade bond market can experience sudden and sharp price swings and become illiquid due to a variety of factors, including changes in economic forecasts, stock market activity, large sustained sales by
major investors, a high profile default or a change in the markets psychology.
Leverage Risk: The Fund may seek to enhance the level of its current distributions to holders of common stock through the use of leverage. The Fund may use leverage through borrowings, including loans from
certain financial institutions. The Fund may borrow in amounts up to 33 1/3% (as determined immediately after borrowing) of the Funds investable assets. The use of leverage can create special risks. There can be no assurance that any
leveraging strategy the Fund employs will be successful during any period in which it is employed.
Liquidity Risk: The Fund may invest in instruments that trade in lower volumes and are less liquid than other investments. Liquidity risk exists when particular investments made by the Fund are difficult to
purchase or sell. Liquidity risk includes the risk that the Fund may make investments that may become less liquid in response to market developments or adverse investor perceptions. Investments that are illiquid or that trade in lower volumes may be
more difficult to value. If the Fund is forced to sell these investments to pay redemption proceeds or for other reasons, the Fund may lose money. In addition, when there is no willing buyer and investments may not reasonably be expected to be sold
or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment, the Fund may incur higher transaction costs when executing trade orders of a given
size. The reduction in dealer market-making capacity in the fixed-income markets that has occurred in recent years also has the potential to reduce liquidity. An inability to sell a portfolio position can adversely affect the Funds value or
prevent the Fund from being able to take advantage of other investment opportunities.
Market and Credit Risk: Securities markets may be volatile and the market prices of the Funds securities may decline. Securities fluctuate in price based on changes in an issuers financial
condition and overall market and economic conditions. If the market prices of the securities owned by the Fund fall, the value of an investment in the Fund will decline. Additionally, the Fund may also be exposed to credit risk in the event that an
issuer or guarantor fails to perform or that an institution or entity with which the Fund has unsettled or open transactions defaults.
Market Disruption and Geopolitical Risks: International wars or conflicts and geopolitical developments in foreign countries, along with instability in
regions such as Asia, Eastern Europe, and the Middle East, possible terrorist attacks in the United States or around the world, public health epidemics such as the outbreak of infectious diseases like the recent
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Notes to Financial Statements
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outbreak of coronavirus globally or the 20142016 outbreak in West Africa of the Ebola virus, and other similar events could adversely affect the U.S. and
foreign financial markets, including increases in market volatility, reduced liquidity in the securities markets and government intervention, and may cause further long-term economic uncertainties in the United States and worldwide generally.
Risks of Investments in Bank Loans: The Funds ability to
receive payments of principal and interest and other amounts in connection with loans (whether through participations, assignments or otherwise) will depend primarily on the financial condition of the borrower. The failure by the Funds
scheduled interest or principal payments on a loan because of a default, bankruptcy or any other reason would adversely affect the income of the Fund and would likely reduce the value of its assets. Even with loans secured by collateral, there is
the risk that the value of the collateral may decline, may be insufficient to meet the obligations of the borrower, or be difficult to liquidate. In the event of a default, the Fund may have difficulty collecting on any collateral and would not have
the ability to collect on any collateral for an uncollateralized loan. Further, the Funds access to collateral, if any, may be limited by bankruptcy laws.
9. Recent Accounting Pronouncements and Reporting Updates
In August 2018, the FASB issued Accounting Standards Update (ASU) No. 2018-13, which changes certain fair
value measurement disclosure requirements. The new ASU, in addition to other modifications and additions, removes the requirement to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and
the Funds policy for the timing of transfers between levels. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Manager has
evaluated the implications of certain provisions of the ASU and has adopted the aspects related to the removal and modification of certain fair value measurement disclosures under the ASU. The Manager continues to evaluate certain other provisions
of the ASU and does not expect a material impact to financial statement disclosures.
10. Subsequent Event
Dividends to Shareholders: On May 28, 2020, the Fund declared monthly dividends of $0.105 per share payable on June 30, 2020, July 31, 2020
and August 31, 2020, respectively, to shareholders of record on June 12, 2020, July 17th 2020 and August 14, 2020, respectively. The ex-dates are June 11, 2020, July 16, 2020 and
August 13, 2020, respectively.
Report of Independent Registered Public Accounting Firm
To the Shareholders of the Fund and Board of Directors
PGIM High Yield Bond Fund, Inc.:
Opinion on the Financial Statements
We have audited the
accompanying statement of assets and liabilities of PGIM High Yield Bond Fund, Inc. (formerly PGIM Short Duration High Yield Fund, Inc.) (the Fund), including the schedule of investments, as of May 31, 2020, the related statement of operations
and cash flows for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the
financial highlights for each of the years or periods indicated therein. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of May 31, 2020, the
results of its operations and cash flows for the year then ended, changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years or
periods indicated therein, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the
Funds management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to
assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of May 31, 2020, by correspondence with the custodian, transfer agent, and brokers, or
by other appropriate auditing procedures when replies were not received. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial
statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more PGIM
and/or Prudential Retail investment companies since 2003.
New York, New
York
July 20, 2020
Tax Information
(unaudited)
For the year ended May 31, 2020, the Fund reports the maximum amount allowable but not less than 83.37% as interest related dividends in accordance with
Section 871(k)(1) and 881(e)(1) of the Internal Revenue Code.
In
January 2021, you will be advised on IRS Form 1099-DIV or substitute 1099-DIV as to the federal tax status of distributions received by you in calendar year 2020.
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PGIM High Yield Bond Fund, Inc.
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57
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Other Information
(unaudited)
Dividend Reinvestment Plan. Unless a holder of common stock elects to receive cash by contacting Computershare Trust Company, N.A. (the Plan
Administrator), all dividends declared on common stock will be automatically reinvested by the Plan Administrator pursuant to the Funds Automatic Dividend Reinvestment Plan (the Plan), in additional common stock. The holders
of common stock who elect not to participate in the Plan will receive all dividends and other distributions (together, a Dividend) in cash paid by check mailed directly to the stockholder of record (or, if the common stock is held in
street or other nominee name, then to such nominee) by the Plan Administrator as dividend disbursing agent. Participation in the Plan is completely voluntary and may be terminated or resumed at any time without penalty by notice if received and
processed by the Plan Administrator prior to the Dividend record date; otherwise such termination or resumption will be effective with respect to any subsequently declared Dividend. Such notice will be effective with respect to a particular
Dividend. Some brokers may automatically elect to receive cash on behalf of the holders of common stock and may re-invest that cash in additional common stock.
The Plan Administrator will open an account for each common stockholder under the Plan
in the same name in which such common stockholders common stock is registered. Whenever the Fund declares a Dividend payable in cash, non-participants in the Plan will receive cash and participants in
the Plan will receive the equivalent in common stock. The common stock will be acquired by the Plan Administrator for the participants accounts, depending upon the circumstances described below, either (i) through receipt of additional
unissued but authorized common stock from the Fund (Newly Issued common stock) or (ii) by purchase of outstanding common stock on the open market (Open-Market Purchases) on the NYSE or elsewhere. If, on the payment date
for any Dividend, the closing market price of the common stock plus per share fees (as defined below) is equal to or greater than the NAV per share of common stock (such condition being referred to as market premium), the Plan
Administrator will invest the Dividend amount in Newly Issued common stock on behalf of the participants. The number of Newly Issued common stock to be credited to each participants account will be determined by dividing the dollar amount of
the Dividend by the NAV per share of common stock on the payment date, provided that, if the NAV per share of common stock is less than or equal to 95% of the closing market price per share of common stock on the payment date, the dollar amount of
the Dividend will be divided by 95% of the closing market price per common stock on the payment date. If, on the payment date for any Dividend, the NAV per share of common stock is greater than the closing market value per share of common stock plus
per share fees (such condition being referred to as market discount), the Plan Administrator will invest the Dividend amount in shares of common stock acquired on behalf of the participants in Open-Market Purchases.
Per share fees include any applicable brokerage commissions the Plan
Administrator is required to pay.
In the event of a market discount on the payment date for any Dividend, the Plan Administrator will have until the
last business day before the next date on which the common stock trades on an ex-dividend basis or 30 days after the payment date for such Dividend, whichever is sooner (the Last Purchase
Date), to invest the Dividend amount in common stock acquired in Open-Market Purchases on behalf of participants. If, before the Plan Administrator has completed its Open-Market Purchases, the market price per share of common stock exceeds the
NAV per share of common stock, the average per share purchase price paid by the Plan Administrator for common stock may exceed the NAV per share of the common stock, resulting in the acquisition of fewer shares of common stock than if the Dividend
had been paid in Newly Issued common stock on the Dividend payment date. Because of the foregoing difficulty with respect to Open-Market Purchases, the Plan provides that if the Plan Administrator is unable to invest the full Dividend amount in
Open-Market Purchases during the purchase period or if the market discount shifts to a market premium during the purchase period, the Plan Administrator may cease making Open-Market Purchases and may invest the uninvested portion of the Dividend
amount in Newly Issued common stock at the NAV per share of common stock at the close of business on the Last Purchase Date, provided that, if the NAV is less than or equal to 95% of the then current market price per share of common stock, the
dollar amount of the Dividend will be divided by 95% of the market price on the payment date for purposes of determining the number of shares issuable under the Plan.
The Plan Administrator maintains all stockholder accounts in the Plan and furnishes
written confirmation of all transactions in the accounts, including information needed by stockholders for tax records. Common stock in the account of each Plan participant will be held by the Plan Administrator on behalf of the Plan participant,
and each stockholder proxy will include those shares purchased or received pursuant to the Plan. The Plan Administrator will forward all proxy solicitation materials to participants and vote proxies for shares held under the Plan in accordance with
the instructions of the participants.
In the case of the holders of common
stock such as banks, brokers or nominees that hold shares of common stock for others who are the beneficial owners, the Plan Administrator will administer the Plan on the basis of the number of shares of common stock certified from time to time by
the record stockholders name and held for the account of beneficial owners who participate in the Plan.
The Plan Administrators service fee, if any, and expenses for administering the plan will be paid for by the Fund. If a participant elects by written, Internet or telephonic notice to the Plan Administrator
to have the Plan Administrator sell part or all of the shares held by the Plan Administrator in the participants account and remit the proceeds to the participant, the Plan Administrator is authorized to deduct a $15.00 transaction fee plus a
$0.12 per share fee. If a participant elects to sell his or her shares of common stock, the Plan
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PGIM High Yield Bond Fund, Inc.
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59
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Other Information
(unaudited) (continued)
Administrator
will process all sale instructions received no later than five business days after the date on which the order is received by the Plan Administrator, assuming the relevant markets are open and sufficient market liquidity exists (and except where
deferral is required under applicable federal or state laws or regulations). Such sale will be made through the Plan Administrators broker on the relevant market and the sale price will not be determined until such time as the broker completes
the sale. In every case the price to the participant shall be the weighted average sale price obtained by the Plan Administrators broker net of fees for each aggregate order placed by the participant and executed by the broker. To maximize
cost savings, the Plan Administrator will seek to sell shares in round lot transactions. For this purpose the Plan Administrator may combine a participants shares with those of other selling participants.
There will be no brokerage charges with respect to shares of common stock issued
directly by the Fund. However, each participant will pay a pro rata share of brokerage commissions incurred in connection with Open-Market Purchases. Each participant will be charged a per share fee (currently $0.05 per share) on all Open-Market
Purchases. The automatic reinvestment of Dividends will not relieve participants of any federal, state or local income tax that may be payable (or required to be withheld) on such Dividends. See Tax Matters. Participants that request a
sale of common stock through the Plan Administrator are subject to brokerage commissions.
Each participant may terminate the participants account under the Plan by so notifying the Plan Administrator via the Plan Administrators website at www.computershare.com/ investor, by filling out the
transaction request form located at the bottom of the participants Statement and sending it to the Plan Administrator or by calling the Plan Administrator. Such termination will be effective immediately if the participants notice is
received by the Plan Administrator prior to any dividend or distribution record date. Upon any withdrawal or termination, the Plan Administrator will cause to be delivered to each terminating participant a statement of holdings for the appropriate
number of the Funds whole book-entry shares of common stock and a check for the cash adjustment of any fractional share at the market value of the Funds shares of common stock as of the close of business on the date the termination is
effective less any applicable fees. In the event a participants notice of termination is on or after a record date (but before payment date) for an account whose dividends are reinvested, the Plan Administrator, in its sole discretion, may
either distribute such dividends in cash or reinvest them in shares of common stock on behalf of the terminating participant. In the event reinvestment is made, the Plan Administrator will process the termination as soon as practicable, but in no
event later than five business days after the reinvestment is completed. The Plan may be terminated by 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.
The Fund reserves the right to amend or terminate the Plan. There is no direct service charge to participants with
regard to purchases in the Plan; however, the Fund reserves the right to amend the Plan to include a service charge payable by the participants.
All correspondence or questions concerning the Plan should be directed to the Plan Administrator, Computershare Trust Company, N.A., P.O. Box 43078, Providence,
RI 02940-3078 or by calling (toll free) 800-451-6788.
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PGIM High Yield Bond Fund, Inc.
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61
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Bylaws Amendment
On July 9,
2020, the Board of Directors of the Fund amended the Funds Bylaws, effective immediately, to elect to be subject to the Maryland Control Share Acquisition Act (MCSAA).
The MCSSA provides that a holder of control shares of a Maryland
corporation acquired in a control share acquisition may not exercise voting rights with respect to control shares, except to the extent approved at a meeting of stockholders by a vote of
two-thirds of all votes entitled to be cast on the matter, not including votes entitled to be cast by the person who has made or proposes to make a control share acquisition (an Acquiring Person) or by
officers or employees-directors of the corporation. Generally, control shares are shares that, when aggregated with shares already owned by an Acquiring Person or which the Acquiring Person is entitled to exercise voting power, would
entitle the Acquiring Person to exercise 10% or more, 33-1/3% or more, or a majority of the total voting power of shares entitled to vote in the election of directors.
The MCSSA will only apply to control shares acquired after July 9,
2020, the date that the Fund elected to be subject to the MCSSA by the Bylaws amendment.
The above description of the provisions of the MCSSA is only a summary and does not purport to be complete. Stockholders should refer to the actual provisions of the MCSSA for more information, including key terms,
various exclusions from the MCSSAs scope, and the procedure by which stockholders may approve the reinstatement of voting rights to holders of control shares.
Supplemental Proxy Information
(unaudited)
An Annual Meeting of Stockholders was held on March 9, 2020. At such meeting the stockholders elected the following Class II Directors:
Approval of Directors
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Class II
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Affirmative Votes Cast
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Shares Against/Withheld
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Kevin J. Bannon
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27,408,814.000
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1,515,521.000
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Keith F. Hartstein
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27,327,377.000
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1,596,958.000
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Grace C. Torres
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23,814,193.000
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5,110,142.000
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PGIM High Yield Bond Fund, Inc.
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63
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Management of the Fund
(unaudited)
Information about the Directors and Officers of the Fund is set forth below. Directors who are not deemed to be interested persons of the Fund, as
defined in the Investment Company Act of 1940 (the 1940 Act), are referred to as Independent Directors. Directors who are deemed to be interested persons of the Fund are referred to as Interested
Directors. The Directors are responsible for the overall supervision of the operations of the Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Board in turn elects the Officers, who are
responsible for administering the day-to-day operations of the Fund.
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Independent Directors
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Name, Address, Age
Position(s) Portfolios
Overseen
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Principal Occupation(s) During Past
Five Years
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Term of
Office &
Length of
Time Served
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Other Directorships
Held
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Ellen S. Alberding (62)
Director
Portfolios Overseen: 95
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President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system)
(since 2011); Trustee, Skills for Americas Future (national initiative to connect employers to community colleges) (since 2011); Trustee, National Park Foundation (charitable foundation for national park system) (since 2009); Trustee, Economic
Club of Chicago (since 2009).
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Since 2013 (Class I)
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None.
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Kevin J. Bannon (67)
Director
Portfolios Overseen: 95
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Managing Director (April 2008-May 2015) and Chief Investment Officer (October 2008-November 2013) of Highmount
Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; President (May 2003-May 2007) of BNY Hamilton
Family of Mutual Funds.
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Since 2011 (Class II)
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Director of Urstadt Biddle Properties (since September 2008).
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Linda W. Bynoe (67)
Director
Portfolios Overseen: 95
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President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Ltd. (management
consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co. (broker-dealer).
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Since 2011 (Class III)
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Director of Anixter International, Inc. (communication products distributor) (since January 2006);
Director of Northern Trust Corporation (financial services) (since April 2006); Trustee of Equity Residential (residential real estate) (since December 2009).
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PGIM High Yield Bond Fund, Inc.
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Management of the Fund
(continued)
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Independent Directors
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Name, Address, Age
Position(s) Portfolios
Overseen
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Principal Occupation(s) During Past
Five Years
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Term of
Office &
Length of
Time Served
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Other Directorships
Held
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Barry H. Evans (59)
Director
Portfolios Overseen: 94
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Retired; formerly President (2005-2016), Global Chief Operating Officer (2014-2016), Chief Investment Officer Global Head of Fixed Income
(1998-2014), and various portfolio manager roles (1986-2006), Manulife Asset Management U.S.
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Since 2017
(Class I)
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Director, Manulife Trust Company (since 2011); formerly Director, Manulife Asset Management Limited
(2015-2017); formerly Chairman of the Board of Directors of Manulife Asset Management U.S. (2005-2016); formerly Chairman of the Board, Declaration Investment Management and Research (2008-2016).
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Keith F. Hartstein (63)
Director & Independent Chair
Portfolios Overseen:
95
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Retired; Member (since November 2014) of the Governing Council of the Independent Directors Council (organization of independent mutual fund
directors); formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC
(asset management); Chairman, Investment Company Institutes Sales Force Marketing Committee (2003-2008).
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Since 2013 (Class II)
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None.
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Laurie Simon Hodrick (57)
Director
Portfolios Overseen: 94
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A. Barton Hepburn Professor Emerita of Economics in the Faculty of Business, Columbia Business School (since 2018); Visiting Professor of Law, Stanford
Law School (since 2015); Visiting Fellow at the Hoover Institution, Stanford University (since 2015); Sole Member, ReidCourt LLC (since 2008) (a consulting firm); formerly A. Barton Hepburn Professor of Economics in the Faculty of Business, Columbia
Business School (1996-2017); formerly Managing Director, Global Head of Alternative Investment Strategies, Deutsche Bank (2006-2008).
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Since 2017
(Class III)
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Independent Director, Synnex Corporation (since April 2019) (information technology); Independent
Director, Kabbage, Inc. (since July 2018) (financial services); Independent Director, Corporate Capital Trust (2017-2018) (a business development company).
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Visit our website at pgiminvestments.com
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Independent Directors
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Name, Address, Age
Position(s) Portfolios
Overseen
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Principal Occupation(s) During Past
Five Years
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Term of
Office &
Length of
Time Served
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Other Directorships
Held
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Michael S. Hyland, CFA (74)
Director
Portfolios Overseen: 95
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Retired (since February 2005); formerly Senior Managing Director (July 2001-February 2005) of Bear Stearns & Co, Inc.; Global Partner, INVESCO
(1999-2001); Managing Director and President of Salomon Brothers Asset Management (1989-1999).
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Since 2011 (Class III)
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None.
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Brian K. Reid (58)
Board Member
Portfolios Overseen: 94
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Retired; formerly Chief Economist for the Investment Company Institute (ICI) (2005-2017); formerly Senior Economist and Director of Industry and
Financial Analysis at the ICI (1998-2004); formerly Senior Economist, Industry and Financial Analysis at the ICI (1996-1998); formerly Staff Economist at the Federal Reserve Board (1989-1996); Director, ICI Mutual Insurance Company
(2012-2017).
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Since 2018
(Class I)
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None
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Grace C. Torres (60)
Director
Portfolios Overseen: 94
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Retired; formerly Treasurer and Principal Financial and Accounting Officer of the PGIM Funds, Target Funds, Advanced Series Trust, Prudential Variable
Contract Accounts and The Prudential Series Fund (1998-June 2014); Assistant Treasurer (March 1999-June 2014) and Senior Vice President (September 1999-June 2014) of PGIM Investments LLC; Assistant Treasurer (May 2003-June 2014) and Vice President
(June 2005-June 2014) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (May 2003-June 2014) of Prudential Annuities Advisory Services, Inc.
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Since 2015 (Class II)
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Formerly Director (July 2015-January 2018) of Sun Bancorp, Inc. N.A. and Sun National Bank; Director
(since January 2018) of OceanFirst Financial Corp. and OceanFirst Bank.
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PGIM High Yield Bond Fund, Inc.
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Management of the Fund
(continued)
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Interested Directors
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Name, Address, Age
Position(s) Portfolios
Overseen
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Principal Occupation(s) During Past
Five Years
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Term of
Office &
Length of
Time Served
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Other Directorships
Held
|
Stuart S. Parker (57)
Director & President
Portfolios Overseen:
95
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President of PGIM Investments LLC (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December
2012); Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of PGIM Investments LLC (June 2005-December 2011).
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Since 2015 (Class I)
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None.
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Scott E. Benjamin (47)
Director & Vice President
Portfolios Overseen:
95
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Executive Vice President (since June 2009) of PGIM Investments LLC; Executive Vice President (June 2009-June 2012) and Vice President (since June 2012)
of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, PGIM Investments (since February 2006); Vice President of
Product Development and Product Management, PGIM Investments (2003-2006).
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Since 2011 (Class III)
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None.
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Fund Officers(a)
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Name, Address and Age
Position with Fund
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Length of
Time Served
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Principal Occupation(s) During Past Five Years
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Claudia DiGiacomo (45)
Chief Legal Officer
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Since 2011
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Chief Legal Officer of PGIM Investment LLC (since June 2020); Vice President and Corporate Counsel of The
Prudential Insurance Company of America (since January 2005); formerly Vice President and Assistant Secretary of PGIM Investments LLC (December 2005 - June 2020); formerly Associate at Sidley Austin Brown & Wood LLP
(1999-2004).
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Dino Capasso (45)
Chief Compliance Officer
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Since 2018
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Chief Compliance Officer (July 2019-Present) of PGIM Investments LLC; Chief Compliance Officer (July 2019-Present) of the PGIM Funds, Target Funds,
Advanced Series Trust, The Prudential Series Fund, Prudentials Gibraltar Fund, Inc., PGIM Global High Yield Fund, Inc., PGIM High Yield Bond Fund, Inc., and PGIM Jennison MLP Income Fund, Inc.; Vice President and Deputy Chief Compliance
Officer (June 2017-2019) of PGIM Investments LLC; formerly, Senior Vice President and Senior Counsel (January 2016-June 2017), and Vice President and Counsel (February 2012-December 2015) of Pacific Investment Management Company
LLC.
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Visit our website at pgiminvestments.com
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Fund Officers(a)
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Name, Address and Age
Position with Fund
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Length of
Time Served
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Principal Occupation(s) During Past Five Years
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Andrew R. French (57)
Secretary
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Since 2011
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Vice President (since February 2010) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant
Secretary (since January 2007) of PGIM Investments LLC; Vice President and Assistant Secretary (since January 2007) of PMFS.
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Jonathan D. Shain (61)
Assistant Secretary
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Since 2011
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Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of PGIM Investments
LLC; Vice President and Assistant Secretary (since February 2001) of PMFS; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.
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Diana N. Huffman (38)
Assistant Secretary
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Since 2019
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Vice President and Corporate Counsel (since September 2015) of Prudential; formerly Associate at Willkie Farr & Gallagher LLP
(2009-2015).
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Melissa Gonzalez (40)
Assistant Secretary
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Since 2020
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Vice President and Corporate Counsel (since September 2018) of Prudential; formerly Director and Corporate Counsel (March 2014-September 2018) of
Prudential.
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Patrick E. McGuinness (34)
Assistant Secretary
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Since 2020
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Director and Corporate Counsel (since May 2020) of PGIM Investments LLC; formerly Director and Corporate Counsel (2017-2020) of The Prudential
Insurance Company of America; and Corporate Counsel (2012-2017) of IIL, Inc.
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Christian J. Kelly (45)
Treasurer & Principal Financial and Accounting Officer
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Since 2019
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Vice President, Head of Fund Administration of PGIM Investments LLC (since November 2018); formerly, Director of Fund Administration of Lord
Abbett & Co. LLC (2009-2018), Treasurer and Principal Accounting Officer of the Lord Abbett Family of Funds (2017-2018); Director of Accounting, Avenue Capital Group (2008-2009); Senior Manager, Investment Management Practice of
Deloitte & Touche LLP (1998-2007).
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Deborah Conway (51) Assistant Treasurer
|
|
Since 2019
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Vice President (since 2017) and Director (2007-2017), within PGIM Investments Fund Administration.
|
Elyse M. McLaughlin (46)
Assistant Treasurer
|
|
Since 2019
|
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Vice President (since 2017) and Director (2011-2017), within PGIM Investments Fund
Administration.
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Lana Lomuti (52)
Assistant Treasurer
|
|
Since 2014
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Vice President (since 2007) and Director (2005-2007), within PGIM Investments Fund Administration; formerly
Assistant Treasurer (December 2007-February 2014) of The Greater China Fund, Inc.
|
Russ Shupak (46)
Assistant Treasurer
|
|
Since 2019
|
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Vice President (since 2017) and Director (2013-2017) within PGIM Investments Fund Administration.
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(a)
|
Excludes Mr. Parker and Mr. Benjamin, Interested Directors of the Fund who also serve as President and Vice President, respectively.
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PGIM High Yield Bond Fund, Inc.
|
Management of the Fund
(continued)
Explanatory Notes to Tables:
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Directors are deemed to be Interested, as defined in the 1940 Act, by reason of their affiliation with PGIM Investments LLC and/or an affiliate of
PGIM Investments LLC.
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Unless otherwise noted, the address of all Directors and Officers is c/o PGIM Investments LLC, 655 Broad Street, Newark, New Jersey 07102-4077.
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The Board of Directors is divided into three classes, each of which has three-year terms. Class I term expires in 2022, Class II term expires in 2023
and Class III term expires in 2021. Officers are generally elected by the Board to one-year terms.
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There is no set term of office for Directors or Officers. The Directors have adopted a retirement policy, which calls for the retirement of Directors on
December 31 of the year in which they reach the age of 75.
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Other Directorships Held includes only directorships of companies required to register or file reports with the SEC under the Securities Exchange Act
of 1934 (that is, public companies) or other investment companies registered under the 1940 Act.
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Portfolios Overseen includes all investment companies managed by PGIM Investments LLC. The investment companies for which PGIM Investments LLC serves
as manager include the PGIM Funds, The Prudential Variable Contract Accounts, Target Mutual Funds, PGIM High Yield Bond Fund, Inc., PGIM Global High Yield Fund, Inc., The Prudential Series Fund, Prudentials Gibraltar Fund, Inc. and the
Advanced Series Trust.
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|
Visit our website at pgiminvestments.com
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Privacy Notice
Prudential values your business and your trust. We respect the privacy of your
personal information and take our responsibility to protect it seriously. This privacy notice is provided on behalf of the Prudential companies listed at the end of this notice (Prudential), and applies to our current and former customers. This
notice describes how we treat the information we receive about you, including the ways in which we will share your personal information within Prudential and your right to opt out of such sharing.
Protecting Your Personal Information
We maintain physical, electronic and procedural safeguards to protect your personal information. The people who are authorized to have access to your personal
information need it to do their jobs, and we require them to keep that information secure and confidential.
Personal Information We Collect
We collect your personal information when you fill out applications and other
forms, when you enter personal details on our websites, when you respond to our emails, and when you provide us information over the telephone. We also collect personal information that others give us about you. This information includes, for
example:
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address, email address, telephone number, and other contact information
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income and financial information
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medical information for insurance applications
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consumer reports from consumer reporting agencies
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participant information from organizations that purchase products or services from us for the benefit of their members or employees
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Using Your Information
We use your personal information for various business purposes, including:
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normal everyday business purposes, such as providing services to you and administrating your account or policy
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business research and analysis
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marketing products and services of Prudential and other companies in which you may be interested
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Sharing Your Information
We may share your personal
information, including information about your transactions and experiences, among Prudential companies and with other non-Prudential companies who perform services for us or on our behalf, for our everyday
business purposes, such as providing services to you and administering your account or policy. We may also share your personal information with another financial institution if you agree that your account or policy can be transferred to that
financial company.
We may share your personal information among Prudential companies so that the Prudential companies can market their
products and services to you. We may also share consumer report information among Prudential companies which may include information about you from credit reports and certain information that we receive from you and from consumer reporting agencies
or other third parties. You can limit this sharing by following the instructions described in this notice. For those customers who have one of our products through a plan sponsored by an employer or other organization, we will share your personal
information in a manner consistent with the terms of the plan agreement or consistent with our agreement with you.
We may also share your personal information as permitted or required by law, including, for example, to law enforcement officials and regulators, in response to subpoenas, and to prevent fraud.
Unless you agree otherwise, we do not share your personal information with non-Prudential companies for them to market their products or services to you. We may tell you about a product or service that other companies offer and, if you respond, that company will know that we selected you
to receive the information.
Limiting Our SharingOpt Out/Privacy
Choice
You may tell us not to share your personal information among Prudential companies for marketing purposes, and not to share consumer report
information among Prudential companies, by opting out of such sharing. To limit our sharing for these purposes:
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visit us online at: www.prudential.com/privacyoptout
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call us at: 1-877-248-4019
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If you previously told us since 2016 not to share
your personal information among Prudential companies for marketing purposes, or not to share your consumer report information among Prudential companies, you do not need to tell us not to share your information again.
You are not able to limit our ability to share your personal information among
Prudential companies and with other non-Prudential companies for servicing and administration purposes.
Questions
If you have any questions about how we protect,
use, and share your personal information or about this privacy notice, please call us. The toll-free number is 1-877-248-4019.
We reserve the right to modify this notice at any time. This notice is
also available anytime at www.prudential.com.
This notice is being
provided to customers and former customers of the Prudential companies listed below.
Insurance Companies and Insurance Company Separate Accounts
The Prudential Insurance Company of America;
Prudential Annuities Life Assurance Corporation; Pruco Life Insurance Company; Pruco Life Insurance Company of New Jersey; Prudential Retirement Insurance and Annuity Company (PRIAC); CG Variable Annuity
Account I and CG Variable Annuity Account II; Prudential Legacy Insurance Company of New Jersey; All insurance company separate accounts that include the following names or are otherwise
identified as maintained by an entity that includes the following names: Prudential, Pruco, or PRIAC
Insurance Agencies
Prudential Insurance Agency, LLC; Mullin TBG Insurance Agency Services, LLC; Assurance IQ,
LLC.
Broker-Dealers and Registered Investment Advisers
AST Investment Services, Inc.; Prudential Annuities Distributors, Inc.; Global Portfolio Strategies, Inc.; Pruco Securities, LLC; PGIM, Inc.; Prudential Investment
Management Services LLC; PGIM Investments LLC; Prudential Private Placement Investors, L.P., Prudential Customer Solutions LLC; QMA LLC; Jennison Associates LLC
Bank and Trust Companies
Prudential Bank & Trust,
FSB; Prudential Trust Company
Investment Companies and Other Investment
Vehicles
PGIM Funds; Prudential Capital Partners, L.P.; Advanced Series Trust; Prudential Private Placement Investors, Inc.; All funds that include
the following names: Prudential, PCP, PGIM, or PCEP
Other Companies
Prudential Workplace Solutions Group Services, LLC; Prudential Mutual Fund Services LLC
Vermont Residents: We will not share information about your creditworthiness among Prudential companies, other than as permitted
by Vermont law, unless you authorize us to make those disclosures.
Prudential, the Prudential logo and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions
worldwide.
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∎ MAIL
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∎ MAIL (OVERNIGHT)
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∎ TELEPHONE
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Computershare
P.O. Box 30170
College Station, TX
77842-3170
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Computershare
211 Quality Circle
Suite 210
College Station, TX 77845
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(800) 451-6788
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∎ WEBSITE
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pgiminvestments.com
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PROXY VOTING
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The Board of Directors of the Fund has delegated to the Funds subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A
description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 451-6788 or by visiting the Securities and Exchange Commissions website at sec.gov. Information regarding how the
Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Funds website and on the Securities and Exchange Commissions website.
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DIRECTORS
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Ellen S. Alberding Kevin J. Bannon
Scott E. Benjamin Linda W. Bynoe
Barry H. Evans Keith F. Hartstein Laurie Simon Hodrick Michael S. Hyland
Stuart S. Parker Brian K. Reid
Grace C. Torres
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OFFICERS
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Stuart S. Parker, President Scott E. Benjamin, Vice President Christian J. Kelly, Treasurer and Principal Financial and Accounting Officer Claudia DiGiacomo, Chief
Legal Officer Dino Capasso, Chief Compliance Officer Charles H. Smith, Anti-Money
Laundering Compliance Officer Andrew R. French, Secretary Jonathan D. Shain, Assistant
Secretary Melissa Gonzalez, Assistant Secretary Diana N. Huffman, Assistant
Secretary Kelly A. Coyne, Assistant Secretary Patrick McGuinness, Assistant Secretary Lana Lomuti, Assistant Treasurer Russ Shupak, Assistant Treasurer Elyse McLaughlin, Assistant Treasurer Deborah Conway, Assistant Treasurer
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MANAGER
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PGIM Investments LLC
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655 Broad Street
Newark, NJ 07102
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SUBADVISER
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PGIM Fixed Income
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655 Broad Street
Newark, NJ
07102
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CUSTODIAN
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The Bank of New York Mellon
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240 Greenwich Street
New York, NY 10286
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TRANSFER AGENT
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Computershare Trust Company, N.A.
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PO Box 30170
College Station, TX
77842-3170
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INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
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KPMG LLP
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345 Park Avenue
New York, NY 10154
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FUND COUNSEL
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Sidley Austin LLP
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787 Seventh Avenue
New York, NY 10019
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SHAREHOLDER COMMUNICATIONS WITH DIRECTORS
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Shareholders can communicate directly with the Board of Directors by writing to the Chair of the Board, PGIM High Yield Bond Fund, Inc., PGIM Investments, Attn: Board of Directors, 655 Broad
Street, Newark, NJ 07102. Shareholders can communicate directly with an individual Director by writing to the same address. Communications are not screened before being delivered to
the addressee.
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AVAILABILITY OF PORTFOLIO SCHEDULE
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The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year as an exhibit to its reports on
Form N-PORT. The Funds Form N-PORT filings are available on the Commissions website at sec.gov.
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