UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21332
HELIOS HIGH INCOME FUND, INC.
(Exact name of registrant as specified in charter)
THREE WORLD FINANCIAL CENTER,
200 VESEY STREET, 24
TH
FLOOR
NEW YORK, NEW YORK 10281-1010
(Address of principal executive offices) (Zip code)
KIM G. REDDING, PRESIDENT
HELIOS HIGH INCOME FUND, INC.
THREE WORLD FINANCIAL CENTER, 200 VESEY STREET, 24
TH
FLOOR
NEW YORK, NEW YORK 10281-1010
(Name and address of agent for service)
Registrant’s telephone number, including area code: 1-800-497-3746
Date of fiscal year end:
March 31, 2013
Date of reporting period: September 30, 2012
Item 1. Reports to Shareholders.
IN PROFILE
Brookfield
is a global alternative asset manager with approximately $150 billion in assets under management as of
September 30, 2012. We have over a 100-year history of owning and operating assets with a focus on property, renewable power, infrastructure and private equity. We offer a range of public and private investment products and services, which
leverage our expertise and experience and provide us with a distinct competitive advantage in the markets where we operate. On behalf of our clients, Brookfield is also an active investor in the public securities markets, where our experience
extends nearly 40 years. Over this time, we have successfully developed several investment operations and built expertise in the management of institutional portfolios, retail mutual funds, and structured product investments.
Through our
SEC-registered investment advisor, Brookfield Investment Management Inc., our public market activities complement our core competencies as a direct investor. These activities encompass global listed real estate and infrastructure equities, corporate
high yield investments, opportunistic credit strategies and a dedicated insurance asset management division. Headquartered in New York, NY, Brookfield Investment Management Inc. maintains offices and investment teams in Toronto, Chicago, Boston and
London.
LETTER TO STOCKHOLDERS
Dear Stockholders,
I am pleased to provide the Semi-Annual Report for Helios Advantage Income Fund,
Inc., Helios High Income Fund, Inc., Helios Multi-Sector High Income Fund, Inc. and Helios Strategic Income Fund, Inc. (each a “Fund” and, collectively, the “Funds”) for the six month period ended September 30, 2012.
The high yield market delivered impressive performance in recent months, reflecting improved investor confidence as well as continued
demand for yield. Prior concerns over the health of the European Union began to subside over the period, following the announcement of new monetary policy actions by the European Central Bank. Additionally, the ongoing recovery in the U.S. housing
market led to enhanced optimism regarding the U.S. economy overall. This return to confidence led to strong demand within the high yield market, which continues to benefit from robust corporate credit quality and liquidity in addition to meaningful
current income.
We continue to maintain our positive view of high yield credit fundamentals. Furthermore, we continue to believe that
yield spreads in the high yield market remain attractive. However, we note that the market is now trading above par and nominal yields are trending below historical averages. Accordingly, while we believe the current market represents value for
investors, the potential for future price appreciation may be limited.
Importantly, our experience suggests that a diversified
portfolio of income producing corporate bonds with a conservative risk profile should support an attractive dividend stream for investors. We continue to believe the Funds are well-positioned to generate sustainable yields over the course of an
entire market cycle.
In addition to performance information, this report provides an overview of market conditions and a discussion of
factors affecting the Funds’ investment performance, together with the Funds’ unaudited financial statements and schedule of investments as of September 30, 2012.
We welcome your questions and comments, and encourage you to contact our Investor Relations team at (800) 497-3746 or visit us at
www.brookfieldim.com for more information. Thank you for your support.
Sincerely,
Kim G. Redding
President
2012 Semi-Annual Report
1
HELIOS ADVANTAGE INCOME FUND, INC.
OBJECTIVE & STRATEGY
Helios Advantage Income Fund, Inc. seeks a high
level of current income. The Fund seeks capital growth as a secondary investment objective when consistent with its primary investment objective. The Fund invests a majority of its total assets in below-investment grade debt securities that offer
attractive yield and capital appreciation potential. The Fund also may invest in investment grade debt securities, up to 15% of its total assets in foreign debt and foreign equity securities and up to 25% of its total assets in domestic equity
securities, including common and preferred stocks. The Fund invests in a wide range of below-investment grade debt securities, including corporate bonds, mortgage-backed and asset-backed securities and municipal and foreign government obligations,
as well as securities of companies in bankruptcy reorganization proceedings or otherwise in the process of debt restructuring. (Below-investment grade debt securities are rated Ba1 or lower by Moody’s Investors Service, Inc., BB+ or lower by
Standard & Poor’s Ratings Group, comparably rated by another nationally recognized statistical rating organization or, if unrated, determined by the Fund’s investment advisor to be of comparable quality.) The Fund may use leverage
through bank borrowings, reverse repurchase agreements or other transactions involving indebtedness or through the issuance of preferred shares. The Fund may leverage one third of its total assets (in each case including the amount borrowed.) The
Fund may vary its use of leverage in response to changing market conditions.
Investment Risks:
Investors in any bond fund should
anticipate fluctuations in price. Bond prices and the value of bond funds decline as interest rates rise. Bonds with longer-term maturities generally are more vulnerable to interest rate risk than bonds with shorter-term maturities. Below-investment
grade bonds involve greater credit risk, which is the risk that the issuer will not make interest or principal payments when due. An economic downturn or period of rising interest rates could adversely affect the ability of issuers, especially
issuers of below-investment grade debt, to service primary obligations and an unanticipated default could cause the Fund to experience a reduction in value of its shares. The Fund’s investments in mortgage-backed or asset-backed securities that
are “subordinated” to other interests in the same pool may increase credit risk to the extent that the Fund, as a holder of those securities, may only receive payments after the pool’s obligations to other investors have been
satisfied. Below-investment grade bonds also are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher-rated debt securities. The value of U.S. and foreign equity securities
in which the Fund invests will change based on changes in a company’s financial condition and in overall market and economic conditions. Leverage creates an opportunity for an increased return to common stockholders, but unless the income and
capital appreciation, if any, on securities acquired with leverage proceeds exceed the costs of the leverage, the use of leverage will diminish the investment performance of the Fund’s shares. Use of leverage also may increase the likelihood
that the net asset value of the Fund and market value of its common shares will be more volatile, and the yield and total return to common stockholders will tend to fluctuate more in response to changes in interest rates and creditworthiness.
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the six months ended September 30, 2012, Helios Advantage Income Fund, Inc. (NYSE: HAV) had a total return based on net asset value of
6.98% and a total return based on market price of 3.28%, which assumes the reinvestment of dividends and is exclusive of brokerage commissions. Based on the NYSE closing price of $9.21 on September 30, 2012, the Fund’s shares had a
dividend yield of 8.14%. The dividend yield is calculated as the annualized amount of the reporting period’s most recent monthly dividend declared divided by the stated stock price.
Individual contributors of performance included Marina District Finance, Pultegroup, and Niska Gas Storage. Marina District Finance owns the
Borgata Hotel/Casino in Atlantic City whose bonds rallied as investors realized that competition in that market would not negatively impact the property. Pultegroup is a residential homebuilder benefitting from the apparent bottoming in the housing
sector and Niska Gas Storage which benefited from high volumes of natural gas injections as new gas production came online this period.
Detractors of performance included Insight Communications, General Motors’ equity, and AK Steel. Insight Communications is a cable TV company
whose bonds were called when the company was acquired by Time Warner Cable. General Motors’ equity was down in the period as investors worried about the possible impact of a
Brookfield
Investment Management Inc.
2
HELIOS ADVANTAGE INCOME FUND, INC.
sale of the U.S. government’s shares acquired during the recession. AK Steel is a large North American steel producer whose bonds were lower on softer steel prices resulting from a reduction
in Chinese demand.
HIGH YIELD MARKET ENVIRONMENT
The high yield market delivered robust returns for the six-month period ended September 30, 2012. Early in the period, markets corrected lower as, for the third year in a row, investors held a negative view
beginning in May 2012. This was primarily attributed to concerns over the health of the European Union and slowing economic growth in China. Unlike prior years, however, the correction was short-lived, confined mostly to the month of May. Every
other month during the period saw strong positive returns in excess of 1% per month cumulating to a six-month return of 6.5% despite the correction in May. The high yield bond market’s enthusiasm was not matched by equity returns, which
were up only 1.6% as measured by the Russell 2000 Index.
The spread between high yield corporate bonds and the 10-Year U.S. Treasury
compressed modestly during the six-month period from 594 basis points to 569 basis points. We view this compression as a positive because the underlying 10-year U.S. Treasury rate fell from 2.21% to 1.64%.
Current spreads of 569 basis points remain wider than the 400-500 basis points we would normally expect to see at this point in the credit cycle,
although that has diminished somewhat as spreads continue to narrow. Therefore, while the high yield market continues to represent value to investors, further price appreciation is likely to be limited as the sector, as a whole, is trading above
par.
Corporate credit has been sound for the past couple of years, and we saw stable credit this period with the
default rate declining slightly from 1.9%.
1
to 1.8%.
2
Note that this period’s default rate of 1.8% remains well below the market’s
25-year average default rate of 4.2%
3
Credit ratings agencies confirm the stable trend in corporate credit by upgrading 1.0 times as many high yield companies as
they downgraded in the past 12 months.
4
We noted that companies reported
acceptable (but not strong) earnings through the second quarter of 2011, (the latest reporting period) and we saw more management teams taking a cautious view of the future.
Supply and demand was generally positive during the period with high yield mutual funds seeing strong inflows.
5
New issue volume was strong following May’s correction, accelerating to an all-time
quarterly record of $98.5 billion, in the third quarter of calendar 2012, above the previous record of $96.8 billion posted in the first quarter of 2012. September’s new issue volume of $46 billion was an all-time record. Overall, with money
flooding into mutual funds, deals were oversubscribed and traded higher in the aftermarket. Traders report that there seems to be ample cash available to buy issues and report that some challenges exist in purchasing good quality paper in the
secondary market. The bulk of new issues are used to refinance debt which has the effect of improving credit quality by eliminating near term maturities. We note with some concern, however, a rise in the number of riskier new issues late in the
period when some companies took advantage of the robust buying appetite and issued lower quality paper, PIK or pay-in-kind bonds, and financing to pay dividends to owners. While the volume of these riskier transactions is not yet concerning, we note
that it is the first time since the downturn that we have seen a significant increase in such paper.
OUTLOOK
Brookfield has been positive on the high yield market, noting the robust credit quality, good corporate liquidity and excellent progress on the
part of corporate treasurers in managing their debt structures. The high yield market agreed and returns were excellent. As these fundamentals remain in place, our outlook for this asset class over the next 12 months or so remains positive.
|
1
|
JP Morgan, High Yield Default Monitor, April 2, 2012 p 1
|
|
2
|
JP Morgan, High Yield Default Monitor, October 1, 2012 p 4.
|
|
3
|
JP Morgan, High Yield Default Monitor, October 1, 2012 p 2
|
|
4
|
JP Morgan, High Yield Default Monitor, October 1, 2012 p 10
|
|
5
|
Credit Suisse “Leveraged Finance Strategy Update” October 1, 2012, p. 2.
|
2012 Semi-Annual Report
3
HELIOS ADVANTAGE INCOME FUND, INC.
However, we also believe that significant further potential upside appreciation is limited due to the decline in spreads from 737 to 569 basis points in 2012, and with the return of the market above par. While
normally we would expect the spread to be 50 to 100 basis points narrower than current levels, we note the unusually depressed level of the benchmark treasury yields, which may be artificially depressed due to actions by the Federal Reserve. With
the high yield market trading at yields near all time lows, our enthusiasm is tempered at this point. We are carefully watching the quality of new issues coming to market as a possible negative going forward.
Given our expectation of modest economic growth, modestly increasing defaults, although no general recession, we believe that high yield investors
are adequately, but not generously compensated at current yield spread levels. While we would normally be targeting yield spreads of 400 to 500 basis points at this point in the credit cycle, we remain skeptical that the problems in Europe are
permanently addressed, and are increasingly concerned with the health of the U.S. balance sheet which will need to be addressed shortly after the November election. With these risks outstanding we expect high yield investors will continue to demand
a premium to historical spreads, at least for the next few quarters. For investors seeking to clip the current coupon offered in the high yield market, the investment landscape remains attractive.
Forward-Looking Information
This management discussion contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements that are based on various assumptions (some of which are beyond our control) may be identified by reference to a future period or periods or
by the use of forward-looking terminology, such as “may,” “will,” “believe,” “expect,” “anticipate,” “continue,” “should,” “intend,” or similar terms or variations on
those terms or the negative of those terms. Although we believe that the expectations contained in any forward-looking statement are based on reasonable assumptions, we can give no assurance that our expectations will be attained. We do not
undertake, and specifically disclaim any obligation, to publicly release any update or supplement to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
Disclosure
The
Fund’s portfolio holdings are subject to change without notice. The mention of specific securities is not a recommendation or solicitation for any person to buy, sell or hold any particular security. There is no assurance that the
Helios Advantage Income Fund, Inc. currently holds these securities.
The Barclays Capital U.S. Corporate High Yield Index covers the
U.S. dollar denominated, non-investment grade, fixed-rate, taxable corporate bond market. Securities are classified as high yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below. The index excludes emerging markets
debt. The Barclays Capital U.S. Corporate High Yield Index is part of the Barclays Capital U.S. Universal and Global High Yield Indices. The index is unmanaged and, unlike the Fund, is not affected by cash flows or trading and other expenses. It is
not possible to invest directly in an index. Index performance is shown for illustrative purposes only and does not predict or depict the performance of the Fund.
The Fund may utilize leverage to seek to enhance the yield and net asset value of its common stock, through bank borrowings, issuance of short-term debt securities or shares of preferred stock, or a combination
thereof. However, these objectives cannot be achieved in all interest rate environments. While leverage may result in a higher yield for the Fund, the use of leverage involves risk, including the potential for higher volatility of the NAV,
fluctuations of dividends and other distributions paid by the Fund and the market price of the Fund’s common stock, among others. Certain funds may invest assets in securities of issuers domiciled outside the United States, including issuers
from emerging markets. Foreign investing involves special risks, including foreign currency risk and the possibility of substantial volatility due to adverse political, economic or other developments.
Performance data quoted represents past performance results and does not guarantee future results. Current performance may be lower or higher than
the performance data quoted.
Brookfield
Investment Management Inc.
4
HELIOS ADVANTAGE INCOME FUND, INC.
These views represent the opinions of Brookfield Investment Management Inc. and are not intended to predict or depict the performance of any investment. These views are as of the close of business on
September 30, 2012 and subject to change based on subsequent developments.
2012 Semi-Annual Report
5
HELIOS ADVANTAGE INCOME FUND, INC.
Portfolio Characteristics (Unaudited)
September 30, 2012
PORTFOLIO STATISTICS
|
|
|
|
|
Annualized dividend yield
1
|
|
8.14%
|
|
|
|
|
Weighted average coupon
|
|
8.08%
|
|
|
|
|
Weighted average life
|
|
4.75 years
|
|
|
|
|
Percentage of leveraged assets
|
|
27.85%
|
|
|
|
|
Total number of holdings
|
|
134
|
CREDIT QUALITY
|
|
|
|
|
|
|
BBB
|
|
|
3
|
%
|
|
|
|
|
BB
|
|
|
16
|
%
|
|
|
|
|
B
|
|
|
56
|
%
|
|
|
|
|
CCC
|
|
|
19
|
%
|
|
|
|
|
Unrated
|
|
|
2
|
%
|
|
|
|
|
Cash
|
|
|
4
|
%
|
|
Total
|
|
|
100
|
%
|
ASSET ALLOCATION
2
|
|
|
|
|
|
|
Investment Grade Corporate Bonds
|
|
|
5
|
%
|
|
|
|
|
High Yield Corporate Bonds
|
|
|
94
|
%
|
|
|
|
|
Common Stocks and Warrants
|
|
|
1
|
%
|
|
Total
|
|
|
100
|
%
|
|
1
|
Dividends may include net investment income, capital gains and/or return of capital. The dividend yield referenced above is calculated as the annualized
amount of the most recent monthly dividend declared divided by September 30, 2012 stock price.
|
|
2
|
Includes only invested assets; excludes cash.
|
Brookfield
Investment Management Inc.
6
HELIOS ADVANTAGE INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
INVESTMENT GRADE CORPORATE BONDS – 5.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive – 1.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ford Motor Co.
2
(Cost – $596,132)
|
|
|
6.50
|
%
|
|
|
08/01/18
|
|
|
$
|
650
|
|
|
$
|
750,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Industry – 1.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Georgia-Pacific LLC
|
|
|
7.25
|
|
|
|
06/01/28
|
|
|
|
230
|
|
|
|
291,053
|
|
|
Georgia-Pacific LLC
|
|
|
7.38
|
|
|
|
12/01/25
|
|
|
|
270
|
|
|
|
357,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Basic Industry
(Cost – $468,993)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
648,423
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy – 1.5 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pioneer Natural Resources Co.
|
|
|
6.65
|
|
|
|
03/15/17
|
|
|
|
500
|
|
|
|
593,541
|
|
|
SESI LLC
2
|
|
|
6.88
|
|
|
|
06/01/14
|
|
|
|
299
|
|
|
|
299,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Energy
(Cost – $736,646)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
892,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications – 2.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qwest Corp.
2
(Cost – $887,906)
|
|
|
6.88
|
|
|
|
09/15/33
|
|
|
|
1,225
|
|
|
|
1,240,312
|
|
|
Total INVESTMENT GRADE CORPORATE BONDS
(Cost – $2,689,677)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,532,026
|
|
|
HIGH YIELD CORPORATE BONDS – 126.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive – 7.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Axle & Manufacturing, Inc .
2
|
|
|
7.88
|
|
|
|
03/01/17
|
|
|
|
1,000
|
|
|
|
1,042,500
|
|
|
Chrysler Group LLC/CG Co-Issuer, Inc.
|
|
|
8.25
|
|
|
|
06/15/21
|
|
|
|
775
|
|
|
|
825,375
|
|
|
General Motors Financial Company, Inc.
3,4
|
|
|
4.75
|
|
|
|
08/15/17
|
|
|
|
250
|
|
|
|
256,328
|
|
|
Jaguar Land Rover PLC
3,4,6
|
|
|
8.13
|
|
|
|
05/15/21
|
|
|
|
575
|
|
|
|
626,031
|
|
|
Motors Liquidation Co.
8,9
|
|
|
7.13
|
|
|
|
07/15/13
|
|
|
|
250
|
|
|
|
25
|
|
|
Motors Liquidation Co.
8,9
|
|
|
8.38
|
|
|
|
07/15/33
|
|
|
|
1,750
|
|
|
|
175
|
|
|
Pittsburgh Glass Works LLC
3,4
|
|
|
8.50
|
|
|
|
04/15/16
|
|
|
|
765
|
|
|
|
711,450
|
|
|
Tenneco, Inc.
2
|
|
|
6.88
|
|
|
|
12/15/20
|
|
|
|
775
|
|
|
|
848,625
|
|
|
Visteon Corp.
|
|
|
6.75
|
|
|
|
04/15/19
|
|
|
|
110
|
|
|
|
115,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Automotive
(Cost – $4,112,085)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,426,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Industry – 22.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AK Steel Corp.
2
|
|
|
7.63
|
|
|
|
05/15/20
|
|
|
|
775
|
|
|
|
678,125
|
|
|
Alpha Natural Resources, Inc.
|
|
|
6.25
|
|
|
|
06/01/21
|
|
|
|
625
|
|
|
|
520,313
|
|
|
Arch Coal, Inc.
|
|
|
8.75
|
|
|
|
08/01/16
|
|
|
|
550
|
|
|
|
539,000
|
|
|
Associated Materials LLC/AMH New Finance, Inc.
2
|
|
|
9.13
|
|
|
|
11/01/17
|
|
|
|
700
|
|
|
|
686,000
|
|
|
Building Materials Corporation of America
3,4
|
|
|
6.75
|
|
|
|
05/01/21
|
|
|
|
375
|
|
|
|
410,625
|
|
|
Cascades, Inc.
6
|
|
|
7.75
|
|
|
|
12/15/17
|
|
|
|
275
|
|
|
|
288,063
|
|
|
Cascades, Inc.
6
|
|
|
7.88
|
|
|
|
01/15/20
|
|
|
|
500
|
|
|
|
523,750
|
|
|
CONSOL Energy, Inc.
2
|
|
|
8.25
|
|
|
|
04/01/20
|
|
|
|
275
|
|
|
|
288,063
|
|
|
FMG Resources August 2006 Property Ltd.
3,4,6
|
|
|
6.88
|
|
|
|
04/01/22
|
|
|
|
500
|
|
|
|
457,500
|
|
|
Hexion US Finance Corp./Hexion Nova Scotia Finance ULC
|
|
|
9.00
|
|
|
|
11/15/20
|
|
|
|
700
|
|
|
|
624,750
|
|
|
Huntsman International LLC
2
|
|
|
8.63
|
|
|
|
03/15/21
|
|
|
|
1,000
|
|
|
|
1,145,000
|
|
|
Ineos Group Holdings SA
3,4,6
|
|
|
8.50
|
|
|
|
02/15/16
|
|
|
|
775
|
|
|
|
732,375
|
|
|
Ineos Finance PLC
3,4,6
|
|
|
9.00
|
|
|
|
05/15/15
|
|
|
|
400
|
|
|
|
423,000
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
2012 Semi-Annual Report
7
HELIOS ADVANTAGE INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
HIGH YIELD CORPORATE BONDS (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Masonite International Corp.
2,3,4,6
|
|
|
8.25
|
%
|
|
|
04/15/21
|
|
|
$
|
775
|
|
|
$
|
817,625
|
|
|
Ply Gem Industries, Inc.
2
|
|
|
8.25
|
|
|
|
02/15/18
|
|
|
|
775
|
|
|
|
808,906
|
|
|
Steel Dynamics, Inc.
|
|
|
7.63
|
|
|
|
03/15/20
|
|
|
|
550
|
|
|
|
596,750
|
|
|
Tembec Industries, Inc.
2,6
|
|
|
11.25
|
|
|
|
12/15/18
|
|
|
|
775
|
|
|
|
813,750
|
|
|
United States Steel Corp.
2
|
|
|
7.00
|
|
|
|
02/01/18
|
|
|
|
1,400
|
|
|
|
1,403,500
|
|
|
USG Corp.
2
|
|
|
9.75
|
|
|
|
01/15/18
|
|
|
|
475
|
|
|
|
513,000
|
|
|
Verso Paper Holdings LLC/Verso Paper, Inc.
3,4
|
|
|
11.75
|
|
|
|
01/15/19
|
|
|
|
550
|
|
|
|
580,250
|
|
|
Xerium Technologies, Inc.
|
|
|
8.88
|
|
|
|
06/15/18
|
|
|
|
550
|
|
|
|
486,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Basic Industry
(Cost – $13,078,875)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,337,095
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Goods – 12.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AAR Corp.
3,4
|
|
|
7.25
|
|
|
|
01/15/22
|
|
|
|
300
|
|
|
|
312,000
|
|
|
Berry Plastics Corp.
2
|
|
|
9.50
|
|
|
|
05/15/18
|
|
|
|
775
|
|
|
|
850,562
|
|
|
Casella Waste Systems, Inc.
3,4
|
|
|
7.75
|
|
|
|
02/15/19
|
|
|
|
1,000
|
|
|
|
980,000
|
|
|
Coleman Cable, Inc.
2
|
|
|
9.00
|
|
|
|
02/15/18
|
|
|
|
550
|
|
|
|
585,750
|
|
|
Crown Cork & Seal Company, Inc.
2
|
|
|
7.38
|
|
|
|
12/15/26
|
|
|
|
975
|
|
|
|
1,070,062
|
|
|
Mueller Water Products, Inc.
|
|
|
7.38
|
|
|
|
06/01/17
|
|
|
|
775
|
|
|
|
794,375
|
|
|
Owens-Illinois, Inc.
|
|
|
7.80
|
|
|
|
05/15/18
|
|
|
|
575
|
|
|
|
662,687
|
|
|
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC
2
|
|
|
9.00
|
|
|
|
04/15/19
|
|
|
|
775
|
|
|
|
790,500
|
|
|
Tekni-Plex, Inc.
3,4
|
|
|
9.75
|
|
|
|
06/01/19
|
|
|
|
425
|
|
|
|
454,750
|
|
|
Terex Corp.
|
|
|
6.50
|
|
|
|
04/01/20
|
|
|
|
300
|
|
|
|
312,000
|
|
|
Terex Corp.
2
|
|
|
8.00
|
|
|
|
11/15/17
|
|
|
|
475
|
|
|
|
491,625
|
|
|
Trimas Corp.
|
|
|
9.75
|
|
|
|
12/15/17
|
|
|
|
276
|
|
|
|
318,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Capital Goods
(Cost – $7,134,404)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,623,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Cyclical – 7.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DineEquity, Inc.
2
|
|
|
9.50
|
|
|
|
10/30/18
|
|
|
|
750
|
|
|
|
845,625
|
|
|
Levi Strauss & Co.
2
|
|
|
7.63
|
|
|
|
05/15/20
|
|
|
|
750
|
|
|
|
810,000
|
|
|
Limited Brands, Inc.
|
|
|
7.60
|
|
|
|
07/15/37
|
|
|
|
475
|
|
|
|
486,875
|
|
|
Limited Brands, Inc.
|
|
|
8.50
|
|
|
|
06/15/19
|
|
|
|
300
|
|
|
|
361,500
|
|
|
Michaels Stores, Inc.
|
|
|
7.75
|
|
|
|
11/01/18
|
|
|
|
600
|
|
|
|
643,500
|
|
|
Sally Holdings LLC/Sally Capital, Inc.
|
|
|
6.88
|
|
|
|
11/15/19
|
|
|
|
475
|
|
|
|
528,437
|
|
|
The Neiman Marcus Group Inc.
2
|
|
|
10.38
|
|
|
|
10/15/15
|
|
|
|
375
|
|
|
|
382,500
|
|
|
YCC Holdings LLC/Yankee Finance, Inc.
7
|
|
|
10.25
|
|
|
|
02/15/16
|
|
|
|
400
|
|
|
|
414,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consumer Cyclical
(Cost – $4,202,513)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,472,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Non-Cyclical – 5.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B&G Foods, Inc.
2
|
|
|
7.63
|
|
|
|
01/15/18
|
|
|
|
1,000
|
|
|
|
1,080,000
|
|
|
C&S Group Enterprises LLC
3,4
|
|
|
8.38
|
|
|
|
05/01/17
|
|
|
|
630
|
|
|
|
661,500
|
|
|
Easton-Bell Sports, Inc.
2
|
|
|
9.75
|
|
|
|
12/01/16
|
|
|
|
650
|
|
|
|
702,812
|
|
|
Jarden Corp.
2
|
|
|
7.50
|
|
|
|
05/01/17
|
|
|
|
500
|
|
|
|
572,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consumer Non-Cyclical
(Cost – $2,806,283)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,016,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
Brookfield
Investment Management Inc.
8
HELIOS ADVANTAGE INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
HIGH YIELD CORPORATE BONDS (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy – 20.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BreitBurn Energy Partners L.P./BreitBurn Finance Corp.
2
|
|
|
8.63
|
%
|
|
|
10/15/20
|
|
|
$
|
775
|
|
|
$
|
846,687
|
|
|
Calfrac Holdings L.P.
2,3,4
|
|
|
7.50
|
|
|
|
12/01/20
|
|
|
|
700
|
|
|
|
693,000
|
|
|
Crosstex Energy L.P./Crosstex Energy Finance Corp.
2
|
|
|
8.88
|
|
|
|
02/15/18
|
|
|
|
675
|
|
|
|
722,250
|
|
|
EV Energy Partners L.P./EV Energy Finance Corp.
2
|
|
|
8.00
|
|
|
|
04/15/19
|
|
|
|
775
|
|
|
|
804,062
|
|
|
Frac Tech Services LLC/Frac Tech Finance, Inc.
3,4
|
|
|
8.13
|
|
|
|
11/15/18
|
|
|
|
455
|
|
|
|
484,575
|
|
|
GMX Resources, Inc.
7
|
|
|
11.00
|
|
|
|
12/01/17
|
|
|
|
286
|
|
|
|
268,178
|
|
|
Hercules Offshore, Inc.
2,3,4
|
|
|
10.50
|
|
|
|
10/15/17
|
|
|
|
750
|
|
|
|
790,313
|
|
|
Hilcorp Energy ILP/Hilcorp Finance Co.
3,4
|
|
|
8.00
|
|
|
|
02/15/20
|
|
|
|
550
|
|
|
|
611,875
|
|
|
Key Energy Services, Inc.
|
|
|
6.75
|
|
|
|
03/01/21
|
|
|
|
500
|
|
|
|
507,500
|
|
|
Linn Energy LLC/Linn Energy Finance Corp.
2
|
|
|
8.63
|
|
|
|
04/15/20
|
|
|
|
775
|
|
|
|
848,625
|
|
|
McJunkin Red Man Corp.
2
|
|
|
9.50
|
|
|
|
12/15/16
|
|
|
|
650
|
|
|
|
701,187
|
|
|
Niska Gas Storage US LLC/Niska Gas Storage Canada ULC
2
|
|
|
8.88
|
|
|
|
03/15/18
|
|
|
|
750
|
|
|
|
774,375
|
|
|
Petroleum Geo-Services ASA
3,4,6
|
|
|
7.38
|
|
|
|
12/15/18
|
|
|
|
325
|
|
|
|
346,937
|
|
|
Plains Exploration & Production Co.
|
|
|
7.63
|
|
|
|
06/01/18
|
|
|
|
550
|
|
|
|
585,750
|
|
|
Precision Drilling Corp.
2,6
|
|
|
6.63
|
|
|
|
11/15/20
|
|
|
|
750
|
|
|
|
798,750
|
|
|
Quicksilver Resources, Inc.
2
|
|
|
11.75
|
|
|
|
01/01/16
|
|
|
|
450
|
|
|
|
454,500
|
|
|
Trinidad Drilling Ltd.
3,4,6
|
|
|
7.88
|
|
|
|
01/15/19
|
|
|
|
760
|
|
|
|
820,800
|
|
|
Venoco, Inc.
2
|
|
|
8.88
|
|
|
|
02/15/19
|
|
|
|
750
|
|
|
|
652,500
|
|
|
W&T Offshore, Inc.
|
|
|
8.50
|
|
|
|
06/15/19
|
|
|
|
255
|
|
|
|
277,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Energy
(Cost – $11,573,352)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,989,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare – 9.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DJO Finance LLC/DJO Finance Corp.
3,4
|
|
|
9.88
|
|
|
|
04/15/18
|
|
|
|
400
|
|
|
|
395,000
|
|
|
HCA, Inc.
2
|
|
|
8.00
|
|
|
|
10/01/18
|
|
|
|
775
|
|
|
|
895,125
|
|
|
Health Management Associates, Inc.
2,3,4
|
|
|
7.38
|
|
|
|
01/15/20
|
|
|
|
775
|
|
|
|
840,875
|
|
|
inVentiv Health, Inc.
3,4
|
|
|
10.25
|
|
|
|
08/15/18
|
|
|
|
300
|
|
|
|
264,000
|
|
|
Kindred Healthcare, Inc.
|
|
|
8.25
|
|
|
|
06/01/19
|
|
|
|
400
|
|
|
|
389,000
|
|
|
Pharmaceutical Product Development, Inc.
2,3,4
|
|
|
9.50
|
|
|
|
12/01/19
|
|
|
|
775
|
|
|
|
869,938
|
|
|
Polymer Group, Inc.
2
|
|
|
7.75
|
|
|
|
02/01/19
|
|
|
|
750
|
|
|
|
798,750
|
|
|
Service Corporation International
2
|
|
|
6.75
|
|
|
|
04/01/16
|
|
|
|
1,000
|
|
|
|
1,117,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Healthcare
(Cost – $5,127,760)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,570,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media – 10.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Reprographics Co.
2
|
|
|
10.50
|
|
|
|
12/15/16
|
|
|
|
750
|
|
|
|
787,500
|
|
|
Cablevision Systems Corp.
2
|
|
|
8.63
|
|
|
|
09/15/17
|
|
|
|
800
|
|
|
|
930,000
|
|
|
CCO Holdings LLC/CCO Holdings Capital Corp.
2
|
|
|
8.13
|
|
|
|
04/30/20
|
|
|
|
975
|
|
|
|
1,101,750
|
|
|
Cenveo Corp.
|
|
|
8.88
|
|
|
|
02/01/18
|
|
|
|
350
|
|
|
|
331,625
|
|
|
Clear Channel Communications, Inc.
2
|
|
|
9.00
|
|
|
|
03/01/21
|
|
|
|
750
|
|
|
|
667,500
|
|
|
Cumulus Media Holdings, Inc.
|
|
|
7.75
|
|
|
|
05/01/19
|
|
|
|
775
|
|
|
|
753,688
|
|
|
Deluxe Corp.
2
|
|
|
7.38
|
|
|
|
06/01/15
|
|
|
|
600
|
|
|
|
610,500
|
|
|
Mediacom LLC/Mediacom Capital Corp.
2
|
|
|
9.13
|
|
|
|
08/15/19
|
|
|
|
775
|
|
|
|
856,375
|
|
|
National CineMedia LLC
3,4
|
|
|
6.00
|
|
|
|
04/15/22
|
|
|
|
275
|
|
|
|
290,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Media
(Cost – $6,130,906)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,329,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
2012 Semi-Annual Report
9
HELIOS ADVANTAGE INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
HIGH YIELD CORPORATE BONDS (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate – 1.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RealogyCorp.
3,4
(Cost – $700,999)
|
|
|
7.88
|
%
|
|
|
02/15/19
|
|
|
$
|
775
|
|
|
$
|
813,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services – 17.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMC Entertainment, Inc.
2
|
|
|
8.75
|
|
|
|
06/01/19
|
|
|
|
875
|
|
|
|
964,688
|
|
|
Avis Budget Car Rental LLC/Avis Budget Finance, Inc.
2
|
|
|
8.25
|
|
|
|
01/15/19
|
|
|
|
775
|
|
|
|
843,781
|
|
|
Avis Budget Car Rental LLC/Avis Budget Finance, Inc.
|
|
|
9.75
|
|
|
|
03/15/20
|
|
|
|
200
|
|
|
|
228,500
|
|
|
Beazer Homes USA, Inc.
|
|
|
9.13
|
|
|
|
06/15/18
|
|
|
|
300
|
|
|
|
303,000
|
|
|
Boyd Gaming Corp.
3,4
|
|
|
9.00
|
|
|
|
07/01/20
|
|
|
|
400
|
|
|
|
408,000
|
|
|
Caesars Entertainment Operating Company, Inc.
3,4
|
|
|
8.50
|
|
|
|
02/15/20
|
|
|
|
300
|
|
|
|
300,000
|
|
|
Caesars Entertainment Operating Company, Inc.
2
|
|
|
11.25
|
|
|
|
06/01/17
|
|
|
|
600
|
|
|
|
645,000
|
|
|
CityCenter Holdings LLC/CityCenter Finance Corp.
2
|
|
|
7.63
|
|
|
|
01/15/16
|
|
|
|
750
|
|
|
|
800,625
|
|
|
FTI Consulting, Inc.
|
|
|
7.75
|
|
|
|
10/01/16
|
|
|
|
500
|
|
|
|
513,750
|
|
|
Iron Mountain, Inc.
|
|
|
8.38
|
|
|
|
08/15/21
|
|
|
|
325
|
|
|
|
359,938
|
|
|
Marina District Finance Company, Inc.
2
|
|
|
9.88
|
|
|
|
08/15/18
|
|
|
|
400
|
|
|
|
401,000
|
|
|
MGM Resorts International
2
|
|
|
7.63
|
|
|
|
01/15/17
|
|
|
|
775
|
|
|
|
821,500
|
|
|
MGM Resorts International
3,4
|
|
|
8.63
|
|
|
|
02/01/19
|
|
|
|
225
|
|
|
|
245,250
|
|
|
MTR Gaming Group, Inc.
|
|
|
11.50
|
|
|
|
08/01/19
|
|
|
|
578
|
|
|
|
608,319
|
|
|
Palace Entertainment Holdings LLC/Palace Entertainment Holdings Corp.
3,4
|
|
|
8.88
|
|
|
|
04/15/17
|
|
|
|
750
|
|
|
|
793,125
|
|
|
PulteGroup, Inc.
2
|
|
|
6.38
|
|
|
|
05/15/33
|
|
|
|
750
|
|
|
|
697,500
|
|
|
Standard Pacific Corp.
2
|
|
|
8.38
|
|
|
|
05/15/18
|
|
|
|
550
|
|
|
|
634,563
|
|
|
UR Merger Sub Corp.
|
|
|
8.25
|
|
|
|
02/01/21
|
|
|
|
450
|
|
|
|
493,875
|
|
|
UR Merger Sub Corp.
2
|
|
|
10.25
|
|
|
|
11/15/19
|
|
|
|
325
|
|
|
|
370,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Services
(Cost – $9,644,018)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,432,914
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology & Electronics – 2.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Data Corp.
2,3,4
|
|
|
8.25
|
|
|
|
01/15/21
|
|
|
|
750
|
|
|
|
748,125
|
|
|
First Data Corp.
|
|
|
9.88
|
|
|
|
09/24/15
|
|
|
|
71
|
|
|
|
72,420
|
|
|
Freescale Semiconductor, Inc.
2
|
|
|
8.05
|
|
|
|
02/01/20
|
|
|
|
775
|
|
|
|
763,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Technology & Electronics
(Cost – $1,574,602)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,583,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications – 7.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cincinnati Bell, Inc.
|
|
|
8.25
|
|
|
|
10/15/17
|
|
|
|
345
|
|
|
|
368,288
|
|
|
Cincinnati Bell, Inc.
|
|
|
8.75
|
|
|
|
03/15/18
|
|
|
|
430
|
|
|
|
436,450
|
|
|
Frontier Communications Corp.
2
|
|
|
7.13
|
|
|
|
03/15/19
|
|
|
|
1,300
|
|
|
|
1,384,500
|
|
|
Level 3 Communications, Inc.
3,4
|
|
|
8.88
|
|
|
|
06/01/19
|
|
|
|
775
|
|
|
|
813,750
|
|
|
PAETEC Holding Corp.
|
|
|
9.88
|
|
|
|
12/01/18
|
|
|
|
500
|
|
|
|
572,500
|
|
|
Windstream Corp.
2
|
|
|
7.00
|
|
|
|
03/15/19
|
|
|
|
1,000
|
|
|
|
1,020,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Telecommunications
(Cost – $4,243,407)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,595,488
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility – 2.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calpine Corp.
2,3,4
|
|
|
7.25
|
|
|
|
10/15/17
|
|
|
|
650
|
|
|
|
693,875
|
|
|
NRG Energy, Inc.
|
|
|
8.50
|
|
|
|
06/15/19
|
|
|
|
550
|
|
|
|
594,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Utility
(Cost – $1,195,337)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,287,875
|
|
|
Total HIGH YIELD CORPORATE BONDS
(Cost – $71,524,541)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
75,478,456
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
Brookfield
Investment Management Inc.
10
HELIOS ADVANTAGE INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
TERM LOANS – 0.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Texas Competitive Electric Holdings Company LLC
1,4
|
|
|
4.74
|
%
|
|
|
10/10/17
|
|
|
$
|
288
|
|
|
$
|
197,597
|
|
|
Texas Competitive Electric Holdings Company LLC
1,4
|
|
|
4.94
|
|
|
|
10/10/17
|
|
|
|
46
|
|
|
|
31,750
|
|
|
Total TERM LOANS
(Cost – $276,817)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
229,347
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Value
(Note 2)
|
|
|
COMMON STOCKS – 1.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Industry – 1.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huntsman Corp.
(Cost – $379,531)
|
|
|
|
|
|
|
|
|
|
|
37,905
|
|
|
|
565,922
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications – 0.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frontier Communications Corp.
|
|
|
|
|
|
|
|
|
|
|
21,644
|
|
|
|
106,056
|
|
|
Windstream Corp.
|
|
|
|
|
|
|
|
|
|
|
11,050
|
|
|
|
111,716
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Telecommunications
(Cost – $325,638)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
217,772
|
|
|
Total COMMON STOCKS
(Cost – $705,169)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
783,694
|
|
|
WARRANTS – 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive – 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Motors Co.
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expiration: July 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise Price: $18.33
|
|
|
|
|
|
|
|
|
|
|
7,393
|
|
|
|
61,066
|
|
|
General Motors Co.
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expiration: July 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise Price: $10.00
|
|
|
|
|
|
|
|
|
|
|
7,393
|
|
|
|
101,876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Automotive
(Cost – $432,026)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
162,942
|
|
|
Total WARRANTS
(Cost – $432,026)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
162,942
|
|
|
Total Investments – 134.0%
(Cost – $75,628,230)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,186,465
|
|
|
Liabilities in Excess of Other Assets – (34.0)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(20,324,979
|
)
|
|
|
|
|
|
|
|
TOTAL NET ASSETS – 100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
59,861,486
|
|
|
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
2012 Semi-Annual Report
11
HELIOS HIGH INCOME FUND, INC.
OBJECTIVE & STRATEGY
Helios High Income Fund, Inc. seeks a high
level of current income. The Fund seeks capital growth as a secondary investment objective when consistent with its primary investment objective. The Fund invests a majority of its total assets in below-investment grade debt securities that offer
attractive yield and capital appreciation potential. The Fund also may invest in investment grade debt securities, up to 15% of its total assets in foreign debt and foreign equity securities and up to 25% of its total assets in domestic equity
securities, including common and preferred stocks. The Fund invests in a wide range of below-investment grade debt securities, including corporate bonds, mortgage-backed and asset-backed securities and municipal and foreign government obligations,
as well as securities of companies in bankruptcy reorganization proceedings or otherwise in the process of debt restructuring. (Below-investment grade debt securities are rated Ba1 or lower by Moody’s Investors Service, Inc., BB+ or lower by
Standard & Poor’s Ratings Group, comparably rated by another nationally recognized statistical rating organization or, if unrated, determined by the Fund’s investment advisor to be of comparable quality.) The Fund may use leverage
through bank borrowings, reverse repurchase agreements or other transactions involving indebtedness or through the issuance of preferred shares. The Fund may leverage one third of its total assets (in each case including the amount borrowed.) The
Fund may vary its use of leverage in response to changing market conditions.
Investment Risks:
Investors in any bond fund should
anticipate fluctuations in price. Bond prices and the value of bond funds decline as interest rates rise. Bonds with longer-term maturities generally are more vulnerable to interest rate risk than bonds with shorter-term maturities. Below-investment
grade bonds involve greater credit risk, which is the risk that the issuer will not make interest or principal payments when due. An economic downturn or period of rising interest rates could adversely affect the ability of issuers, especially
issuers of below-investment grade debt, to service primary obligations and an unanticipated default could cause the Fund to experience a reduction in value of its shares. The Fund’s investments in mortgage-backed or asset-backed securities that
are “subordinated” to other interests in the same pool may increase credit risk to the extent that the Fund as a holder of those securities may only receive payments after the pool’s obligations to other investors have been satisfied.
Below-investment grade bonds also are subject to greater price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher-rated debt securities. The value of U.S. and foreign equity securities in which
the Fund invests will change based on changes in a company’s financial condition and in overall market and economic conditions. Leverage creates an opportunity for an increased return to common stockholders, but unless the income and capital
appreciation, if any, on securities acquired with leverage proceeds exceed the costs of the leverage, the use of leverage will diminish the investment performance of the Fund’s shares. Use of leverage also may increase the likelihood that the
net asset value of the Fund and market value of its common shares will be more volatile, and the yield and total return to common stockholders will tend to fluctuate more in response to changes in interest rates and creditworthiness.
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the six months ended September 30, 2012, Helios High Income Fund, Inc. (NYSE: HIH) had a total return based on net asset value of 6.92%
and a total return based on market price of 3.60%, which assumes the reinvestment of dividends and is exclusive of brokerage commissions. Based on the NYSE closing price of $8.84 on September 30, 2012, the Fund’s shares had a dividend
yield of 8.14%. The dividend yield is calculated as the annualized amount of the reporting period’s most recent monthly dividend declared divided by the stated stock price.
Individual contributors of performance included Frontier Communications, Cablevision Systems, and AMC Entertainment. Frontier Communications offers
telephonic communications services in rural areas to small business and residential customers. Their bonds rallied on expectations that the company may seek to refinance at today’s lower interest rates. Cablevision Systems is a cable TV company
whose bonds rallied on general market strength assisted by attractive call protections. AMC Entertainment is a movie exhibition company whose bonds rallied when the company was acquired.
Detractors of performance included Insight Communications, General Motors’ equity and AK Steel. Insight Communications is a cable TV company
whose bonds were called when the company was acquired by Time
Brookfield
Investment Management Inc.
12
HELIOS HIGH INCOME FUND, INC.
Warner Cable, General Motors’ equity was down in the period as investors worried about the possible impact of a sale of the U.S. government’s shares acquired during the recession. AK
Steel is a large North American steel producer whose bonds were lower on softer steel prices resulting from a reduction in Chinese demand.
HIGH YIELD MARKET ENVIRONMENT
The high yield market delivered robust returns
for the six-month period ended September 30, 2012. Early in the period, markets corrected lower as, for the third year in a row, investors held a negative view beginning in May 2012. This was primarily attributed to concerns over the health of
the European Union and slowing economic growth in China. Unlike prior years, however, the correction was short-lived, confined mostly to the month of May. Every other month during the period saw strong positive returns in excess of 1% per month
cumulating to a six-month return of 6.5% despite the correction in May. The high yield bond market’s enthusiasm was not matched by equity returns, which were up only 1.6% as measured by the Russell 2000 Index.
The spread between high yield corporate bonds and the 10-Year U.S. Treasury compressed modestly during the six-month period from 594 basis points
to 569 basis points. We view this compression as a positive because the underlying 10-year U.S. Treasury rate fell from 2.21% to 1.64%.
Current spreads of 569 basis points remain wider than the 400-500 basis points we would normally expect to see at this point in the credit cycle,
although that has diminished somewhat as spreads continue to narrow. Therefore, while the high yield market continues to represent value to investors, further price appreciation is likely to be limited as the sector, as a whole, is trading above
par.
Corporate credit has been sound for the past couple of years, and we saw stable credit this period with the
default rate declining slightly from 1.9%.
1
to 1.8%.
2
Note that this period’s default rate of 1.8% remains well below the market’s
25-year average default rate of 4.2%.
3
Credit ratings agencies confirm the stable trend in corporate credit by upgrading 1.0 times as many high yield companies as
they downgraded in the past 12 months.
4
We noted that companies reported
acceptable (but not strong) earnings through the second quarter of 2011, (the latest reporting period) and we saw more management teams taking a cautious view of the future.
Supply and demand was generally positive during the period with high yield mutual funds seeing strong inflows.
5
New issue volume was strong following May’s correction, accelerating to an all-time
quarterly record of $98.5 billion, in the third quarter of calendar 2012, above the previous record of $96.8 billion posted in the first quarter of 2012. September’s new issue volume of $46 billion was an all-time record. Overall, with money
flooding into mutual funds, deals were oversubscribed and traded higher in the aftermarket. Traders report that there seems to be ample cash available to buy issues and report that some challenges exist in purchasing good quality paper in the
secondary market. The bulk of new issues are used to refinance debt which has the effect of improving credit quality by eliminating near term maturities. We note with some concern, however, a rise in the number of riskier new issues late in the
period when some companies took advantage of the robust buying appetite and issued lower quality paper, PIK or pay-in-kind bonds, and financing to pay dividends to owners. While the volume of these riskier transactions is not yet concerning, we note
that it is the first time since the downturn that we have seen a significant increase in such paper.
OUTLOOK
Brookfield has been positive on the high yield market, noting the robust credit quality, good corporate liquidity and excellent progress on the
part of corporate treasurers in managing their debt structures. The high yield market agreed and returns were excellent. As these fundamentals remain in place, our outlook for this asset class over the next 12 months or so remains positive.
|
1
|
JP Morgan, High Yield Default Monitor, April 2, 2012 p 1
|
|
2
|
JP Morgan, High Yield Default Monitor, October 1, 2012 p 4.
|
|
3
|
JP Morgan, High Yield Default Monitor, October 1, 2012 p 2
|
|
4
|
JP Morgan, High Yield Default Monitor, October 1, 2012 p 10
|
|
5
|
Credit Suisse “Leveraged Finance Strategy Update” October 1, 2012, p. 2.
|
2012 Semi-Annual Report
13
HELIOS HIGH INCOME FUND, INC.
However, we also believe that significant further potential upside appreciation is limited due to the decline in spreads from 737 to 569 basis points in 2012, and with the return of the market above par. While
normally we would expect the spread to be 50 to 100 basis points narrower than current levels, we note the unusually depressed level of the benchmark treasury yields, which may be artificially depressed due to actions by the Federal Reserve. With
the high yield market trading at yields near all time lows, our enthusiasm is tempered at this point. We are carefully watching the quality of new issues coming to market as a possible negative going forward.
Given our expectation of modest economic growth, modestly increasing defaults, although no general recession, we believe that high yield investors
are adequately, but not generously compensated at current yield spread levels. While we would normally be targeting yield spreads of 400 to 500 basis points at this point in the credit cycle, we remain skeptical that the problems in Europe are
permanently addressed, and are increasingly concerned with the health of the U.S. balance sheet which will need to be addressed shortly after the November election. With these risks outstanding we expect high yield investors will continue to demand
a premium to historical spreads, at least for the next few quarters. For investors seeking to clip the current coupon offered in the high yield market, the investment landscape remains attractive.
Forward-Looking Information
This management discussion contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements that are based on various assumptions (some of which are beyond our control) may be identified by reference to a future period or periods or
by the use of forward-looking terminology, such as “may,” “will,” “believe,” “expect,” “anticipate,” “continue,” “should,” “intend,” or similar terms or variations on
those terms or the negative of those terms. Although we believe that the expectations contained in any forward-looking statement are based on reasonable assumptions, we can give no assurance that our expectations will be attained. We do not
undertake, and specifically disclaim any obligation, to publicly release any update or supplement to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
Disclosure
The
Fund’s portfolio holdings are subject to change without notice. The mention of specific securities is not a recommendation or solicitation for any person to buy, sell or hold any particular security. There is no assurance that the
Helios High Income Fund, Inc. currently holds these securities.
The Barclays Capital U.S. Corporate High Yield Index covers the U.S.
dollar denominated, non-investment grade, fixed-rate, taxable corporate bond market. Securities are classified as high yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below. The index excludes emerging markets debt.
The Barclays Capital U.S. Corporate High Yield Index is part of the Barclays Capital U.S. Universal and Global High Yield Indices. The index is unmanaged and, unlike the Fund, is not affected by cash flows or trading and other expenses. It is not
possible to invest directly in an index. Index performance is shown for illustrative purposes only and does not predict or depict the performance of the Fund.
The Fund may utilize leverage to seek to enhance the yield and net asset value of its common stock, through bank borrowings, issuance of short-term debt securities or shares of preferred stock, or a combination
thereof. However, these objectives cannot be achieved in all interest rate environments. While leverage may result in a higher yield for the Fund, the use of leverage involves risk, including the potential for higher volatility of the NAV,
fluctuations of dividends and other distributions paid by the Fund and the market price of the Fund’s common stock, among others. Certain funds may invest assets in securities of issuers domiciled outside the United States, including issuers
from emerging markets. Foreign investing involves special risks, including foreign currency risk and the possibility of substantial volatility due to adverse political, economic or other developments.
Performance data quoted represents past performance results and does not guarantee future results. Current performance may be lower or higher than
the performance data quoted.
Brookfield
Investment Management Inc.
14
HELIOS HIGH INCOME FUND, INC.
These views represent the opinions of Brookfield Investment Management Inc. and are not intended to predict or depict the performance of any investment. These views are as of the close of business on
September 30, 2012 and subject to change based on subsequent developments.
2012 Semi-Annual Report
15
HELIOS HIGH INCOME FUND, INC.
Portfolio Characteristics (Unaudited)
September 30, 2012
PORTFOLIO STATISTICS
|
|
|
|
|
Annualized dividend yield
1
|
|
8.14%
|
|
|
|
|
Weighted average coupon
|
|
8.08%
|
|
|
|
|
Weighted average life
|
|
4.68 years
|
|
|
|
|
Percentage of leveraged assets
|
|
28.68%
|
|
|
|
|
Total number of holdings
|
|
131
|
CREDIT QUALITY
|
|
|
|
|
|
|
BBB
|
|
|
4
|
%
|
|
|
|
|
BB
|
|
|
15
|
%
|
|
|
|
|
B
|
|
|
55
|
%
|
|
|
|
|
CCC
|
|
|
20
|
%
|
|
|
|
|
Unrated
|
|
|
2
|
%
|
|
|
|
|
Cash
|
|
|
4
|
%
|
|
Total
|
|
|
100
|
%
|
ASSET ALLOCATION
2
|
|
|
|
|
|
|
Investment Grade Corporate Bonds
|
|
|
6
|
%
|
|
|
|
|
High Yield Corporate Bonds
|
|
|
93
|
%
|
|
|
|
|
Common Stocks and Warrants
|
|
|
1
|
%
|
|
Total
|
|
|
100
|
%
|
|
1
|
Dividends may include net investment income, capital gains and/or return of capital. The dividend yield referenced above is calculated as the annualized
amount of the most recent monthly dividend declared divided by the September 30, 2012 stock price.
|
|
2
|
Includes only invested assets; excludes cash.
|
Brookfield
Investment Management Inc.
16
HELIOS HIGH INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
INVESTMENT GRADE CORPORATE BONDS – 7.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive – 1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ford Motor Co.
2
(Cost – $435,635)
|
|
|
6.50
|
%
|
|
|
08/01/18
|
|
|
$
|
475
|
|
|
$
|
548,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Industry – 1.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Georgia-Pacific LLC
|
|
|
7.25
|
|
|
|
06/01/28
|
|
|
|
220
|
|
|
|
278,398
|
|
|
Georgia-Pacific LLC
|
|
|
7.38
|
|
|
|
12/01/25
|
|
|
|
255
|
|
|
|
337,516
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Basic Industry
(Cost – $445,475)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
615,914
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy – 1.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pioneer Natural Resources Co.
|
|
|
6.65
|
|
|
|
03/15/17
|
|
|
|
350
|
|
|
|
415,479
|
|
|
SESI LLC
2
|
|
|
6.88
|
|
|
|
06/01/14
|
|
|
|
224
|
|
|
|
224,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Energy
(Cost – $525,869)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
639,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications – 2.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qwest Corp.
2
(Cost – $933,945)
|
|
|
6.88
|
|
|
|
09/15/33
|
|
|
|
1,225
|
|
|
|
1,240,313
|
|
|
Total INVESTMENT GRADE CORPORATE BONDS
(Cost – $2,340,924)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,044,331
|
|
|
HIGH YIELD CORPORATE BONDS – 126.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive – 7.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Axle & Manufacturing, Inc.
|
|
|
7.75
|
|
|
|
11/15/19
|
|
|
|
200
|
|
|
|
220,500
|
|
|
American Axle & Manufacturing, Inc.
2
|
|
|
7.88
|
|
|
|
03/01/17
|
|
|
|
550
|
|
|
|
573,375
|
|
|
Chrysler Group LLC/CG Co-Issuer, Inc.
|
|
|
8.25
|
|
|
|
06/15/21
|
|
|
|
550
|
|
|
|
585,750
|
|
|
General Motors Financial Company, Inc.
3,4
|
|
|
4.75
|
|
|
|
08/15/17
|
|
|
|
175
|
|
|
|
179,429
|
|
|
Jaguar Land Rover PLC
3,4,6
|
|
|
8.13
|
|
|
|
05/15/21
|
|
|
|
400
|
|
|
|
435,500
|
|
|
Motors Liquidation Co.
8,9
|
|
|
7.13
|
|
|
|
07/15/13
|
|
|
|
250
|
|
|
|
25
|
|
|
Motors Liquidation Co.
8,9
|
|
|
8.38
|
|
|
|
07/15/33
|
|
|
|
1,250
|
|
|
|
125
|
|
|
Pittsburgh Glass Works LLC
3,4
|
|
|
8.50
|
|
|
|
04/15/16
|
|
|
|
545
|
|
|
|
506,850
|
|
|
Tenneco, Inc.
2
|
|
|
6.88
|
|
|
|
12/15/20
|
|
|
|
550
|
|
|
|
602,250
|
|
|
Visteon Corp.
|
|
|
6.75
|
|
|
|
04/15/19
|
|
|
|
80
|
|
|
|
84,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Automotive
(Cost – $2,938,896)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,187,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Industry – 23.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AK Steel Corp.
2
|
|
|
7.63
|
|
|
|
05/15/20
|
|
|
|
580
|
|
|
|
507,500
|
|
|
Alpha Natural Resources, Inc.
|
|
|
6.25
|
|
|
|
06/01/21
|
|
|
|
475
|
|
|
|
395,437
|
|
|
Arch Coal, Inc.
2
|
|
|
8.75
|
|
|
|
08/01/16
|
|
|
|
500
|
|
|
|
490,000
|
|
|
Associated Materials LLC/AMH New Finance, Inc.
2
|
|
|
9.13
|
|
|
|
11/01/17
|
|
|
|
525
|
|
|
|
514,500
|
|
|
Building Materials Corporation of America
3,4
|
|
|
6.75
|
|
|
|
05/01/21
|
|
|
|
275
|
|
|
|
301,125
|
|
|
Cascades, Inc.
2,6
|
|
|
7.75
|
|
|
|
12/15/17
|
|
|
|
550
|
|
|
|
576,125
|
|
|
CONSOL Energy, Inc.
2
|
|
|
8.25
|
|
|
|
04/01/20
|
|
|
|
225
|
|
|
|
235,687
|
|
|
FMG Resources August 2006 Property Ltd.
3,4,6
|
|
|
6.88
|
|
|
|
04/01/22
|
|
|
|
375
|
|
|
|
343,125
|
|
|
Hexion US Finance Corp./Hexion Nova Scotia Finance ULC
|
|
|
9.00
|
|
|
|
11/15/20
|
|
|
|
550
|
|
|
|
490,875
|
|
|
Huntsman International LLC
2
|
|
|
8.63
|
|
|
|
03/15/21
|
|
|
|
500
|
|
|
|
572,500
|
|
|
Ineos Finance PLC
3,4,6
|
|
|
9.00
|
|
|
|
05/15/15
|
|
|
|
285
|
|
|
|
301,387
|
|
|
Ineos Group Holdings SA
3,4,6
|
|
|
8.50
|
|
|
|
02/15/16
|
|
|
|
550
|
|
|
|
519,750
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
2012 Semi-Annual Report
17
HELIOS HIGH INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
HIGH YIELD CORPORATE BONDS (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Masonite International Corp.
2,3,4,6
|
|
|
8.25
|
%
|
|
|
04/15/21
|
|
|
$
|
575
|
|
|
$
|
606,625
|
|
|
Ply Gem Industries, Inc.
2
|
|
|
8.25
|
|
|
|
02/15/18
|
|
|
|
550
|
|
|
|
574,062
|
|
|
Steel Dynamics, Inc.
2
|
|
|
7.63
|
|
|
|
03/15/20
|
|
|
|
500
|
|
|
|
542,500
|
|
|
Tembec Industries, Inc.
2,6
|
|
|
11.25
|
|
|
|
12/15/18
|
|
|
|
550
|
|
|
|
577,500
|
|
|
United States Steel Corp.
2
|
|
|
7.00
|
|
|
|
02/01/18
|
|
|
|
1,000
|
|
|
|
1,002,500
|
|
|
USG Corp.
2
|
|
|
9.75
|
|
|
|
01/15/18
|
|
|
|
500
|
|
|
|
540,000
|
|
|
Verso Paper Holdings LLC/Verso Paper, Inc.
3,4
|
|
|
11.75
|
|
|
|
01/15/19
|
|
|
|
375
|
|
|
|
395,625
|
|
|
Xerium Technologies, Inc.
|
|
|
8.88
|
|
|
|
06/15/18
|
|
|
|
415
|
|
|
|
367,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Basic Industry
(Cost – $9,668,649)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,854,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Goods – 13.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AAR Corp.
3,4
|
|
|
7.25
|
|
|
|
01/15/22
|
|
|
|
200
|
|
|
|
208,000
|
|
|
Berry Plastics Corp.
2
|
|
|
9.50
|
|
|
|
05/15/18
|
|
|
|
550
|
|
|
|
603,625
|
|
|
Casella Waste Systems, Inc.
3,4
|
|
|
7.75
|
|
|
|
02/15/19
|
|
|
|
775
|
|
|
|
759,500
|
|
|
Coleman Cable, Inc.
|
|
|
9.00
|
|
|
|
02/15/18
|
|
|
|
300
|
|
|
|
319,500
|
|
|
Crown Cork & Seal Company, Inc.
2
|
|
|
7.38
|
|
|
|
12/15/26
|
|
|
|
700
|
|
|
|
768,250
|
|
|
Mueller Water Products, Inc.
|
|
|
7.38
|
|
|
|
06/01/17
|
|
|
|
625
|
|
|
|
640,625
|
|
|
Owens-Illinois, Inc.
|
|
|
7.80
|
|
|
|
05/15/18
|
|
|
|
425
|
|
|
|
489,813
|
|
|
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC
2
|
|
|
9.00
|
|
|
|
04/15/19
|
|
|
|
550
|
|
|
|
561,000
|
|
|
Tekni-Plex, Inc.
3,4
|
|
|
9.75
|
|
|
|
06/01/19
|
|
|
|
300
|
|
|
|
321,000
|
|
|
Terex Corp.
|
|
|
6.50
|
|
|
|
04/01/20
|
|
|
|
200
|
|
|
|
208,000
|
|
|
Terex Corp.
2
|
|
|
8.00
|
|
|
|
11/15/17
|
|
|
|
350
|
|
|
|
362,250
|
|
|
Trimas Corp.
2
|
|
|
9.75
|
|
|
|
12/15/17
|
|
|
|
208
|
|
|
|
240,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Capital Goods
(Cost – $5,143,976)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,481,803
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Cyclical – 6.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DineEquity, Inc.
2
|
|
|
9.50
|
|
|
|
10/30/18
|
|
|
|
525
|
|
|
|
591,938
|
|
|
Levi Strauss & Co.
|
|
|
7.63
|
|
|
|
05/15/20
|
|
|
|
500
|
|
|
|
540,000
|
|
|
Limited Brands, Inc.
|
|
|
7.60
|
|
|
|
07/15/37
|
|
|
|
300
|
|
|
|
307,500
|
|
|
Limited Brands, Inc.
|
|
|
8.50
|
|
|
|
06/15/19
|
|
|
|
250
|
|
|
|
301,250
|
|
|
Michaels Stores, Inc.
|
|
|
7.75
|
|
|
|
11/01/18
|
|
|
|
450
|
|
|
|
482,625
|
|
|
The Neiman Marcus Group Inc.
2
|
|
|
10.38
|
|
|
|
10/15/15
|
|
|
|
260
|
|
|
|
265,200
|
|
|
YCC Holdings LLC/Yankee Finance, Inc.
7
|
|
|
10.25
|
|
|
|
02/15/16
|
|
|
|
300
|
|
|
|
310,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consumer Cyclical
(Cost – $2,629,361)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,799,013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Non-Cyclical – 3.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B&G Foods, Inc.
2
|
|
|
7.63
|
|
|
|
01/15/18
|
|
|
|
500
|
|
|
|
540,000
|
|
|
C&S Group Enterprises LLC
3,4
|
|
|
8.38
|
|
|
|
05/01/17
|
|
|
|
472
|
|
|
|
495,600
|
|
|
Easton-Bell Sports, Inc.
2
|
|
|
9.75
|
|
|
|
12/01/16
|
|
|
|
475
|
|
|
|
513,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consumer Non-Cyclical
(Cost – $1,470,092)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,549,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy – 20.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BreitBurn Energy Partners L.P./BreitBurn Finance Corp.
2
|
|
|
8.63
|
|
|
|
10/15/20
|
|
|
|
550
|
|
|
|
600,875
|
|
|
Calfrac Holdings L.P.
2,3,4
|
|
|
7.50
|
|
|
|
12/01/20
|
|
|
|
525
|
|
|
|
519,750
|
|
|
Crosstex Energy L.P./Crosstex Energy Finance Corp.
2
|
|
|
8.88
|
|
|
|
02/15/18
|
|
|
|
500
|
|
|
|
535,000
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
Brookfield
Investment Management Inc.
18
HELIOS HIGH INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
HIGH YIELD CORPORATE BONDS (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EV Energy Partners L.P./EV Energy Finance Corp.
2
|
|
|
8.00
|
%
|
|
|
04/15/19
|
|
|
$
|
550
|
|
|
$
|
570,625
|
|
|
Frac Tech Services LLC/Frac Tech Finance, Inc.
2,3,4
|
|
|
8.13
|
|
|
|
11/15/18
|
|
|
|
340
|
|
|
|
362,100
|
|
|
GMX Resources, Inc.
2,7
|
|
|
11.00
|
|
|
|
12/01/17
|
|
|
|
202
|
|
|
|
188,966
|
|
|
Hercules Offshore, Inc.
2,3,4
|
|
|
10.50
|
|
|
|
10/15/17
|
|
|
|
325
|
|
|
|
342,469
|
|
|
Hilcorp Energy I LP/Hilcorp Finance Co.
2,3,4
|
|
|
8.00
|
|
|
|
02/15/20
|
|
|
|
500
|
|
|
|
556,250
|
|
|
Key Energy Services, Inc.
|
|
|
6.75
|
|
|
|
03/01/21
|
|
|
|
400
|
|
|
|
406,000
|
|
|
Linn Energy LLC/Linn Energy Finance Corp.
2
|
|
|
8.63
|
|
|
|
04/15/20
|
|
|
|
550
|
|
|
|
602,250
|
|
|
McJunkin Red Man Corp.
|
|
|
9.50
|
|
|
|
12/15/16
|
|
|
|
475
|
|
|
|
512,406
|
|
|
Niska Gas Storage US LLC/Niska Gas Storage Canada ULC
2
|
|
|
8.88
|
|
|
|
03/15/18
|
|
|
|
525
|
|
|
|
542,063
|
|
|
Petroleum Geo-Services ASA
3,4,6
|
|
|
7.38
|
|
|
|
12/15/18
|
|
|
|
225
|
|
|
|
240,188
|
|
|
Plains Exploration & Production Co.
|
|
|
7.63
|
|
|
|
06/01/18
|
|
|
|
500
|
|
|
|
532,500
|
|
|
Precision Drilling Corp.
6
|
|
|
6.63
|
|
|
|
11/15/20
|
|
|
|
450
|
|
|
|
479,250
|
|
|
Quicksilver Resources, Inc.
2
|
|
|
11.75
|
|
|
|
01/01/16
|
|
|
|
350
|
|
|
|
353,500
|
|
|
Trinidad Drilling Ltd.
2,3,4,6
|
|
|
7.88
|
|
|
|
01/15/19
|
|
|
|
550
|
|
|
|
594,000
|
|
|
Venoco, Inc.
2
|
|
|
8.88
|
|
|
|
02/15/19
|
|
|
|
525
|
|
|
|
456,750
|
|
|
W&T Offshore, Inc.
|
|
|
8.50
|
|
|
|
06/15/19
|
|
|
|
190
|
|
|
|
207,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Energy
(Cost – $8,322,083)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,602,042
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare – 9.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DJO Finance LLC/DJO Finance Corp.
3,4
|
|
|
9.88
|
|
|
|
04/15/18
|
|
|
|
300
|
|
|
|
296,250
|
|
|
HCA, Inc.
2
|
|
|
8.00
|
|
|
|
10/01/18
|
|
|
|
550
|
|
|
|
635,250
|
|
|
Health Management Associates, Inc.
2,3,4
|
|
|
7.38
|
|
|
|
01/15/20
|
|
|
|
550
|
|
|
|
596,750
|
|
|
inVentiv Health, Inc.
3,4
|
|
|
10.25
|
|
|
|
08/15/18
|
|
|
|
215
|
|
|
|
189,200
|
|
|
Kindred Healthcare, Inc.
|
|
|
8.25
|
|
|
|
06/01/19
|
|
|
|
300
|
|
|
|
291,750
|
|
|
Pharmaceutical Product Development, Inc.
3,4
|
|
|
9.50
|
|
|
|
12/01/19
|
|
|
|
500
|
|
|
|
561,250
|
|
|
Polymer Group, Inc.
2
|
|
|
7.75
|
|
|
|
02/01/19
|
|
|
|
525
|
|
|
|
559,125
|
|
|
Service Corporation International
2
|
|
|
6.75
|
|
|
|
04/01/16
|
|
|
|
750
|
|
|
|
838,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Healthcare
(Cost – $3,659,342)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,967,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media – 11.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Reprographics Co.
2
|
|
|
10.50
|
|
|
|
12/15/16
|
|
|
|
525
|
|
|
|
551,250
|
|
|
Cablevision Systems Corp.
2
|
|
|
8.63
|
|
|
|
09/15/17
|
|
|
|
750
|
|
|
|
871,875
|
|
|
CCO Holdings LLC/CCO Holdings Capital Corp.
2
|
|
|
8.13
|
|
|
|
04/30/20
|
|
|
|
750
|
|
|
|
847,500
|
|
|
Cenveo Corp.
|
|
|
8.88
|
|
|
|
02/01/18
|
|
|
|
250
|
|
|
|
236,875
|
|
|
Clear Channel Communications, Inc.
2
|
|
|
9.00
|
|
|
|
03/01/21
|
|
|
|
525
|
|
|
|
467,250
|
|
|
Cumulus Media Holdings, Inc.
|
|
|
7.75
|
|
|
|
05/01/19
|
|
|
|
550
|
|
|
|
534,875
|
|
|
Deluxe Corp.
2
|
|
|
7.38
|
|
|
|
06/01/15
|
|
|
|
500
|
|
|
|
508,750
|
|
|
Mediacom LLC/Mediacom Capital Corp.
2
|
|
|
9.13
|
|
|
|
08/15/19
|
|
|
|
550
|
|
|
|
607,750
|
|
|
National CineMedia LLC
3,4
|
|
|
6.00
|
|
|
|
04/15/22
|
|
|
|
200
|
|
|
|
211,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Media
(Cost – $4,684,345)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,837,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate – 1.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realogy Corp.
2,3,4
(Cost – $497,483)
|
|
|
7.88
|
|
|
|
02/15/19
|
|
|
|
550
|
|
|
|
577,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
2012 Semi-Annual Report
19
HELIOS HIGH INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
HIGH YIELD CORPORATE BONDS (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services – 16.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMC Entertainment, Inc.
2
|
|
|
8.75
|
%
|
|
|
06/01/19
|
|
|
$
|
800
|
|
|
$
|
882,000
|
|
|
Avis Budget Car Rental LLC/Avis Budget Finance, Inc.
2
|
|
|
8.25
|
|
|
|
01/15/19
|
|
|
|
550
|
|
|
|
598,812
|
|
|
Avis Budget Car Rental LLC/Avis Budget Finance, Inc.
|
|
|
9.75
|
|
|
|
03/15/20
|
|
|
|
150
|
|
|
|
171,375
|
|
|
Beazer Homes USA, Inc.
3,4
|
|
|
6.63
|
|
|
|
04/15/18
|
|
|
|
300
|
|
|
|
320,625
|
|
|
Beazer Homes USA, Inc.
2
|
|
|
9.13
|
|
|
|
06/15/18
|
|
|
|
250
|
|
|
|
252,500
|
|
|
Boyd Gaming Corp.
3,4
|
|
|
9.00
|
|
|
|
07/01/20
|
|
|
|
300
|
|
|
|
306,000
|
|
|
Caesars Entertainment Operating Company, Inc.
3,4
|
|
|
8.50
|
|
|
|
02/15/20
|
|
|
|
200
|
|
|
|
200,000
|
|
|
Caesars Entertainment Operating Company, Inc.
2
|
|
|
11.25
|
|
|
|
06/01/17
|
|
|
|
450
|
|
|
|
483,750
|
|
|
CityCenter Holdings LLC/CityCenter Finance Corp.
|
|
|
7.63
|
|
|
|
01/15/16
|
|
|
|
100
|
|
|
|
106,750
|
|
|
Iron Mountain, Inc.
2
|
|
|
8.38
|
|
|
|
08/15/21
|
|
|
|
250
|
|
|
|
276,875
|
|
|
Marina District Finance Company, Inc.
2
|
|
|
9.88
|
|
|
|
08/15/18
|
|
|
|
300
|
|
|
|
300,750
|
|
|
MGM Resorts International
2
|
|
|
7.63
|
|
|
|
01/15/17
|
|
|
|
550
|
|
|
|
583,000
|
|
|
MGM Resorts International
3,4
|
|
|
8.63
|
|
|
|
02/01/19
|
|
|
|
150
|
|
|
|
163,500
|
|
|
MTR Gaming Group, Inc.
|
|
|
11.50
|
|
|
|
08/01/19
|
|
|
|
428
|
|
|
|
450,422
|
|
|
Palace Entertainment Holdings LLC/Palace Entertainment Holdings Corp.
3,4
|
|
|
8.88
|
|
|
|
04/15/17
|
|
|
|
525
|
|
|
|
555,188
|
|
|
Standard Pacific Corp.
2
|
|
|
8.38
|
|
|
|
05/15/18
|
|
|
|
500
|
|
|
|
576,875
|
|
|
UR Merger Sub Corp.
|
|
|
8.25
|
|
|
|
02/01/21
|
|
|
|
300
|
|
|
|
329,250
|
|
|
UR Merger Sub Corp.
2
|
|
|
10.25
|
|
|
|
11/15/19
|
|
|
|
250
|
|
|
|
285,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Services
(Cost – $6,288,596)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,842,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology & Electronics – 2.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Data Corp.
2,3,4
|
|
|
8.25
|
|
|
|
01/15/21
|
|
|
|
525
|
|
|
|
523,688
|
|
|
First Data Corp.
|
|
|
9.88
|
|
|
|
09/24/15
|
|
|
|
53
|
|
|
|
54,060
|
|
|
Freescale Semiconductor, Inc.
|
|
|
8.05
|
|
|
|
02/01/20
|
|
|
|
550
|
|
|
|
541,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Technology & Electronics
(Cost – $1,112,472)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,119,498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications – 7.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cincinnati Bell, Inc.
2
|
|
|
8.25
|
|
|
|
10/15/17
|
|
|
|
250
|
|
|
|
266,875
|
|
|
Cincinnati Bell, Inc.
|
|
|
8.75
|
|
|
|
03/15/18
|
|
|
|
300
|
|
|
|
304,500
|
|
|
Frontier Communications Corp.
2
|
|
|
7.13
|
|
|
|
03/15/19
|
|
|
|
950
|
|
|
|
1,011,750
|
|
|
Level 3 Communications, Inc.
3,4
|
|
|
8.88
|
|
|
|
06/01/19
|
|
|
|
550
|
|
|
|
577,500
|
|
|
PAETEC Holding Corp.
|
|
|
9.88
|
|
|
|
12/01/18
|
|
|
|
300
|
|
|
|
343,500
|
|
|
Windstream Corp.
2
|
|
|
7.00
|
|
|
|
03/15/19
|
|
|
|
800
|
|
|
|
816,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Telecommunications
(Cost – $3,070,043)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,320,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility – 2.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calpine Corp.
2,3,4
|
|
|
7.25
|
|
|
|
10/15/17
|
|
|
|
500
|
|
|
|
533,750
|
|
|
NRG Energy, Inc.
|
|
|
8.50
|
|
|
|
06/15/19
|
|
|
|
500
|
|
|
|
540,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Utility
(Cost – $995,348)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,073,750
|
|
|
Total HIGH YIELD CORPORATE BONDS
(Cost – $50,480,686)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,212,324
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
Brookfield
Investment Management Inc.
20
HELIOS HIGH INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
TERM LOANS – 0.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Texas Competitive Electric Holdings Company LLC
1,4
|
|
|
4.74
|
%
|
|
|
10/10/17
|
|
|
$
|
226
|
|
|
$
|
155,255
|
|
|
Texas Competitive Electric Holdings Company LLC
1,4
|
|
|
4.94
|
|
|
|
10/10/17
|
|
|
|
36
|
|
|
|
24,947
|
|
|
Total TERM LOANS
(Cost – $217,498)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
180,202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Value
(Note 2)
|
|
|
COMMON STOCKS – 1.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Industry – 1.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huntsman Corp.
(Cost – $275,862)
|
|
|
|
|
|
|
|
|
|
|
27,370
|
|
|
|
408,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications – 0.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frontier Communications Corp.
|
|
|
|
|
|
|
|
|
|
|
15,508
|
|
|
|
75,989
|
|
|
Windstream Corp.
|
|
|
|
|
|
|
|
|
|
|
8,300
|
|
|
|
83,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Telecommunications
(Cost – $273,230)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
159,902
|
|
|
Total COMMON STOCKS
(Cost – $549,092)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
568,536
|
|
|
WARRANTS – 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive – 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Motors Co.
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expiration: July 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise Price: $18.33
|
|
|
|
|
|
|
|
|
|
|
5,546
|
|
|
|
45,810
|
|
|
General Motors Co.
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expiration: July 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise Price: $10.00
|
|
|
|
|
|
|
|
|
|
|
5,546
|
|
|
|
76,424
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Automotive
(Cost – $336,206)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
122,234
|
|
|
Total WARRANTS
(Cost – $336,206)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
122,234
|
|
|
Total Investments – 135.6%
(Cost – $53,924,406)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
57,127,627
|
|
|
Liabilities in Excess of Other Assets – (35.6)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(15,000,067
|
)
|
|
|
|
|
|
|
|
TOTAL NET ASSETS – 100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
42,127,560
|
|
|
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
2012 Semi-Annual Report
21
HELIOS MULTI-SECTOR HIGH INCOME FUND, INC.
OBJECTIVE & STRATEGY
Helios Multi-Sector High Income Fund, Inc.
seeks a high level of current income. The Fund seeks capital growth as a secondary investment objective when consistent with its primary investment objective. The Fund invests in a diversified portfolio consisting primarily of debt securities
that offer attractive yield and capital appreciation potential. Under normal market conditions, the Fund invests a majority of its total assets in below-investment grade debt securities, including up to 20% of the Fund’s total assets in
distressed securities. The Fund maintains the flexibility to invest up to 50% of its total assets in investment grade debt securities. The Fund invests up to 30% of its total assets in equity securities of both domestic and foreign issuers and up to
15% of its total assets in a combination of foreign debt and foreign equity securities. The Fund invests in a wide range of debt securities including, corporate bonds, mortgage-backed and asset-backed securities, convertible debt securities,
distressed securities, including securities of companies in bankruptcy reorganization proceedings or otherwise in the process of debt restructuring, U.S. government and municipal obligations and foreign government obligations. (Below-investment
grade debt securities are rated Ba1 or lower by Moody’s Investors Service, Inc., BB+ or lower by Standard & Poor’s Ratings Group, comparably rated by another nationally recognized statistical rating organization or, if unrated,
determined by the Fund’s investment advisor to be of comparable quality.) The Fund may use leverage through bank borrowings, reverse repurchase agreements or other transactions involving indebtedness or through the issuance of preferred shares.
The Fund may leverage one third of its total assets (in each case including the amount borrowed.) The Fund may vary its use of leverage in response to changing market conditions.
Investment Risks:
Investors in any bond fund should anticipate fluctuations in price. Bond prices and the value of bond funds decline as
interest rates rise. Bonds with longer-term maturities generally are more vulnerable to interest rate risk than bonds with shorter-term maturities. Below-investment grade bonds involve greater credit risk, which is the risk that the issuer will not
make interest or principal payments when due. An economic downturn or period of rising interest rates could adversely affect the ability of issuers, especially issuers of below investment-grade debt, to service primary obligations and an
unanticipated default could cause the Fund to experience a reduction in value of its shares. The Fund’s investments in mortgage-backed or asset-backed securities that are “subordinated” to other interests in the same pool may increase
credit risk to the extent that the Fund as a holder of those securities may only receive payments after the pool’s obligations to other investors have been satisfied. Below-investment grade bonds also are subject to greater price volatility and
are less liquid, especially during periods of economic uncertainty or change, than higher-rated debt securities. The value of U.S. and foreign equity securities in which the Fund invests will change based on changes in a company’s financial
condition and in overall market and economic conditions. Leverage creates an opportunity for an increased return to common stockholders, but unless the income and capital appreciation, if any, on securities acquired with leverage proceeds exceed the
costs of the leverage, the use of leverage will diminish the investment performance of the Fund’s shares. Use of leverage also may increase the likelihood that the net asset value of the Fund and market value of its common shares will be more
volatile, and the yield and total return to common stockholders will tend to fluctuate more in response to changes in interest rates and creditworthiness.
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the
six months ended September 30, 2012, Helios Multi-Sector High Income Fund, Inc. (NYSE: HMH) had a total return based on net asset value of 6.96% and a total return based on market price of 9.74%, which assumes the reinvestment of dividends and
is exclusive of brokerage commissions. Based on the NYSE closing price of $6.39 on September 30, 2012, the Fund’s shares had a dividend yield of 7.98%. The dividend yield is calculated as the annualized amount of the reporting
period’s most recent monthly dividend declared divided by the stated stock price.
Individual contributors of performance included
Frontier Communications, USG Corp., and Pultegroup. Frontier Communications offers telephonic communications services in rural areas to small business and residential customers. Their bonds rallied on expectations the company may seek to refinance
at today’s lower interest rates. USG Corp., a manufacturer of building materials, benefitted from a recovery in new housing construction and Pultegroup, a residential homebuilder benefitted from the apparent bottoming in the housing sector
Brookfield
Investment Management Inc.
22
HELIOS MULTI-SECTOR HIGH INCOME FUND, INC.
Detractors of performance included Insight Communications, General Motors’ equity and AK Steel. Insight Communications is a cable TV company whose bonds were called when the company was acquired by Time Warner
Cable. General Motors’ equity was down in the period as investors worried about the possible impact of a sale of the U.S. government’s shares acquired during the recession. AK Steel is a large North American steel producer whose bonds were
lower on softer steel prices resulting from reduction in Chinese demand.
HIGH YIELD MARKET ENVIRONMENT
The high yield market delivered robust returns for the six-month period ended September 30, 2012. Early in the period, markets corrected lower
as, for the third year in a row, investors held a negative view beginning in May 2012. This was primarily attributed to concerns over the health of the European Union and slowing economic growth in China. Unlike prior years, however, the correction
was short-lived, confined mostly to the month of May. Every other month during the period saw strong positive returns in excess of 1% per month cumulating to a six-month return of 6.5% despite the correction in May. The high yield bond
market’s enthusiasm was not matched by equity returns, which were up only 1.6% as measured by the Russell 2000 Index.
The spread
between high yield corporate bonds and the 10-Year U.S. Treasury compressed modestly during the six-month period from 594 basis points to 569 basis points. We view this compression as a positive because the underlying 10-year U.S. Treasury rate fell
from 2.21% to 1.64%.
Current spreads of 569 basis points remain wider than the 400-500 basis points we would normally expect to see at
this point in the credit cycle, although that has diminished somewhat as spreads continue to narrow. Therefore, while the high yield market continues to represent value to investors, further price appreciation is likely to be limited as the sector,
as a whole, is trading above par.
Corporate credit has been sound for the past couple of years, and we saw stable
credit this period with the default rate declining slightly from 1.9%.
1
to
1.8%.
2
Note that this period’s default rate of 1.8% remains well below
the market’s 25-year average default rate of 4.2%.
3
Credit ratings agencies confirm the stable trend in corporate credit by upgrading 1.0 times as many high yield companies as
they downgraded in the past 12 months.
4
We noted that companies reported
acceptable (but not strong) earnings through the second quarter of 2011, (the latest reporting period) and we saw more management teams taking a cautious view of the future.
Supply and demand was generally positive during the period with high yield mutual funds seeing strong inflows.
5
New issue volume was strong following May’s correction, accelerating to an all-time
quarterly record of $98.5 billion, in the third quarter of calendar 2012, above the previous record of $96.8 billion posted in the first quarter of 2012. September’s new issue volume of $46 billion was an all-time record. Overall, with money
flooding into mutual funds, deals were oversubscribed and traded higher in the aftermarket. Traders report that there seems to be ample cash available to buy issues and report that some challenges exist in purchasing good quality paper in the
secondary market. The bulk of new issues are used to refinance debt which has the effect of improving credit quality by eliminating near term maturities. We note with some concern, however, a rise in the number of riskier new issues late in the
period when some companies took advantage of the robust buying appetite and issued lower quality paper, PIK or pay-in-kind bonds, and financing to pay dividends to owners. While the volume of these riskier transactions is not yet concerning, we note
that it is the first time since the downturn that we have seen a significant increase in such paper.
OUTLOOK
Brookfield has been positive on the high yield market, noting the robust credit quality, good corporate liquidity and excellent progress on the
part of corporate treasurers in managing their debt structures. The high yield market
|
1
|
JP Morgan, High Yield Default Monitor, April 2, 2012 p 1
|
|
2
|
JP Morgan, High Yield Default Monitor, October 1, 2012 p 4.
|
|
3
|
JP Morgan, High Yield Default Monitor, October 1, 2012 p 2
|
|
4
|
JP Morgan, High Yield Default Monitor, October 1, 2012 p 10
|
|
5
|
Credit Suisse “Leveraged Finance Strategy Update” October 1, 2012, p. 2.
|
2012 Semi-Annual Report
23
HELIOS MULTI-SECTOR HIGH INCOME FUND, INC.
agreed and returns were excellent. As these fundamentals remain in place, our outlook for this asset class over the next 12 months or so remains positive.
However, we also believe that significant further potential upside appreciation is limited due to the decline in spreads from 737 to 569 basis
points in 2012, and with the return of the market above par. While normally we would expect the spread to be 50 to 100 basis points narrower than current levels, we note the unusually depressed level of the benchmark treasury yields, which may be
artificially depressed due to actions by the Federal Reserve. With the high yield market trading at yields near all time lows, our enthusiasm is tempered at this point. We are carefully watching the quality of new issues coming to market as a
possible negative going forward.
Given our expectation of modest economic growth, modestly increasing defaults, although no general
recession, we believe that high yield investors are adequately, but not generously compensated at current yield spread levels. While we would normally be targeting yield spreads of 400 to 500 basis points at this point in the credit cycle, we remain
skeptical that the problems in Europe are permanently addressed, and are increasingly concerned with the health of the U.S. balance sheet which will need to be addressed shortly after the November election. With these risks outstanding we expect
high yield investors will continue to demand a premium to historical spreads, at least for the next few quarters. For investors seeking to clip the current coupon offered in the high yield market, the investment landscape remains attractive.
Forward-Looking Information
This management discussion contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Forward-looking statements that are based on various assumptions (some of which are beyond our control) may be identified by reference to a future period or periods or by the use of forward-looking terminology, such as “may,”
“will,” “believe,” “expect,” “anticipate,” “continue,” “should,” “intend,” or similar terms or variations on those terms or the negative of those terms. Although we believe that
the expectations contained in any forward-looking statement are based on reasonable assumptions, we can give no assurance that our expectations will be attained. We do not undertake, and specifically disclaim any obligation, to publicly release any
update or supplement to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
Disclosure
The Fund’s portfolio holdings are subject to change without
notice. The mention of specific securities is not a recommendation or solicitation for any person to buy, sell or hold any particular security. There is no assurance that the Helios Multi-Sector High Income Fund, Inc. currently holds these
securities.
The Barclays Capital U.S. Corporate High Yield Index covers the U.S. dollar denominated, non-investment grade, fixed-rate,
taxable corporate bond market. Securities are classified as high yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below. The index excludes emerging markets debt. The Barclays Capital U.S. Corporate High Yield Index
is part of the Barclays Capital U.S. Universal and Global High Yield Indices. The index is unmanaged and, unlike the Fund, is not affected by cash flows or trading and other expenses. It is not possible to invest directly in an index. Index
performance is shown for illustrative purposes only and does not predict or depict the performance of the Fund.
The Fund may utilize
leverage to seek to enhance the yield and net asset value of its common stock, through bank borrowings, issuance of short-term debt securities or shares of preferred stock, or a combination thereof. However, these objectives cannot be achieved in
all interest rate environments. While leverage may result in a higher yield for the Fund, the use of leverage involves risk, including the potential for higher volatility of the NAV, fluctuations of dividends and other distributions paid by the Fund
and the market price of the Fund’s common stock, among others. Certain funds may invest assets in securities of issuers domiciled outside the United States, including issuers from emerging markets. Foreign investing involves special risks,
including foreign currency risk and the possibility of substantial volatility due to adverse political, economic or other developments.
Brookfield
Investment Management Inc.
24
HELIOS MULTI-SECTOR HIGH INCOME FUND, INC.
Performance data quoted represents past performance results and does not guarantee future results. Current performance may be lower or higher than the performance data quoted.
These views represent the opinions of Brookfield Investment Management Inc. and are not intended to predict or depict the performance of any
investment. These views are as of the close of business on September 30, 2012 and subject to change based on subsequent developments.
2012 Semi-Annual Report
25
HELIOS MULTI-SECTOR HIGH INCOME FUND, INC.
Portfolio Characteristics (Unaudited)
September 30, 2012
PORTFOLIO STATISTICS
|
|
|
|
|
Annualized dividend yield
1
|
|
7.98%
|
|
|
|
|
Weighted average coupon
|
|
8.12%
|
|
|
|
|
Weighted average life
|
|
4.85 years
|
|
|
|
|
Percentage of leveraged assets
|
|
28.75%
|
|
|
|
|
Total number of holdings
|
|
133
|
CREDIT QUALITY
|
|
|
|
|
|
|
BBB
|
|
|
3
|
%
|
|
|
|
|
BB
|
|
|
15
|
%
|
|
|
|
|
B
|
|
|
56
|
%
|
|
|
|
|
CCC
|
|
|
20
|
%
|
|
|
|
|
Unrated
|
|
|
2
|
%
|
|
|
|
|
Cash
|
|
|
4
|
%
|
|
Total
|
|
|
100
|
%
|
ASSET ALLOCATION
2
|
|
|
|
|
|
|
Investment Grade Corporate Bonds
|
|
|
5
|
%
|
|
|
|
|
High Yield Corporate Bonds
|
|
|
94
|
%
|
|
|
|
|
Common Stocks and Warrants
|
|
|
1
|
%
|
|
Total
|
|
|
100
|
%
|
|
1
|
Dividends may include net investment income, capital gains and/or return of capital. The dividend yield referenced above is calculated as the annualized
amount of the most recent monthly dividend declared divided by the September 30, 2012 stock price.
|
|
2
|
Includes only invested assets; excludes cash.
|
Brookfield
Investment Management Inc.
26
HELIOS MULTI-SECTOR HIGH INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
INVESTMENT GRADE CORPORATE BONDS – 6.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive – 1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ford Motor Co.
(Cost – $481,491)
|
|
|
6.50
|
%
|
|
|
08/01/18
|
|
|
$
|
525
|
|
|
$
|
606,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Industry – 1.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Georgia-Pacific LLC
|
|
|
7.25
|
|
|
|
06/01/28
|
|
|
|
240
|
|
|
|
303,707
|
|
|
Georgia-Pacific LLC
|
|
|
7.38
|
|
|
|
12/01/25
|
|
|
|
285
|
|
|
|
377,224
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Basic Industry
(Cost – $492,476)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
680,931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy – 1.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pioneer Natural Resources Co.
|
|
|
6.65
|
|
|
|
03/15/17
|
|
|
|
400
|
|
|
|
474,833
|
|
|
SESI LLC
2
|
|
|
6.88
|
|
|
|
06/01/14
|
|
|
|
249
|
|
|
|
249,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Energy
(Cost – $597,586)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
723,833
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications – 2.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qwest Corp.
2
(Cost – $725,517)
|
|
|
6.88
|
|
|
|
09/15/33
|
|
|
|
1,000
|
|
|
|
1,012,500
|
|
|
Total INVESTMENT GRADE CORPORATE BONDS
(Cost – $2,297,070)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,023,639
|
|
|
HIGH YIELD CORPORATE BONDS – 127.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive – 7.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Axle & Manufacturing, Inc.
|
|
|
7.75
|
|
|
|
11/15/19
|
|
|
|
275
|
|
|
|
303,187
|
|
|
American Axle & Manufacturing, Inc.
2
|
|
|
7.88
|
|
|
|
03/01/17
|
|
|
|
550
|
|
|
|
573,375
|
|
|
Chrysler Group LLC/CG Co-Issuer, Inc.
|
|
|
8.25
|
|
|
|
06/15/21
|
|
|
|
625
|
|
|
|
665,625
|
|
|
General Motors Financial Company, Inc.
3,4
|
|
|
4.75
|
|
|
|
08/15/17
|
|
|
|
200
|
|
|
|
205,062
|
|
|
Jaguar Land Rover PLC
3,4,6
|
|
|
8.13
|
|
|
|
05/15/21
|
|
|
|
475
|
|
|
|
517,156
|
|
|
Motors Liquidation Co.
8,9
|
|
|
7.13
|
|
|
|
07/15/13
|
|
|
|
250
|
|
|
|
25
|
|
|
Motors Liquidation Co.
8,9
|
|
|
8.38
|
|
|
|
07/15/33
|
|
|
|
1,500
|
|
|
|
150
|
|
|
Pittsburgh Glass Works LLC
3,4
|
|
|
8.50
|
|
|
|
04/15/16
|
|
|
|
625
|
|
|
|
581,250
|
|
|
Tenneco, Inc.
2
|
|
|
6.88
|
|
|
|
12/15/20
|
|
|
|
625
|
|
|
|
684,375
|
|
|
Visteon Corp.
|
|
|
6.75
|
|
|
|
04/15/19
|
|
|
|
95
|
|
|
|
99,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Automotive
(Cost – $3,360,051)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,629,955
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Industry – 22.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AK Steel Corp.
2
|
|
|
7.63
|
|
|
|
05/15/20
|
|
|
|
790
|
|
|
|
691,250
|
|
|
Alpha Natural Resources, Inc.
|
|
|
6.25
|
|
|
|
06/01/21
|
|
|
|
525
|
|
|
|
437,062
|
|
|
Arch Coal, Inc.
2
|
|
|
8.75
|
|
|
|
08/01/16
|
|
|
|
675
|
|
|
|
661,500
|
|
|
Associated Materials LLC/AMH New Finance, Inc.
2
|
|
|
9.13
|
|
|
|
11/01/17
|
|
|
|
600
|
|
|
|
588,000
|
|
|
Building Materials Corporation of America
3,4
|
|
|
6.75
|
|
|
|
05/01/21
|
|
|
|
300
|
|
|
|
328,500
|
|
|
Cascades, Inc.
2,6
|
|
|
7.75
|
|
|
|
12/15/17
|
|
|
|
625
|
|
|
|
654,687
|
|
|
CONSOL Energy, Inc.
2
|
|
|
8.25
|
|
|
|
04/01/20
|
|
|
|
225
|
|
|
|
235,687
|
|
|
FMG Resources August 2006 Property Ltd.
3,4,6
|
|
|
6.88
|
|
|
|
04/01/22
|
|
|
|
400
|
|
|
|
366,000
|
|
|
Hexion US Finance Corp./Hexion Nova Scotia Finance ULC
|
|
|
9.00
|
|
|
|
11/15/20
|
|
|
|
850
|
|
|
|
758,625
|
|
|
Huntsman International LLC
2
|
|
|
8.63
|
|
|
|
03/15/21
|
|
|
|
550
|
|
|
|
629,750
|
|
|
Ineos Finance PLC
3,4,6
|
|
|
9.00
|
|
|
|
05/15/15
|
|
|
|
325
|
|
|
|
343,687
|
|
|
Ineos Group Holdings SA
3,4,6
|
|
|
8.50
|
|
|
|
02/15/16
|
|
|
|
625
|
|
|
|
590,625
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
2012 Semi-Annual Report
27
HELIOS MULTI-SECTOR HIGH INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
HIGH YIELD CORPORATE BONDS (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Masonite International Corp.
2,3,4,6
|
|
|
8.25
|
%
|
|
|
04/15/21
|
|
|
$
|
625
|
|
|
$
|
659,375
|
|
|
Ply Gem Industries, Inc.
2
|
|
|
8.25
|
|
|
|
02/15/18
|
|
|
|
625
|
|
|
|
652,344
|
|
|
Steel Dynamics, Inc.
2
|
|
|
7.63
|
|
|
|
03/15/20
|
|
|
|
675
|
|
|
|
732,375
|
|
|
Tembec Industries, Inc.
2,6
|
|
|
11.25
|
|
|
|
12/15/18
|
|
|
|
625
|
|
|
|
656,250
|
|
|
USG Corp.
2
|
|
|
9.75
|
|
|
|
01/15/18
|
|
|
|
675
|
|
|
|
729,000
|
|
|
Verso Paper Holdings LLC/Verso Paper, Inc.
3,4
|
|
|
11.75
|
|
|
|
01/15/19
|
|
|
|
425
|
|
|
|
448,375
|
|
|
Xerium Technologies, Inc.
|
|
|
8.88
|
|
|
|
06/15/18
|
|
|
|
470
|
|
|
|
415,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Basic Industry
(Cost – $10,559,882)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,579,042
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Goods – 12.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AAR Corp.
3,4
|
|
|
7.25
|
|
|
|
01/15/22
|
|
|
|
225
|
|
|
|
234,000
|
|
|
Berry Plastics Corp.
2
|
|
|
9.50
|
|
|
|
05/15/18
|
|
|
|
625
|
|
|
|
685,937
|
|
|
Casella Waste Systems, Inc.
3,4
|
|
|
7.75
|
|
|
|
02/15/19
|
|
|
|
825
|
|
|
|
808,500
|
|
|
Coleman Cable, Inc.
|
|
|
9.00
|
|
|
|
02/15/18
|
|
|
|
300
|
|
|
|
319,500
|
|
|
Crown Cork & Seal Company, Inc.
2
|
|
|
7.38
|
|
|
|
12/15/26
|
|
|
|
775
|
|
|
|
850,562
|
|
|
Mueller Water Products, Inc.
|
|
|
7.38
|
|
|
|
06/01/17
|
|
|
|
625
|
|
|
|
640,625
|
|
|
Owens-Illinois, Inc.
|
|
|
7.80
|
|
|
|
05/15/18
|
|
|
|
475
|
|
|
|
547,437
|
|
|
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC
2
|
|
|
9.00
|
|
|
|
04/15/19
|
|
|
|
625
|
|
|
|
637,500
|
|
|
Tekni-Plex, Inc.
3,4
|
|
|
9.75
|
|
|
|
06/01/19
|
|
|
|
350
|
|
|
|
374,500
|
|
|
Terex Corp.
|
|
|
6.50
|
|
|
|
04/01/20
|
|
|
|
225
|
|
|
|
234,000
|
|
|
Terex Corp.
2
|
|
|
8.00
|
|
|
|
11/15/17
|
|
|
|
400
|
|
|
|
414,000
|
|
|
Trimas Corp.
2
|
|
|
9.75
|
|
|
|
12/15/17
|
|
|
|
228
|
|
|
|
263,340
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Capital Goods
(Cost – $5,620,597)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,009,901
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Cyclical – 9.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DineEquity, Inc.
2
|
|
|
9.50
|
|
|
|
10/30/18
|
|
|
|
600
|
|
|
|
676,500
|
|
|
Levi Strauss & Co.
2
|
|
|
7.63
|
|
|
|
05/15/20
|
|
|
|
675
|
|
|
|
729,000
|
|
|
Limited Brands, Inc.
|
|
|
7.60
|
|
|
|
07/15/37
|
|
|
|
375
|
|
|
|
384,375
|
|
|
Limited Brands, Inc.
|
|
|
8.50
|
|
|
|
06/15/19
|
|
|
|
250
|
|
|
|
301,250
|
|
|
Mead Products LLC/ACCO Brands Corp.
3,4
|
|
|
6.75
|
|
|
|
04/30/20
|
|
|
|
500
|
|
|
|
521,250
|
|
|
Michaels Stores, Inc.
|
|
|
7.75
|
|
|
|
11/01/18
|
|
|
|
475
|
|
|
|
509,437
|
|
|
Rite Aid Corp.
2
|
|
|
9.75
|
|
|
|
06/12/16
|
|
|
|
275
|
|
|
|
301,125
|
|
|
Sally Holdings LLC/Sally Capital, Inc.
|
|
|
6.88
|
|
|
|
11/15/19
|
|
|
|
250
|
|
|
|
278,125
|
|
|
The Neiman Marcus Group Inc.
2
|
|
|
10.38
|
|
|
|
10/15/15
|
|
|
|
300
|
|
|
|
306,000
|
|
|
YCC Holdings LLC/Yankee Finance, Inc.
7
|
|
|
10.25
|
|
|
|
02/15/16
|
|
|
|
325
|
|
|
|
336,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consumer Cyclical
(Cost – $4,091,136)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,343,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Non-Cyclical – 3.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B&G Foods, Inc.
2
|
|
|
7.63
|
|
|
|
01/15/18
|
|
|
|
675
|
|
|
|
729,000
|
|
|
C&S Group Enterprises LLC
3,4
|
|
|
8.38
|
|
|
|
05/01/17
|
|
|
|
540
|
|
|
|
567,000
|
|
|
Easton-Bell Sports, Inc.
2
|
|
|
9.75
|
|
|
|
12/01/16
|
|
|
|
525
|
|
|
|
567,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consumer Non-Cyclical
(Cost – $1,764,492)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,863,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy – 20.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BreitBurn Energy Partners L.P./BreitBurn Finance Corp.
2
|
|
|
8.63
|
|
|
|
10/15/20
|
|
|
|
625
|
|
|
|
682,812
|
|
|
Calfrac Holdings L.P.
2,3,4
|
|
|
7.50
|
|
|
|
12/01/20
|
|
|
|
600
|
|
|
|
594,000
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
Brookfield
Investment Management Inc.
28
HELIOS MULTI-SECTOR HIGH INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
HIGH YIELD CORPORATE BONDS (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crosstex Energy L.P./Crosstex Energy Finance Corp.
2
|
|
|
8.88
|
%
|
|
|
02/15/18
|
|
|
$
|
550
|
|
|
$
|
588,500
|
|
|
EV Energy Partners L.P./EV Energy Finance Corp.
2
|
|
|
8.00
|
|
|
|
04/15/19
|
|
|
|
625
|
|
|
|
648,438
|
|
|
Frac Tech Services LLC/Frac Tech Finance, Inc.
2,3,4
|
|
|
8.13
|
|
|
|
11/15/18
|
|
|
|
390
|
|
|
|
415,350
|
|
|
GMX Resources, Inc.
2,7
|
|
|
11.00
|
|
|
|
12/01/17
|
|
|
|
229
|
|
|
|
214,733
|
|
|
Hercules Offshore, Inc.
2,3,4
|
|
|
10.50
|
|
|
|
10/15/17
|
|
|
|
375
|
|
|
|
395,156
|
|
|
Hilcorp Energy I LP/Hilcorp Finance Co.
2,3,4
|
|
|
8.00
|
|
|
|
02/15/20
|
|
|
|
675
|
|
|
|
750,938
|
|
|
Key Energy Services, Inc.
|
|
|
6.75
|
|
|
|
03/01/21
|
|
|
|
375
|
|
|
|
380,625
|
|
|
Linn Energy LLC/Linn Energy Finance Corp.
2
|
|
|
8.63
|
|
|
|
04/15/20
|
|
|
|
660
|
|
|
|
722,700
|
|
|
McJunkin Red Man Corp.
|
|
|
9.50
|
|
|
|
12/15/16
|
|
|
|
525
|
|
|
|
566,344
|
|
|
Niska Gas Storage US LLC/Niska Gas Storage Canada ULC
2
|
|
|
8.88
|
|
|
|
03/15/18
|
|
|
|
600
|
|
|
|
619,500
|
|
|
Petroleum Geo-Services ASA
3,4,6
|
|
|
7.38
|
|
|
|
12/15/18
|
|
|
|
275
|
|
|
|
293,563
|
|
|
Plains Exploration & Production Co.
2
|
|
|
7.63
|
|
|
|
06/01/18
|
|
|
|
675
|
|
|
|
718,875
|
|
|
Precision Drilling Corp.
6
|
|
|
6.63
|
|
|
|
11/15/20
|
|
|
|
225
|
|
|
|
239,625
|
|
|
Quicksilver Resources, Inc.
2
|
|
|
11.75
|
|
|
|
01/01/16
|
|
|
|
375
|
|
|
|
378,750
|
|
|
Trinidad Drilling Ltd.
2,3,4,6
|
|
|
7.88
|
|
|
|
01/15/19
|
|
|
|
625
|
|
|
|
675,000
|
|
|
Venoco, Inc.
|
|
|
8.88
|
|
|
|
02/15/19
|
|
|
|
600
|
|
|
|
522,000
|
|
|
W&T Offshore, Inc.
|
|
|
8.50
|
|
|
|
06/15/19
|
|
|
|
220
|
|
|
|
239,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Energy
(Cost – $9,309,286)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,646,709
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare – 9.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DJO Finance LLC/DJO Finance Corp.
3,4
|
|
|
9.88
|
|
|
|
04/15/18
|
|
|
|
325
|
|
|
|
320,938
|
|
|
HCA, Inc.
2
|
|
|
8.00
|
|
|
|
10/01/18
|
|
|
|
625
|
|
|
|
721,875
|
|
|
Health Management Associates, Inc.
2,3,4
|
|
|
7.38
|
|
|
|
01/15/20
|
|
|
|
625
|
|
|
|
678,125
|
|
|
inVentiv Health, Inc.
3,4
|
|
|
10.25
|
|
|
|
08/15/18
|
|
|
|
245
|
|
|
|
215,600
|
|
|
Kindred Healthcare, Inc.
|
|
|
8.25
|
|
|
|
06/01/19
|
|
|
|
325
|
|
|
|
316,063
|
|
|
Pharmaceutical Product Development, Inc.
2,3,4
|
|
|
9.50
|
|
|
|
12/01/19
|
|
|
|
625
|
|
|
|
701,563
|
|
|
Polymer Group, Inc.
2
|
|
|
7.75
|
|
|
|
02/01/19
|
|
|
|
600
|
|
|
|
639,000
|
|
|
Service Corporation International
2
|
|
|
6.75
|
|
|
|
04/01/16
|
|
|
|
750
|
|
|
|
838,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Healthcare
(Cost – $4,121,178)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,431,289
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media – 10.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Reprographics Co.
2
|
|
|
10.50
|
|
|
|
12/15/16
|
|
|
|
600
|
|
|
|
630,000
|
|
|
Cablevision Systems Corp.
2
|
|
|
8.63
|
|
|
|
09/15/17
|
|
|
|
750
|
|
|
|
871,875
|
|
|
CCO Holdings LLC/CCO Holdings Capital Corp.
2
|
|
|
8.13
|
|
|
|
04/30/20
|
|
|
|
675
|
|
|
|
762,750
|
|
|
Cenveo Corp.
|
|
|
8.88
|
|
|
|
02/01/18
|
|
|
|
275
|
|
|
|
260,563
|
|
|
Clear Channel Communications, Inc.
2
|
|
|
9.00
|
|
|
|
03/01/21
|
|
|
|
600
|
|
|
|
534,000
|
|
|
Cumulus Media Holdings, Inc.
|
|
|
7.75
|
|
|
|
05/01/19
|
|
|
|
625
|
|
|
|
607,813
|
|
|
Deluxe Corp.
2
|
|
|
7.38
|
|
|
|
06/01/15
|
|
|
|
500
|
|
|
|
508,750
|
|
|
Mediacom LLC/Mediacom Capital Corp.
2
|
|
|
9.13
|
|
|
|
08/15/19
|
|
|
|
625
|
|
|
|
690,625
|
|
|
National CineMedia LLC
3,4
|
|
|
6.00
|
|
|
|
04/15/22
|
|
|
|
225
|
|
|
|
237,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Media
(Cost – $4,952,719)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,103,751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate – 1.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realogy Corp.
3,4
(Cost – $565,322)
|
|
|
7.88
|
|
|
|
02/15/19
|
|
|
|
625
|
|
|
|
656,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
2012 Semi-Annual Report
29
HELIOS MULTI-SECTOR HIGH INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
HIGH YIELD CORPORATE BONDS (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services – 17.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMC Entertainment, Inc.
2
|
|
|
8.75
|
%
|
|
|
06/01/19
|
|
|
$
|
600
|
|
|
$
|
661,500
|
|
|
Avis Budget Car Rental LLC/Avis Budget Finance, Inc.
2
|
|
|
8.25
|
|
|
|
01/15/19
|
|
|
|
625
|
|
|
|
680,469
|
|
|
Avis Budget Car Rental LLC/Avis Budget Finance, Inc.
|
|
|
9.75
|
|
|
|
03/15/20
|
|
|
|
175
|
|
|
|
199,938
|
|
|
Beazer Homes USA, Inc.
2
|
|
|
9.13
|
|
|
|
06/15/18
|
|
|
|
275
|
|
|
|
277,750
|
|
|
Boyd Gaming Corp.
3,4
|
|
|
9.00
|
|
|
|
07/01/20
|
|
|
|
325
|
|
|
|
331,500
|
|
|
Caesars Entertainment Operating Company, Inc.
3,4
|
|
|
8.50
|
|
|
|
02/15/20
|
|
|
|
225
|
|
|
|
225,000
|
|
|
Caesars Entertainment Operating Company, Inc.
2
|
|
|
11.25
|
|
|
|
06/01/17
|
|
|
|
500
|
|
|
|
537,500
|
|
|
CityCenter Holdings LLC/CityCenter Finance Corp.
2
|
|
|
7.63
|
|
|
|
01/15/16
|
|
|
|
600
|
|
|
|
640,500
|
|
|
Iron Mountain, Inc.
2
|
|
|
8.38
|
|
|
|
08/15/21
|
|
|
|
275
|
|
|
|
304,563
|
|
|
Marina District Finance Company, Inc.
2
|
|
|
9.88
|
|
|
|
08/15/18
|
|
|
|
325
|
|
|
|
325,813
|
|
|
MGM Resorts International
2
|
|
|
7.63
|
|
|
|
01/15/17
|
|
|
|
625
|
|
|
|
662,500
|
|
|
MGM Resorts International
3,4
|
|
|
8.63
|
|
|
|
02/01/19
|
|
|
|
200
|
|
|
|
218,000
|
|
|
MTR Gaming Group, Inc.
|
|
|
11.50
|
|
|
|
08/01/19
|
|
|
|
478
|
|
|
|
503,442
|
|
|
Palace Entertainment Holdings LLC/Palace Entertainment Holdings Corp.
3,4
|
|
|
8.88
|
|
|
|
04/15/17
|
|
|
|
600
|
|
|
|
634,500
|
|
|
PulteGroup, Inc.
2
|
|
|
6.38
|
|
|
|
05/15/33
|
|
|
|
600
|
|
|
|
558,000
|
|
|
Standard Pacific Corp.
2
|
|
|
8.38
|
|
|
|
05/15/18
|
|
|
|
675
|
|
|
|
778,781
|
|
|
UR Merger Sub Corp.
|
|
|
8.25
|
|
|
|
02/01/21
|
|
|
|
350
|
|
|
|
384,125
|
|
|
UR Merger Sub Corp.
2
|
|
|
10.25
|
|
|
|
11/15/19
|
|
|
|
275
|
|
|
|
313,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Services
(Cost – $7,567,265)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,237,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology & Electronics – 2.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Data Corp.
2,3,4
|
|
|
8.25
|
|
|
|
01/15/21
|
|
|
|
600
|
|
|
|
598,500
|
|
|
First Data Corp.
|
|
|
9.88
|
|
|
|
09/24/15
|
|
|
|
61
|
|
|
|
62,220
|
|
|
Freescale Semiconductor, Inc.
|
|
|
8.05
|
|
|
|
02/01/20
|
|
|
|
625
|
|
|
|
615,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Technology & Electronics
(Cost – $1,270,390)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,276,345
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications – 8.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cincinnati Bell, Inc.
2
|
|
|
8.25
|
|
|
|
10/15/17
|
|
|
|
265
|
|
|
|
282,888
|
|
|
Cincinnati Bell, Inc.
|
|
|
8.75
|
|
|
|
03/15/18
|
|
|
|
360
|
|
|
|
365,400
|
|
|
Frontier Communications Corp.
2
|
|
|
7.13
|
|
|
|
03/15/19
|
|
|
|
1,050
|
|
|
|
1,118,250
|
|
|
Level 3 Communications, Inc.
3,4
|
|
|
8.88
|
|
|
|
06/01/19
|
|
|
|
625
|
|
|
|
656,250
|
|
|
PAETEC Holding Corp.
|
|
|
9.88
|
|
|
|
12/01/18
|
|
|
|
375
|
|
|
|
429,375
|
|
|
Windstream Corp.
2
|
|
|
7.00
|
|
|
|
03/15/19
|
|
|
|
1,000
|
|
|
|
1,020,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Telecommunications
(Cost – $3,578,550)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,872,163
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility – 2.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calpine Corp.
2,3,4
|
|
|
7.25
|
|
|
|
10/15/17
|
|
|
|
550
|
|
|
|
587,125
|
|
|
NRG Energy, Inc.
2
|
|
|
8.50
|
|
|
|
06/15/19
|
|
|
|
675
|
|
|
|
729,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Utility
(Cost – $1,218,274)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,316,125
|
|
|
Total HIGH YIELD CORPORATE BONDS
(Cost – $57,979,142)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,966,004
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
Brookfield
Investment Management Inc.
30
HELIOS MULTI-SECTOR HIGH INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
TERM LOANS – 0.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Texas Competitive Electric Holdings Company LLC
1,4
|
|
|
4.74
|
%
|
|
|
10/10/17
|
|
|
$
|
247
|
|
|
$
|
169,369
|
|
|
Texas Competitive Electric Holdings Company LLC
1,4
|
|
|
4.94
|
|
|
|
10/10/17
|
|
|
|
40
|
|
|
|
27,215
|
|
|
Total TERM LOANS
(Cost – $237,249)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
196,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Value
(Note 2)
|
|
|
COMMON STOCKS – 1.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Industry – 1.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huntsman Corp.
(Cost – $309,392)
|
|
|
|
|
|
|
|
|
|
|
30,900
|
|
|
|
461,337
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications – 0.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Frontier Communications Corp.
|
|
|
|
|
|
|
|
|
|
|
17,743
|
|
|
|
86,941
|
|
|
Windstream Corp.
|
|
|
|
|
|
|
|
|
|
|
9,200
|
|
|
|
93,012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Telecommunications
(Cost – $285,725)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
179,953
|
|
|
Total COMMON STOCKS
(Cost – $595,117)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
641,290
|
|
|
WARRANTS – 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive – 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Motors Co.
5
Expiration: July 2019
Exercise Price: $18.33
|
|
|
|
|
|
|
|
|
|
|
6,469
|
|
|
|
53,434
|
|
|
General Motors Co.
5
Expiration: July 2016
Exercise Price: $10.00
|
|
|
|
|
|
|
|
|
|
|
6,469
|
|
|
|
89,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Automotive
(Cost – $384,117)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
142,577
|
|
|
Total WARRANTS
(Cost – $384,117)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
142,577
|
|
|
Total Investments – 135.9%
(Cost – $61,492,695)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64,970,094
|
|
|
Liabilities in Excess of Other Assets – (35.9)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(17,177,682
|
)
|
|
|
|
|
|
|
|
TOTAL NET ASSETS – 100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
47,792,412
|
|
|
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
2012 Semi-Annual Report
31
HELIOS STRATEGIC INCOME FUND, INC.
OBJECTIVE & STRATEGY
Helios Strategic Income Fund, Inc. seeks a high
level of current income. The Fund seeks capital growth as a secondary investment objective when consistent with its primary investment objective. The Fund invests in a diversified portfolio of securities that offers attractive yield and capital
appreciation potential and consists primarily of debt securities and secondarily of equity securities. The Advisor will continually analyze the markets for income-producing securities and will periodically reallocate the Fund’s investments
among various fixed-income and equity asset classes and between investment grade and below-investment grade debt securities to pursue its investment objectives. As a result, a majority of the Fund’s total assets may be invested in investment
grade securities at some times and in below-investment grade debt securities at other times. The Fund invests in a wide range of debt securities, including corporate bonds, mortgage-backed and asset-backed securities, and municipal and foreign
government obligations, as well as securities of companies in bankruptcy reorganization proceedings or otherwise in the process of debt restructuring. The Fund also invests in other securities providing the potential for high income or a combination
of high income and capital growth. (Below-investment grade debt securities are rated Ba1 or lower by Moody’s Investors Service, Inc., BB+ or lower by Standard & Poor’s Ratings Group, comparably rated by another nationally
recognized statistical rating organization or, if unrated, determined by the Fund’s investment advisor to be of comparable quality.) The Fund may use leverage through bank borrowings, reverse repurchase agreements or other transactions
involving indebtedness or through the issuance of preferred shares. The Fund may leverage up to one third of its total assets (in each case including the amount borrowed.) The Fund may vary its use of leverage in response to changing market
conditions.
Investment Risks:
Investors in any bond fund should anticipate fluctuations in price. Bond prices and the value of
bond funds decline as interest rates rise. Bonds with longer-term maturities generally are more vulnerable to interest rate risk than bonds with shorter-term maturities. Below-investment grade bonds involve greater credit risk, which is the risk
that the issuer will not make interest or principal payments when due. An economic downturn or period of rising interest rates could adversely affect the ability of issuers, especially issuers of below-investment grade debt, to service primary
obligations and an unanticipated default could cause the Fund to experience a reduction in value of its shares. The Fund’s investments in mortgage-backed or asset-backed securities that are “subordinated” to other interests in the
same pool may increase credit risk to the extent that the Fund, as a holder of those securities, may only receive payments after the pools’ obligations to other investors have been satisfied. Below-investment grade bonds are subject to greater
price volatility and are less liquid, especially during periods of economic uncertainty or change, than higher-rated debt securities. The value of U.S. and foreign equity securities in which the Fund invests will change based on changes in a
company’s financial condition and in overall market and economic conditions. Leverage creates an opportunity for an increased return to common stockholders, but unless the income and capital appreciation, if any, on securities acquired with
leverage proceeds exceed the costs of the leverage, the use of leverage will diminish the net investment performance of the Fund’s shares. Use of leverage also may increase the likelihood that the net asset value of the Fund and market value of
its common shares will be more volatile, and the yield and total return to common stockholders will tend to fluctuate more in response to changes in interest rates and creditworthiness.
MANAGEMENT DISCUSSION OF FUND PERFORMANCE
For the
six months ended September 30, 2012, Helios Strategic Income Fund, Inc. (NYSE: HSA) had a total return based on net asset value of 7.70% and a total return based on market price of 10.95%, which assumes the reinvestment of dividends and is
exclusive of brokerage commissions. Based on the NYSE closing price of $6.37 on September 30, 2012, the Fund’s shares had a dividend yield of 6.59%. The dividend yield is calculated as the annualized amount of the reporting period’s
most recent monthly dividend declared divided by the stated stock price.
Individual contributors of performance included B&G
Foods’ equity, Frontier Communications, and Anheuser-Busch. B&G Foods produces shelf-stable foods to grocery markets and benefitted from strong cost controls and improved profit margins. Frontier Communications offers telephonic
communications services in rural areas to small business and residential customers whose bonds rallied on expectations the company may seek to refinance at today’s lower interest rates. Anheuser-Busch is an international beer company that
experienced strong business trends.
Brookfield
Investment Management Inc.
32
HELIOS STRATEGIC INCOME FUND, INC.
Detractors of performance included Insight Communications, General Motors’ equity and Windstream’s equity. Insight Communications is a cable TV company whose bonds were called when the company was
acquired by Time Warner Cable. General Motors’ equity was down in the period as investors worried about the possible impact of a sale of the U.S. government’s shares acquired during the recession. Windstream, a rural telecommunications
company, saw its equity move lower on disappointing earnings announced in May, followed by a management shakeup.
HIGH YIELD MARKET
ENVIRONMENT
The high yield market delivered robust returns for the six-month period ended September 30, 2012. Early in the
period, markets corrected lower as, for the third year in a row, investors held a negative view beginning in May 2012. This was primarily attributed to concerns over the health of the European Union and slowing economic growth in China. Unlike prior
years, however, the correction was short-lived, confined mostly to the month of May. Every other month during the period saw strong positive returns in excess of 1% per month cumulating to a six-month return of 6.5% despite the correction in
May. The high yield bond market’s enthusiasm was not matched by equity returns, which were up only 1.6% as measured by the Russell 2000 Index.
The spread between high yield corporate bonds and the 10-Year U.S. Treasury compressed modestly during the six-month period from 594 basis points to 569 basis points. We view this compression as a positive because
the underlying 10-year U.S. Treasury rate fell from 2.21% to 1.64%.
Current spreads of 569 basis points remain wider than the 400-500
basis points we would normally expect to see at this point in the credit cycle, although that has diminished somewhat as spreads continue to narrow. Therefore, while the high yield market continues to represent value to investors, further price
appreciation is likely to be limited as the sector, as a whole, is trading above par.
Corporate credit has been
sound for the past couple of years, and we saw stable credit this period with the default rate declining slightly from
1.9%.
1
to 1.8%.
2
Note that this period’s default rate of 1.8% remains well below the market’s 25-year average default rate of
4.2%.
3
Credit ratings agencies confirm the stable trend in corporate credit by upgrading 1.0 times as many high yield companies as
they downgraded in the past 12 months.
4
We noted that companies reported
acceptable (but not strong) earnings through the second quarter of 2011, (the latest reporting period) and we saw more management teams taking a cautious view of the future.
Supply and demand was generally positive during the period with high yield mutual funds seeing strong inflows.
5
New issue volume was strong following May’s correction, accelerating to an all-time
quarterly record of $98.5 billion, in the third quarter of calendar 2012, above the previous record of $96.8 billion posted in the first quarter of 2012. September’s new issue volume of $46 billion was an all-time record. Overall, with money
flooding into mutual funds, deals were oversubscribed and traded higher in the aftermarket. Traders report that there seems to be ample cash available to buy issues and report that some challenges exist in purchasing good quality paper in the
secondary market. The bulk of new issues are used to refinance debt which has the effect of improving credit quality by eliminating near term maturities. We note with some concern, however, a rise in the number of riskier new issues late in the
period when some companies took advantage of the robust buying appetite and issued lower quality paper, PIK or pay-in-kind bonds, and financing to pay dividends to owners. While the volume of these riskier transactions is not yet concerning, we note
that it is the first time since the downturn that we have seen a significant increase in such paper.
|
1
|
JP Morgan, High Yield Default Monitor, April 2, 2012 p 1
|
|
2
|
JP Morgan, High Yield Default Monitor, October 1, 2012 p 4.
|
|
3
|
JP Morgan, High Yield Default Monitor, October 1, 2012 p 2
|
|
4
|
JP Morgan, High Yield Default Monitor, October 1, 2012 p 10
|
|
5
|
Credit Suisse “Leveraged Finance Strategy Update” October 1, 2012, p. 2.
|
2012 Semi-Annual Report
33
HELIOS STRATEGIC INCOME FUND, INC.
OUTLOOK
Brookfield has been positive on the high yield market, noting the
robust credit quality, good corporate liquidity and excellent progress on the part of corporate treasurers in managing their debt structures. The high yield market agreed and returns were excellent. As these fundamentals remain in place, our outlook
for this asset class over the next 12 months or so remains positive.
However, we also believe that significant further potential upside
appreciation is limited due to the decline in spreads from 737 to 569 basis points in 2012, and with the return of the market above par. While normally we would expect the spread to be 50 to 100 basis points narrower than current levels, we note the
unusually depressed level of the benchmark treasury yields, which may be artificially depressed due to actions by the Federal Reserve. With the high yield market trading at yields near all time lows, our enthusiasm is tempered at this point. We are
carefully watching the quality of new issues coming to market as a possible negative going forward.
Given our expectation of modest
economic growth, modestly increasing defaults, although no general recession, we believe that high yield investors are adequately, but not generously compensated at current yield spread levels. While we would normally be targeting yield spreads of
400 to 500 basis points at this point in the credit cycle, we remain skeptical that the problems in Europe are permanently addressed, and are increasingly concerned with the health of the U.S. balance sheet which will need to be addressed shortly
after the November election. With these risks outstanding we expect high yield investors will continue to demand a premium to historical spreads, at least for the next few quarters. For investors seeking to clip the current coupon offered in the
high yield market, the investment landscape remains attractive.
Forward-Looking Information
This management discussion contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements that are based on various assumptions (some of which are beyond our control) may be identified by reference to a future period or periods or
by the use of forward-looking terminology, such as “may,” “will,” “believe,” “expect,” “anticipate,” “continue,” “should,” “intend,” or similar terms or variations on
those terms or the negative of those terms. Although we believe that the expectations contained in any forward-looking statement are based on reasonable assumptions, we can give no assurance that our expectations will be attained. We do not
undertake, and specifically disclaim any obligation, to publicly release any update or supplement to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.
Disclosure
The
Fund’s portfolio holdings are subject to change without notice. The mention of specific securities is not a recommendation or solicitation for any person to buy, sell or hold any particular security. There is no assurance that the
Helios Strategic Income Fund, Inc. currently holds these securities.
The Barclays Capital U.S. Corporate High Yield Index covers the
U.S. dollar denominated, non-investment grade, fixed-rate, taxable corporate bond market. Securities are classified as high yield if the middle rating of Moody’s, Fitch, and S&P is Ba1/BB+/BB+ or below. The index excludes emerging markets
debt. The Barclays Capital U.S. Corporate High Yield Index is part of the Barclays Capital U.S. Universal and Global High Yield Indices. The index is unmanaged and, unlike the Fund, is not affected by cash flows or trading and other expenses. It is
not possible to invest directly in an index. Index performance is shown for illustrative purposes only and does not predict or depict the performance of the Fund.
The Fund may utilize leverage to seek to enhance the yield and net asset value of its common stock, through bank borrowings, issuance of short-term debt securities or shares of preferred stock, or a combination
thereof. However, these objectives cannot be achieved in all interest rate environments. While leverage may result in a higher yield for the Fund, the use of leverage involves risk, including the potential for higher volatility of the NAV,
fluctuations of dividends and other distributions paid by the Fund and the market price of the Fund’s common
Brookfield
Investment Management Inc.
34
HELIOS STRATEGIC INCOME FUND, INC.
stock, among others. Certain funds may invest assets in securities of issuers domiciled outside the United States, including issuers from emerging markets. Foreign investing involves special
risks, including foreign currency risk and the possibility of substantial volatility due to adverse political, economic or other developments.
Performance data quoted represents past performance results and does not guarantee future results. Current performance may be lower or higher than the performance data quoted.
These views represent the opinions of Brookfield Investment Management Inc. and are not intended to predict or depict the performance of any
investment. These views are as of the close of business on September 30, 2012 and subject to change based on subsequent developments.
2012 Semi-Annual Report
35
HELIOS STRATEGIC INCOME FUND, INC.
Portfolio Characteristics (Unaudited)
September 30, 2012
PORTFOLIO STATISTICS
|
|
|
|
|
Annualized dividend yield
1
|
|
6.59%
|
|
|
|
|
Weighted average coupon
|
|
7.64%
|
|
|
|
|
Weighted average life
|
|
4.94 years
|
|
|
|
|
Percentage of leveraged assets
|
|
27.46%
|
|
|
|
|
Total number of holdings
|
|
131
|
CREDIT QUALITY
|
|
|
|
|
|
|
BBB
|
|
|
26
|
%
|
|
|
|
|
BB
|
|
|
9
|
%
|
|
|
|
|
B
|
|
|
38
|
%
|
|
|
|
|
CCC
|
|
|
17
|
%
|
|
|
|
|
Unrated
|
|
|
7
|
%
|
|
|
|
|
Cash
|
|
|
3
|
%
|
|
Total
|
|
|
100
|
%
|
ASSET ALLOCATION
2
|
|
|
|
|
|
|
Commercial Mortgage-Backed Securities
|
|
|
15
|
%
|
|
|
|
|
Investment Grade Corporate Bonds
|
|
|
14
|
%
|
|
|
|
|
High Yield Corporate Bonds
|
|
|
65
|
%
|
|
|
|
|
Common Stocks and Warrants
|
|
|
6
|
%
|
|
Total
|
|
|
100
|
%
|
|
1
|
Dividends may include net investment income, capital gains and/or return of capital. The dividend yield referenced above is calculated as the annualized
amount of the most recent monthly dividend declared divided by the September 30, 2012 stock price.
|
|
2
|
Includes only invested assets; excludes cash.
|
Brookfield
Investment Management Inc.
36
HELIOS STRATEGIC INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
COMMERCIAL MORTGAGE-BACKED SECURITIES – 20.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bear Stearns Commercial Mortgage Securities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series 2006-PW14, Class A4
|
|
|
5.20
|
%
|
|
|
12/11/38
|
|
|
$
|
625
|
|
|
$
|
720,185
|
|
|
Series 2007-T28, Class A4
1
|
|
|
5.74
|
|
|
|
09/11/42
|
|
|
|
670
|
|
|
|
798,161
|
|
|
Citigroup/Deutsche Bank Commercial Mortgage Trust
Series 2007-CD4, Class A4
|
|
|
5.32
|
|
|
|
12/11/49
|
|
|
|
1,000
|
|
|
|
1,138,624
|
|
|
Commercial Mortgage Pass Through Certificates
Series 2007-C9, Class A4
1
|
|
|
6.00
|
|
|
|
12/10/49
|
|
|
|
500
|
|
|
|
595,297
|
|
|
Greenwich Capital Commercial Funding Corp.
Series 2007-GG9, Class A4
|
|
|
5.44
|
|
|
|
03/10/39
|
|
|
|
1,000
|
|
|
|
1,141,822
|
|
|
JP Morgan Chase Commercial Mortgage Securities Corp.
Series 2006-LDP7, Class A4
1
|
|
|
6.06
|
|
|
|
04/15/45
|
|
|
|
650
|
|
|
|
749,672
|
|
|
LB-UBS Commercial Mortgage Trust
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series 2006-C1, Class A4
|
|
|
5.16
|
|
|
|
02/15/31
|
|
|
|
670
|
|
|
|
751,314
|
|
|
Series 2006-C6, Class A4
|
|
|
5.37
|
|
|
|
09/15/39
|
|
|
|
670
|
|
|
|
773,822
|
|
|
Morgan Stanley Capital I
Series 2007-T27, Class A4
1
|
|
|
5.82
|
|
|
|
06/11/42
|
|
|
|
660
|
|
|
|
780,619
|
|
|
Wachovia Bank Commercial Mortgage Trust
Series 2007-C30, Class A5
|
|
|
5.34
|
|
|
|
12/15/43
|
|
|
|
890
|
|
|
|
1,007,395
|
|
|
Total COMMERCIAL MORTGAGE-BACKED SECURITIES
(Cost – $7,862,839)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,456,911
|
|
|
INVESTMENT GRADE CORPORATE BONDS – 18.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive – 1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ford Motor Co.
2
(Cost – $412,707)
|
|
|
6.50
|
|
|
|
08/01/18
|
|
|
|
450
|
|
|
|
519,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Industry – 6.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alcoa, Inc.
2
|
|
|
5.55
|
|
|
|
02/01/17
|
|
|
|
1,000
|
|
|
|
1,120,321
|
|
|
ArcelorMittal
2,6
|
|
|
6.13
|
|
|
|
06/01/18
|
|
|
|
500
|
|
|
|
496,725
|
|
|
The Dow Chemical Co.
2
|
|
|
5.70
|
|
|
|
05/15/18
|
|
|
|
1,000
|
|
|
|
1,203,756
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Basic Industry
(Cost – $2,266,712)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,820,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Goods – 1.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tyco Electronics Group S.A.
2,6
(Cost – $472,278)
|
|
|
6.55
|
|
|
|
10/01/17
|
|
|
|
500
|
|
|
|
604,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Cyclical – 0.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Game Technology
(Cost – $285,284)
|
|
|
7.50
|
|
|
|
06/15/19
|
|
|
|
250
|
|
|
|
299,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Non-Cyclical – 3.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Altria Group, Inc.
2
|
|
|
9.70
|
|
|
|
11/10/18
|
|
|
|
169
|
|
|
|
242,059
|
|
|
Anheuser-Busch InBev Worldwide, Inc.
2
|
|
|
7.75
|
|
|
|
01/15/19
|
|
|
|
1,000
|
|
|
|
1,352,876
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consumer Non-Cyclical
(Cost – $1,207,018)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,594,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy – 0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SESI LLC
2
(Cost – $207,494)
|
|
|
6.88
|
|
|
|
06/01/14
|
|
|
|
211
|
|
|
|
211,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
2012 Semi-Annual Report
37
HELIOS STRATEGIC INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
INVESTMENT GRADE CORPORATE BONDS (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media – 1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Time Warner Cable, Inc.
2
(Cost – $497,326)
|
|
|
8.25
|
%
|
|
|
04/01/19
|
|
|
$
|
500
|
|
|
$
|
671,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications – 2.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Qwest Corp.
2
(Cost – $965,730)
|
|
|
6.88
|
|
|
|
09/15/33
|
|
|
|
1,000
|
|
|
|
1,012,500
|
|
|
Total INVESTMENT GRADE CORPORATE BONDS
(Cost – $6,314,549)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,734,627
|
|
|
HIGH YIELD CORPORATE BONDS – 86.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive – 5.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Axle & Manufacturing, Inc.
|
|
|
7.75
|
|
|
|
11/15/19
|
|
|
|
175
|
|
|
|
192,937
|
|
|
American Axle & Manufacturing, Inc.
2
|
|
|
7.88
|
|
|
|
03/01/17
|
|
|
|
500
|
|
|
|
521,250
|
|
|
Chrysler Group LLC/CG Co-Issuer, Inc.
|
|
|
8.25
|
|
|
|
06/15/21
|
|
|
|
525
|
|
|
|
559,125
|
|
|
Jaguar Land Rover PLC
3,4,6
|
|
|
8.13
|
|
|
|
05/15/21
|
|
|
|
400
|
|
|
|
435,500
|
|
|
Motors Liquidation Co.
8,9
|
|
|
7.13
|
|
|
|
07/15/13
|
|
|
|
250
|
|
|
|
25
|
|
|
Motors Liquidation Co.
8,9
|
|
|
8.38
|
|
|
|
07/15/33
|
|
|
|
1,250
|
|
|
|
125
|
|
|
Pittsburgh Glass Works LLC
3,4
|
|
|
8.50
|
|
|
|
04/15/16
|
|
|
|
520
|
|
|
|
483,600
|
|
|
Visteon Corp.
|
|
|
6.75
|
|
|
|
04/15/19
|
|
|
|
80
|
|
|
|
84,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Automotive
(Cost – $2,095,452)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,276,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Industry – 13.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AK Steel Corp.
2
|
|
|
7.63
|
|
|
|
05/15/20
|
|
|
|
200
|
|
|
|
175,000
|
|
|
Alpha Natural Resources, Inc.
|
|
|
6.25
|
|
|
|
06/01/21
|
|
|
|
325
|
|
|
|
270,562
|
|
|
Arch Coal, Inc.
2
|
|
|
8.75
|
|
|
|
08/01/16
|
|
|
|
475
|
|
|
|
465,500
|
|
|
Associated Materials LLC/AMH New Finance, Inc.
2
|
|
|
9.13
|
|
|
|
11/01/17
|
|
|
|
500
|
|
|
|
490,000
|
|
|
Building Materials Corporation of America
3,4
|
|
|
6.75
|
|
|
|
05/01/21
|
|
|
|
150
|
|
|
|
164,250
|
|
|
Cascades, Inc.
2,6
|
|
|
7.88
|
|
|
|
01/15/20
|
|
|
|
525
|
|
|
|
549,937
|
|
|
CONSOL Energy, Inc.
2
|
|
|
8.25
|
|
|
|
04/01/20
|
|
|
|
175
|
|
|
|
183,312
|
|
|
FMG Resources August 2006 Property Ltd.
3,4,6
|
|
|
6.88
|
|
|
|
04/01/22
|
|
|
|
450
|
|
|
|
411,750
|
|
|
Hexion US Finance Corp./Hexion Nova Scotia Finance ULC
|
|
|
9.00
|
|
|
|
11/15/20
|
|
|
|
575
|
|
|
|
513,187
|
|
|
Ineos Finance PLC
3,4,6
|
|
|
9.00
|
|
|
|
05/15/15
|
|
|
|
275
|
|
|
|
290,813
|
|
|
Ineos Group Holdings SA
2,3,4,6
|
|
|
8.50
|
|
|
|
02/15/16
|
|
|
|
525
|
|
|
|
496,125
|
|
|
Masonite International Corp.
2,3,4,6
|
|
|
8.25
|
|
|
|
04/15/21
|
|
|
|
530
|
|
|
|
559,150
|
|
|
PlyGem Industries, Inc.
|
|
|
8.25
|
|
|
|
02/15/18
|
|
|
|
245
|
|
|
|
255,719
|
|
|
Verso Paper Holdings LLC/Verso Paper, Inc.
3,4
|
|
|
11.75
|
|
|
|
01/15/19
|
|
|
|
375
|
|
|
|
395,625
|
|
|
Xerium Technologies, Inc.
2
|
|
|
8.88
|
|
|
|
06/15/18
|
|
|
|
395
|
|
|
|
349,575
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Basic Industry
(Cost – $5,652,204)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,570,505
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Goods – 10.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Berry Plastics Corp.
2
|
|
|
9.50
|
|
|
|
05/15/18
|
|
|
|
525
|
|
|
|
576,187
|
|
|
Casella Waste Systems, Inc.
3,4
|
|
|
7.75
|
|
|
|
02/15/19
|
|
|
|
725
|
|
|
|
710,500
|
|
|
Coleman Cable, Inc.
|
|
|
9.00
|
|
|
|
02/15/18
|
|
|
|
100
|
|
|
|
106,500
|
|
|
Crown Cork & Seal Company, Inc.
2
|
|
|
7.38
|
|
|
|
12/15/26
|
|
|
|
500
|
|
|
|
548,750
|
|
|
Mueller Water Products, Inc.
2
|
|
|
7.38
|
|
|
|
06/01/17
|
|
|
|
350
|
|
|
|
358,750
|
|
|
Owens-Illinois, Inc.
2
|
|
|
7.80
|
|
|
|
05/15/18
|
|
|
|
400
|
|
|
|
461,000
|
|
|
Reynolds Group Issuer, Inc./Reynolds Group Issuer LLC
2
|
|
|
9.00
|
|
|
|
04/15/19
|
|
|
|
525
|
|
|
|
535,500
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
Brookfield
Investment Management Inc.
38
HELIOS STRATEGIC INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
HIGH YIELD CORPORATE BONDS (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tekni-Plex, Inc.
3,4
|
|
|
9.75
|
%
|
|
|
06/01/19
|
|
|
$
|
275
|
|
|
$
|
294,250
|
|
|
Terex Corp.
|
|
|
6.50
|
|
|
|
04/01/20
|
|
|
|
200
|
|
|
|
208,000
|
|
|
Terex Corp.
2
|
|
|
8.00
|
|
|
|
11/15/17
|
|
|
|
325
|
|
|
|
336,375
|
|
|
Trimas Corp.
2
|
|
|
9.75
|
|
|
|
12/15/17
|
|
|
|
196
|
|
|
|
226,380
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Capital Goods
(Cost – $4,060,476)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,362,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Cyclical – 3.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DineEquity, Inc.
|
|
|
9.50
|
|
|
|
10/30/18
|
|
|
|
85
|
|
|
|
95,837
|
|
|
Levi Strauss & Co.
2
|
|
|
7.63
|
|
|
|
05/15/20
|
|
|
|
475
|
|
|
|
513,000
|
|
|
Limited Brands, Inc.
|
|
|
7.60
|
|
|
|
07/15/37
|
|
|
|
350
|
|
|
|
358,750
|
|
|
Michaels Stores, Inc.
|
|
|
7.75
|
|
|
|
11/01/18
|
|
|
|
175
|
|
|
|
187,687
|
|
|
YCC Holdings LLC/Yankee Finance, Inc.
7
|
|
|
10.25
|
|
|
|
02/15/16
|
|
|
|
200
|
|
|
|
207,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Consumer Cyclical
(Cost – $1,298,890)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,362,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Non-Cyclical – 1.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
C&S Group Enterprises LLC
3,4
(Cost – $448,342)
|
|
|
8.38
|
|
|
|
05/01/17
|
|
|
|
450
|
|
|
|
472,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy – 13.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BreitBurn Energy Partners L.P./BreitBurn Finance Corp.
2
|
|
|
8.63
|
|
|
|
10/15/20
|
|
|
|
525
|
|
|
|
573,562
|
|
|
Calfrac Holdings L.P.
2,3,4
|
|
|
7.50
|
|
|
|
12/01/20
|
|
|
|
525
|
|
|
|
519,750
|
|
|
Crosstex Energy L.P./Crosstex Energy Finance Corp.
2
|
|
|
8.88
|
|
|
|
02/15/18
|
|
|
|
475
|
|
|
|
508,250
|
|
|
EV Energy Partners L.P./EV Energy Finance Corp.
2
|
|
|
8.00
|
|
|
|
04/15/19
|
|
|
|
525
|
|
|
|
544,688
|
|
|
Frac Tech Services LLC/Frac Tech Finance, Inc.
3,4
|
|
|
8.13
|
|
|
|
11/15/18
|
|
|
|
225
|
|
|
|
239,625
|
|
|
GMX Resources, Inc.
2,7
|
|
|
11.00
|
|
|
|
12/01/17
|
|
|
|
190
|
|
|
|
178,468
|
|
|
Hercules Offshore, Inc.
2,3,4
|
|
|
10.50
|
|
|
|
10/15/17
|
|
|
|
300
|
|
|
|
316,125
|
|
|
Hilcorp Energy I LP/Hilcorp Finance Co .
2,3,4
|
|
|
8.00
|
|
|
|
02/15/20
|
|
|
|
475
|
|
|
|
528,438
|
|
|
Linn Energy LLC/Linn Energy Finance Corp.
|
|
|
8.63
|
|
|
|
04/15/20
|
|
|
|
140
|
|
|
|
153,300
|
|
|
McJunkin Red Man Corp.
2
|
|
|
9.50
|
|
|
|
12/15/16
|
|
|
|
450
|
|
|
|
485,438
|
|
|
Niska Gas Storage US LLC/Niska Gas Storage Canada ULC
2
|
|
|
8.88
|
|
|
|
03/15/18
|
|
|
|
250
|
|
|
|
258,125
|
|
|
Petroleum Geo-Services ASA
3,4,6
|
|
|
7.38
|
|
|
|
12/15/18
|
|
|
|
225
|
|
|
|
240,188
|
|
|
Trinidad Drilling Ltd.
2,3,4,6
|
|
|
7.88
|
|
|
|
01/15/19
|
|
|
|
310
|
|
|
|
334,800
|
|
|
Venoco, Inc.
2
|
|
|
8.88
|
|
|
|
02/15/19
|
|
|
|
500
|
|
|
|
435,000
|
|
|
W&T Offshore, Inc.
|
|
|
8.50
|
|
|
|
06/15/19
|
|
|
|
185
|
|
|
|
201,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Energy
(Cost – $5,373,054)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,517,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare – 5.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DJO Finance LLC/DJO Finance Corp.
3,4
|
|
|
9.88
|
|
|
|
04/15/18
|
|
|
|
300
|
|
|
|
296,250
|
|
|
HCA, Inc.
2
|
|
|
8.00
|
|
|
|
10/01/18
|
|
|
|
525
|
|
|
|
606,375
|
|
|
Health Management Associates, Inc.
2,3,4
|
|
|
7.38
|
|
|
|
01/15/20
|
|
|
|
525
|
|
|
|
569,625
|
|
|
inVentiv Health, Inc.
3,4
|
|
|
10.25
|
|
|
|
08/15/18
|
|
|
|
205
|
|
|
|
180,400
|
|
|
Kindred Healthcare, Inc.
|
|
|
8.25
|
|
|
|
06/01/19
|
|
|
|
300
|
|
|
|
291,750
|
|
|
Pharmaceutical Product Development, Inc.
3,4
|
|
|
9.50
|
|
|
|
12/01/19
|
|
|
|
300
|
|
|
|
336,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Healthcare
(Cost – $2,167,828)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,281,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
2012 Semi-Annual Report
39
HELIOS STRATEGIC INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
HIGH YIELD CORPORATE BONDS (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media – 8.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Reprographics Co.
2
|
|
|
10.50
|
%
|
|
|
12/15/16
|
|
|
$
|
500
|
|
|
$
|
525,000
|
|
|
Cablevision Systems Corp.
2
|
|
|
8.63
|
|
|
|
09/15/17
|
|
|
|
475
|
|
|
|
552,188
|
|
|
CCO Holdings LLC/CCO Holdings Capital Corp.
2
|
|
|
8.13
|
|
|
|
04/30/20
|
|
|
|
550
|
|
|
|
621,500
|
|
|
Cenveo Corp.
|
|
|
8.88
|
|
|
|
02/01/18
|
|
|
|
225
|
|
|
|
213,188
|
|
|
Clear Channel Communications, Inc.
2
|
|
|
9.00
|
|
|
|
03/01/21
|
|
|
|
500
|
|
|
|
445,000
|
|
|
Cumulus Media Holdings, Inc.
|
|
|
7.75
|
|
|
|
05/01/19
|
|
|
|
400
|
|
|
|
389,000
|
|
|
Mediacom LLC/Mediacom Capital Corp.
2
|
|
|
9.13
|
|
|
|
08/15/19
|
|
|
|
525
|
|
|
|
580,125
|
|
|
National CineMedia LLC
3,4
|
|
|
6.00
|
|
|
|
04/15/22
|
|
|
|
175
|
|
|
|
184,625
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Media
(Cost – $3,407,363)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,510,626
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate – 1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Realogy Corp.
2,3,4
(Cost – $474,871)
|
|
|
7.88
|
|
|
|
02/15/19
|
|
|
|
525
|
|
|
|
551,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services – 13.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMC Entertainment, Inc.
2
|
|
|
8.75
|
|
|
|
06/01/19
|
|
|
|
600
|
|
|
|
661,500
|
|
|
Avis Budget Car Rental LLC/Avis Budget Finance, Inc.
2
|
|
|
8.25
|
|
|
|
01/15/19
|
|
|
|
525
|
|
|
|
571,594
|
|
|
Beazer Homes USA, Inc.
2
|
|
|
9.13
|
|
|
|
06/15/18
|
|
|
|
250
|
|
|
|
252,500
|
|
|
Boyd Gaming Corp.
3,4
|
|
|
9.00
|
|
|
|
07/01/20
|
|
|
|
300
|
|
|
|
306,000
|
|
|
Caesars Entertainment Operating Company, Inc.
3,4
|
|
|
8.50
|
|
|
|
02/15/20
|
|
|
|
125
|
|
|
|
125,000
|
|
|
Caesars Entertainment Operating Company, Inc.
2
|
|
|
11.25
|
|
|
|
06/01/17
|
|
|
|
525
|
|
|
|
564,375
|
|
|
Cedar Fair LP/Canada’s Wonderland Co./Magnum Management Corp.
|
|
|
9.13
|
|
|
|
08/01/18
|
|
|
|
100
|
|
|
|
113,625
|
|
|
Iron Mountain, Inc.
|
|
|
8.38
|
|
|
|
08/15/21
|
|
|
|
225
|
|
|
|
249,188
|
|
|
Marina District Finance Company, Inc.
2
|
|
|
9.88
|
|
|
|
08/15/18
|
|
|
|
275
|
|
|
|
275,688
|
|
|
MGM Resorts International
2
|
|
|
7.63
|
|
|
|
01/15/17
|
|
|
|
525
|
|
|
|
556,500
|
|
|
MGM Resorts International
3,4
|
|
|
8.63
|
|
|
|
02/01/19
|
|
|
|
125
|
|
|
|
136,250
|
|
|
MTR Gaming Group, Inc.
|
|
|
11.50
|
|
|
|
08/01/19
|
|
|
|
403
|
|
|
|
423,951
|
|
|
Palace Entertainment Holdings LLC/Palace Entertainment Holdings Corp.
2,3,4
|
|
|
8.88
|
|
|
|
04/15/17
|
|
|
|
500
|
|
|
|
528,750
|
|
|
UR Merger Sub Corp.
|
|
|
8.25
|
|
|
|
02/01/21
|
|
|
|
275
|
|
|
|
301,813
|
|
|
UR Merger Sub Corp.
2
|
|
|
10.25
|
|
|
|
11/15/19
|
|
|
|
250
|
|
|
|
285,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Services
(Cost – $5,003,837)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,351,734
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Technology & Electronics – 2.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Data Corp.
2,3,4
|
|
|
8.25
|
|
|
|
01/15/21
|
|
|
|
500
|
|
|
|
498,750
|
|
|
First Data Corp.
|
|
|
9.88
|
|
|
|
09/24/15
|
|
|
|
51
|
|
|
|
52,020
|
|
|
Freescale Semiconductor, Inc.
2
|
|
|
8.05
|
|
|
|
02/01/20
|
|
|
|
525
|
|
|
|
517,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Technology & Electronics
(Cost – $1,061,654)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,067,895
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications – 6.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cincinnati Bell, Inc.
|
|
|
8.25
|
|
|
|
10/15/17
|
|
|
|
240
|
|
|
|
256,200
|
|
|
Cincinnati Bell, Inc.
2
|
|
|
8.75
|
|
|
|
03/15/18
|
|
|
|
285
|
|
|
|
289,275
|
|
|
Frontier Communications Corp.
2
|
|
|
7.13
|
|
|
|
03/15/19
|
|
|
|
725
|
|
|
|
772,125
|
|
|
Level 3 Communications, Inc.
3,4
|
|
|
8.88
|
|
|
|
06/01/19
|
|
|
|
525
|
|
|
|
551,250
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
Brookfield
Investment Management Inc.
40
HELIOS STRATEGIC INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
Rate
|
|
|
Maturity
|
|
|
Principal
Amount
(000s)
|
|
|
Value
(Note 2)
|
|
|
HIGH YIELD CORPORATE BONDS (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PAETEC Holding Corp.
|
|
|
9.88
|
%
|
|
|
12/01/18
|
|
|
$
|
250
|
|
|
$
|
286,250
|
|
|
Windstream Corp.
2
|
|
|
7.00
|
|
|
|
03/15/19
|
|
|
|
500
|
|
|
|
510,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Telecommunications
(Cost – $2,466,465)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,665,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility – 1.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NRG Energy, Inc.
2
(Cost – $468,600)
|
|
|
8.50
|
|
|
|
06/15/19
|
|
|
|
475
|
|
|
|
513,000
|
|
|
Total HIGH YIELD CORPORATE BONDS
(Cost – $33,979,036)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35,502,195
|
|
|
TERM LOANS – 0.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Texas Competitive Electric Holdings Company LLC
1,4
|
|
|
4.74
|
|
|
|
10/10/17
|
|
|
|
205
|
|
|
|
141,141
|
|
|
Texas Competitive Electric Holdings Company LLC
1,4
|
|
|
4.94
|
|
|
|
10/10/17
|
|
|
|
33
|
|
|
|
22,679
|
|
|
Total TERM LOANS
(Cost – $197,707)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
163,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Value
(Note 2)
|
|
|
COMMON STOCKS – 7.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Industry – 0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huntsman Corp.
(Cost – $257,286)
|
|
|
|
|
|
|
|
|
|
|
25,696
|
|
|
|
383,641
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Non-Cyclical – 1.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B&G Foods, Inc.
(Cost – $247,294)
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
606,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Energy – 1.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BreitBurn Energy Partners LP
|
|
|
|
|
|
|
|
|
|
|
13,075
|
|
|
|
254,047
|
|
|
Crosstex Energy LP
|
|
|
|
|
|
|
|
|
|
|
7,800
|
|
|
|
120,120
|
|
|
Niska Gas Storage Partners LLC
|
|
|
|
|
|
|
|
|
|
|
12,500
|
|
|
|
156,750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Energy
(Cost – $594,148)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
530,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications – 3.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AT&T, Inc.
|
|
|
|
|
|
|
|
|
|
|
8,500
|
|
|
|
320,450
|
|
|
CenturyLink, Inc.
|
|
|
|
|
|
|
|
|
|
|
9,500
|
|
|
|
383,800
|
|
|
Frontier Communications Corp.
|
|
|
|
|
|
|
|
|
|
|
41,180
|
|
|
|
201,782
|
|
|
Verizon Communications, Inc.
|
|
|
|
|
|
|
|
|
|
|
7,500
|
|
|
|
341,775
|
|
|
Windstream Corp.
|
|
|
|
|
|
|
|
|
|
|
26,350
|
|
|
|
266,399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Telecommunications
(Cost – $1,529,133)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,514,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utility – 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ferrellgas Partners L.P.
(Cost – $123,019)
|
|
|
|
|
|
|
|
|
|
|
6,750
|
|
|
|
130,950
|
|
|
Total COMMON STOCKS
(Cost – $2,750,880)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,165,914
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
2012 Semi-Annual Report
41
HELIOS STRATEGIC INCOME FUND, INC.
Schedule of Investments (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
Value
(Note 2)
|
|
|
WARRANTS – 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive – 0.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General Motors Co.
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expiration: July 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise Price: $18.33
|
|
|
|
|
|
|
5,546
|
|
|
$
|
45,810
|
|
|
General Motors Co.
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expiration: July 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise Price: $10.00
|
|
|
|
|
|
|
5,546
|
|
|
|
76,424
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Automotive
(Cost – $336,207)
|
|
|
|
|
|
|
|
|
|
|
122,234
|
|
|
Total WARRANTS
(Cost – $336,207)
|
|
|
|
|
|
|
|
|
|
|
122,234
|
|
|
Total Investments – 134.6%
(Cost – $51,441,218)
|
|
|
|
|
|
|
|
|
|
|
55,145,701
|
|
|
Liabilities in Excess of Other Assets – (34.6)%
|
|
|
|
|
|
|
|
|
|
|
(14,168,314
|
)
|
|
|
|
|
|
|
|
TOTAL NET ASSETS – 100.0%
|
|
|
|
|
|
|
|
|
|
$
|
40,977,387
|
|
|
|
|
See Notes to Schedules of Investments and Notes to Financial Statements.
Brookfield
Investment Management Inc.
42
HELIOS FUNDS
Notes to Schedules of Investments (Unaudited)
September 30, 2012
The following notes should be read in conjunction with the accompanying Schedules of Investments.
|
|
|
|
|
|
|
|
|
1
|
|
|
—
|
|
|
Variable rate security – Interest rate shown is the rate in effect as of September 30, 2012.
|
|
2
|
|
|
—
|
|
|
Portion or entire principal amount pledged as collateral for credit facility.
|
|
3
|
|
|
—
|
|
|
Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may only be resold in transactions exempt from registration, normally to qualified
institutional buyers. As of September 30, 2012, the total values of all such investments were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
Value
|
|
|
% of Net Assets
|
|
|
Helios Advantage Income Fund, Inc.
|
|
$
|
18,646,747
|
|
|
|
31.15
|
%
|
|
Helios High Income Fund, Inc.
|
|
|
13,600,474
|
|
|
|
32.28
|
|
|
Helios Multi-Sector High Income Fund, Inc.
|
|
|
15,730,013
|
|
|
|
32.91
|
|
|
Helios Strategic Income Fund, Inc.
|
|
|
11,157,889
|
|
|
|
27.23
|
|
|
|
|
|
|
|
|
|
|
4
|
|
|
—
|
|
|
Private Placement.
|
|
5
|
|
|
—
|
|
|
Non-Income producing security.
|
|
6
|
|
|
—
|
|
|
Foreign security or a U.S. security of a foreign company.
|
|
7
|
|
|
—
|
|
|
Payment in kind security.
|
|
8
|
|
|
—
|
|
|
Security fair valued in good faith pursuant to the fair value procedures adopted by the Board of Directors. As of September 30, 2012, the total values of all such securities were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
Value
|
|
|
% of Net Assets
|
|
|
Helios Advantage Income Fund, Inc.
|
|
$
|
200
|
|
|
|
0.00
|
%
|
|
Helios High Income Fund, Inc.
|
|
|
150
|
|
|
|
0.00
|
|
|
Helios Multi-Sector High Income Fund, Inc.
|
|
|
175
|
|
|
|
0.00
|
|
|
Helios Strategic Income Fund, Inc.
|
|
|
150
|
|
|
|
0.00
|
|
|
|
|
|
|
|
|
|
|
9
|
|
|
—
|
|
|
Issuer is currently in default on its regularly scheduled interest payment.
|
See Notes to Financial Statements.
2012 Semi-Annual Report
43
HELIOS FUNDS
Statements of Assets and Liabilities (Unaudited)
September 30,
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Helios
Advantage
Income Fund,
Inc.
|
|
|
Helios High
Income Fund,
Inc.
|
|
|
Helios Multi-
Sector High
Income Fund,
Inc.
|
|
|
Helios
Strategic
Income Fund,
Inc.
|
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in securities, at value (Note 2)
|
|
$
|
80,186,465
|
|
|
$
|
57,127,627
|
|
|
$
|
64,970,094
|
|
|
$
|
55,145,701
|
|
|
Cash
|
|
|
3,190,562
|
|
|
|
2,422,386
|
|
|
|
2,512,595
|
|
|
|
1,953,147
|
|
|
Interest and dividends receivable
|
|
|
1,702,979
|
|
|
|
1,197,256
|
|
|
|
1,380,722
|
|
|
|
968,491
|
|
|
Prepaid expenses
|
|
|
20,869
|
|
|
|
14,690
|
|
|
|
16,651
|
|
|
|
14,259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
85,100,875
|
|
|
|
60,761,959
|
|
|
|
68,880,062
|
|
|
|
58,081,598
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable for credit facility (Note 6)
|
|
|
23,700,000
|
|
|
|
17,425,000
|
|
|
|
19,800,000
|
|
|
|
15,950,000
|
|
|
Payable for credit facility interest (Note 6)
|
|
|
4,100
|
|
|
|
2,939
|
|
|
|
3,376
|
|
|
|
2,744
|
|
|
Payable for investments purchased
|
|
|
1,398,725
|
|
|
|
1,073,962
|
|
|
|
1,148,798
|
|
|
|
1,024,126
|
|
|
Investment advisory fee payable (Note 4)
|
|
|
44,734
|
|
|
|
31,881
|
|
|
|
36,183
|
|
|
|
30,427
|
|
|
Administration fee payable (Note 4)
|
|
|
10,323
|
|
|
|
7,357
|
|
|
|
8,350
|
|
|
|
7,022
|
|
|
Accrued expenses
|
|
|
81,507
|
|
|
|
93,260
|
|
|
|
90,943
|
|
|
|
89,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
25,239,389
|
|
|
|
18,634,399
|
|
|
|
21,087,650
|
|
|
|
17,104,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets
|
|
$
|
59,861,486
|
|
|
$
|
42,127,560
|
|
|
$
|
47,792,412
|
|
|
$
|
40,977,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Composition of Net Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital stock, at par value ( $0.0001 par value, 1,000,000,000 shares authorized) (Note 8)
|
|
$
|
655
|
|
|
$
|
485
|
|
|
$
|
759
|
|
|
$
|
593
|
|
|
Additional paid-in capital (Note 8)
|
|
|
455,758,794
|
|
|
|
338,132,746
|
|
|
|
493,858,337
|
|
|
|
402,153,392
|
|
|
Undistributed (overdistribution of ) net investment income
|
|
|
366,315
|
|
|
|
(4,821
|
)
|
|
|
386,178
|
|
|
|
436,141
|
|
|
Accumulated net realized loss on investment transactions
|
|
|
(400,822,513
|
)
|
|
|
(299,204,071
|
)
|
|
|
(449,930,261
|
)
|
|
|
(365,317,222
|
)
|
|
Net unrealized appreciation on investments
|
|
|
4,558,235
|
|
|
|
3,203,221
|
|
|
|
3,477,399
|
|
|
|
3,704,483
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets applicable to capital stock outstanding
|
|
$
|
59,861,486
|
|
|
$
|
42,127,560
|
|
|
$
|
47,792,412
|
|
|
$
|
40,977,387
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investments at cost
|
|
$
|
75,628,230
|
|
|
$
|
53,924,406
|
|
|
$
|
61,492,695
|
|
|
$
|
51,441,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Outstanding and Net Asset Value Per Share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares outstanding
|
|
|
6,547,746
|
|
|
|
4,850,531
|
|
|
|
7,592,570
|
|
|
|
5,930,400
|
|
|
Net asset value per share
|
|
$
|
9.14
|
|
|
$
|
8.69
|
|
|
$
|
6.29
|
|
|
$
|
6.91
|
|
See Notes to Financial Statements.
Brookfield
Investment Management Inc.
44
HELIOS FUNDS
Statements of Operations (Unaudited)
For the Six Months Ended
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Helios
Advantage
Income Fund,
Inc.
|
|
|
Helios High
Income Fund,
Inc.
|
|
|
Helios Multi-
Sector High
Income Fund,
Inc.
|
|
|
Helios
Strategic
Income Fund,
Inc.
|
|
|
Investment Income (Note 2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
3,104,256
|
|
|
$
|
2,207,684
|
|
|
$
|
2,501,620
|
|
|
$
|
1,835,486
|
|
|
Dividends
|
|
|
17,435
|
|
|
|
12,726
|
|
|
|
14,329
|
|
|
|
66,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total investment income
|
|
|
3,121,691
|
|
|
|
2,220,410
|
|
|
|
2,515,949
|
|
|
|
1,901,591
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investment advisory fees (Note 4)
|
|
|
267,399
|
|
|
|
190,669
|
|
|
|
216,227
|
|
|
|
181,128
|
|
|
Administration fees (Note 4)
|
|
|
61,707
|
|
|
|
44,001
|
|
|
|
49,899
|
|
|
|
41,799
|
|
|
Legal fees
|
|
|
51,883
|
|
|
|
37,498
|
|
|
|
41,821
|
|
|
|
36,207
|
|
|
Fund accounting fees
|
|
|
24,612
|
|
|
|
24,015
|
|
|
|
24,257
|
|
|
|
23,955
|
|
|
Audit and tax services
|
|
|
22,061
|
|
|
|
22,061
|
|
|
|
22,061
|
|
|
|
22,061
|
|
|
Directors’ fees
|
|
|
21,559
|
|
|
|
21,559
|
|
|
|
21,559
|
|
|
|
21,559
|
|
|
Reports to stockholders
|
|
|
14,369
|
|
|
|
14,845
|
|
|
|
15,623
|
|
|
|
14,746
|
|
|
Transfer agent fees
|
|
|
13,131
|
|
|
|
13,162
|
|
|
|
13,065
|
|
|
|
13,079
|
|
|
Insurance
|
|
|
11,974
|
|
|
|
8,446
|
|
|
|
9,524
|
|
|
|
8,136
|
|
|
Registration fees
|
|
|
11,908
|
|
|
|
11,908
|
|
|
|
11,908
|
|
|
|
11,908
|
|
|
Miscellaneous
|
|
|
5,278
|
|
|
|
4,725
|
|
|
|
5,603
|
|
|
|
5,603
|
|
|
Custodian
|
|
|
4,234
|
|
|
|
4,223
|
|
|
|
4,416
|
|
|
|
4,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
510,115
|
|
|
|
397,112
|
|
|
|
435,963
|
|
|
|
384,569
|
|
|
Interest expense on credit facility (Note 6)
|
|
|
164,158
|
|
|
|
117,233
|
|
|
|
134,881
|
|
|
|
109,784
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
674,273
|
|
|
|
514,345
|
|
|
|
570,844
|
|
|
|
494,353
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
2,447,418
|
|
|
|
1,706,065
|
|
|
|
1,945,105
|
|
|
|
1,407,238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Realized and Unrealized Gain (Loss) on Investments (Note 2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized gain on investment transactions
|
|
|
189,979
|
|
|
|
172,137
|
|
|
|
169,854
|
|
|
|
168,728
|
|
|
Net change in unrealized appreciation on investments
|
|
|
1,330,990
|
|
|
|
864,102
|
|
|
|
1,105,003
|
|
|
|
1,413,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net realized and unrealized gain on investments
|
|
|
1,520,969
|
|
|
|
1,036,239
|
|
|
|
1,274,857
|
|
|
|
1,581,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets resulting from operations
|
|
$
|
3,968,387
|
|
|
$
|
2,742,304
|
|
|
$
|
3,219,962
|
|
|
$
|
2,988,973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
2012 Semi-Annual Report
45
HELIOS FUNDS
Statements of Changes in Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Helios Advantage Income
Fund, Inc.
|
|
|
Helios High Income
Fund, Inc.
|
|
|
|
|
For the Six
Months Ended
September 30, 2012
(Unaudited)
|
|
|
For the
Fiscal Year Ended
March 31, 2012
|
|
|
For the Six
Months Ended
September 30, 2012
(Unaudited)
|
|
|
For the
Fiscal Year Ended
March 31, 2012
|
|
|
Increase (Decrease) in Net Assets Resulting from Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
2,447,418
|
|
|
$
|
4,974,374
|
|
|
$
|
1,706,065
|
|
|
$
|
3,518,337
|
|
|
Net realized gain on investment transactions
|
|
|
189,979
|
|
|
|
3,200,883
|
|
|
|
172,137
|
|
|
|
3,496,946
|
|
|
Net change in unrealized appreciation on investments
|
|
|
1,330,990
|
|
|
|
(448,526
|
)
|
|
|
864,102
|
|
|
|
(1,350,148
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets resulting from operations
|
|
|
3,968,387
|
|
|
|
7,726,731
|
|
|
|
2,742,304
|
|
|
|
5,665,135
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and Distributions to Stockholders (Note 2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
(2,454,168
|
)
|
|
|
(4,722,655
|
)
|
|
|
(1,745,034
|
)
|
|
|
(3,484,189
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total dividends and distributions paid
|
|
|
(2,454,168
|
)
|
|
|
(4,722,655
|
)
|
|
|
(1,745,034
|
)
|
|
|
(3,484,189
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Stock Transactions (Note 8):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reinvestment of dividends and distributions
|
|
|
67,808
|
|
|
|
31,898
|
|
|
|
61,092
|
|
|
|
59,021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total increase in net assets
|
|
|
1,582,027
|
|
|
|
3,035,974
|
|
|
|
1,058,362
|
|
|
|
2,239,967
|
|
|
|
|
|
|
|
|
Net Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
58,279,459
|
|
|
|
55,243,485
|
|
|
|
41,069,198
|
|
|
|
38,829,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period
|
|
$
|
59,861,486
|
|
|
$
|
58,279,459
|
|
|
$
|
42,127,560
|
|
|
$
|
41,069,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(including undistributed (overdistribution of) net investment income of)
|
|
$
|
366,315
|
|
|
$
|
373,065
|
|
|
$
|
(4,821
|
)
|
|
$
|
34,148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Transactions (Note 8):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reinvested shares
|
|
|
7,615
|
|
|
|
3,584
|
|
|
|
7,184
|
|
|
|
7,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
Brookfield
Investment Management Inc.
46
HELIOS FUNDS
Statements of Changes in Net Assets (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Helios Multi-Sector High Income
Fund, Inc.
|
|
|
Helios Strategic Income
Fund, Inc.
|
|
|
|
|
For the Six
Months Ended
September 30, 2012
(Unaudited)
|
|
|
For the
Fiscal Year Ended
March 31, 2012
|
|
|
For the Six
Months Ended
September 30, 2012
(Unaudited)
|
|
|
For the
Fiscal Year Ended
March 31, 2012
|
|
|
Increase (Decrease) in Net Assets Resulting from Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
1,945,105
|
|
|
$
|
3,946,745
|
|
|
$
|
1,407,238
|
|
|
$
|
2,765,054
|
|
|
Net realized gain on investment transactions
|
|
|
169,854
|
|
|
|
3,981,749
|
|
|
|
168,728
|
|
|
|
2,511,064
|
|
|
Net change in unrealized appreciation on investments
|
|
|
1,105,003
|
|
|
|
(903,870
|
)
|
|
|
1,413,007
|
|
|
|
465,630
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in net assets resulting from operations
|
|
|
3,219,962
|
|
|
|
7,024,624
|
|
|
|
2,988,973
|
|
|
|
5,741,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends and Distributions to Stockholders (Note 2):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
(1,935,432
|
)
|
|
|
(3,661,470
|
)
|
|
|
(1,245,384
|
)
|
|
|
(2,490,768
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total dividends and distributions paid
|
|
|
(1,935,432
|
)
|
|
|
(3,661,470
|
)
|
|
|
(1,245,384
|
)
|
|
|
(2,490,768
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Stock Transactions (Note 8):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reinvestment of dividends and distributions
|
|
|
24,696
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total increase in net assets
|
|
|
1,309,226
|
|
|
|
3,363,154
|
|
|
|
1,743,589
|
|
|
|
3,250,980
|
|
|
|
|
|
|
|
|
Net Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
46,483,186
|
|
|
|
43,120,032
|
|
|
|
39,233,798
|
|
|
|
35,982,818
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period
|
|
$
|
47,792,412
|
|
|
$
|
46,483,186
|
|
|
$
|
40,977,387
|
|
|
$
|
39,233,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(including undistributed net investment income of)
|
|
$
|
386,178
|
|
|
$
|
376,505
|
|
|
$
|
436,141
|
|
|
$
|
274,287
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Transactions (Note 8):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reinvested shares
|
|
|
4,032
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
2012 Semi-Annual Report
47
HELIOS ADVANTAGE INCOME FUND, INC.
Statement of Cash Flows (Unaudited)
For the Six Months Ended
September 30, 2012
|
|
|
|
|
|
|
Increase (Decrease) in Cash:
|
|
|
|
|
|
|
|
|
Cash flows provided by (used for) operating activities:
|
|
|
|
|
|
Net increase in net assets resulting from operations
|
|
$
|
3,968,387
|
|
|
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities
|
|
|
|
|
|
Purchases of long-term investments
|
|
|
(13,074,352
|
)
|
|
Proceeds from disposition of long-term portfolio investments
|
|
|
11,601,539
|
|
|
Increase in interest and dividends receivable
|
|
|
(62,026
|
)
|
|
Increase in prepaid expenses
|
|
|
(10,763
|
)
|
|
Increase in payable for investments purchased
|
|
|
1,398,725
|
|
|
Increase in payable for credit facility interest
|
|
|
1,317
|
|
|
Decrease in investment advisory fee payable
|
|
|
(492
|
)
|
|
Decrease in administration fee payable
|
|
|
(114
|
)
|
|
Decrease in accrued expenses
|
|
|
(1,179
|
)
|
|
Net amortization on investments
|
|
|
(53,931
|
)
|
|
Unrealized appreciation on investments
|
|
|
(1,330,990
|
)
|
|
Net realized gain on investment transactions
|
|
|
(189,979
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
2,246,142
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used for financing activities:
|
|
|
|
|
|
Dividends and distributions paid to stockholders
|
|
|
(2,386,360
|
)
|
|
|
|
|
|
|
|
Net cash used for financing activities
|
|
|
(2,386,360
|
)
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash
|
|
|
(140,218
|
)
|
|
Cash at the beginning of period
|
|
|
3,330,780
|
|
|
|
|
|
|
|
|
Cash at the end of period
|
|
$
|
3,190,562
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information:
Interest payments for the six months ended September 30, 2012, totaled $162,841.
Non-cash
financing activities included reinvestment of dividends of $67,808.
See Notes to Financial Statements.
Brookfield
Investment Management Inc.
48
HELIOS HIGH INCOME FUND, INC.
Statement of Cash Flows (Unaudited)
For the Six Months Ended September 30, 2012
|
|
|
|
|
|
|
Increase (Decrease) in Cash:
|
|
|
|
|
|
|
|
|
Cash flows provided by (used for) operating activities:
|
|
|
|
|
|
Net increase in net assets resulting from operations
|
|
$
|
2,742,304
|
|
|
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities
|
|
|
|
|
|
Purchases of long-term investments
|
|
|
(9,651,249
|
)
|
|
Proceeds from disposition of long-term portfolio investments
|
|
|
8,531,978
|
|
|
Increase in interest and dividends receivable
|
|
|
(30,826
|
)
|
|
Increase in prepaid expenses
|
|
|
(7,560
|
)
|
|
Increase in payable for investments purchased
|
|
|
1,073,962
|
|
|
Increase in payable for credit facility interest
|
|
|
950
|
|
|
Decrease in investment advisory fee payable
|
|
|
(393
|
)
|
|
Decrease in administration fee payable
|
|
|
(91
|
)
|
|
Increase in accrued expenses
|
|
|
6,254
|
|
|
Net amortization on investments
|
|
|
(37,225
|
)
|
|
Unrealized appreciation on investments
|
|
|
(864,102
|
)
|
|
Net realized gain on investment transactions
|
|
|
(172,137
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
1,591,865
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used for financing activities:
|
|
|
|
|
|
Dividends and distributions paid to stockholders
|
|
|
(1,683,942
|
)
|
|
|
|
|
|
|
|
Net cash used for financing activities
|
|
|
(1,683,942
|
)
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash
|
|
|
(92,077
|
)
|
|
Cash at the beginning of period
|
|
|
2,514,463
|
|
|
|
|
|
|
|
|
Cash at the end of period
|
|
$
|
2,422,386
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information:
Interest payments for the six months ended September 30, 2012, totaled $116,283.
Noncash
financing activities included reinvestment of dividends of $61,092.
See Notes to Financial Statements.
2012 Semi-Annual Report
49
HELIOS MULTI-SECTOR HIGH INCOME FUND, INC.
Statement of Cash Flows (Unaudited)
For the
Six Months Ended September 30, 2012
|
|
|
|
|
|
|
Increase (Decrease) in Cash:
|
|
|
|
|
|
|
|
|
Cash flows provided by (used for) operating activities:
|
|
|
|
|
|
Net increase in net assets resulting from operations
|
|
$
|
3,219,962
|
|
|
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities
|
|
|
|
|
|
Purchases of long-term investments
|
|
|
(11,069,964
|
)
|
|
Proceeds from disposition of long-term portfolio investments
|
|
|
9,064,835
|
|
|
Increase in interest and dividends receivable
|
|
|
(62,541
|
)
|
|
Increase in prepaid expenses
|
|
|
(8,619
|
)
|
|
Increase in payable for investments purchased
|
|
|
1,148,798
|
|
|
Increase in payable for credit facility interest
|
|
|
1,088
|
|
|
Decrease in investment advisory fee payable
|
|
|
(402
|
)
|
|
Decrease in administration fee payable
|
|
|
(93
|
)
|
|
Increase in accrued expenses
|
|
|
5,980
|
|
|
Net amortization on investments
|
|
|
(25,489
|
)
|
|
Unrealized appreciation on investments
|
|
|
(1,105,003
|
)
|
|
Net realized gain on investment transactions
|
|
|
(169,854
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
998,698
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used for financing activities:
|
|
|
|
|
|
Dividends and distributions paid to stockholders
|
|
|
(1,910,736
|
)
|
|
|
|
|
|
|
|
Net cash used for financing activities
|
|
|
(1,910,736
|
)
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash
|
|
|
(912,038
|
)
|
|
Cash at the beginning of period
|
|
|
3,424,633
|
|
|
|
|
|
|
|
|
Cash at the end of period
|
|
$
|
2,512,595
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information:
Interest payments for the six months ended September 30, 2012, totaled $133,793.
Non-cash
financing activities included reinvestment of dividends and distributions of $24,696.
See Notes to Financial Statements.
Brookfield
Investment Management Inc.
50
HELIOS STRATEGIC INCOME FUND, INC.
Statement of Cash Flows (Unaudited)
For the Six Months Ended September 30, 2012
|
|
|
|
|
|
|
Increase (Decrease) in Cash:
|
|
|
|
|
|
|
|
|
Cash flows provided by (used for) operating activities:
|
|
|
|
|
|
Net increase in net assets resulting from operations
|
|
$
|
2,988,973
|
|
|
Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities
|
|
|
|
|
|
Purchases of long-term investments
|
|
|
(7,770,902
|
)
|
|
Proceeds from disposition of long-term portfolio investments
|
|
|
6,999,247
|
|
|
Increase in interest and dividends receivable
|
|
|
(17,068
|
)
|
|
Increase in prepaid expenses
|
|
|
(7,400
|
)
|
|
Increase in payable for investments purchased
|
|
|
1,024,126
|
|
|
Increase in payable for credit facility interest
|
|
|
882
|
|
|
Decrease in investment advisory fee payable
|
|
|
(22
|
)
|
|
Decrease in administration fee payable
|
|
|
(4
|
)
|
|
Increase in accrued expenses
|
|
|
6,447
|
|
|
Net amortization and paydown losses on investments
|
|
|
37,615
|
|
|
Unrealized appreciation on investments
|
|
|
(1,413,007
|
)
|
|
Net realized gain on investment transactions
|
|
|
(168,728
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
1,680,159
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows used for financing activities:
|
|
|
|
|
|
Dividends and distributions paid to stockholders
|
|
|
(1,245,384
|
)
|
|
|
|
|
|
|
|
Net cash used for financing activities
|
|
|
(1,245,384
|
)
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash
|
|
|
434,775
|
|
|
Cash at the beginning of period
|
|
|
1,518,372
|
|
|
|
|
|
|
|
|
Cash at the end of period
|
|
$
|
1,953,147
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information:
Interest payments for the six months ended September 30, 2012, totaled $108,902.
See Notes to Financial Statements.
2012 Semi-Annual Report
51
HELIOS ADVANTAGE INCOME FUND, INC.
Financial Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the
Six Months Ended
September 30, 2012
(Unaudited)
|
|
|
For the Fiscal Year Ended March 31,
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
2,3
|
|
|
2008*
,2,3
(Unaudited)
|
|
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
8.91
|
|
|
$
|
8.45
|
|
|
$
|
7.50
|
|
|
$
|
6.20
|
|
|
$
|
15.55
|
|
|
$
|
66.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
0.38
|
|
|
|
0.76
|
|
|
|
0.74
|
|
|
|
0.70
|
|
|
|
1.75
|
|
|
|
6.15
|
|
|
Net realized and unrealized gain (loss) on investment transactions
|
|
|
0.23
|
|
|
|
0.42
|
|
|
|
0.93
|
|
|
|
1.40
|
|
|
|
(8.85
|
)
|
|
|
(49.85
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets resulting from operations
|
|
|
0.61
|
|
|
|
1.18
|
|
|
|
1.67
|
|
|
|
2.10
|
|
|
|
(7.10
|
)
|
|
|
(43.70
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(0.38
|
)
|
|
|
(0.72
|
)
|
|
|
(0.72
|
)
|
|
|
(0.70
|
)
|
|
|
(1.20
|
)
|
|
|
(6.55
|
)
|
|
Return of capital distributions
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.10
|
)
|
|
|
(1.05
|
)
|
|
|
(0.65
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total dividends and distributions paid
|
|
|
(0.38
|
)
|
|
|
(0.72
|
)
|
|
|
(0.72
|
)
|
|
|
(0.80
|
)
|
|
|
(2.25
|
)
|
|
|
(7.20
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
9.14
|
|
|
$
|
8.91
|
|
|
$
|
8.45
|
|
|
$
|
7.50
|
|
|
$
|
6.20
|
|
|
$
|
15.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market price, end of period
|
|
$
|
9.21
|
|
|
$
|
9.30
|
|
|
$
|
7.70
|
|
|
$
|
7.00
|
|
|
$
|
5.00
|
|
|
$
|
16.70
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return
†
|
|
|
3.28
|
%
4
|
|
|
32.08
|
%
|
|
|
21.39
|
%
|
|
|
58.73
|
%
|
|
|
(61.80
|
)%
|
|
|
(73.61
|
)%
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets / Supplementary Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000s)
|
|
$
|
59,861
|
|
|
$
|
58,279
|
|
|
$
|
55,243
|
|
|
$
|
49,017
|
|
|
$
|
40,676
|
|
|
$
|
100,299
|
|
|
Gross operating expenses
|
|
|
1.74
|
%
5
|
|
|
1.93
|
%
|
|
|
2.30
|
%
|
|
|
2.22
|
%
|
|
|
2.44
|
%
|
|
|
3.66
|
%
|
|
Interest expense
|
|
|
0.56
|
%
5
|
|
|
0.55
|
%
|
|
|
0.37
|
%
|
|
|
0.52
|
%
|
|
|
0.03
|
%
|
|
|
N/A
|
1
|
|
Total expenses
|
|
|
2.30
|
%
5
|
|
|
2.48
|
%
|
|
|
2.67
|
%
|
|
|
2.74
|
%
|
|
|
2.47
|
%
|
|
|
3.66
|
%
|
|
Net expenses, including fee waivers and reimbursement and excluding interest expense, debt issuance costs and extraordinary
expenses
|
|
|
1.74
|
%
5
|
|
|
1.93
|
%
|
|
|
2.24
|
%
|
|
|
1.40
|
%
|
|
|
1.23
|
%
|
|
|
3.49
|
%
|
|
Net investment income
|
|
|
8.37
|
%
5
|
|
|
8.89
|
%
|
|
|
9.44
|
%
|
|
|
9.97
|
%
|
|
|
19.66
|
%
|
|
|
15.69
|
%
|
|
Net investment income, excluding the effect of fee waivers and reimbursement
|
|
|
8.37
|
%
5
|
|
|
8.89
|
%
|
|
|
9.38
|
%
|
|
|
9.15
|
%
|
|
|
18.91
|
%
|
|
|
15.52
|
%
|
|
Portfolio turnover rate
|
|
|
15
|
%
4
|
|
|
29
|
%
|
|
|
62
|
%
|
|
|
45
|
%
|
|
|
89
|
%
|
|
|
76
|
%
|
|
*
|
By correspondence dated May 27, 2010, the Fund’s independent registered public accounting firm for the fiscal year ended March 31, 2008,
informed the Fund that it’s audit report dated May 29, 2008 on the Fund’s financial statements should no longer be relied upon. Based upon the actions of the Fund’s former independent registered public accounting firm, the
financial highlights for the fiscal year ended March 31, 2008 should not be relied upon.
|
|
†
|
Total investment return is computed based upon the New York Stock Exchange market price of the Fund’s shares and excludes the effect of brokerage
commissions. Dividends and distributions are assumed to be reinvested at the prices obtained under the Fund’s dividend reinvestment plan.
|
|
1
|
Not available. During this period, interest expense was not reported separately from operating expenses.
|
|
2
|
The Fund had a 1:5 reverse stock split with ex-dividend and payable dates of August 31, 2009 and September 1, 2009, respectively. Prior year net
asset values and per share amounts have been restated to reflect the impact of the reverse stock split. (See Notes to Financial Statements). The net asset value and market price reported at the original dates prior to the reverse stock split were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended March 31,
|
|
2009
|
|
|
2008
(Unaudited)
|
|
|
Net Asset Value (prior to reverse stock split)
|
|
$
|
1.24
|
|
|
$
|
3.11
|
|
|
Market Price (prior to reverse stock split)
|
|
$
|
1.00
|
|
|
$
|
3.34
|
|
|
3
|
Brookfield Investment Management, Inc. became the Adviser of the Fund on July 29, 2008.
|
See Notes to Financial Statements.
Brookfield
Investment Management Inc.
52
HELIOS HIGH INCOME FUND, INC.
Financial Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the
Six Months Ended
September 30, 2012
(Unaudited)
|
|
|
For the Fiscal Year Ended March 31,
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
2,3
|
|
|
2008*
,2,3
(Unaudited)
|
|
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
8.48
|
|
|
$
|
8.03
|
|
|
$
|
7.66
|
|
|
$
|
6.25
|
|
|
$
|
15.60
|
|
|
$
|
65.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
0.35
|
|
|
|
0.73
|
|
|
|
0.69
|
|
|
|
0.72
|
|
|
|
1.95
|
|
|
|
5.80
|
|
|
Net realized and unrealized gain (loss) on investment transactions
|
|
|
0.22
|
|
|
|
0.44
|
|
|
|
0.40
|
|
|
|
1.49
|
|
|
|
(9.05
|
)
|
|
|
(48.90
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net assets resulting from operations
|
|
|
0.57
|
|
|
|
1.17
|
|
|
|
1.09
|
|
|
|
2.21
|
|
|
|
(7.10
|
)
|
|
|
(43.10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(0.36
|
)
|
|
|
(0.72
|
)
|
|
|
(0.69
|
)
|
|
|
(0.72
|
)
|
|
|
(1.40
|
)
|
|
|
(6.30
|
)
|
|
Return of capital distributions
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.03
|
)
|
|
|
(0.08
|
)
|
|
|
(0.85
|
)
|
|
|
(0.90
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total dividends and distributions paid
|
|
|
(0.36
|
)
|
|
|
(0.72
|
)
|
|
|
(0.72
|
)
|
|
|
(0.80
|
)
|
|
|
(2.25
|
)
|
|
|
(7.20
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
8.69
|
|
|
$
|
8.48
|
|
|
$
|
8.03
|
|
|
$
|
7.66
|
|
|
$
|
6.25
|
|
|
$
|
15.60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market price, end of period
|
|
$
|
8.84
|
|
|
$
|
8.90
|
|
|
$
|
7.62
|
|
|
$
|
7.19
|
|
|
$
|
4.95
|
|
|
$
|
17.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return
†
|
|
|
3.60
|
%
4
|
|
|
27.89
|
%
|
|
|
17.00
|
%
|
|
|
64.29
|
%
|
|
|
(64.25
|
)%
|
|
|
(72.40
|
)%
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets/ Supplementary Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000s)
|
|
$
|
42,128
|
|
|
$
|
41,069
|
|
|
$
|
38,829
|
|
|
$
|
37,040
|
|
|
$
|
30,190
|
|
|
$
|
74,539
|
|
|
Gross operating expenses
|
|
|
1.93
|
%
5
|
|
|
2.13
|
%
|
|
|
2.51
|
%
|
|
|
2.28
|
%
|
|
|
2.30
|
%
|
|
|
3.73
|
%
|
|
Interest expense
|
|
|
0.58
|
%
5
|
|
|
0.57
|
%
|
|
|
0.38
|
%
|
|
|
0.49
|
%
|
|
|
0.04
|
%
|
|
|
N/A
|
1
|
|
Total expenses
|
|
|
2.51
|
%
5
|
|
|
2.70
|
%
|
|
|
2.89
|
%
|
|
|
2.77
|
%
|
|
|
2.34
|
%
|
|
|
3.73
|
%
|
|
Net expenses, including fee waivers and reimbursement and excluding interest expense, debt issuance costs and extraordinary
expenses
|
|
|
1.93
|
%
5
|
|
|
2.13
|
%
|
|
|
2.36
|
%
|
|
|
1.30
|
%
|
|
|
1.24
|
%
|
|
|
3.56
|
%
|
|
Net investment income
|
|
|
8.28
|
%
5
|
|
|
8.92
|
%
|
|
|
8.91
|
%
|
|
|
10.10
|
%
|
|
|
22.35
|
%
|
|
|
14.81
|
%
|
|
Net investment income, excluding the effect of fee waivers and reimbursement
|
|
|
8.28
|
%
5
|
|
|
8.92
|
%
|
|
|
8.75
|
%
|
|
|
9.12
|
%
|
|
|
21.37
|
%
|
|
|
14.64
|
%
|
|
Portfolio turnover rate
|
|
|
16
|
%
4
|
|
|
29
|
%
|
|
|
60
|
%
|
|
|
48
|
%
|
|
|
88
|
%
|
|
|
74
|
%
|
|
*
|
By correspondence dated May 27, 2010, the Fund’s independent registered public accounting firm for the fiscal year ended March 31, 2008,
informed the Fund that it’s audit report dated May 29, 2008 on the Fund’s financial statements should no longer be relied upon. Based upon the actions of the Fund’s former independent registered public accounting firm, the
financial highlights for the fiscal year ended March 31, 2008 should not be relied upon.
|
|
†
|
Total investment return is computed based upon the New York Stock Exchange market price of the Fund’s shares and excludes the effect of brokerage
commissions. Dividends and distributions are assumed to be reinvested at the prices obtained under the Fund’s dividend reinvestment plan.
|
|
1
|
Not available. During this period, interest expense was not reported separately from operating expenses.
|
|
2
|
The Fund had a 1:5 reverse stock split with ex-dividend and payable dates of August 31, 2009 and September 1, 2009, respectively. Prior year net
asset values and per share amounts have been restated to reflect the impact of the reverse stock split. (See Notes to Financial Statements). The net asset value and market price reported at the original dates prior to the reverse stock split were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended March 31,
|
|
2009
|
|
|
2008
(Unaudited)
|
|
|
Net Asset Value (prior to reverse stock split)
|
|
$
|
1.25
|
|
|
$
|
3.12
|
|
|
Market Price (prior to reverse stock split)
|
|
$
|
0.99
|
|
|
$
|
3.51
|
|
|
3
|
Brookfield Investment Management, Inc. became the Adviser of the Fund on July 29, 2008.
|
See Notes to Financial Statements.
2012 Semi-Annual Report
53
HELIOS MULTI-SECTOR HIGH INCOME FUND, INC.
Financial Highlights
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the
Six Months Ended
September 30, 2012
(Unaudited)
|
|
|
For the Fiscal Year Ended March 31,
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
2,3
|
|
|
2008*
,2,3
(Unaudited)
|
|
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
6.13
|
|
|
$
|
5.68
|
|
|
$
|
5.38
|
|
|
$
|
4.40
|
|
|
$
|
13.55
|
|
|
$
|
70.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
0.26
|
|
|
|
0.52
|
|
|
|
0.49
|
|
|
|
0.50
|
|
|
|
1.50
|
|
|
|
6.40
|
|
|
Net realized and unrealized gain (loss) on investment transactions
|
|
|
0.16
|
|
|
|
0.41
|
|
|
|
0.29
|
|
|
|
1.01
|
|
|
|
(8.35
|
)
|
|
|
(54.35
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net asset value resulting from operations
|
|
|
0.42
|
|
|
|
0.93
|
|
|
|
0.78
|
|
|
|
1.51
|
|
|
|
(6.85
|
)
|
|
|
(47.95
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(0.26
|
)
|
|
|
(0.48
|
)
|
|
|
(0.48
|
)
|
|
|
(0.50
|
)
|
|
|
(1.20
|
)
|
|
|
(7.75
|
)
|
|
Distributions from net realized gains
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.35
|
)
|
|
Return of capital distributions
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.03
|
)
|
|
|
(1.10
|
)
|
|
|
(0.90
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total dividends and distributions paid
|
|
|
(0.26
|
)
|
|
|
(0.48
|
)
|
|
|
(0.48
|
)
|
|
|
(0.53
|
)
|
|
|
(2.30
|
)
|
|
|
(9.00
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
6.29
|
|
|
$
|
6.13
|
|
|
$
|
5.68
|
|
|
$
|
5.38
|
|
|
$
|
4.40
|
|
|
$
|
13.55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market price, end of period
|
|
$
|
6.39
|
|
|
$
|
6.07
|
|
|
$
|
5.15
|
|
|
$
|
5.00
|
|
|
$
|
3.55
|
|
|
$
|
16.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return
†
|
|
|
9.74
|
%
4
|
|
|
28.69
|
%
|
|
|
13.33
|
%
|
|
|
58.59
|
%
|
|
|
(72.05
|
)%
|
|
|
(72.67
|
)%
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets/Supplementary Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000s)
|
|
$
|
47,792
|
|
|
$
|
46,483
|
|
|
$
|
43,120
|
|
|
$
|
40,852
|
|
|
$
|
33,460
|
|
|
$
|
98,627
|
|
|
Gross operating expenses
|
|
|
1.87
|
%
5
|
|
|
2.06
|
%
|
|
|
2.43
|
%
|
|
|
2.23
|
%
|
|
|
2.59
|
%
|
|
|
3.71
|
%
|
|
Interest expense
|
|
|
0.57
|
%
5
|
|
|
0.57
|
%
|
|
|
0.39
|
%
|
|
|
0.51
|
%
|
|
|
0.06
|
%
|
|
|
N/A
|
1
|
|
Total expenses
|
|
|
2.44
|
%
5
|
|
|
2.63
|
%
|
|
|
2.82
|
%
|
|
|
2.74
|
%
|
|
|
2.65
|
%
|
|
|
3.71
|
%
|
|
Net expenses, including fee waivers and reimbursement and excluding interest expense, debt issuance costs and extraordinary
expenses
|
|
|
1.87
|
%
5
|
|
|
2.06
|
%
|
|
|
2.32
|
%
|
|
|
1.30
|
%
|
|
|
1.20
|
%
|
|
|
3.55
|
%
|
|
Net investment income
|
|
|
8.33
|
%
5
|
|
|
8.90
|
%
|
|
|
9.00
|
%
|
|
|
10.03
|
%
|
|
|
20.53
|
%
|
|
|
15.28
|
%
|
|
Net investment income, excluding the effect of fee waivers and reimbursement
|
|
|
8.33
|
%
5
|
|
|
8.90
|
%
|
|
|
8.89
|
%
|
|
|
9.10
|
%
|
|
|
19.65
|
%
|
|
|
15.11
|
%
|
|
Portfolio turnover rate
|
|
|
15
|
%
4
|
|
|
30
|
%
|
|
|
64
|
%
|
|
|
49
|
%
|
|
|
75
|
%
|
|
|
68
|
%
|
|
*
|
By correspondence dated May 27, 2010, the Fund’s independent registered public accounting firm for the fiscal year ended March 31, 2008,
informed the Fund that it’s audit report dated May 29, 2008 on the Fund’s financial statements should no longer be relied upon. Based upon the actions of the Fund’s former independent registered public accounting firm, the
financial highlights for the fiscal year ended March 31, 2008 should not be relied upon.
|
|
†
|
Total investment return is computed based upon the New York Stock Exchange market price of the Fund’s shares and excludes the effect of brokerage
commissions. Dividends and distributions are assumed to be reinvested at the prices obtained under the Fund’s dividend reinvestment plan.
|
|
1
|
Not available. During this period, interest expense was not reported separately from operating expenses.
|
|
2
|
The Fund had a 1:5 reverse stock split with ex-dividend and payable dates of August 31, 2009 and September 1, 2009, respectively. Prior year net
asset values and per share amounts have been restated to reflect the impact of the reverse stock split. (See Notes to Financial Statements). The net asset value and market price reported at the original dates prior to the reverse stock split were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended March 31,
|
|
2009
|
|
|
2008
(Unaudited)
|
|
|
Net Asset Value (prior to reverse stock split)
|
|
$
|
0.88
|
|
|
$
|
2.71
|
|
|
Market Price (prior to reverse stock split)
|
|
$
|
0.71
|
|
|
$
|
3.33
|
|
|
3
|
Brookfield Investment Management, Inc. became the Adviser of the Fund on July 29, 2008.
|
See Notes to Financial Statements.
Brookfield
Investment Management Inc.
54
HELIOS STRATEGIC INCOME FUND, INC.
Financial Highlights (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For
the
Six Months Ended
September 30, 2012
(Unaudited)
|
|
|
For the Fiscal Year Ended March 31,
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
2009
2,3
|
|
|
2008*
,2,3
(Unaudited)
|
|
|
Per Share Operating Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
6.62
|
|
|
$
|
6.07
|
|
|
$
|
5.90
|
|
|
$
|
5.05
|
|
|
$
|
14.35
|
|
|
$
|
64.45
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
0.23
|
|
|
|
0.47
|
|
|
|
0.48
|
|
|
|
0.51
|
|
|
|
2.20
|
|
|
|
6.00
|
|
|
Net realized and unrealized gain (loss) on investment transactions
|
|
|
0.27
|
|
|
|
0.50
|
|
|
|
0.17
|
|
|
|
1.00
|
|
|
|
(9.10
|
)
|
|
|
(48.90
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in net asset value resulting from operations
|
|
|
0.50
|
|
|
|
0.97
|
|
|
|
0.65
|
|
|
|
1.51
|
|
|
|
(6.90
|
)
|
|
|
(42.90
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(0.21
|
)
|
|
|
(0.42
|
)
|
|
|
(0.45
|
)
|
|
|
(0.51
|
)
|
|
|
(1.70
|
)
|
|
|
(6.40
|
)
|
|
Return of capital distributions
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.03
|
)
|
|
|
(0.15
|
)
|
|
|
(0.70
|
)
|
|
|
(0.80
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total dividends and distributions paid
|
|
|
(0.21
|
)
|
|
|
(0.42
|
)
|
|
|
(0.48
|
)
|
|
|
(0.66
|
)
|
|
|
(2.40
|
)
|
|
|
(7.20
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of period
|
|
$
|
6.91
|
|
|
$
|
6.62
|
|
|
$
|
6.07
|
|
|
$
|
5.90
|
|
|
$
|
5.05
|
|
|
$
|
14.35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market price, end of period
|
|
$
|
6.37
|
|
|
$
|
5.94
|
|
|
$
|
5.31
|
|
|
$
|
5.46
|
|
|
$
|
4.10
|
|
|
$
|
15.90
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investment Return
†
|
|
|
10.95
|
%
4
|
|
|
20.55
|
%
|
|
|
6.24
|
%
|
|
|
51.23
|
%
|
|
|
(65.85
|
)%
|
|
|
(74.01
|
)%
|
|
|
|
|
|
|
|
|
|
Ratios to Average Net Assets/Supplementary Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000s)
|
|
$
|
40,977
|
|
|
$
|
39,234
|
|
|
$
|
35,983
|
|
|
$
|
34,970
|
|
|
$
|
29,816
|
|
|
$
|
82,734
|
|
|
Gross operating expenses
|
|
|
1.94
|
%
5
|
|
|
2.14
|
%
|
|
|
2.54
|
%
|
|
|
2.34
|
%
|
|
|
2.24
|
%
|
|
|
3.86
|
%
|
|
Interest expense
|
|
|
0.55
|
%
5
|
|
|
0.55
|
%
|
|
|
0.37
|
%
|
|
|
0.47
|
%
|
|
|
0.21
|
%
|
|
|
N/A
|
1
|
|
Total expenses
|
|
|
2.49
|
%
5
|
|
|
2.69
|
%
|
|
|
2.91
|
%
|
|
|
2.81
|
%
|
|
|
2.45
|
%
|
|
|
3.86
|
%
|
|
Net expenses, including fee waivers and reimbursement and excluding interest expense, debt issuance costs and extraordinary
expenses
|
|
|
1.94
|
%
5
|
|
|
2.14
|
%
|
|
|
2.38
|
%
|
|
|
1.30
|
%
|
|
|
1.27
|
%
|
|
|
3.69
|
%
|
|
Net investment income
|
|
|
7.08
|
%
5
|
|
|
7.38
|
%
|
|
|
7.60
|
%
|
|
|
9.05
|
%
|
|
|
26.85
|
%
|
|
|
15.79
|
%
|
|
Net investment income, excluding the effect of fee waivers and reimbursement
|
|
|
7.08
|
%
5
|
|
|
7.38
|
%
|
|
|
7.44
|
%
|
|
|
8.02
|
%
|
|
|
25.93
|
%
|
|
|
15.62
|
%
|
|
Portfolio turnover rate
|
|
|
13
|
%
4
|
|
|
36
|
%
|
|
|
55
|
%
|
|
|
43
|
%
|
|
|
71
|
%
|
|
|
73
|
%
|
|
*
|
By correspondence dated May 27, 2010, the Fund’s independent registered public accounting firm for the fiscal year ended March 31, 2008,
informed the Fund that it’s audit report dated May 29, 2008 on the Fund’s financial statements should no longer be relied upon. Based upon the actions of the Fund’s former independent registered public accounting firm, the
financial highlights for the fiscal year ended March 31, 2008 should not be relied upon.
|
|
†
|
Total investment return is computed based upon the New York Stock Exchange market price of the Fund’s shares and excludes the effect of brokerage
commissions. Dividends and distributions are assumed to be reinvested at the prices obtained under the Fund’s dividend reinvestment plan.
|
|
1
|
Not available. During this period, interest expense was not reported separately from operating expenses.
|
|
2
|
The Fund had a 1:5 reverse stock split with ex-dividend and payable dates of August 31, 2009 and September 1, 2009, respectively. Prior year net
asset values and per share amounts have been restated to reflect the impact of the reverse stock split. (See Notes to Financial Statements). The net asset value and market price reported at the original dates prior to the reverse stock split were as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended March 31,
|
|
2009
|
|
|
2008
(Unaudited)
|
|
|
Net Asset Value (prior to reverse stock split)
|
|
$
|
1.01
|
|
|
$
|
2.87
|
|
|
Market Price (prior to reverse stock split)
|
|
$
|
0.82
|
|
|
$
|
3.18
|
|
|
3
|
Brookfield Investment Management, Inc. became the Adviser of the Fund on July 29, 2008.
|
See Notes to Financial Statements.
2012 Semi-Annual Report
55
HELIOS FUNDS
Notes to Financial Statements (Unaudited)
September 30, 2012
1. Organization
Helios Advantage Income Fund, Inc., Helios High Income Fund,
Inc., Helios Multi-Sector High Income Fund, Inc. and Helios Strategic Income Fund, Inc. (each a “Fund” and, collectively, the “Funds” or the “Helios Funds”) were organized as separate Maryland corporations on September
7, 2004, April 16, 2003, November 14, 2005 and January 16, 2004, respectively. Each Fund is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as a diversified, closed-end management investment company with
its own investment objective.
Brookfield Investment Management Inc. (“BIM” or “Adviser”), a wholly-owned subsidiary
of Brookfield Asset Management Inc., is registered as an investment Adviser under the Investment Advisers Act of 1940, as amended, and serves as investment adviser to the Funds.
Each Fund’s primary investment objective is to seek a high level of current income with capital growth as a secondary investment objective. No
assurances can be given that each Fund’s investment objective will be achieved.
2. Significant Accounting Policies
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
(“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Valuation of
Investments:
Debt securities, including U.S. government securities, listed corporate bonds, other fixed income and asset-backed securities, and unlisted securities and private placement securities, are generally valued at the latest price
furnished by an independent pricing service or, if not valued by an independent pricing service, using prices obtained from at least two active and reliable market makers in any such security or a broker-dealer. Short-term debt securities with
remaining maturities of sixty days or less are valued at cost with interest accrued or discount accreted to the date of maturity, unless such valuation, in the judgment of the Adviser’s Valuation Committee, does not represent market value.
Investments in equity securities listed or traded on any securities exchange or traded in the over-the-counter market are valued at the
last quoted price as of the close of business on the valuation date. Equity securities for which no sales were reported for that date are valued at “fair value” as determined in good faith by the Adviser’s Valuation Committee.
Investments in open-end registered investment companies, if any, are valued at the net asset value (“NAV”) as reported by those investment companies.
The Boards have adopted procedures for the valuation of the Funds’ securities and has delegated the day to day responsibilities for valuation determinations under these procedures to the Adviser. Securities
are valued using unadjusted quoted market prices, when available, as supplied primarily by third party pricing services or dealers. When price quotations for certain securities are not readily available or cannot be determined, a significant event
has occurred that would materially affect the value of the security, or if the available quotations are not believed to be reflective of the market value by the Adviser, those securities will be valued at “fair value” as determined in good
faith by the Adviser’s Valuation Committee using procedures adopted by and under the supervision of each Fund’s Board of Directors. The Valuation Committee is comprised of senior members of the Adviser’s management team. There can be
no assurance that a Fund could purchase or sell a portfolio security at the price used to calculate a Fund’s NAV.
Fair valuation
procedures may be used to value a substantial portion of the assets of each Fund. A Fund may use the fair value of a security to calculate its NAV when, for example, (1) a portfolio security is not traded in a public market or the principal
market in which the security trades is closed, (2) trading in a portfolio security is suspended and not resumed prior to the normal market close, (3) a portfolio security is not traded in significant
Brookfield
Investment Management Inc.
56
HELIOS FUNDS
Notes to Financial Statements (Unaudited)
September 30, 2012
volume for a substantial period, or (4) the Adviser determines that the quotation or price for a portfolio security provided by a broker-dealer or an independent pricing service is
inaccurate.
The “fair value” of securities may be difficult to determine and thus judgment plays a greater role in the
valuation process. The fair valuation methodology may include or consider the following guidelines, as appropriate: (1) evaluation of all relevant factors, including but not limited to, pricing history, current market level, supply and demand
of the respective security; (2) comparison to the values and current pricing of securities that have comparable characteristics; (3) knowledge of historical market information with respect to the security; (4) other factors relevant
to the security which would include, but not be limited to, duration, yield, fundamental analytical data, the Treasury yield curve, and credit quality. Significant increases or decreases in any of these factors in isolation may result in higher or
lower fair value measurement.
The values assigned to fair valued investments are based on available information and do not necessarily
represent amounts that might ultimately be realized, since such amounts depend on future developments inherent in long-term investments. Changes in the fair valuation of portfolio securities may be less frequent and of greater magnitude than changes
in the price of portfolio securities valued at their last sale price, by an independent pricing service, or based on market quotations. Imprecision in estimating fair value can also impact the amount of unrealized appreciation or depreciation
recorded for a particular portfolio security and differences in the assumptions used could result in a different determination of fair value, and those differences could be material.
The Funds have established methods of fair value measurements in accordance with GAAP. Fair value denotes the price that a Fund would receive upon
selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. A three-tier hierarchy has been established to maximize the use of observable market data and minimize the use of
unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk,
for example, the risk inherent in a particular valuation technique used to measure fair value including such a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable. Observable
inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity. Unobservable inputs are inputs that reflect the
reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in
the three broad levels listed below.
|
|
|
|
|
|
|
•
|
|
Level 1 -
|
|
quoted prices in active markets for identical investments
|
|
•
|
|
Level 2 -
|
|
quoted prices in markets that are not active or other significant observable inputs (including, but not limited to: quoted prices for similar investments, quoted prices
based on recently executed transactions, interest rates, credit risk, etc.)
|
|
•
|
|
Level 3 -
|
|
significant unobservable inputs (including each Fund’s own assumptions in determining the fair value of investments)
|
The Adviser’s valuation policy, as previously stated, establishes parameters for the sources and types of
valuation analysis, as well as, the methodologies and inputs the Adviser uses in determining fair value, including the use of the Adviser’s Valuation Committee. If the Valuation Committee determines that additional techniques, sources or inputs
are appropriate or necessary in a given situation, such additional work will be undertaken.
To assess the continuing appropriateness of
security valuations, the Adviser (or its third party service provider who is subject to oversight by the Adviser), compares daily its prior day prices, prices on comparable securities and sale prices to the current day prices and challenges those
prices that either remain unchanged or exceeds certain tolerance levels with the third party pricing service or broker source. For those securities valued by fair valuations, the Valuation Committee reviews and affirms the reasonableness of the
valuations based on such methodologies and fair valuation determinations on a regular basis after considering all relevant information that is reasonably available.
2012 Semi-Annual Report
57
HELIOS FUNDS
Notes to Financial Statements (Unaudited)
September 30, 2012
The inputs or methodology used for valuing investments 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 September 30, 2012 in valuing the Fund’s investments carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Helios Advantage Income Fund, Inc.
|
|
|
|
|
|
|
|
|
|
|
Valuation Inputs
|
|
Investment
Grade
Corporate
Bonds
|
|
|
High Yield
Corporate
Bonds
|
|
|
Term
Loans
|
|
|
Common
Stocks
|
|
|
Warrants
|
|
|
Total
|
|
|
Level 1 — Quoted Prices
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
783,694
|
|
|
$
|
162,942
|
|
|
$
|
946,636
|
|
|
Level 2 — Quoted Prices in Inactive Markets or Other Significant Observable Inputs
|
|
|
3,532,026
|
|
|
|
51,543,644
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
55,075,670
|
|
|
Level 3 — Significant Unobservable Inputs
|
|
|
—
|
|
|
|
23,934,812
|
|
|
|
229,347
|
|
|
|
—
|
|
|
|
—
|
|
|
|
24,164,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
3,532,026
|
|
|
$
|
75,478,456
|
|
|
$
|
229,347
|
|
|
$
|
783,694
|
|
|
$
|
162,942
|
|
|
$
|
80,186,465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table provides quantitative information about the Fund’s Level 3 values, as well as its inputs,
as of September 30, 2012. The table is not all-inclusive, but provides information on the significant Level 3 inputs. The range below is the range of prices denoted as a percentage of par.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
|
|
|
|
|
|
|
Assets
|
|
Fair Value as of
September 30, 2012
|
|
|
Valuation
Methodology
|
|
Significant
Unobservable
Input
|
|
Range
|
|
High Yield Corporate Bonds
|
|
$
|
23,934,812
|
|
|
Unadjusted quoted
market prices
|
|
NBIB
(1)
|
|
0.01
(2)
- 112.25
|
|
Term Loans
|
|
|
229,347
|
|
|
Unadjusted quoted
market prices
|
|
NBIB
(1)
|
|
68.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fair Value for Level 3 Investments
|
|
$
|
24,164,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The Fund generally uses prices provided by an independent pricing service, or broker non-binding indicative bid prices (NBIB) on or near the valuation date as
the primary basis for the fair value determinations for high yield corporate debt. These bid prices are non-binding, and may not be determinative of fair value. Each bid price is evaluated by the Valuation Committee in conjunction with additional
information compiled by the Adviser.
|
|
(2)
|
The Fund holds two securities that
are priced at $0.01 causing the range shown above to be large.
|
The following is a reconciliation of assets in which
significant unobservable inputs (Level 3) were used in determining fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in Securities
|
|
High Yield
Corporate
Bonds
|
|
|
Term
Loans
|
|
|
Total
|
|
|
Balance as of March 31, 2012
|
|
$
|
18,920,655
|
|
|
$
|
185,210
|
|
|
$
|
19,105,865
|
|
|
Accrued Discounts (Premiums)
|
|
|
4,694
|
|
|
|
2,975
|
|
|
|
7,669
|
|
|
Realized Gain/(Loss)
|
|
|
105,502
|
|
|
|
—
|
|
|
|
105,502
|
|
|
Change in Unrealized Appreciation (Depreciation)
|
|
|
169,206
|
|
|
|
41,162
|
|
|
|
210,368
|
|
|
Purchases at cost
|
|
|
9,439,560
|
|
|
|
38,156
|
|
|
|
9,477,716
|
|
|
Sales proceeds
|
|
$
|
(4,516,430
|
)
|
|
$
|
(38,156
|
)
|
|
$
|
(4,554,586
|
)
|
|
Transfers into Level 3
|
|
|
652,500
|
|
|
|
—
|
|
|
|
652,500
|
(a)
|
|
Transfers out of Level 3
|
|
|
(840,875
|
)
|
|
|
—
|
|
|
|
(840,875
|
)
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of September 30, 2012
|
|
$
|
23,934,812
|
|
|
$
|
229,347
|
|
|
$
|
24,164,159
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized gains or losses relating to assets still held at reporting date
|
|
$
|
191,324
|
|
|
$
|
41,162
|
|
|
$
|
232,486
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Transfers in and out of Level 3 are due primarily to increases or decreases in trade basis information versus dealer quotes.
|
Brookfield
Investment Management Inc.
58
HELIOS FUNDS
Notes to Financial Statements (Unaudited)
September 30, 2012
The following is a summary of the inputs used as of September 30, 2012 in valuing the Fund’s investments carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Helios High Income Fund, Inc.
|
|
|
|
|
|
|
|
|
|
|
Valuation Inputs
|
|
Investment
Grade
Corporate
Bonds
|
|
|
High Yield
Corporate
Bonds
|
|
|
Term
Loans
|
|
|
Common
Stocks
|
|
|
Warrants
|
|
|
Total
|
|
|
Level 1 — Quoted Prices
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
568,536
|
|
|
$
|
122,234
|
|
|
$
|
690,770
|
|
|
Level 2 — Quoted Prices in Inactive Markets or Other Significant Observable Inputs
|
|
|
3,044,331
|
|
|
|
35,694,609
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
38,738,940
|
|
|
Level 3 — Significant Unobservable Inputs
|
|
|
—
|
|
|
|
17,517,715
|
|
|
|
180,202
|
|
|
|
—
|
|
|
|
—
|
|
|
|
17,697,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
3,044,331
|
|
|
$
|
53,212,324
|
|
|
$
|
180,202
|
|
|
$
|
568,536
|
|
|
$
|
122,234
|
|
|
$
|
57,127,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table provides quantitative information about the Fund’s Level 3 values, as well as its inputs,
as of September 30, 2012. The table is not all-inclusive, but provides information on the significant Level 3 inputs. The range below is the range of prices denoted as a percentage of par.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
|
|
|
|
|
|
|
Assets
|
|
Fair Value as of
September 30, 2012
|
|
|
Valuation
Methodology
|
|
Significant
Unobservable
Input
|
|
Range
|
|
High Yield Corporate Bonds
|
|
$
|
17,517,715
|
|
|
Unadjusted quoted
market prices
|
|
NBIB
(1)
|
|
0.01
(2)
- 112.25
|
|
Term Loans
|
|
|
180,202
|
|
|
Unadjusted quoted
market prices
|
|
NBIB
(1)
|
|
68.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fair Value for Level 3 Investments
|
|
$
|
17,697,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The Fund generally uses prices provided by an independent pricing service, or broker non-binding indicative bid prices (NBIB) on or near the valuation date as
the primary basis for the fair value determinations for high yield corporate debt. These bid prices are non-binding, and may not be determinative of fair value. Each bid price is evaluated by the Valuation Committee in conjunction with additional
information compiled by the Adviser.
|
|
(2)
|
The Fund holds two securities that
are priced at $0.01 causing the range shown above to be large.
|
The following is a reconciliation of assets in which
significant unobservable inputs (Level 3) were used in determining fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in Securities
|
|
High Yield
Corporate
Bonds
|
|
|
Term
Loans
|
|
|
Total
|
|
|
Balance as of March 31, 2012
|
|
$
|
13,709,679
|
|
|
$
|
145,522
|
|
|
$
|
13,855,201
|
|
|
Accrued Discounts (Premiums)
|
|
|
1,585
|
|
|
|
2,338
|
|
|
|
3,923
|
|
|
Realized Gain/(Loss)
|
|
|
122,431
|
|
|
|
—
|
|
|
|
122,431
|
|
|
Change in Unrealized Appreciation (Depreciation)
|
|
|
108,602
|
|
|
|
32,342
|
|
|
|
140,944
|
|
|
Purchases at cost
|
|
|
6,868,240
|
|
|
|
29,979
|
|
|
|
6,898,219
|
|
|
Sales proceeds
|
|
|
(3,152,822
|
)
|
|
|
(29,979
|
)
|
|
|
(3,182,801
|
)
|
|
Transfers into Level 3
|
|
|
456,750
|
|
|
|
—
|
|
|
|
456,750
|
(a)
|
|
Transfers out of Level 3
|
|
|
(596,750
|
)
|
|
|
—
|
|
|
|
(596,750
|
)
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of September 30, 2012
|
|
$
|
17,517,715
|
|
|
$
|
180,202
|
|
|
$
|
17,697,917
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized gains or losses relating to assets still held at reporting date
|
|
$
|
153,176
|
|
|
$
|
32,342
|
|
|
$
|
185,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Transfers in and out of Level 3 are due primarily to increases or decreases in trade basis information versus dealer quotes.
|
2012 Semi-Annual Report
59
HELIOS FUNDS
Notes to Financial Statements (Unaudited)
September 30, 2012
The following is a summary of the inputs used as of September 30, 2012 in valuing the Fund’s investments carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Helios Multi-Sector High Income Fund, Inc.
|
|
|
|
|
|
|
|
|
|
|
Valuation Inputs
|
|
Investment
Grade
Corporate
Bonds
|
|
|
High Yield
Corporate
Bonds
|
|
|
Term
Loans
|
|
|
Common
Stocks
|
|
|
Warrants
|
|
|
Total
|
|
|
Level 1 — Quoted Prices
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
641,290
|
|
|
$
|
142,577
|
|
|
$
|
783,867
|
|
|
Level 2 — Quoted Prices in Inactive Markets or Other Significant Observable Inputs
|
|
|
3,023,639
|
|
|
|
40,690,771
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
43,714,410
|
|
|
Level 3 — Significant Unobservable Inputs
|
|
|
—
|
|
|
|
20,275,233
|
|
|
|
196,584
|
|
|
|
—
|
|
|
|
—
|
|
|
|
20,471,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
3,023,639
|
|
|
$
|
60,966,004
|
|
|
$
|
196,584
|
|
|
$
|
641,290
|
|
|
$
|
142,577
|
|
|
$
|
64,970,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table provides quantitative information about the Fund’s Level 3 values, as well as its inputs,
as of September 30, 2012. The table is not all-inclusive, but provides information on the significant Level 3 inputs. The range below is the range of prices denoted as a percentage of par.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
|
|
|
|
|
|
|
Assets
|
|
Fair Value as of
September 30, 2012
|
|
|
Valuation
Methodology
|
|
Significant
Unobservable
Input
|
|
Range
|
|
High Yield Corporate Bonds
|
|
$
|
20,275,233
|
|
|
Unadjusted quoted
market prices
|
|
NBIB
(1)
|
|
0.01
(2)
- 112.25
|
|
Term Loans
|
|
|
196,584
|
|
|
Unadjusted quoted
market prices
|
|
NBIB
(1)
|
|
68.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fair Value for Level 3 Investments
|
|
$
|
20,471,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The Fund generally uses prices provided by an independent pricing service, or broker non-binding indicative bid prices (NBIB) on or near the valuation date as
the primary basis for the fair value determinations for high yield corporate debt. These bid prices are non-binding, and may not be determinative of fair value. Each bid price is evaluated by the Valuation Committee in conjunction with additional
information compiled by the Adviser.
|
|
(2)
|
The Fund holds two securities that
are priced at $0.01 causing the range shown above to be large.
|
The following is a reconciliation of assets in which
significant unobservable inputs (Level 3) were used in determining fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in Securities
|
|
High Yield
Corporate
Bonds
|
|
|
Term
Loans
|
|
|
Total
|
|
|
Balance as of March 31, 2012
|
|
$
|
15,840,232
|
|
|
$
|
158,751
|
|
|
$
|
15,998,983
|
|
|
Accrued Discounts (Premiums)
|
|
|
860
|
|
|
|
2,551
|
|
|
|
3,411
|
|
|
Realized Gain/(Loss)
|
|
|
123,917
|
|
|
|
—
|
|
|
|
123,917
|
|
|
Change in Unrealized Appreciation (Depreciation)
|
|
|
128,208
|
|
|
|
35,282
|
|
|
|
163,490
|
|
|
Purchases at cost
|
|
|
8,000,110
|
|
|
|
32,701
|
|
|
|
8,032,811
|
|
|
Sales proceeds
|
|
|
(3,661,969
|
)
|
|
|
(32,701
|
)
|
|
|
(3,694,670
|
)
|
|
Transfers into Level 3
|
|
|
522,000
|
|
|
|
—
|
|
|
|
522,000
|
(a)
|
|
Transfers out of Level 3
|
|
|
(678,125
|
)
|
|
|
—
|
|
|
|
(678,125
|
)
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of September 30, 2012
|
|
$
|
20,275,233
|
|
|
$
|
196,584
|
|
|
$
|
20,471,817
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized gains or losses relating to assets still held at reporting date
|
|
$
|
137,850
|
|
|
$
|
35,282
|
|
|
$
|
173,132
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Transfers in and out of Level 3 are due primarily to increases or decreases in trade basis information versus dealer quotes.
|
Brookfield
Investment Management Inc.
60
HELIOS FUNDS
Notes to Financial Statements (Unaudited)
September 30, 2012
The following is a summary of the inputs used as of September 30, 2012 in valuing the Fund’s investments carried at fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Helios Strategic Income Fund, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
Valuation Inputs
|
|
Commercial
Mortgage-
Backed
Securities
|
|
|
Investment
Grade
Corporate
Bonds
|
|
|
High Yield
Corporate
Bonds
|
|
|
Term
Loans
|
|
|
Common
Stocks
|
|
|
Warrants
|
|
|
Total
|
|
|
Level 1 — Quoted Prices
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,165,914
|
|
|
$
|
122,234
|
|
|
$
|
3,288,148
|
|
|
Level 2 — Quoted Prices in Inactive Markets or Other Significant Observable Inputs
|
|
|
—
|
|
|
|
7,734,627
|
|
|
|
20,895,064
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
28,629,691
|
|
|
Level 3 — Significant Unobservable Inputs
|
|
|
8,456,911
|
|
|
|
—
|
|
|
|
14,607,131
|
|
|
|
163,820
|
|
|
|
—
|
|
|
|
—
|
|
|
|
23,227,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
8,456,911
|
|
|
$
|
7,734,627
|
|
|
$
|
35,502,195
|
|
|
$
|
163,820
|
|
|
$
|
3,165,914
|
|
|
$
|
122,234
|
|
|
$
|
55,145,701
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table provides quantitative information about the Fund’s Level 3 values, as well as its inputs,
as of September 30, 2012. The table is not all-inclusive, but provides information on the significant Level 3 inputs. The range below is the range of prices denoted as a percentage of par.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quantitative Information about Level 3 Fair Value Measurements
|
|
|
|
|
|
|
|
Assets
|
|
Fair Value as of
September 30, 2012
|
|
|
Valuation
Methodology
|
|
Significant
Unobservable
Input
|
|
Range
|
|
Commercial Mortgage-Backed Securities
|
|
$
|
8,456,911
|
|
|
Unadjusted quoted
market prices
|
|
NBIB
(1)
|
|
112.14 - 119.13
|
|
High Yield Corporate Bonds
|
|
|
14,607,131
|
|
|
Unadjusted quoted
market prices
|
|
NBIB
(1)
|
|
0.01
(2)
-112.25
|
|
Term Loans
|
|
$
|
163,820
|
|
|
Unadjusted quoted
market prices
|
|
NBIB
(1)
|
|
68.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Fair Value for Level 3 Investments
|
|
$
|
23,227,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The Fund generally uses prices
provided by an independent pricing service, or broker non-binding indicative bid prices (NBIB) on or near the valuation date as the primary basis for the fair value determinations for commercial mortgage-backed securities and high yield corporate
debt. These bid prices are non-binding, and may not be determinative of fair value. Each bid price is evaluated by the Valuation Committee in conjunction with additional information compiled by the Adviser.
|
|
(2)
|
The Fund holds two securities that
are priced at $0.01 causing the range shown above to be large.
|
The following is a reconciliation of assets in which
significant unobservable inputs (Level 3) were used in determining fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in Securities
|
|
Commercial
Mortgage-
Backed
Securities
|
|
|
High Yield
Corporate
Bonds
|
|
|
Term
Loans
|
|
|
Total
|
|
|
Balance as of March 31, 2012
|
|
$
|
8,205,705
|
|
|
$
|
11,827,302
|
|
|
$
|
132,293
|
|
|
$
|
20,165,300
|
|
|
Accrued Discounts (Premiums)
|
|
|
(34,916
|
)
|
|
|
2,807
|
|
|
|
2,125
|
|
|
|
(29,984
|
)
|
|
Realized Gain/(Loss)
|
|
|
—
|
|
|
|
120,311
|
|
|
|
—
|
|
|
|
120,311
|
|
|
Change in Unrealized Appreciation (Depreciation)
|
|
|
286,122
|
|
|
|
48,775
|
|
|
|
29,402
|
|
|
|
364,299
|
|
|
Purchases at cost
|
|
|
—
|
|
|
|
5,822,305
|
|
|
|
27,251
|
|
|
|
5,849,556
|
|
|
Sales proceeds
|
|
|
—
|
|
|
|
(3,079,744
|
)
|
|
|
(27,251
|
)
|
|
|
(3,106,995
|
)
|
2012 Semi-Annual Report
61
HELIOS FUNDS
Notes to Financial Statements (Unaudited)
September 30, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in Securities
|
|
Commercial
Mortgage-
Backed
Securities
|
|
|
High Yield
Corporate
Bonds
|
|
|
Term
Loans
|
|
|
Total
|
|
|
Transfers into Level 3
|
|
|
—
|
|
|
|
435,000
|
|
|
|
—
|
|
|
|
435,000
|
(a)
|
|
Transfers out of Level 3
|
|
|
—
|
|
|
|
(569,625
|
)
|
|
|
—
|
|
|
|
(569,625
|
)
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of September 30, 2012
|
|
$
|
8,456,911
|
|
|
$
|
14,607,131
|
|
|
$
|
163,820
|
|
|
$
|
23,227,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in unrealized gains or losses relating to assets still held at reporting date
|
|
$
|
286,122
|
|
|
$
|
100,477
|
|
|
$
|
29,402
|
|
|
$
|
416,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
Transfers in and out of Level 3 are due primarily to increases or decreases in trade basis information versus dealer quotes.
|
For the six months ended September 30, 2012, there was no security transfer activity between Level 1 and Level 2 for any of the Funds.
Investment Transactions and Investment Income:
Securities transactions are recorded on the trade date. Realized gains and losses
from securities transactions are calculated on the identified cost basis. Interest income is recorded on the accrual basis. Discounts and premiums on securities are accreted and amortized, respectively on a daily basis, using the effective yield to
maturity method adjusted based on management’s assessment of the collectability of such interest. Dividend income is recorded on the ex-dividend date.
Taxes:
Each Fund intends to continue to meet the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and to distribute substantially all of its taxable
income to its stockholders. Therefore, no federal income or excise tax provision is required. Each Fund may incur an excise tax to the extent it has not distributed all of its taxable income on a calendar year basis.
GAAP provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. An
evaluation of tax positions taken in the course of preparing the Funds’ tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the taxing authority is required. Tax benefits of positions
not deemed to meet the more-likely-than-not threshold would be booked as a tax expense in the current year and recognized as: a liability for unrecognized tax benefits; a reduction of an income tax refund receivable; a reduction of a deferred tax
asset; an increase in deferred tax liability; or a combination thereof. As of September 30, 2012, the Funds have determined that there are no uncertain tax positions or tax liabilities required to be accrued.
The Funds have reviewed all taxable years that are open for examination (
i.e.,
not barred by the applicable statute of limitations) by
taxing authorities of all major jurisdictions, including the Internal Revenue Service. As of September 30, 2012, open taxable years consisted of the taxable years ended March 31, 2009 through March 31, 2012. No examination of any of
the Fund’s tax returns is currently in progress.
Expenses:
Expenses directly attributable to a Fund are charged directly to
that Fund, while expenses which are attributable to more than one Fund are allocated among the respective Funds based upon relative net assets.
Dividends and Distributions:
Each Fund declares and pays dividends monthly from net investment income. To the extent that these distributions exceed net investment income, they may be classified as return of
capital. Each Fund also pays distributions at least annually from its net realized capital gains, if any. Dividends and distributions are recorded on the ex-dividend date. All common shares have equal dividend and other distribution rights. A notice
disclosing the source(s) of a distribution will be provided if payment is made from any source other than net investment income. Any such notice would be provided only for informational purposes in order to comply with the requirements of
Section 19(a) of the 1940 Act and not for tax reporting purposes. The tax composition of each Fund’s distributions for each calendar year is reported on IRS Form 1099-DIV.
Brookfield
Investment Management Inc.
62
HELIOS FUNDS
Notes to Financial Statements (Unaudited)
September 30, 2012
Dividends from net investment income and distributions from realized gains from investment transactions have been determined in accordance with Federal income tax regulations and may differ from net investment
income and realized gains recorded by each Fund for financial reporting purposes. These differences which could be temporary or permanent in nature may result in reclassification of distributions; however, net investment income, net realized gains
and losses and net assets are not affected.
When-Issued and Delayed Delivery Transactions:
The Funds may engage in when-issued
or delayed delivery transactions. The Funds record when-issued securities on the trade date and maintain security positions such that sufficient liquid assets will be available to make payment for the securities purchased. Securities purchased on a
when issued or delayed delivery basis are marked to market daily and begin earning interest on the settlement date. Losses may occur on these transactions due to changes in market conditions or the failure of counterparties to perform under the
contract.
Cash Flow Information:
Each Fund invests in securities and distributes dividends and distributions which are paid in
cash or are reinvested at the discretion of stockholders. These activities are reported in the Statements of Changes in Net Assets. Additional information on cash receipts and cash payments is presented in the Statement of Cash Flows. Cash, as used
in the Statement of Cash Flows, is the amount reported as “Cash” in the Statements of Assets and Liabilities, and does not include short-term investments.
Accounting practices that do not affect reporting activities on a cash basis include carrying investments at value and accreting discounts and amortizing premiums on debt obligations.
3. Risks of Investing in Asset-Backed Securities and Below-Investment Grade Securities
The value of asset-backed securities may be affected by, among other factors, changes in: interest rates, the market’s assessment of the
quality of the underlying assets, the creditworthiness of the servicer for the underlying assets, information concerning the originator of the underlying assets, or the creditworthiness or rating of the entities that provide any supporting letters
of credit, surety bonds, derivative instruments, or other credit enhancement. The value of asset-backed securities also will be affected by the exhaustion, termination or expiration of any credit enhancement.
The Funds have investments in below-investment grade debt securities. Below-investment grade securities involve a higher degree of credit risk than
investment grade debt securities. In the event of an unanticipated default, the Funds would experience a reduction in their income, a decline in the market value of the securities so affected and a decline in the NAV of their shares. During an
economic downturn or period of rising interest rates, highly leveraged and other below-investment grade issuers frequently experience financial stress that could adversely affect their ability to service principal and interest payment obligations,
to meet projected business goals and to obtain additional financing. The market prices of below-investment grade debt securities are generally less sensitive to interest rate changes than higher-rated investments but are more sensitive to adverse
economic or political changes or individual developments specific to the issuer than higher-rated investments. Periods of economic or political uncertainty and change can be expected to result in significant volatility of prices for these
securities. Rating services consider these securities to be speculative in nature.
Below-investment grade securities may be subject to
market conditions, events of default or other circumstances which cause them to be considered “distressed securities.” Distressed securities frequently do not produce income while they are outstanding. The Funds may be required to bear
certain extraordinary expenses in order to protect and recover their investments in certain distressed securities. Therefore, to the extent the Funds seek capital growth through investment in such securities, the Funds’ ability to achieve
current income for its stockholders may be diminished. The Funds also are subject to significant uncertainty as to when and in what manner and for what value the obligations evidenced by distressed securities will eventually be satisfied
(
e.g.
, through a liquidation of the obligor’s assets, an exchange offer or plan of reorganization involving the securities or a payment of some amount in satisfaction of the obligation). In addition, even if an exchange offer is made or
a plan of reorganization is adopted with respect to distressed securities held by the Funds, there can be no
2012 Semi-Annual Report
63
HELIOS FUNDS
Notes to Financial Statements (Unaudited)
September 30, 2012
assurance that the securities or other assets received by the Funds in connection with such exchange offer or plan of reorganization will not have a lower value or income potential than may have
been anticipated when the investment was made. Moreover, any securities received by the Funds upon completion of an exchange offer or plan of reorganization may be restricted as to resale. As a result of the Funds’ participation in negotiations
with respect to any exchange offer or plan of reorganization with respect to an issuer of such securities, the Funds may be restricted from disposing of distressed securities.
4. Investment Advisory Agreements and Affiliated Transactions
Each Fund has
entered into a separate Investment Advisory Agreement (the “Advisory Agreements”) with the Adviser under which the Adviser is responsible for the management of each Fund’s portfolio and provides the necessary personnel, facilities,
equipment and certain other services necessary to the operations of each Fund. The Advisory Agreements provide, among other things, that the Adviser will bear all expenses of its employees and overhead incurred in connection with the performance of
its duties under the Advisory Agreements, and will pay all salaries of the Funds’ directors and officers who are affiliated persons (as such term is defined in the 1940 Act) of the Adviser. The Advisory Agreements provide that each Fund shall
pay the Adviser a monthly fee for its services at an annual rate of 0.65% of each Fund’s average daily total assets minus liabilities (other than aggregate indebtedness entered into for purposes of leverage).
Each Fund previously entered into a separate expense limitation agreement (the “Expense Limitation Agreements”) under which the Adviser
contractually agreed to waive its fees and/or reimburse each Fund for its expenses to the extent necessary to ensure each Fund’s annual operating expenses (excluding brokerage, interest expenses and taxes, and acquired fund fees and expenses)
did not exceed 1.30% of average annual net assets of each Fund. The Expense Limitation Agreements terminated effective July 29, 2010. Pursuant to the Expense Limitation Agreements, the Adviser retains its right to receive reimbursement of any
payments made by it, or to recoup any fees waived by it during the prior three fiscal years, provided that after giving effect to such repayment or recoupment, such adjusted total annual operating expenses (expressed as a percentage of average net
assets) for each Fund would not exceed the percentage limitations listed above.
The amount of investment advisory fees waived and
expenses reimbursed available to be recouped and the year of expiration for each Fund are listed in the table below:
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
March 31, 2013
|
|
|
Up to
July 29, 2013
|
|
|
Helios Advantage Income Fund, Inc.
|
|
$
|
374,959
|
|
|
$
|
32,427
|
|
|
Helios High Income Fund, Inc.
|
|
|
337,154
|
|
|
|
58,511
|
|
|
Helios Multi-Sector High Income Fund, Inc.
|
|
|
353,979
|
|
|
|
44,492
|
|
|
Helios Strategic Income Fund, Inc.
|
|
|
341,483
|
|
|
|
57,099
|
|
During the six months ended September 30, 2012, the Adviser earned the following in investment advisory fees
under the Advisory Agreements.
|
|
|
|
|
|
|
Fund
|
|
Investment
Advisory Fees
|
|
|
Helios Advantage Income Fund, Inc.
|
|
$
|
267,399
|
|
|
Helios High Income Fund, Inc.
|
|
|
190,669
|
|
|
Helios Multi-Sector High Income Fund, Inc.
|
|
|
216,227
|
|
|
Helios Strategic Income Fund, Inc.
|
|
|
181,128
|
|
|
|
|
|
|
|
|
|
|
$
|
855,423
|
|
|
|
|
|
|
|
The Funds have entered into an Administration Agreement with the Adviser. The Adviser entered into a
sub-administration agreement with U.S. Bancorp Fund Services, LLC (the “Sub-Administrator”). The Adviser and Sub-Administrator perform administrative services necessary for the operation of the Funds, including maintaining
Brookfield
Investment Management Inc.
64
HELIOS FUNDS
Notes to Financial Statements (Unaudited)
September 30, 2012
certain books and records of the Funds and preparing reports and other documents required by federal, state, and other applicable laws and regulations, and providing the Funds with administrative
office facilities. For these services, each Fund pays to the Adviser a monthly fee at an annual rate of 0.15% of each Fund’s average daily total assets minus liabilities (other than the aggregate indebtedness entered into for purposes of
leverage). The Adviser is responsible for any fees due the Sub-Administrator.
During the six months ended September 30, 2012, the
Adviser earned the following in Administration fees:
|
|
|
|
|
|
|
Fund
|
|
Administration Fee
|
|
|
Helios Advantage Income Fund, Inc.
|
|
$
|
61,707
|
|
|
Helios High Income Fund, Inc.
|
|
|
44,001
|
|
|
Helios Multi-Sector High Income Fund, Inc.
|
|
|
49,899
|
|
|
Helios Strategic Income Fund, Inc.
|
|
|
41,799
|
|
|
|
|
|
|
|
|
|
|
$
|
197,406
|
|
|
|
|
|
|
|
Certain officers of the Funds are officers and/or directors of the Adviser.
5. Purchases and Sales of Investments
Purchases and sales of investments, excluding short-term securities, credit facility and U.S. Government securities, for the six months ended September 30, 2012 were as follows:
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
Purchases
|
|
|
Sales
|
|
|
Helios Advantage Income Fund, Inc.
|
|
$
|
13,074,352
|
|
|
$
|
11,601,539
|
|
|
Helios High Income Fund, Inc.
|
|
|
9,651,249
|
|
|
|
8,531,978
|
|
|
Helios Multi-Sector High Income Fund, Inc.
|
|
|
11,069,964
|
|
|
|
9,064,835
|
|
|
Helios Strategic Income Fund, Inc.
|
|
|
7,770,902
|
|
|
|
6,999,247
|
|
For the six months ended September 30, 2012, there were no transactions in U.S. Government securities.
6. Borrowings
Credit facility:
The Funds established a line of credit with BNP Paribas for investment purposes subject to the limitations of the 1940 Act
for borrowings by registered investment companies. Each Fund pays interest in the amount of 0.80% plus the 3-month London Interbank Offered Rate on the amount outstanding and 0.80% on the line of credit that is unused. For the six months ended
September 30, 2012, the average interest rate paid on the amounts outstanding under the line of credit was 1.25% for each of the Funds.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Helios Advantage
Income Fund, Inc.
|
|
|
Helios High
Income Fund, Inc.
|
|
|
Helios Multi-Sector
High Income Fund, Inc.
|
|
|
Helios Strategic
Income Fund, Inc.
|
|
|
Total line of credit amount available
|
|
$
|
27,000,000
|
|
|
$
|
19,000,000
|
|
|
$
|
22,000,000
|
|
|
$
|
18,000,000
|
|
|
Line of credit outstanding at September 30, 2012
|
|
|
23,700,000
|
|
|
|
17,425,000
|
|
|
|
19,800,000
|
|
|
|
15,950,000
|
|
|
Line of credit amount unused at September 30, 2012
|
|
|
3,300,000
|
|
|
|
1,575,000
|
|
|
|
2,200,000
|
|
|
|
2,050,000
|
|
|
Average balance outstanding during the period
|
|
|
23,700,000
|
|
|
|
17,425,000
|
|
|
|
19,800,000
|
|
|
|
15,950,000
|
|
|
Interest expense incurred on line of credit during the period
|
|
|
164,158
|
|
|
|
117,233
|
|
|
|
134,881
|
|
|
|
109,784
|
|
2012 Semi-Annual Report
65
HELIOS FUNDS
Notes to Financial Statements (Unaudited)
September 30, 2012
7. Reverse Stock Split
Effective September 1, 2009, each Fund affected a
1 for 5 reverse stock split for its respective shares. All share transactions in capital stock and per share data prior to September 1, 2009, have been restated to give effect of the reverse stock split. The reverse stock split had no impact on
the overall value of a stockholder’s investment in each Fund.
8. Capital Stock
Each Fund is authorized to issue 1,000,000,000 shares of capital stock with a par value of $0.0001 per share. The Funds’ Boards of Directors
are authorized to classify and reclassify any unissued shares of capital stock from time to time by setting or changing any preferences, conversion or other rights, voting powers, or, restrictions, limitations as to dividends, qualifications, or
terms or conditions for the redemption of such shares by the Funds. The common shares have no preemptive, conversion, exchange or redemption rights. All common shares have equal voting, dividend, distribution and liquidation rights. The common
shares, when issued, will be fully paid and non-assessable. Common stockholders are entitled to one vote per share and all voting rights for the election of directors are non-cumulative. The Funds have no present intentions of offering additional
shares, except as described in the Dividend Reinvestment Plan on page 75.
9. Federal Income Tax Information
Income and capital gain distributions are determined in accordance with federal income tax regulations, which may differ from GAAP.
The tax character of distributions for the six months ended September 30, 2012 is expected to be from ordinary income but will be determined
at the end of each Fund’s current fiscal year.
The tax character of distributions paid for the fiscal year ended March 31,
2012 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Helios Advantage
Income Fund, Inc.
|
|
|
Helios High
Income Fund, Inc.
|
|
|
Helios Multi-Sector
High Income Fund, Inc.
|
|
|
Helios Strategic
Income Fund, Inc.
|
|
|
Ordinary
income
(1)
|
|
$
|
4,722,655
|
|
|
$
|
3,484,189
|
|
|
$
|
3,661,470
|
|
|
$
|
2,490,768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total distributions
|
|
$
|
4,722,655
|
|
|
$
|
3,484,189
|
|
|
$
|
3,661,470
|
|
|
$
|
2,490,768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
For tax purposes, short-term capital gain distributions are considered ordinary income distributions.
|
At March 31, 2012, each Fund’s most recently completed tax year-end, the components of net assets (excluding paid-in capital) on a tax
basis were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Helios Advantage
Income Fund, Inc.
|
|
|
Helios High
Income Fund, Inc.
|
|
|
Helios Multi-Sector
High Income Fund, Inc.
|
|
|
Helios Strategic
Income Fund, Inc.
|
|
|
Undistributed ordinary income
|
|
$
|
373,065
|
|
|
$
|
34,148
|
|
|
$
|
376,505
|
|
|
$
|
276,511
|
|
|
Capital loss
carryforward
(1)
|
|
|
(401,012,492
|
)
|
|
|
(299,376,208
|
)
|
|
|
(450,100,115
|
)
|
|
|
(365,491,429
|
)
|
|
Unrealized appreciation
|
|
|
3,227,245
|
|
|
|
2,339,119
|
|
|
|
2,372,396
|
|
|
|
2,294,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(397,412,182
|
)
|
|
$
|
(297,002,941
|
)
|
|
$
|
(447,351,214
|
)
|
|
$
|
(362,920,187
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
To the extent future capital gains
are offset by capital loss carryforwards, such gains will not be distributed.
|
As of March 31, 2012, the
Funds’ capital loss carryforwards were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
Expiring in
2014
|
|
|
Expiring in
2015
|
|
|
Expiring in
2016
|
|
|
Expiring in
2017
|
|
|
Expiring in
2018
|
|
|
Helios Advantage Income Fund, Inc.
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
54,307,610
|
|
|
$
|
175,931,140
|
|
|
$
|
170,773,742
|
|
|
Helios High Income Fund, Inc.
|
|
|
—
|
|
|
|
—
|
|
|
|
42,347,138
|
|
|
|
130,227,458
|
|
|
|
126,801,612
|
|
|
Helios Multi-Sector High Income Fund, Inc.
|
|
|
—
|
|
|
|
—
|
|
|
|
61,500,585
|
|
|
|
205,725,325
|
|
|
|
182,874,205
|
|
|
Helios Strategic Income Fund, Inc.
|
|
|
1,362,197
|
|
|
|
193,592
|
|
|
|
59,889,208
|
|
|
|
152,878,553
|
|
|
|
151,167,879
|
|
Brookfield
Investment Management Inc.
66
HELIOS FUNDS
Notes to Financial Statements (Unaudited)
September 30, 2012
Federal Income Tax Basis:
The federal income tax basis of the Funds’ investments at September 30, 2012 was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fund
|
|
Cost of
Investments
|
|
|
Gross Unrealized
Appreciation
|
|
|
Gross Unrealized
Depreciation
|
|
|
Net Unrealized
Appreciation
|
|
|
Helios Advantage Income Fund, Inc.
|
|
$
|
75,628,230
|
|
|
$
|
5,728,864
|
|
|
$
|
(1,170,629
|
)
|
|
$
|
4,558,235
|
|
|
Helios High Income Fund, Inc.
|
|
|
53,924,406
|
|
|
|
4,137,669
|
|
|
|
(934,448
|
)
|
|
|
3,203,221
|
|
|
Helios Multi-Sector High Income Fund, Inc.
|
|
|
61,492,695
|
|
|
|
4,544,659
|
|
|
|
(1,067,260
|
)
|
|
|
3,477,399
|
|
|
Helios Strategic Income Fund, Inc.
|
|
|
51,441,218
|
|
|
|
4,716,333
|
|
|
|
(1,011,850
|
)
|
|
|
3,704,483
|
|
Capital Account Reclassifications:
Because federal income tax regulations differ in certain respects from
GAAP, income and capital gain distributions, if any, determined in accordance with tax regulations may differ from net investment income and realized gains recognized for financial reporting purposes. These differences are primarily due to differing
treatments for wash sales and return of capital. Permanent book and tax differences, if any, relating to stockholder distributions will result in reclassifications to paid-in-capital or to undistributed capital gains. These reclassifications have no
effect on net assets or NAV per share.
10. Indemnification
Under each Fund’s organizational documents, its officers and directors are indemnified against certain liabilities arising out of the
performance of their duties to each Fund. In addition, in the normal course of business, the Funds enter into contracts with their vendors and others that provide for indemnification. The Funds’ maximum exposure under these arrangements is
unknown, since this would involve the resolution of certain claims, as well as future claims that may be made, against the Funds. Thus, an estimate of the financial impact, if any, of these arrangements cannot be made at this time.
11. New Accounting Pronouncements
In December 2011, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-11 “Disclosures about Offsetting Assets and Liabilities.”
ASU 2011-11 requires disclosures to make financial statements that are prepared under U.S. GAAP more comparable to those prepared under IFRS. The new disclosure requirements mandate that entities disclose both gross and net information about
instruments and transactions eligible for offset in the Statements of Assets & Liabilities as well as instruments and transactions subject to an agreement similar to a master netting arrangement. In addition, ASU 2011-11 requires disclosure
of collateral received and posted in connection with master netting agreements or similar arrangements. New disclosures are required for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual
periods.
Management is currently evaluating the impact ASU No. 2011-11 will have on the Funds’ financial statements and
disclosures.
12. Pending Litigation
Beginning in late 2007, lawsuits were filed in state and federal courts in Tennessee, Alabama, Arkansas, Indiana, Mississippi, Louisiana, New York and Texas relating to certain fixed income funds managed by the
Adviser, including the Funds. Certain of the cases were filed as putative class actions on behalf of investors who purchased shares of the Funds from December 2004 through February 2008 and other cases were filed as actions on behalf of one or more
individuals or trusts. The complaints name various entities and individuals as defendants including, among others, the Funds, the former Adviser, Morgan Asset Management, Inc. (“MAM”), Morgan Keegan & Company, Inc. (“Morgan
Keegan”), Regions Financial Corporation and several affiliates (“Regions”), certain former directors and former officers of the Funds and the Funds’ former portfolio managers. The complaints generally allege that the defendants
misrepresented or failed to disclose material facts relating to portfolio composition, fair valuation, liquidity and risk in Fund registration statements and other documents. The
2012 Semi-Annual Report
67
HELIOS FUNDS
Notes to Financial Statements (Unaudited)
September 30, 2012
plaintiffs seek damages in amounts to be determined at trial and reasonable costs and, in some cases, attorneys’ fees. Each of the cases is at a preliminary stage. An answer was filed in a
state court case,
Burke v. Citigroup Global Markets, Inc.
pending in the circuit court of Jefferson County, Alabama, on behalf of Helios Multi-Sector High Income Fund, Inc. and Helios Strategic Income Fund, Inc. Other than the Burke case and
the motions to dismiss filed in the actions discussed below, no responses to the complaints have been filed in the actions pending against the Funds, and no classes have been certified in any of the putative class actions filed against the Funds. As
discussed further below, the Funds moved to dismiss the consolidated class action related to the Closed-End funds, but the Court denied the motion as it relates to the Funds. The parties in this action substantially reached a settlement and filed a
Stipulation of Settlement for the Court’s preliminary approval as discussed further below.
On March 13, 2008, a derivative
action was filed in the United States District Court for the Western District of Tennessee seeking damages on behalf of Helios Multi-Sector High Income Fund, Inc. against MAM and certain former directors of the Fund. The complaint in this action
alleged, among other things, that defendants MAM and certain former directors of the Fund breached their fiduciary duties and mismanaged the Fund in connection with portfolio composition, fair valuation, liquidity, risk management and disclosure.
The complaint sought damages in an amount to be determined at trial and reasonable costs and attorneys’ fees. Motions to dismiss the complaint were filed by the respective defendants. The Board of the Fund underwent an investigation of the
underlying allegations in the complaint to determine whether pursuit of such claims is in the best interest of the Fund. The Fund moved to dismiss the action without prejudice, or alternatively, to stay the action pending the completion of the
Board’s investigation of the underlying allegations and its determination as to proceeding on behalf of the Fund. On March 10, 2010, the court granted the defendants’ motions to dismiss and dismissed the action without prejudice to
the Fund’s right to seek remuneration for any perceived wrongs on the completion of its Board’s investigation.
Subsequently,
on March 18, 2010, four derivative actions were filed on behalf of each of the Funds. The complaints in these actions allege, among other things, that defendants MAM, and certain former officers and directors of the Funds breached their
fiduciary duties and mismanaged the Funds in connection with portfolio composition, fair valuation, liquidity, risk management and disclosure. The complaints seek equitable relief, damages in an amount to be determined at trial and reasonable costs
and attorneys’ fees. The proceedings are at a preliminary stage. On November 5, 2010, the Court granted plaintiff’s unopposed motion for consolidation of these actions, and on December 6, 2010, plaintiffs filed a consolidated
amended complaint. The Boards of the Funds have undertaken an investigation of the underlying allegations in the consolidated amended complaint to determine whether pursuit of such claims is in the best interest of the Funds. On January 24,
2011, the Funds filed a motion for a stay of the action pending the completion of the Boards’ investigation or, in the alternative, until April 6, 2011. Also on January 24, 2011, the non-Fund defendants filed motions to dismiss the
consolidated amended complaint. On February 9, 2011, the Court granted the Funds’ motion and stayed the case until April 6, 2011. On April 6, 2011, the Funds and derivative plaintiffs filed a joint, unopposed motion for a
sixty-day extension of the stay of the case to facilitate their discussion of a possible resolution of the issues in this action. The Court granted this motion on April 8, 2011, staying the case until June 6, 2011. Per the Court’s
June 28, 2011 Scheduling Order, derivative plaintiffs filed their motion in opposition to the non-Fund defendants’ motion to dismiss on July 19, 2011. Non-Fund defendants filed their reply on August 18, 2011. On September 9,
2011, the Court entered an order granting non-Fund defendants’ motion to dismiss without prejudice. Following the Board’s investigation, the Board has authorized derivative plaintiffs’ counsel to pursue the derivative claims on behalf
of the Closed-End funds. On October 21, 2011, derivative plaintiffs filed a verified shareholder derivative complaint, with plans to file an amended complaint soon thereafter. Subsequently, on November 15, 2011, derivative plaintiffs filed
a verified amended shareholder derivative complaint. On January 13, 2012, non-Fund defendants filed a motion to dismiss the amended derivative complaint. Derivative plaintiffs filed their opposition brief on February 27, 2012, and
defendants’ replies were filed on March 28, 2012. On May 8, 2012, the parties notified the Court that a settlement in principle had been reached in the derivative action, and on May 9, 2012 the Court granted the parties’
joint motion to stay the action pending finalization and documentation of the settlement terms.
Brookfield
Investment Management Inc.
68
HELIOS FUNDS
Notes to Financial Statements (Unaudited)
September 30, 2012
Claims substantially similar to those described above have been made in lawsuits filed in the United States Federal and state courts concerning certain open-end funds formerly managed by the Adviser. Motions to
dismiss the open-end derivative and open-end class actions were filed by the respective defendants. The open-end fund defendants moved to dismiss the open-end derivative action without prejudice, or alternatively, to stay such action pending the
completion of the Board investigation described above. On September 24, 2010, the Court denied defendants’ motions to dismiss but granted a stay of the action pending receipt by October 25, 2010 of a report by the Board regarding the
status of its investigation; on October 22, 2010, the Board filed a status report, and requested that the stay be extended until November 30, 2010. The open-end fund defendants separately moved to dismiss the open-end class actions for
failure to state a claim. On September 30, 2010, the Court issued an order granting in part and denying in part defendants’ motions to dismiss. Defendants’ time to answer the surviving claims was extended until November 30, 2010.
On November 30, 2010, the open-end funds filed an additional status report in the open-end derivative action, including a proposed memorandum of understanding between the open-end funds and derivative plaintiffs regarding the resolution of some
of the issues in the open-end derivative and class actions and the realignment of the open-end funds as plaintiffs in the open-end derivative action (the “MOU”). The open-end funds and derivative plaintiffs also filed a motion for an
extension of the stay to facilitate the steps necessary to seek approval of the MOU and the proposed settlement. On December 10, 2010, the Court granted the joint motion and stayed the action until April 6, 2011. On December 16, 2010, the Court
entered a scheduling order in the open-end class action that gave plaintiffs until April 6, 2011 to file the necessary motions seeking approval of the proposed partial settlement. On March 14, 2011, the open-end funds and derivative
plaintiffs filed a joint motion for approval of the proposed notice to the open-end funds’ shareholders and final approval of the MOU in the open-end derivative action. On that same date, the open-end funds and lead plaintiffs filed a joint
motion for preliminary approval of the proposed partial settlement and approval of notice to the settlement class members in the open-end class action. Non-Fund defendants filed opposition papers on April 18, 2011. On June 21, 2011 the
Funds and plaintiffs executed an amended MOU (the “Amended MOU”), which was submitted to the Court together with the reply papers of the Funds and plaintiffs on June 24, 2011. The non-Fund defendants filed their sur-reply papers on
August 1, 2011. On August 12, 2011, plaintiffs and the Funds filed a motion with the Court requesting leave to file sur-sur-reply briefs in response to the non-Fund defendants’ sur-reply briefs. On September 6, 2011, plaintiffs
and the Funds filed a joint motion to strike the Declaration of Nancy J. Moore (the “Moore Declaration”), submitted in support of the non-Fund defendants’ opposition to final approval of the Amended MOU and partial settlement.
Non-Fund defendants filed their opposition brief September 20, 2011, and plaintiffs and the Funds filed their reply brief on October 27, 2011. The Court held a hearing on the motion to strike the Moore Declaration on December 7, 2011,
and on January 4, 2012, the Court entered an order denying the motion to strike. On March 26, 2012, the Court granted plaintiffs’ and the Funds’ joint motion for leave to file a sur-sur-reply on the Amended MOU briefing. On
April 18, 2012, plaintiffs and the Funds each filed their respective sur-sur-reply briefs. On June 6, 2012, plaintiffs filed a motion for leave to file a Second Amended Consolidated Class Action Complaint, and attached the proposed amended
complaint to the filing. On July 12, 2012, the Court granted the parties’ joint motion to extend the time for defendents to file a response to plaintiffs’ motion to amend the complaint until 30 days after a ruling from the Court on
the motion to approve the AMOU and partial settlement, which is still pending.
On September 23, 2008, most of the cases pending in
federal court in the Western District of Tennessee in which the Funds are defendants, and other cases pending in that court involving the same or similar claims against other defendants, were consolidated into a single proceeding encaptioned
In re Regions Morgan Keegan Closed End Fund Litigation
. On December 15, 2010, the Court entered an order appointing lead plaintiffs and lead counsel and consolidating the various actions in this proceeding. On February 22,
2011, plaintiffs filed a consolidated amended class action complaint, alleging Section 11 and Section 12 securities violations against Helios Multi-Sector High Income Fund, and Section 10b securities violations against all four
Closed-End Funds. On April 13, 2011, the Funds filed a motion to dismiss the consolidated amended complaint with prejudice. The non-Fund defendants filed separate motions to dismiss the consolidated amended complaint on April 13, 2011. Per
the Court’s May 20, 2011 Scheduling Order, plaintiffs filed their brief in opposition to the Funds’ and non-Fund defendants’ separate motions to dismiss on June 17, 2011. The Funds and non-Fund defendants filed their replies
in support of their separate motions to dismiss on August 12, 2011. On March 30, 2012, the Court entered
2012 Semi-Annual Report
69
HELIOS FUNDS
Notes to Financial Statements (Unaudited)
September 30, 2012
an order granting in part and denying in part the motion to dismiss. The Court dismissed certain claims against the Officer Co-Defendants, but denied dismissal of all other claims. On
April 13, 2012, plaintiffs filed a consolidated amended class action complaint. On May 7, 2012, the Court granted co-defendants’ and the Funds’ joint, unopposed motion for an extension on the filing of an answer to the amended
class action complaint until June 11, 2012. On May 8, 2012, the parties notified the Court that a settlement in principle had been reached in the securities class action, and on May 9, 2012 the Court granted the parties’ joint
motion to stay the action pending finalization and documentation of the settlement terms.
On February 12, 2009, the Judicial Panel
on Multidistrict Litigation (“Judicial Panel”) issued an order transferring related actions pending in other federal courts to the United States District Court for the Western District of Tennessee and directing that the transferred cases
be coordinated or consolidated with the above-described actions relating to the Funds (the “MDL proceeding”).
On June 18
and June 23, 2010, respectively, two actions were filed in the Northern District of Alabama against Morgan Keegan, MK Holding, Inc., the Funds, and certain other defendants. These complaints generally allege that the defendants misrepresented
or failed to disclose material facts relating to portfolio composition, fair valuation, liquidity and risk in Fund prospectuses and registration statements. The plaintiffs seek damages in amounts to be determined at trial and attorneys’ fees.
On July 28, 2010, joint motions were filed by plaintiffs, Morgan Keegan and MK Holding, Inc. in these proceedings for temporary stays pending transfer to the Western District of Tennessee for consolidated or coordinated pretrial proceedings as
part of the MDL proceeding. The Court entered the MDL transfer order consolidating the actions on August 31, 2010.
On
July 12, 2010, a putative class action was filed in the Western District of Tennessee against MAM, Morgan Keegan, Regions, MK Holding, Inc., the Funds, and certain other defendants. The action purports to assert claims under the Employee
Retirement Income Security Act of 1974 (“ERISA”), on behalf of all ERISA plans for which Regions Bank serves or served as trustee, custodian or agent that owned or held shares of certain investment funds, which are subject of the
multidistrict litigation discussed above. The Funds, together with certain open-end funds formerly managed by the Adviser, are sued as Nonfiduciary Parties in Interest, and are alleged to be liable, and subject to equitable remedies, for allegedly
knowingly participating in breaches of ERISA fiduciary duties by other defendants, or wrongfully obtaining or receiving assets from the Regions ERISA Trusts. Plaintiffs also allege that the Funds are liable for the conduct of certain other
defendants who allegedly acted as agents of the Funds. The action seeks equitable remedies, including a constructive trust and/or restitution of assets allegedly wrongfully obtained or received, as well as fees, profits, bonuses, dividends or other
remuneration, together with damages in an amount to be determined at trial and reasonable costs and attorneys’ fees. On September 9, 2010, the non-Fund defendants filed a motion to consolidate this action with other ERISA cases in which
the Funds are not named as defendants. On April 25, 2011, the Court granted defendants’ motion to consolidate the ERISA actions. On May 20, 2011, the ERISA plaintiffs filed a Third Amended Consolidated Class Action Complaint that no longer
names the Funds as defendants in the action.
No estimate of the effect, if any, of these lawsuits on the Funds can be made at this
time.
13. Subsequent Events
Recent Litigation Updates
The Funds
and the other parties to
In re Helios Closed-End Funds Derivative Litigation
, (the “Litigation”) have filed with the U.S. District Court for the Western District of Tennessee a Stipulation of Settlement. The Stipulation was
submitted to the Court together with a proposed Preliminary Approval Order, which if signed by the Court, will preliminarily approve the settlement of the derivative claims filed on behalf of the Closed-End Funds in the Litigation in exchange for a
settlement payment to the Closed-End Funds by the Regions Financial Corp. and several Morgan Keegan affiliated entities, as defined in the stipulation, in the amount of $6.0 million, less an attorneys’ fee award in the amount of $1.8 million.
After a hearing on the settlement, if the Court grants final approval of the settlement, it is expected that each of the Closed-End Funds’ share of the settlement, after the
Brookfield
Investment Management Inc.
70
HELIOS FUNDS
Notes to Financial Statements (Unaudited)
September 30, 2012
attorneys’ fee award is deducted, will be approximately the amounts reflected below, based upon an allocation of the settlement to the Closed-End Funds approved by the Closed-End Funds’
Boards of Directors:
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|
|
|
|
Helios Advantage Income Fund, Inc.
|
|
$1,150,000 ($0.18 per share)
|
|
Helios Multi-Sector High Income Fund, Inc.
|
|
$1,225,000 ($0.16 per share)
|
|
Helios High Income Fund, Inc.
|
|
$ 850,000 ($0.17 per share)
|
|
Helios Strategic Income Fund, Inc.
|
|
$ 975,000 ($0.16 per share)
|
The Preliminary Approval Order, once signed by the Court, will provide for further notice of the settlement to the
shareholders of the Closed-End Funds (at the Closed-End Funds’ expense), and the scheduling of a hearing and any remaining proceedings. The amount of the settlement is subject to modification by the Court prior to final approval and, therefore,
the amount to be paid to each Closed-End Fund is subject to change.
Concurrent with the filing of the Stipulation of Settlement of the
Litigation, the parties to
In re Regions Morgan Keegan Closed-End Fund Litigation
, (the “Class Action Litigation”) have also filed with the U.S. District Court for the Western District of Tennessee a Stipulation of Settlement. The
Stipulation attaches a Preliminary Approval Order, which if signed by the Court, will preliminarily approve the settlement, including a release of securities claims alleged against the Closed-End Funds and the other defendants pursuant to the terms
of the Stipulation of Settlement of the Class Action Litigation. The Stipulation of Settlement filed in the Class Action Litigation (which also is subject to Court approval) requires that certain of the defendants make a payment of $62.0 million to
a class of Closed-End Fund shareholders and does not require any payments to be made by the Closed-End Funds in connection with the settlement of the Class Action Litigation.
The Preliminary Approval Order in the Class Action Litigation, once signed by the Court, will provide for further notice of the settlement to the class members, and the scheduling of a hearing and any remaining
proceedings.
Other Subsequent Events
GAAP requires recognition in the financial statements of the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the Statements of Assets and Liabilities.
For non-recognized subsequent events that must be disclosed to keep the financial statements from being misleading, the Funds are required to disclose the nature of the event as well as an estimate of their financial effect, or a statement that such
an estimate cannot be made.
Dividends:
The Funds’ Boards of Directors declared the following monthly dividends:
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Fund
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Dividend Per Share
|
|
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Record Date
|
|
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Payable Date
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Helios Advantage Income Fund, Inc.
|
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$
|
0.0625
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October 17, 2012
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October 25, 2012
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Helios High Income Fund, Inc.
|
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$
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0.0600
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October 17, 2012
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October 25, 2012
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Helios Multi-Sector High Income Fund, Inc.
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$
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0.0425
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October 17, 2012
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October 25, 2012
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Helios Strategic Income Fund, Inc.
|
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$
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0.0350
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October 17, 2012
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October 25, 2012
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Fund
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Dividend Per Share
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Record Date
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Payable Date
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Helios Advantage Income Fund, Inc.
|
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$
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0.0625
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November 15, 2012
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November 29, 2012
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Helios High Income Fund, Inc.
|
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$
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0.0600
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November 15, 2012
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November 29, 2012
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Helios Multi-Sector High Income Fund, Inc.
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$
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0.0425
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November 15, 2012
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November 29, 2012
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Helios Strategic Income Fund, Inc.
|
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$
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0.0350
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November 15, 2012
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November 29, 2012
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Management has evaluated subsequent events in the preparation of the Funds’ financial statements and has
determined that other than the items listed herein, there are no events that require recognition or disclosure in the financial statements.
2012 Semi-Annual Report
71
HELIOS FUNDS
Compliance Certifications (Unaudited)
September 30, 2012
On August 20, 2012, the Funds submitted a CEO annual certification to the New York Stock Exchange (“NYSE”) on which the Funds’
principal executive officer certified that he was not aware, as of that date, of any violation by the Funds of the NYSE’s Corporate Governance listing standards. In addition, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and
related SEC rules, the Funds’ principal executive and principal financial officers have made quarterly certifications, included in filings with the SEC on Forms N-CSR and N-Q relating to, among other things, the Funds’ disclosure controls
and procedures and internal control over financial reporting, as applicable.
Brookfield
Investment Management Inc.
72
HELIOS FUNDS
Board Considerations Relating to the Investment Advisory Agreements (Unaudited)
September 30, 2012
At a meeting held on May 22, 2012, the Board, including a majority
of the Disinterested Directors, considered and approved the continuation of the investment advisory agreements (the “Advisory Agreements”) between Brookfield Investment Management Inc. (the “Adviser”) and the Funds. In approving
the Advisory Agreements, the Board, including a majority of the Disinterested Directors, determined that the fee structures were fair and reasonable and that approval of the Advisory Agreements was in the best interests of each Fund and its
shareholders. The Board of Directors considered a wide range of information, including information regularly received from the Adviser at the quarterly Board meetings. While attention was given to all information furnished, the following discusses
the primary factors relevant to the Board’s decision.
NATURE, EXTENT AND QUALITY OF SERVICES.
The Board considered the
level and depth of knowledge of the Adviser. In evaluating the quality of services provided by the Adviser, the Board took into account its familiarity with the Adviser’s management through board meetings, conversations and reports. The Board
noted that the Adviser is responsible for managing the Funds’ investment programs, the general operations and the day-to-day management of the Funds and for compliance with applicable laws, regulations, policies and procedures. The Board
concluded that the nature, extent and quality of the overall services provided by the Adviser and its affiliates are satisfactory. The Board’s conclusion was based, in part, upon services provided to the Funds such as quarterly reports provided
by the Adviser: 1) comparing the performance of each Fund with a peer group, 2) showing that the investment policies and restrictions for each Fund were followed, and 3) covering matters such as the compliance of investment personnel and other
access persons with the Adviser’s and the Funds’ codes of ethics, the adherence to fair value pricing procedures established by the Board, the monitoring of portfolio compliance and presentations regarding the economic environment. The
Board also considered the experience of the Adviser as an investment adviser and the experience of the team of portfolio managers that manages the Funds and its current experience in acting as an investment adviser to other investment funds and
institutional clients.
INVESTMENT PERFORMANCE.
The Board placed significant emphasis on the investment performance of the Funds
in view of its importance to shareholders. While consideration was given to performance reports and discussions at Board meetings throughout the year, particular attention in assessing the performance was given to presentations that compared each of
the Funds’ performance with its Morningstar category peers for the 1, 3 and 5 year periods ending April 30, 2012, as well as the year-to-date period. The Board noted that each Fund performed below the median of its Morningstar category
peers for the 3 and 5 year periods, while each Fund performed above the median for the 1 year period. The Board further noted that Helios Advantage Income Fund and Helios Multi-Sector High Income Fund performed above the median, while Helios High
Income Fund and Helios Strategic Income Fund performed below the median for the year-to-date period. The Board noted the improvement in the performance of each Fund since July 29, 2008, when the Adviser began managing the Funds. Based on the
Adviser’s discussion of the current market and its positioning of each Fund’s portfolio, the Board concluded that each Fund’s performance after the Adviser began its services as investment manager was adequate.
PROFITABILITY.
The Board also considered the level of profits expected to be realized by the Adviser and its affiliates in connection with
the operation of the Funds. In this regard, the Board reviewed the Fund profitability analysis addressing the overall profitability of the Adviser for its management of the Helios fund family, as well as its expected profits and that of its
affiliates for providing administrative support for the Funds. The Board further noted that the methodology followed in allocating costs to the Funds appeared reasonable, while also recognizing that allocation methodologies are inherently
subjective. The Board concluded that the expected profitability to the Adviser from the Funds was reasonable.
MANAGEMENT FEES AND
TOTAL EXPENSES.
The Board also placed significant emphasis on the review of each Fund’s expenses. The Board compared the advisory fees and total expense ratios of each of the Funds with various comparative data that it had been provided.
The Board noted that each Fund’s total expenses were higher than the median, while each Fund’s total advisory and administrative fee was at the median of the Funds’ peer group. The Board further noted that the fees and expenses
payable by the Funds were comparable to those payable by other client accounts managed by the Adviser and concluded that each Fund’s management fees and total expenses were reasonable.
2012 Semi-Annual Report
73
HELIOS FUNDS
Board Considerations Relating to the Investment Advisory Agreements (Unaudited) (continued)
September 30, 2012
ECONOMIES OF SCALE.
The Board considered the potential economies
of scale that may be realized if the assets of the Funds grow. The Board noted that shareholders might benefit from lower operating expenses as a result of an increasing amount of assets being spread over the fixed expenses of the Funds, but noted
that, as closed-end funds, the Funds were unlikely to grow significantly.
In considering the approval of the Advisory Agreements, the
Board, including the Disinterested Directors, did not identify any single factor as controlling. Based on the Board’s evaluation of all factors that it deemed to be relevant, the Board, including the Disinterested Directors, concluded that the
Adviser has demonstrated that it possesses the capability and resources necessary to perform the duties required of it under the Advisory Agreements; performance of the Funds is adequate; and the proposed Advisory fees are fair and reasonable, given
the nature, extent and quality of the services to be rendered by the Adviser.
After carefully reviewing all of these factors, the
Board, including the Disinterested Directors, unanimously approved the continuation of the Advisory Agreements.
Brookfield
Investment Management Inc.
74
HELIOS FUNDS
Dividend Reinvestment Plan (Unaudited)
The Funds offer a dividend reinvestment plan (the “Plan”)
pursuant to which stockholders, unless they elect otherwise, automatically have dividends and other distributions reinvested in common shares of the Fund by Computershare Trust Company, N.A. and Computershare Shareholder Services, Inc. (together,
the “Plan Agent”). Stockholders who elect not to participate in the Plan receive all distributions in cash paid by wire or check mailed directly to the recordholder by the Plan Agent.
How the Plan Works
After a
Fund declares a dividend or determines to make other distributions, the Plan Agent will acquire shares for the participants’ accounts, depending upon the circumstances described below, either (i) through receipt of newly-issued shares of
the Fund or (ii) by open-market purchases as follows:
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•
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If, on the payment date, the NAV is equal to or less than the market price per share plus estimated brokerage commissions, the Plan Agent will invest the
distribution amount in newly-issued shares on behalf of the participants. The number of newly-issued shares to be credited to each participant’s account will be determined by dividing the dollar amount of the distribution by the NAV on the date
the shares are issued. However, if the NAV is less than 95% of the market price on the payment date, the dollar amount of the distribution will be divided by 95% of the market price on the payment date. Because common shares may be issued at less
than their market price, Plan participants may get a benefit that non-participants do not.
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•
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If, on the payment date, the NAV is greater than the market value per share plus estimated brokerage commissions, the Plan Agent will invest the distribution
amount in shares acquired on behalf of the participants in open-market purchases, which may be made on the New York Stock Exchange (“NYSE”), in the over-the-counter market or in negotiated transactions and may be on such terms as to price,
delivery and otherwise as the Plan Agent shall determine. It is possible that the market price for the shares may increase before the Plan Agent has completed its purchases. Therefore, the average purchase price per share the Plan Agent pays may
exceed the market price thereof on the payment date. If the market price per share increases so that it equals or exceeds the NAV per share (minus estimated brokerage commissions), the Plan Agent will cease its purchases. Otherwise, the Plan Agent
will use all distributions received in cash to purchase shares in the open market on or shortly after the payment date, but in no event more than thirty (30) days after the payment date, except where temporary curtailment or suspension of
purchases is necessary to comply with applicable provisions of the federal securities laws. If the Plan Agent is unable to invest the full amount through open-market purchases during the purchase period, the Plan Agent will request that, with
respect to the uninvested portion of such amount, the Fund issue new shares at the close of business on the earlier of the last day of the purchase period or the first day during the purchase period on which the NAV per share (minus estimated
brokerage commissions) equals or is less than the market price per share.
|
Costs of the Plan
The Plan Agent’s fees for the handling of the reinvestment of dividends and other distributions will be paid by the Funds. However, each
participant will pay a pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open-market purchases in connection with the reinvestment of dividends and other distributions. If a participant elects to have the Plan
Agent sell part or all of his or her shares and remit the proceeds, the participant will be subject to a $15.00 service fee and a $0.12 per share sold processing fee (which includes applicable brokerage commissions the Plan Agent is required to
pay). The participant will not be charged any other fees for this service. However, each Fund reserves the right to amend the Plan to include a service fee payable by the participant.
Tax-Implications
The
automatic reinvestment of dividends or other distributions does not relieve participants of any taxes that may be payable on such distributions. Participants will receive tax information annually for their personal records and to help them prepare
their federal income tax returns. For further information as to the tax consequences of participation in the Plan, participants should consult with their own tax advisors.
2012 Semi-Annual Report
75
HELIOS FUNDS
Dividend Reinvestment Plan (Unaudited)
Right to Withdraw
Participants may withdraw from the Plan by calling the Plan Agent at 800-426-5523, writing to the Plan Agent at 250 Royall Street, Canton,
Massachusetts 02021 or completing and returning the transaction form attached to each Plan statement. The withdrawal will be effective immediately if the participant’s notice is received by the Plan Agent not less than ten days prior to any
dividend or other distribution record date. Otherwise, the withdrawal will be effective the first trading day after the payment date for the dividend or other distribution with respect to any subsequent dividend or other distribution.
Brookfield
Investment Management Inc.
76
CORPORATE INFORMATION
Investment Advisor and Administrator
Brookfield Investment Management Inc.
Three World Financial Center
200
Vesey Street
New York, New York 10281-1010
www.brookfieldim.com
Please direct your inquiries to:
Investor Relations
Phone:
1-800-497-3746
E-mail: funds@brookfield.com
Transfer Agent
Stockholder inquiries relating to distributions, address
changes and stockholder account information should be directed to the Fund’s transfer agent:
Computershare Shareholder Services,
Inc.
250 Royall Street
Canton, Massachusetts 02021
1-800-426-5523
Sub-Administrator and Fund Accounting Agent
U.S. Bank Fund Services
615 East Michigan Street
Milwaukee, Wisconsin 53202
Legal Counsel
Paul Hastings LLP
75 East 55th Street
New York, New York 10022
Custodian
U.S. Bank
National Association
1555 North River Center Drive, Suite 302
Milwaukee, Wisconsin 53212
Directors of the Funds
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Rodman L. Drake
|
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Chairman
|
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Louis P. Salvatore
|
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Audit Committee Chairman
|
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Stuart A. McFarland
|
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Director
|
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Diana H. Hamilton
|
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Director
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Officers of the Funds
|
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Kim G. Redding
|
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President
|
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Dana E. Erikson
|
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Vice President
|
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Richard M. Cryan
|
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Vice President
|
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Mark Shipley
|
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Vice President
|
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Steven M. Pires
|
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Treasurer
|
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Jonathan C. Tyras
|
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Secretary
|
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Seth Gelman
|
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Chief Compliance Officer
|
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Lily Wicker
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Assistant Secretary
|
The Funds will file their complete schedules of portfolio holdings with the SEC for the first and
third quarters of each fiscal year on Form N-Q. The Funds’ Form N-Q will be available on the SEC’s website at www.sec.gov. In addition, the Funds’ Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in
Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330.
You may obtain a
description of the Funds’ proxy voting policies and procedures, and information regarding how the Funds voted proxies relating to portfolio securities during the most recent 12-month period ended June 30, without charge, upon request by
calling 1-800-497-3746, or go to the SEC’s website at www.sec.gov.
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for
semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrant.
Not applicable for
semi-annual reports.
Item 6. Schedule of Investments.
Please see Item 1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for
Closed-End
Management Investment Companies.
Not applicable for semi-annual reports.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
There has been no change as of the date of this filing, in the portfolio manager identified in response to paragraph (a)(1) of this Item in the Registrant’s most recently filed annual reports N-CSR.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated
Purchasers.
None.
Item 10. Submission of Matters to a Vote of Security Holders.
None.
Item 11. Controls and Procedures.
|
(a)
|
The Registrant’s principal executive officer and principal financial officer have concluded that the Registrant’s Disclosure Controls and Procedures are
effective, based on their evaluation of such Disclosure Controls and Procedures as of a date within 90 days of the filing of this report on Form
N-CSR.
|
|
(b)
|
As of the date of filing this Form N-CSR, the Registrant’s principal executive officer and principal financial officer are aware of no changes in the
Registrant’s internal control over financial reporting that occurred during the Registrant’s second fiscal quarter of the period covered by this report that has materially affected or is reasonably likely to materially affect the
Registrant’s internal control over financial reporting.
|
Item 12. Exhibits.
|
|
(2)
|
A separate certification for each principal executive officer and principal financial officer of the Registrant as required by Rule 30a-2(a) under the Investment
Company Act of 1940 is attached as an exhibit to this Form N-CSR.
|
|
(b)
|
A separate certification for each principal executive officer and principal financial officer of the Registrant as required by Rule 30a-2(b) under the Investment
Company Act of 1940 is attached as an exhibit to this Form N-CSR.
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
HELIOS HIGH INCOME FUND, INC.
|
|
|
|
|
By:
|
|
/s/ Kim G. Redding
|
|
|
|
Kim G. Redding
|
|
|
|
President and Principal Executive Officer
|
Date: December 6, 2012
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated.
|
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|
By:
|
|
/s/ Kim G. Redding
|
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|
Kim G. Redding
|
|
|
|
President and Principal Executive Officer
|
Date: December 6, 2012
|
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|
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By:
|
|
/s/ Steven M. Pires
|
|
|
|
Steven M. Pires
|
|
|
|
Treasurer and Principal Financial Officer
|
Date: December 6, 2012
Grafico Azioni Highland Hospitality (NYSE:HIH)
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Grafico Azioni Highland Hospitality (NYSE:HIH)
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