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:    811-05594
Exact name of registrant as specified in charter:   

Prudential Short-Term Corporate Bond Fund, Inc.

Address of principal executive offices:    Gateway Center 3,
   100 Mulberry Street,
   Newark, New Jersey 07102
Name and address of agent for service:    Deborah A. Docs
   Gateway Center 3,
   100 Mulberry Street,
   Newark, New Jersey 07102
Registrant’s telephone number, including area code:    800-225-1852
Date of fiscal year end:    12/31/2013
Date of reporting period:    12/31/2013

 

 

 


Item 1 – Reports to Stockholders


LOGO

 

PRUDENTIAL INVESTMENTS » MUTUAL FUNDS

 

PRUDENTIAL SHORT-TERM CORPORATE BOND FUND, INC.

 

ANNUAL REPORT · DECEMBER 31, 2013

 

Fund Type

Corporate Bond

 

Objective

High current income consistent with the preservation of principal

 

This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.

 

The views expressed in this report and information about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.

 

Mutual funds are distributed by Prudential Investment Management Services LLC (PIMS). Prudential Fixed Income is a unit of Prudential Investment Management, Inc. (PIM), a registered investment adviser. PIMS and PIM are Prudential Financial companies. © 2014 Prudential Financial, Inc., and its related entities. Prudential Investments, Prudential, the Prudential logo, Bring Your Challenges, and the Rock symbol are service marks of Prudential Financial, Inc., and its related entities, registered in many jurisdictions worldwide.

 

LOGO

 

LOGO

  LOGO


 

 

February 14, 2014

 

Dear Shareholder:

 

We hope you find the annual report for the Prudential Short-Term Corporate Bond Fund, Inc. informative and useful. The report covers performance for the 12-month period that ended on December 31, 2013.

 

We recognize that ongoing market volatility may make it a difficult time to be an investor. We continue to believe a prudent response to uncertainty is to maintain a diversified portfolio of funds consistent with your tolerance for risk, time horizon, and financial goals.

 

Your financial advisor can help you create a diversified investment plan that may include funds covering all the basic asset classes and that reflects your personal investor profile and risk tolerance. Keep in mind, however, that diversification and asset allocation strategies do not assure a profit or protect against loss in declining markets.

 

Prudential Investments ® is dedicated to helping you solve your toughest investment challenges—whether it’s capital growth, reliable income, or protection from market volatility and other risks. We offer the expertise of Prudential Financial’s affiliated asset managers* that strive to be leaders in a broad range of funds to help you stay on course to the future you envision. They also manage money for major corporations and pension funds around the world, which means you benefit from the same expertise, innovation, and attention to risk demanded by today’s most sophisticated investors.

 

Thank you for choosing the Prudential Investments family of funds.

 

Sincerely,

 

LOGO

 

Stuart S. Parker, President

Prudential Short-Term Corporate Bond Fund, Inc.

 

*Most of Prudential Investments’ equity funds are advised by Jennison Associates LLC, Quantitative Management Associates LLC (QMA), or Prudential Real Estate Investors. Prudential Investments’ fixed income and money market funds are advised by Prudential Investment Management, Inc. (PIM) through its Prudential Fixed Income unit. Jennison Associates, QMA, and PIM are registered investment advisors and Prudential Financial companies. Prudential Real Estate Investors is a unit of PIM.

 

Prudential Short-Term Corporate Bond Fund, Inc.     1   


Your Fund’s Performance (Unaudited)

 

Performance data quoted represent past performance. Past performance does not guarantee future results. The investment return and principal value of an investment will fluctuate, so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the past performance data quoted. An investor may obtain performance data as of the most recent month-end by visiting our website at www.prudentialfunds.com or by calling (800) 225-1852.

 

Cumulative Total Returns (Without Sales Charges) as of 12/31/13

    One Year     Five Years     Ten Years     Since Inception

Class A

    0.89     29.80     48.30  

Class B

    0.14        25.00        37.53     

Class C

    0.14        25.56        39.90     

Class Q

    1.24        N/A         N/A         4.62% (3/02/12)

Class R

    0.65        28.18        N/A       46.41    (5/17/04)

Class Z

    1.15        31.42        52.05     

Barclays 1–5 Year U.S. Credit Index

    1.24        31.74        50.21     

Lipper Short/Int. Inv.-Grade Debt Funds Avg.

    –0.20        29.22        41.57     
       

Average Annual Total Returns (With Sales Charges) as of 12/31/13

    One Year     Five Years     Ten Years     Since Inception

Class A

    –2.38     4.66     3.68  

Class B

    –2.80        4.56        3.24     

Class C

    –0.84        4.66        3.41     

Class Q

    1.24        N/A         N/A       2.49% (3/02/12)

Class R

    0.65        5.09        N/A       4.04     (5/17/04)

Class Z

    1.15        5.62        4.28     

Barclays 1–5 Year U.S. Credit Index

    1.24        5.67        4.15     

Lipper Short/Int. Inv.-Grade Debt Funds Avg.

    –0.20        5.17        3.50     
       

Average Annual Total Returns (Without Sales Charges) as of 12/31/13

    One Year     Five Years     Ten Years     Since Inception

Class A

    0.89     5.35     4.02  

Class B

    0.14        4.56        3.24     

Class C

    0.14        4.66        3.41     

Class Q

    1.24        N/A        N/A      2.49% (3/02/12)

Class R

    0.65        5.09        N/A      4.04     (5/17/04)

Class Z

    1.15        5.62        4.28     

 

 

2   Visit our website at www.prudentialfunds.com


 

 

Growth of a $10,000 Investment

 

LOGO

 

The graph compares a $10,000 investment in the Prudential Short-Term Corporate Bond Fund, Inc. (Class A shares) with a similar investment in the Barclays 1–5 Year U.S. Credit Index by portraying the initial account values at the beginning of the 10-year period for Class A shares (December 31, 2003) and the account values at the end of the current fiscal year (December 31, 2013) as measured on a quarterly basis. For purposes of the graph, and unless otherwise indicated, it has been assumed that (a) the maximum applicable front-end sales charge was deducted from the initial $10,000 investment in Class A shares; (b) all recurring fees (including management fees) were deducted; and (c) all dividends and distributions were reinvested. The line graph provides information for Class A shares only. As indicated in the tables provided earlier, performance for Class B, C, Q, R, and Z shares will vary, due to the differing charges and expenses applicable to each share class (as indicated in the following paragraphs). Without waiver of fees and/or expense reimbursement, if any, the returns would have been lower.

 

Past performance does not predict future performance. Total returns and the ending account values in the graph include changes in share price and reinvestment of dividends and capital gains distributions in a hypothetical investment for the periods shown. The Fund’s total returns do not reflect the deduction of income taxes on an individual’s investment. Taxes may reduce your actual investment returns on income or gains paid by the Fund or any gains you may realize if you sell your shares.

 

Source: Prudential Investments LLC and Lipper, Inc.

 

Inception returns are provided for any share class with less than 10 calendar years of returns.

 

Prudential Short-Term Corporate Bond Fund, Inc.     3   


Your Fund’s Performance (continued)

 

 

The average annual total returns take into account applicable sales charges, which are described for each share class in the table below.

 

   Class A   Class B   Class C   Class Q   Class R   Class Z

Maximum Initial Sales Charge

   3.25% of the public offering price   None   None   None   None   None

Contingent Deferred Sales Charge (CDSC)

   .50% on sales of $1 million or more made within 18 months of purchase   3% (Yr. 1)
2% (Yr. 2)
1% (Yr. 3)
1% (Yr. 4)
0% (Yr. 5)
  1% on sales
made within
12 months
of purchase
  None   None   None

Annual Distribution and Service (12b-1) fees (shown as a percentage of average daily net assets)

   .30%
(.25% currently)
  1%   1%   None   .75%
(.50%
currently)
  None

 

The returns in the tables reflect the share class expense structure in effect at the close of the fiscal period.

 

Benchmark Definitions

 

Barclays 1–5 Year U.S. Credit Index

The Barclays 1–5 Year U.S. Credit Index is an unmanaged index of publicly issued U.S. corporate and specified foreign debentures and secured notes that meet specific maturity (between one and five years), liquidity, and quality requirements. It gives an indication of how short- and intermediate-term bonds have performed. Barclays 1–5 Year U.S. Credit Index Closest Month-End to Inception cumulative total returns as of 12/31/13 are 4.68% for Class Q and 50.34% for Class R. Barclays 1–5 Year U.S. Credit Index Closest Month-End to Inception average annual returns as of 12/31/13 are 2.53% for Class Q and 4.35% for Class R.

 

Lipper Short/Intermediate Investment-Grade Debt Funds Average

The Lipper Short/Intermediate Investment-Grade Debt Funds Average (Lipper Average) represents returns based on an average return of all funds in the Lipper Short/Intermediate Investment-Grade Debt Funds category for the periods noted. Funds in the Lipper Average invest primarily in investment-grade debt issues (rated in the top four grades) with dollar-weighted average maturities of one to five years. Lipper Average Closest Month-End to Inception cumulative total returns as of 12/31/13 are 3.19% for Class Q and 42.23% for Class R. Lipper Average Closest Month-End to Inception average annual returns as of 12/31/13 are 1.72% for Class Q and 3.71% for Class R.

 

Investors cannot invest directly in an index or average. The returns for the Index would be lower if they included the effects of sales charges, operating expenses of a mutual fund, or taxes. Returns for the Lipper Average reflect the deduction of operating expenses, but not sales charges or taxes.

 

4   Visit our website at www.prudentialfunds.com


Distributions and Yields as of 12/31/13

     
     Total Distributions
Paid for 12 Months
     30-Day
SEC Yield
 

Class A

   $ 0.33         1.21

Class B

     0.25         0.50   

Class C

     0.25         0.50   

Class Q

     0.37         1.59   

Class R

     0.30         1.00   

Class Z

     0.36        
1.49
  

 

Allocation expressed as a percentage of net assets as of 12/31/13

  

Corporate Bonds

     91.1

Commercial Mortgage-Backed Securities

     5.8   

Foreign Agencies

     1.1   

Municipal Bonds

     0.6   

U.S. Treasury Obligations

     0.1   

Preferred Stock*

       

*Less than 0.05%.

Allocations reflect only long-term investments and are subject to change.

 

Credit Quality** expressed as a percentage of net assets as of 12/31/13

  

U.S. Government & Agency

     0.1

Aaa

     5.4   

Aa

     4.7   

A

     27.1   

Baa

     56.6   

Ba

     4.2   

B

     0.5   

Not Rated***

     7.6   

Total Investments

     106.2   

Liabilities in excess of other assets

     –6.2   

Total Net Assets

     100.0
  

 

 

 

**Source: Moody’s rating, defaulting to S&P when not rated by Moody’s.

***Approximately 7.5% of Not Rated is invested in affiliated money market mutual fund.

Credit Quality is subject to change.

 

Prudential Short-Term Corporate Bond Fund, Inc.     5   


Strategy and Performance Overview

 

How did the Fund perform?

The Prudential Short-Term Corporate Bond Fund ’s Class A shares returned 0.89%, underperforming the 1.24% gain of the Barclays 1–5 Year U.S. Credit Index (the Index), which does not include the effect of mutual fund operating expenses. However, the Fund’s Class A shares outpaced the Lipper Short/Intermediate Investment-Grade Debt Funds Average, which declined –0.20% for the year.

 

How did the short-term U.S. investment grade corporate bond sector perform?

The short-term investment grade corporate bond sector, as measured by the Index, posted a modest gain of 1.24% for 2013. Bond market performance hinged as much on fluctuations in policy as on changes in the economy. Although 2013 began calmly, in the second quarter, fears of the Federal Reserve (“Fed”) tapering its bond buying program, along with an increase in U.S. economic momentum later in the year, raised interest rates worldwide.

 

   

In the first quarter, corporate bonds outperformed U.S. Treasuries as the Fed’s bond buying program continued to suppress interest rates, sending investors in search of higher-yielding securities. In Europe, supply and demand conditions were generally supportive until mid-March when investors worried that a banking crisis in Cyprus might spill over to the peripheral European countries.

 

   

In the second quarter, better U.S. economic conditions brought a sudden change of stance by the Fed, which suggested it might begin to taper its bond buying program sooner rather than later. Interest rates rose sharply and bond prices, which move inversely with rates, declined. Investments with variable liquidity, as well as sectors directly supported by the Fed—Treasuries and mortgages—were hit hard. Corporate bonds also succumbed to the increase in rates, lagging Treasuries during the second quarter.

 

   

Corporate bonds outperformed Treasuries in the third quarter overall. They rallied in July as interest rates stabilized, lagged in August as rates rose in anticipation of a widely expected taper announcement from the Fed, and rallied again in September as rates dropped following the Fed’s decision to delay tapering. In Europe, economic data suggested that a modest, though uneven, economic recovery was underway.

 

   

In the fourth quarter, corporate bonds outpaced Treasuries as the U.S. economic outlook and investor sentiment improved. European corporate bonds performed well on signs of renewed economic growth and stronger investor demand.

 

6   Visit our website at www.prudentialfunds.com


 

 

   

In December, the Fed said it would begin tapering its bond buying program in January 2014. The central bank said it would reduce its purchases of U.S. Treasury securities and mortgage-backed securities from $85 billion a month to $75 billion a month.

 

Which strategies or holdings contributed the most to the Fund’s performance?

   

The Fund continued to make modest allocations to fixed-income sectors not included in the Index to diversify away from short-term investment-grade corporate bonds and to add incremental yield.

 

   

For example, out-of-benchmark exposure to high-quality commercial mortgage-backed securities aided the Fund’s performance relative to the Index, as this sector benefited from stabilizing commercial real estate values and a favorable demand/supply environment for this kind of security.

 

   

A non-Index stake in short-duration, higher-quality corporate high yield bonds also bolstered the Fund’s results. Default rates for high-yield debt remained well below historical averages, which—coupled with investors’ search for yield during the year—fueled demand for this asset class.

 

   

The Fund benefited from its exposure to investment-grade corporate bonds with a greater-than-the-Index sensitivity to credit-spread movements. The position added to returns as spreads (the difference in yields between corporate bonds of similar maturities) tightened during the year.

 

   

Security selection within investment-grade bonds added to relative returns. The Fund was overweight Verizon Communications , which performed well during the year. Overweight positions in Morgan Stanley and Ford Motor also contributed positively.

 

Which strategies or holdings detracted the most from the Fund’s performance?

   

The Fund’s overweight exposures to cable, electric, healthcare, and pharmaceuticals detracted from returns, as these more defensive sectors were outpaced by lower-quality, more cyclical sectors.

 

   

Security selection within the insurance and non-capital finance sectors also weighed on Fund performance.

 

   

The largest individual detractors were underweighted benchmark components with exposure to Europe that rallied during the year. These positions included Telefonica and Italian sovereign debt. Also detracting from results was the Fund’s overweight in Time Warner Cable , which underperformed on concerns about event risk.

 

Prudential Short-Term Corporate Bond Fund, Inc.     7   


Strategy and Performance Overview (continued)

 

 

Did the Fund’s use of derivatives affect performance?

The Fund’s investment strategy does not heavily rely on derivative strategies, although it does employ certain instruments on a limited basis. Treasury futures are used to manage the Fund’s interest rate risk, which is more efficient than managing interest rate risk through the purchases and sales of cash corporate bonds. Credit default swaps are used sparingly to either add risk exposure to certain issuers, or to hedge credit risk imposed by certain issuers. Neither derivative strategy discussed above had a material impact on the Fund’s performance.

 

8   Visit our website at www.prudentialfunds.com


Fees and Expenses (Unaudited)

 

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments and redemptions, as applicable, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees, and other Fund expenses, as applicable. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

 

The example is based on an investment of $1,000 invested on July 1, 2013, at the beginning of the period, and held through the six-month period ended December 31, 2013. The example is for illustrative purposes only; you should consult the Prospectus for information on initial and subsequent minimum investment requirements.

 

Actual Expenses

The first line for each share class in the table on the following page provides information about actual account values and actual expenses. You may use the information on this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number on the first line under the heading “Expenses Paid During the Six-Month Period” to estimate the expenses you paid on your account during this period.

 

Hypothetical Example for Comparison Purposes

The second line for each share class in the table on the following page provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

 

The Fund’s transfer agent may charge additional fees to holders of certain accounts that are not included in the expenses shown in the table on the following page. These fees apply to individual retirement accounts (IRAs) and Section 403(b) accounts. As of the close of the six-month period covered by the table, IRA fees included an annual maintenance fee of $15 per account (subject to a maximum annual maintenance fee of $25 for all accounts held by the same shareholder). Section 403(b) accounts are charged an annual $25 fiduciary maintenance fee. Some of the fees may vary in amount, or may be waived, based on your total account balance or the number of

 

Prudential Short-Term Corporate Bond Fund, Inc.     9   


Fees and Expenses (continued)

 

Prudential Investments funds, including the Fund, that you own. You should consider the additional fees that were charged to your Fund account over the six-month period when you estimate the total ongoing expenses paid over the period and the impact of these fees on your ending account value, as these additional expenses are not reflected in the information provided in the expense table. Additional fees have the effect of reducing investment returns.

 

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs such as sales charges (loads). Therefore, the second line for each share class in the table is useful in comparing ongoing costs only and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

 

Prudential
Short-Term Corporate
Bond Fund, Inc.
  Beginning Account
Value
July 1, 2013
    Ending Account
Value
December 31, 2013
    Annualized
Expense Ratio
Based on the
Six-Month Period
    Expenses Paid
During  the
Six-Month Period*
 
         
Class A   Actual   $ 1,000.00      $ 1,017.50        0.76   $ 3.86   
    Hypothetical   $ 1,000.00      $ 1,021.37        0.76   $ 3.87   
         
Class B   Actual   $ 1,000.00      $ 1,013.70        1.51   $ 7.66   
    Hypothetical   $ 1,000.00      $ 1,017.59        1.51   $ 7.68   
         
Class C   Actual   $ 1,000.00      $ 1,013.70        1.51   $ 7.66   
    Hypothetical   $ 1,000.00      $ 1,017.59        1.51   $ 7.68   
         
Class Q   Actual   $ 1,000.00      $ 1,019.30        0.42   $ 2.14   
    Hypothetical   $ 1,000.00      $ 1,023.09        0.42   $ 2.14   
         
Class R   Actual   $ 1,000.00      $ 1,016.20        1.01   $ 5.13   
    Hypothetical   $ 1,000.00      $ 1,020.11        1.01   $ 5.14   
         
Class Z   Actual   $ 1,000.00      $ 1,018.80        0.51   $ 2.60   
    Hypothetical   $ 1,000.00      $ 1,022.63        0.51   $ 2.60   

*Fund expenses (net of fee waivers or subsidies, if any) for each share class are equal to the annualized expense ratio for each share class (provided in the table), multiplied by the average account value over the period, multiplied by the 184 days in the six-month period ended December 31, 2013, and divided by 365 days. Expenses presented in the table include the expenses of any underlying portfolios in which the Fund may invest.

 

10   Visit our website at www.prudentialfunds.com


 

The Fund’s annualized expense ratios for the year ended December 31, 2013 are as follows:

 

Class

   Gross Operating Expenses   Net Operating Expenses

A

   0.81%   0.76%

B

    1.51    1.51

C

    1.51    1.51

Q

    0.42    0.42

R

    1.26    1.01

Z

    0.51    0.51

 

Net operating expenses shown above reflect fee waivers and/or expense reimbursements. Additional information on Fund expenses and any fee waivers and/or expense reimbursements can be found in the “Financial Highlights” tables in this report and in the Notes to the Financial Statements in this report.

 

Prudential Short-Term Corporate Bond Fund, Inc.     11   


Portfolio of Investments

 

as of December 31, 2013

 

Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

LONG-TERM INVESTMENTS    98.7%

  

COMMERCIAL MORTGAGE-BACKED SECURITIES    5.8%

  

Banc of America Commercial
Mortgage Trust,
Series 2007-2, Class A1A

  5.584%(a)   04/10/49     20,724      $ 22,542,127   

Series 2007-5, Class A3

  5.620   02/10/51     8,182        8,213,274   

Banc of America Merrill Lynch
Commercial Mortgage, Inc.,
Series 2005-3, Class A4

  4.668   07/10/43     18,528        19,382,585   

Bear Stearns Commercial Mortgage Securities, Series 2007-PW17,
Class A3

  5.736   06/11/50     9,371        9,619,511   

Citigroup Commercial Mortgage Trust, Series 2007-C6, Class A3

  5.705(a)   12/10/49     6,303        6,393,151   

Citigroup/Deutsche Bank Commercial Mortgage Trust,
Series 2006-CD3, Class A5

  5.617   10/15/48     10,000        10,896,980   

Series 2007-CD4, Class A2B

  5.205   12/11/49     493        492,656   

COBALT Commercial Mortgage Trust,
Series 2006-C1, Class A1A

  5.199   08/15/48     7,262        7,754,603   

Commercial Mortgage Trust,
Series 2012-CR4, Class A2

  1.801   10/15/45     3,200        3,166,115   

Series 2013-CR6, Class A2

  2.122   03/10/46     20,000        19,963,040   

DBUBS Mortgage Trust, Series 2011-lC3A, Class A2

  3.642   08/10/44     12,500        13,131,613   

GE Capital Commercial Mortgage Corp.,
Series 2006-C1, Class A4

  5.280(a)   03/10/44     10,000        10,710,200   

GS Mortgage Securities Corp. II,
Series 2013-GC12, Class A2

  2.011   06/10/46     20,000        19,849,520   

Series 2013-GC14, Class A3

  3.526   08/10/46     25,000        25,314,850   

GS Mortgage Securities Trust,
Series 2006-GG6, Class A4

  5.553   04/10/38     3,510        3,779,586   

Series 2006-GG8, Class A4

  5.560   11/10/39     29,715        32,581,963   

JPMorgan Chase Commercial
Mortgage Securities Corp.,
Series 2012-LC9, Class A3

  2.475   12/15/47     7,000        6,803,335   

Series 2013-C10, Class A3

  2.682   12/15/47     22,445        21,958,190   

JPMorgan Chase Commercial
Mortgage Securities Trust,
Series 2007-LD11, Class A2

  5.791(a)   06/15/49     3,212        3,236,283   

Series 2007-LD12, Class A3

  5.927(a)   02/15/51     3,315        3,344,479   

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     13   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

COMMERCIAL MORTGAGE-BACKED SECURITIES (Continued)

  

Series 2012-C8, Class A2

  1.797%   10/15/45     20,000      $ 19,946,100   

Series 2013-C12, Class A3

  3.272   07/15/45     10,000        10,050,150   

Series 2013-C13, Class A3

  3.525   01/15/46     10,000        10,155,260   

Series 2013-C16, Class A2

  3.070   12/15/46     15,000        15,402,750   

LB-UBS Commercial Mortgage Trust, Series 2005-C3, Class A5

  4.739   07/15/30     13,562        14,093,310   

Merrill Lynch Mortgage Trust,
Series 2005-CIP1, Class A2

  4.960   07/12/38     395        395,304   

Series 2005-CIP1, Class A4

  5.047   07/12/38     1,218        1,285,207   

Series 2006-C1, Class A4

  5.687(a)   05/12/39     15,000        16,292,730   

Merrill Lynch/Countrywide Commercial Mortgage Trust,
Series 2006-4, Class A3

  5.172   12/12/49     14,500        15,720,277   

Series 2007-6, Class A2

  5.331   03/12/51     6,542        6,551,942   

UBS-Barclays Commercial Mortgage Trust, Series 2012-C4, Class A3

  2.533   12/10/45     31,000        29,902,662   

Wachovia Bank Commercial Mortgage Trust,
Series 2006-C25, Class A4

  5.724(a)   05/15/43     10,000        10,789,490   

Series 2006-C25, Class A5

  5.724(a)   05/15/43     10,000        10,933,660   

Series 2006-C26, Class A3

  6.011(a)   06/15/45     10,500        11,515,970   

Series 2006-C27, Class A1A

  5.749(a)   07/15/45     31,597        34,645,335   

Series 2006-C28, Class A1A

  5.559   10/15/48     18,652        20,317,902   

Series 2006-C28, Class A2

  5.500   10/15/48     2,085        2,099,324   

Series 2006-C28, Class A4

  5.572   10/15/48     15,000        16,415,955   

Series 2007-C30, Class A3

  5.246   12/15/43     1,904        1,915,330   

Series 2007-C33, Class A3

  5.924(a)   02/15/51     8,391        8,495,084   

Series 2007-C34, Class A1A

  5.608(a)   05/15/46     19,120        20,997,500   

Wells Fargo Commercial Mortgage Trust, Series 2013-LC12, Class A2

  3.531   07/15/46     10,000        9,986,500   
       

 

 

 

TOTAL COMMERCIAL MORTGAGE-BACKED SECURITIES
(cost $550,622,442)

   

    537,041,803   
       

 

 

 

CORPORATE BONDS    91.1%

   

Aerospace & Defense    1.0%

               

BAE Systems Holdings, Inc. (United Kingdom),
Gtd. Notes, 144A

  4.950   06/01/14     8,500        8,646,778   

Gtd. Notes, 144A

  5.200   08/15/15     7,000        7,432,474   

Exelis, Inc., Gtd. Notes

  4.250   10/01/16     5,000        5,280,365   

General Dynamics Corp., Gtd. Notes

  1.000   11/15/17     34,600        33,524,770   

 

See Notes to Financial Statements.

 

14  


Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Aerospace & Defense (cont’d.)

               

Lockheed Martin Corp.,
Sr. Unsec’d. Notes

  2.125%   09/15/16     4,600      $ 4,719,545   

Precision Castparts Corp.,
Sr. Unsec’d. Notes

  1.250   01/15/18     11,640        11,331,552   

Textron, Inc.,
Sr. Unsec’d. Notes

  4.625   09/21/16     14,650        15,792,949   

Sr. Unsec’d. Notes

  6.200   03/15/15     6,000        6,364,878   
       

 

 

 
          93,093,311   
       

 

 

 

Airlines    0.9%

                       

American Airlines,
Series 2013-1, Class A,
Pass-Through Trust, Equipment Trust, 144A

  4.000   07/15/25     2,750        2,660,625   

Series 2013-2 Class A
Pass-Through Trust, Equipment Trust, 144A

  4.950   01/15/23     26,805        27,944,213   

Continental Airlines 1998-3 Class A-1
Pass-Through Trust,
Pass-Through Certificates

  6.820   05/01/18     5,445        5,680,185   

Continental Airlines 1999-1 Class A Pass-Through Trust,
Pass-Through Certificates

  6.545   02/02/19     2,758        3,010,182   

Continental Airlines, Inc. 1998-1
Class A Pass-Through Trust,
Pass-Through Certificates

  6.648   09/15/17     2,860        3,006,100   

Continental Airlines, Inc. 2001-1
Class A-1 Pass-Through Trust, Pass-Through Certificates

  6.703   06/15/21(b)     308        332,553   

Continental Airlines, Inc. 2010-1
Class A Pass-Through Trust, Pass-Through Certificates

  4.750   01/12/21(c)     3,283        3,488,091   

Continental Airlines, Inc.
Pass-Through Trust,
Pass-Through Certificates, Series 2001-1, Class B

  7.373   12/15/15     80        85,162   

Pass-Through Certificates,
Series 2007-2, Class A

  5.983   04/19/22     2,511        2,743,375   

Continental Airlines, Inc., 2009-2 Class A Pass-Through Trust,
Pass-Through Certificates,
Series 2009-2

  7.250   11/10/19     4,130        4,729,289   

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     15   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Airlines (cont’d.)

               

Delta Air Lines, 2010-1 Class A,
Pass-Through Trust, Pass-Through Certificates

  6.200 %   07/02/18(c)     4,247      $ 4,735,065   

Delta Air Lines 2010-2 Pass-Through Trust, Pass-Through Certificates

  4.950   05/23/19     7,596        8,184,235   

Delta Air Lines 2011-1 Pass-Through Trust, Pass-Through Certificates

  5.300   04/15/19(c)     1,682        1,833,272   

Delta Air Lines, Inc., Series 2012-1, Class A, Pass-Through Trust,
Pass-Through Certificates

  4.750   05/07/20(c)     9,881        10,572,137   
       

 

 

 
          79,004,484   
       

 

 

 

Automotive    4.3%

  

American Honda Finance Corp. (Japan),
Sr. Unsec’d. Notes

  2.125   10/10/18     3,750        3,734,561   

Sr. Unsec’d. Notes, 144A

  1.500   09/11/17     14,700        14,483,013   

Sr. Unsec’d. Notes, 144A

  1.600   02/16/18     6,055        5,962,916   

Daimler Finance North America LLC,
Gtd. Notes, 144A

  1.875   09/15/14     20,550        20,727,799   

Gtd. Notes, 144A

  1.950   03/28/14     15,000        15,037,170   

Gtd. Notes, 144A

  2.300   01/09/15     15,375        15,588,605   

Gtd. Notes, 144A

  2.375   08/01/18     15,000        14,966,820   

Gtd. Notes, 144A

  2.950   01/11/17     8,270        8,539,594   

Ford Motor Credit Co. LLC,
Sr. Unsec’d. Notes

  2.375   01/16/18(c)     14,300        14,442,428   

Sr. Unsec’d. Notes

  2.750   05/15/15     33,145        34,001,533   

Sr. Unsec’d. Notes

  3.984   06/15/16     24,348        25,891,639   

Sr. Unsec’d. Notes

  4.207   04/15/16     10,930        11,646,330   

Sr. Unsec’d. Notes

  4.250   02/03/17(c)     14,520        15,620,151   

Sr. Unsec’d. Notes

  5.000   05/15/18     45,956        51,190,802   

Sr. Unsec’d. Notes

  5.625   09/15/15     12,980        13,969,985   

Sr. Unsec’d. Notes

  6.625   08/15/17     2,000        2,316,866   

General Motors Financial Co., Inc.,
Gtd. Notes, 144A

  3.250   05/15/18(c)     6,975        6,975,000   

Gtd. Notes, 144A

  4.750   08/15/17     16,500        17,510,625   

Sr. Unsec’d. Notes, 144A

  3.500   10/02/18(c)     39,500        40,388,750   

Harley-Davidson Financial Services, Inc.,
Gtd. Notes, MTN, 144A

  2.700   03/15/17     12,210        12,517,008   

Gtd. Notes, MTN, 144A

  3.875   03/15/16     9,100        9,597,397   

 

See Notes to Financial Statements.

 

16  


Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Automotive (cont’d.)

               

Harley-Davidson Funding Corp.,
Gtd. Notes, 144A

  5.750 %   12/15/14     1,175      $ 1,227,130   

RCI Banque SA (France),
Sr. Unsec’d. Notes, 144A

  3.400   04/11/14     3,625        3,645,057   

Toyota Motor Credit Corp. (Japan),
Sr. Unsec’d. Notes, MTN

  1.250   10/05/17     23,750        23,314,805   

Volkswagen International Finance NV (Netherlands),
Gtd. Notes, 144A

  1.150   11/20/15     10,000        10,081,160   

Gtd. Notes, 144A

  2.375   03/22/17     10,050        10,310,385   
       

 

 

 
          403,687,529   
       

 

 

 

Banking    24.4%

  

Abbey National Treasury Services PLC (United Kingdom), Bank
Gtd. Notes

  2.875   04/25/14(c)     2,425        2,441,585   

Gtd. Notes, 144A

  3.875   11/10/14     7,250        7,447,969   

ABN AMRO Bank NV (Netherlands),
Sr. Unsec’d. Notes, 144A

  3.000   01/31/14     11,150        11,171,274   

American Express Co.,
Sr. Unsec’d. Notes

  1.550   05/22/18     18,875        18,429,531   

Sr. Unsec’d. Notes

  7.000   03/19/18     19,920        23,801,273   

American Express Credit Corp.,
Sr. Unsec’d. Notes

  2.125   07/27/18     19,190        19,222,220   

Sr. Unsec’d. Notes, MTN

  2.375   03/24/17     10,000        10,278,780   

Sr. Unsec’d. Notes, MTN

  2.800   09/19/16     25,650        26,801,172   

Bank of America Corp.,
Jr. Sub. Notes

  8.125(a)   12/29/49(c)     10,000        11,187,500   

Jr. Sub. Notes, Series K

  8.000(a)   12/29/49(c)     10,101        11,191,908   

Sr. Unsec’d. Notes

  2.000   01/11/18(c)     35,235        35,172,493   

Sr. Unsec’d. Notes

  2.600   01/15/19     26,955        27,073,979   

Sr. Unsec’d. Notes, MTN

  3.625   03/17/16(c)     20,000        21,041,320   

Sr. Unsec’d. Notes

  4.750   08/01/15(c)     7,925        8,396,236   

Sr. Unsec’d. Notes

  5.625   10/14/16     7,144        7,961,152   

Sr. Unsec’d. Notes

  5.650   05/01/18(c)     5,000        5,691,345   

Sr. Unsec’d. Notes

  5.750   12/01/17     30,860        35,122,167   

Sr. Unsec’d. Notes

  6.000   09/01/17     47,395        54,115,232   

Sr. Unsec’d. Notes

  6.500   08/01/16     5,000        5,645,440   

Sr. Unsec’d. Notes, Series 1

  3.750   07/12/16     10,000        10,631,170   

Sub. Notes

  5.750   08/15/16     10,000        11,028,100   

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     17   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Banking (cont’d.)

               

Bank of America NA,
Sub. Notes

  5.300 %   03/15/17     10,500      $ 11,573,331   

Sub. Notes

  6.000   06/15/16     10,000        11,013,650   

Bank of Montreal (Canada),
Sr. Unsec’d. Notes, MTN

  1.400   09/11/17     9,995        9,840,137   

Bank of Nova Scotia (Canada),
Sr. Unsec’d. Notes

  2.550   01/12/17     17,100        17,734,615   

Bank of Tokyo-Mitsubishi UFJ Ltd. (The) (Japan),
Sr. Unsec’d. Notes, 144A

  2.450   09/11/15     8,500        8,712,330   

BB&T Corp.,
Sr. Unsec’d. Notes, MTN

  1.450   01/12/18(c)     16,300        15,870,821   

Sr. Unsec’d. Notes, MTN

  1.600   08/15/17(c)     13,300        13,181,284   

Sr. Unsec’d. Notes, MTN

  2.050   06/19/18     4,875        4,826,426   

BNP Paribas SA (France),
Sr. Unsec’d. Notes

  2.400   12/12/18     26,000        26,016,536   

Capital One Bank USA NA,
Sr. Unsec’d. Notes

  2.150   11/21/18(c)     3,675        3,655,339   

Capital One Financial Corp.,
Sr. Unsec’d. Notes

  3.150   07/15/16     20,250        21,162,728   

Sr. Unsec’d. Notes

  5.250   02/21/17     11,913        12,880,550   

Sr. Unsec’d. Notes

  6.750   09/15/17     32,225        37,661,519   

Sr. Unsec’d. Notes

  7.375   05/23/14     10,409        10,677,053   

Citigroup, Inc.,
Sr. Unsec’d. Notes

  2.500   09/26/18     10,245        10,296,707   

Sr. Unsec’d. Notes

  3.953   06/15/16(c)     98,800        105,113,518   

Sr. Unsec’d. Notes

  4.450   01/10/17     29,000        31,430,171   

Sr. Unsec’d. Notes

  4.587   12/15/15(c)     16,190        17,300,861   

Sr. Unsec’d. Notes

  4.750   05/19/15     29,925        31,488,641   

Sr. Unsec’d. Notes

  6.125   05/15/18(c)     7,780        9,003,708   

Sr. Unsec’d. Notes

  8.500   05/22/19     15,000        19,223,835   

Sub. Notes

  4.875   05/07/15     9,750        10,228,472   

Sub. Notes

  5.000   09/15/14     17,280        17,772,221   

Sub. Notes

  5.500   02/15/17     6,000        6,611,010   

Discover Bank,
Sr. Unsec’d. Notes

  2.000   02/21/18     28,905        28,389,450   

Discover Financial Services,
Sr. Unsec’d. Notes

  6.450   06/12/17     4,112        4,659,472   

Fifth Third Bancorp,
Sr. Unsec’d. Notes

  3.625   01/25/16     7,565        7,947,706   

 

See Notes to Financial Statements.

 

18  


Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Banking (cont’d.)

               

Goldman Sachs Group, Inc. (The),
Sr. Unsec’d. Notes

  2.375 %   01/22/18(c)     45,125      $ 45,296,520   

Sr. Unsec’d. Notes

  2.900   07/19/18     16,050        16,333,668   

Sr. Unsec’d. Notes

  3.300   05/03/15(c)     20,000        20,606,540   

Sr. Unsec’d. Notes

  3.625   02/07/16(c)     31,759        33,330,435   

Sr. Unsec’d. Notes, GMTN

  3.700   08/01/15     21,620        22,512,711   

Sr. Unsec’d. Notes

  5.350   01/15/16     5,000        5,410,870   

Sr. Unsec’d. Notes

  5.375   03/15/20     10,000        11,121,290   

Sr. Unsec’d. Notes

  5.950   01/18/18     36,835        41,879,111   

Sr. Unsec’d. Notes

  6.150   04/01/18(c)     24,250        27,806,917   

Sr. Unsec’d. Notes, MTN

  7.500   02/15/19     25,727        31,334,688   

HSBC Bank PLC (United Kingdom),
Sr. Unsec’d. Notes, 144A

  1.500   05/15/18(c)     35,000        34,176,450   

Sr. Unsec’d. Notes, 144A

  3.100   05/24/16     13,200        13,826,340   

HSBC Bank USA NA,
Sub. Notes

  4.875   08/24/20(c)     12,865        13,884,307   

HSBC USA, Inc.,
Sr. Unsec’d. Notes

  2.375   02/13/15     30        30,611   

Sr. Unsec’d. Notes

  2.625   09/24/18(c)     9,855        10,021,323   

Huntington Bancshares, Inc.,
Sr. Unsec’d. Notes

  2.600   08/02/18     13,660        13,667,991   

JPMorgan Chase & Co.,
Jr. Sub. Notes

  7.900(a)   04/29/49(c)     14,000        15,435,000   

Sr. Unsec’d. Notes

  1.800   01/25/18     20,500        20,320,051   

Sr. Unsec’d. Notes

  2.000   08/15/17     18,875        19,145,932   

Sr. Unsec’d. Notes

  2.600   01/15/16     10,000        10,299,860   

Sr. Unsec’d. Notes

  3.150   07/05/16     48,725        51,082,413   

Sr. Unsec’d. Notes

  3.450   03/01/16(c)     30,000        31,465,350   

Sr. Unsec’d. Notes

  6.000   01/15/18(c)     40,000        46,059,080   

Sr. Unsec’d. Notes

  6.300   04/23/19     51,565        60,859,798   

Sub. Notes

  5.125   09/15/14     27,633        28,469,534   

Sub. Notes

  5.150   10/01/15     14,600        15,604,465   

Sub. Notes

  5.250   05/01/15(c)     11,000        11,610,115   

KeyBank NA,
Sr. Unsec’d. Notes

  1.650   02/01/18(c)     10,425        10,252,112   

Lloyds TSB Bank PLC (United Kingdom),
Bank Gtd. Notes

  2.300   11/27/18(c)     5,850        5,834,825   

Bank Gtd. Notes

  4.200   03/28/17(c)     9,975        10,764,222   

Bank Gtd. Notes, MTN, 144A

  4.375   01/12/15(c)     23,900        24,768,430   

Bank Gtd. Notes, MTN, 144A

  5.800   01/13/20     24,810        28,443,896   

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     19   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Banking (cont’d.)

               

Merrill Lynch & Co, Inc.,
Sr. Unsec’d. Notes, MTN

  6.875 %   04/25/18     30,840      $ 36,464,229   

Sub. Notes

  6.050   05/16/16(c)     12,000        13,202,688   

Mizuho Bank Ltd. (Japan),
Gtd. Notes, 144A

  1.850   03/21/18     5,750        5,604,353   

Morgan Stanley,
Notes, MTN

  4.000   07/24/15     17,000        17,750,431   

Notes, MTN

  6.625   04/01/18     25,000        29,252,350   

Sr. Unsec’d. Notes

  2.125   04/25/18(c)     26,790        26,558,936   

Sr. Unsec’d. Notes

  3.450   11/02/15     22,000        22,899,932   

Sr. Unsec’d. Notes

  3.800   04/29/16(c)     14,000        14,809,620   

Sr. Unsec’d. Notes, MTN

  4.100   01/26/15     18,345        18,974,270   

Sr. Unsec’d. Notes

  4.750   03/22/17     40,000        43,652,720   

Sr. Unsec’d. Notes

  5.375   10/15/15     475        510,896   

Sr. Unsec’d. Notes, MTN

  5.550   04/27/17(c)     14,875        16,593,375   

Sr. Unsec’d. Notes, MTN

  5.625   09/23/19     5,498        6,249,500   

Sr. Unsec’d. Notes, MTN

  5.750   10/18/16     20,272        22,627,546   

Sr. Unsec’d. Notes, MTN

  6.000   05/13/14     5,614        5,721,065   

Sr. Unsec’d. Notes, MTN

  6.000   04/28/15(c)     9,590        10,213,676   

Sr. Unsec’d. Notes, MTN

  6.250   08/28/17     11,493        13,150,624   

Sub. Notes

  4.750   04/01/14(c)     10,000        10,079,500   

Nordea Bank AB (Sweden),
Sr. Unsec’d. Notes, 144A

  3.125   03/20/17     15,400        16,103,487   

PNC Funding Corp.,
Bank Gtd. Notes

  2.700   09/19/16     21,950        22,895,233   

Bank Gtd. Notes

  5.250   11/15/15     17,056        18,315,773   

Royal Bank of Scotland Group PLC (The) (United Kingdom),
Bank Gtd. Notes

  4.375   03/16/16(c)     25,847        27,583,660   

Bank Gtd. Notes

  4.875   03/16/15(c)     10,000        10,455,910   

Bank Gtd. Notes, 144A

  4.875   08/25/14     5,250        5,381,702   

Sr. Unsec’d. Notes

  2.550   09/18/15     4,135        4,229,100   

Santander Holdings USA, Inc.,
Sr. Unsec’d. Notes

  3.000   09/24/15     5,580        5,762,181   

Sr. Unsec’d. Notes

  4.625   04/19/16     3,055        3,257,708   

Skandinaviska Enskilda Banken AB (Sweden),
Sr. Unsec’d. Notes, 144A

  2.375   11/20/18(c)     20,000        19,869,800   

Sumitomo Mitsui Banking Corp. (Japan),
Bank Gtd. Notes

  1.500   01/18/18(c)     20,270        19,704,041   

Bank Gtd. Notes

  1.800   07/18/17(c)     19,221        19,076,208   

 

See Notes to Financial Statements.

 

20  


Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Banking (cont’d.)

                   

SunTrust Banks, Inc.,
Sr. Unsec’d. Notes

  2.350 %   11/01/18(c)     17,695      $ 17,601,252   

Svenska Handelsbanken AB (Sweden),
Bank Gtd. Notes

  2.875   04/04/17     5,000        5,208,305   

Sr. Unsec’d. Notes

  2.500   01/25/19(c)     15,325        15,444,198   

UBS AG (Switzerland),
Sr. Unsec’d. Notes

  3.875   01/15/15     1,453        1,502,191   

Union Bank NA,
Sr. Unsec’d. Notes

  2.625   09/26/18(c)     17,785        18,104,294   

US Bancorp, Jr. Sub. Notes

  3.442   02/01/16     10,000        10,430,870   

Wachovia Bank NA,
Sub. Notes

  4.875   02/01/15     17,675        18,482,748   

Sub. Notes

  6.000   11/15/17     12,525        14,452,598   

Wells Fargo & Co.,
Jr. Sub. Notes

  7.980(a)   12/31/49     17,472        19,481,280   

Sr. Unsec’d. Notes

  1.500   01/16/18(c)     29,250        29,061,045   

Sr. Unsec’d. Notes

  3.676(a)   06/15/16     26,650        28,375,428   

Sub. Notes

  5.000   11/15/14     9,200        9,547,364   
       

 

 

 
          2,274,420,879   
       

 

 

 

Brokerage    0.2%

                       

Charles Schwab Corp. (The),
Sr. Unsec’d. Notes

  2.200   07/25/18     3,950        3,964,090   

Jefferies Group LLC,
Sr. Unsec’d. Notes

  3.875   11/09/15(c)     4,150        4,329,745   

Lehman Brothers Holdings, Inc.,
Sr. Unsec’d. Notes(d)(e)

  5.625(a)   01/24/13     1,000        212,500   

Sr. Unsec’d. Notes(d)(e)

  6.000(a)   07/19/12     900        191,250   

Sr. Unsec’d. Notes(d)(e)

  6.875(a)   02/06/12     1,520        323,000   

Nomura Holdings, Inc. (Japan),
Sr.Unsec’d. Notes, MTN

  2.000   09/13/16     6,900        6,957,042   
       

 

 

 
          15,977,627   
       

 

 

 

Building Materials & Construction    0.3%

  

D.R. Horton, Inc., Gtd. Notes

  3.625   02/15/18(c)     11,000        11,165,000   

Mohawk Industries, Inc.,
Sr. Unsec’d. Notes

  6.375(a)   01/15/16     5,239        5,736,705   

Toll Brothers Finance Corp., Gtd. Notes

  4.000   12/31/18     8,050        8,190,875   
       

 

 

 
          25,092,580   
       

 

 

 

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     21   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Cable    2.9%

                       

Comcast Corp.,
Gtd. Notes

  4.950 %   06/15/16(c)     11,860      $ 12,950,290   

Gtd. Notes

  5.150   03/01/20     11,603        12,943,947   

Gtd. Notes

  5.700   07/01/19     9,000        10,401,894   

Gtd. Notes

  5.900   03/15/16     10,617        11,725,298   

Gtd. Notes

  6.500   01/15/17     8,673        9,935,771   

COX Communications, Inc.,
Sr. Unsec’d. Notes (original cost $1,049,828; purchased 01/29/09)

  5.450   12/15/14(b)(c)(f)     1,132        1,182,998   

Sr. Unsec’d. Notes (original cost $4,505,440; purchased 08/17/10)

  5.500   10/01/15(b)(f)     4,000        4,293,524   

CSC Holdings LLC, Sr. Unsec’d. Notes

  7.625   07/15/18(c)     5,000        5,718,750   

DIRECTV Holdings LLC/DIRECTV
Financing Co., Inc.,
Gtd. Notes

  1.750   01/15/18(c)     14,900        14,616,423   

Gtd. Notes

  2.400   03/15/17     14,850        15,118,176   

Gtd. Notes

  3.500   03/01/16     23,450        24,615,207   

Gtd. Notes

  3.550   03/15/15     1,560        1,611,427   

Gtd. Notes

  4.750   10/01/14     15,685        16,151,644   

DISH DBS Corp.,
Gtd. Notes

  4.250   04/01/18(c)     10,000        10,200,000   

Gtd. Notes

  6.625   10/01/14     10,400        10,816,000   

NBCUniversal Enterprise, Inc.,
Gtd. Notes, 144A

  1.974   04/15/19     13,525        13,229,871   

NBCUniversal Media LLC,
Gtd. Notes

  2.875   04/01/16     15,637        16,277,288   

Time Warner Cable, Inc.,
Gtd. Notes

  3.500   02/01/15     6,600        6,781,170   

Gtd. Notes

  5.850   05/01/17     11,068        12,071,845   

Gtd. Notes

  6.750   07/01/18(c)     6,442        7,224,304   

Gtd. Notes

  7.500   04/01/14     3,870        3,934,250   

Gtd. Notes

  8.250   02/14/14     17,095        17,241,778   

Gtd. Notes

  8.250   04/01/19     9,759        11,432,717   

Gtd. Notes

  8.750   02/14/19(c)     10,135        12,089,454   

UPC Holding BV (Netherlands),
Sec’d. Notes, 144A

  9.875   04/15/18     4,000        4,290,000   

Videotron Ltd. (Canada), Gtd. Notes

  9.125   04/15/18     4,046        4,238,185   
       

 

 

 
          271,092,211   
       

 

 

 

 

See Notes to Financial Statements.

 

22  


Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Capital Goods    3.1%

                   

ABB Finance USA, Inc. (Switzerland),
Gtd. Notes

  1.625 %   05/08/17     8,490      $ 8,473,122   

Caterpillar Financial Services Corp.,
Sr. Unsec’d. Notes, MTN

  1.250   11/06/17(c)     14,485        14,277,488   

Caterpillar, Inc., Sr. Unsec’d. Notes

  1.500   06/26/17     16,225        16,146,357   

CNH Capital LLC, Gtd. Notes, 144A

  3.250   02/01/17     13,125        13,354,688   

Crane Co., Sr. Unsec’d. Notes

  2.750   12/15/18     9,500        9,453,669   

Eaton Corp., Gtd. Notes

  1.500   11/02/17     12,250        12,009,067   

Emerson Electric Co.,
Sr. Unsec’d. Notes

  4.125   04/15/15     3,000        3,132,840   

ERAC USA Finance LLC,
Gtd. Notes, 144A (original cost
$2,970,240; purchased 10/10/12)

  1.400   04/15/16(b)(f)     2,975        2,977,350   

Gtd. Notes, 144A (original cost
$5,439,482; purchased 01/04/11)

  2.250   01/10/14(b)(f)     5,450        5,451,651   

Gtd. Notes, 144A (original cost
$3,519,014; purchased 03/12/12)

  2.750   03/15/17(b)(c)(f)     3,520        3,620,584   

Gtd. Notes, 144A (original cost
$2,046,966; purchased 07/18/13)

  2.800   11/01/18(b)(f)     2,050        2,071,599   

Gtd. Notes, 144A (original cost $11,062,000; purchased 07/17/12)

  5.600   05/01/15(b)(f)     10,000        10,621,040   

Gtd. Notes, 144A (original cost
$815,000; purchased 05/08/09)

  5.900   11/15/15(b)(f)     1,000        1,089,720   

Gtd. Notes, 144A (original cost $5,150,587; purchased 12/17/10 - 11/05/13)

  6.375   10/15/17(b)(f)     4,461        5,162,193   

Federal Express Corp.
2012 Pass-Through Trust,
Pass-Through Certificates, 144A

  2.625   01/15/18     10,221        10,434,378   

Heathrow Funding Ltd. (United Kingdom), Sr. Sec’d. Notes, 144A

  2.500   06/25/15     10,000        10,132,070   

Ingersoll-Rand Global Holding Co.
Ltd., Gtd. Notes, 144A

  2.875   01/15/19     3,715        3,661,604   

John Deere Capital Corp.,
Sr. Unsec’d. Notes

  1.200   10/10/17(c)     10,545        10,282,862   

Sr. Unsec’d. Notes, MTN

  2.000   01/13/17(c)     11,475        11,669,444   

Penske Truck Leasing Co. LP/PTL
Finance Corp.,
Sr. Unsec’d. Notes, 144A
(original cost $1,924,249;
purchased 07/10/12)

  2.500   07/11/14(b)(f)     1,925        1,940,668   

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     23   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Capital Goods (cont’d.)

               

Sr. Unsec’d. Notes, 144A
(original cost $10,035,126;
purchased 09/24/12)

  2.500 %   03/15/16(b)(f)     10,050      $ 10,296,396   

Unsec’d. Notes, 144A
(original cost $8,505,755;
purchased 05/08/12 - 05/09/12)

  3.125   05/11/15(b)(f)     8,500        8,742,080   

Pentair Finance SA,
Gtd. Notes

  1.350   12/01/15     7,750        7,797,701   

Gtd. Notes

  1.875   09/15/17     4,100        4,050,529   

Roper Industries, Inc.,
Sr. Unsec’d. Notes

  1.850   11/15/17     6,770        6,710,851   

SPX Corp., Gtd. Notes

  7.625   12/15/14(c)     14,250        14,998,125   

Timken Co., Sr. Unsec’d. Notes

  6.000   09/15/14     2,665        2,759,895   

Tyco International Finance SA,
Gtd. Notes

  3.375   10/15/15     358        371,444   

United Parcel Service, Inc.,
Sr. Unsec’d. Notes

  5.125   04/01/19     25,400        28,889,935   

United Technologies Corp.,
Sr. Unsec’d. Notes

  1.800   06/01/17     13,490        13,697,935   

Waste Management, Inc.,
Gtd. Notes

  2.600   09/01/16(c)     11,133        11,491,160   

Gtd. Notes

  6.375   03/11/15     1,000        1,065,031   

Xylem, Inc., Gtd. Notes

  3.550   09/20/16     20,030        21,038,631   
       

 

 

 
          287,872,107   
       

 

 

 

Chemicals    1.7%

                       

Ashland, Inc., Sr. Unsec’d. Notes

  3.875   04/15/18(c)     15,000        15,187,500   

Cabot Corp., Sr. Unsec’d. Notes

  2.550   01/15/18     19,425        19,398,194   

Dow Chemical Co. (The),
Sr. Unsec’d. Notes

  8.550   05/15/19     15,000        19,367,910   

Eastman Chemical Co.,
Sr. Unsec’d. Notes

  2.400   06/01/17     8,770        8,863,979   

Sr. Unsec’d. Notes

  3.000   12/15/15     3,950        4,092,532   

Ecolab, Inc.,
Sr. Unsec’d. Notes

  1.450   12/08/17     15,600        15,244,648   

Sr. Unsec’d. Notes

  3.000   12/08/16     21,965        23,012,840   

LyondellBasell Industries NV,
Sr. Unsec’d. Notes

  5.000   04/15/19     23,574        26,181,779   

 

See Notes to Financial Statements.

 

24  


Description   Interest
Rate
  Maturity
Date
    Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Chemicals (cont’d.)

  

               

Potash Corp. of Saskatchewan, Inc. (Canada), Sr. Unsec’d. Notes

  5.250 %     05/15/14        3,800      $ 3,865,200   

PPG Industries, Inc.,
Sr. Unsec’d. Notes

  1.900     01/15/16        4,665        4,733,743   

Rohm & Haas Co., Sr. Unsec’d. Notes

  6.000     09/15/17        4,739        5,376,064   

Sherwin-Williams Co. (The),
Sr. Unsec’d. Notes

  1.350     12/15/17        13,325        12,974,699   
       

 

 

 
          158,299,088   
       

 

 

 

Consumer    1.5%

                           

ADT Corp. (The), Sr. Unsec’d. Notes

  2.250     07/15/17(c)        28,876        28,415,803   

Amazon.com, Inc., Sr. Unsec’d. Notes

  1.200     11/29/17(c)        21,545        21,094,559   

Mattel, Inc., Sr. Unsec’d. Notes

  2.500     11/01/16        4,000        4,103,072   

Newell Rubbermaid, Inc.,
Sr. Unsec’d. Notes

  2.000     06/15/15        3,425        3,469,025   

Sr. Unsec’d. Notes

  2.050     12/01/17        7,090        7,025,020   

QVC, Inc., Sr. Sec’d. Notes, 144A

  7.500     10/01/19        10,475        11,290,447   

Service Corp. International,
Sr. Unsec’d. Notes

  7.000     05/15/19        5,040        5,392,800   

Unilever Capital Corp. (Netherlands),
Gtd. Notes

  0.850     08/02/17(c)        34,600        33,681,993   

VF Corp., Sr. Unsec’d. Notes

  5.950     11/01/17        15,915        17,915,372   

Western Union Co. (The),
Sr. Unsec’d. Notes

  2.375     12/10/15        7,750        7,930,660   

Whirlpool Corp.,
Sr. Unsec’d. Notes, MTN

  8.600     05/01/14        3,000        3,078,591   
       

 

 

 
          143,397,342   
       

 

 

 

Electric    4.3%

                           

AES Corp. (The), Sr. Unsec’d. Notes

  8.000     10/15/17        5,000        5,875,000   

Alliant Energy Corp.,
Sr. Unsec’d. Notes

  4.000     10/15/14        2,000        2,052,440   

Ameren Corp., Sr. Unsec’d. Notes

  8.875     05/15/14        8,692        8,941,260   

American Electric Power Co, Inc.,
Sr. Unsec’d. Notes

  1.650     12/15/17        19,295        18,905,492   

CenterPoint Energy, Inc.,
Sr. Unsec’d. Notes

  5.950     02/01/17(c)        12,400        13,903,674   

Sr. Unsec’d. Notes

  6.850     06/01/15        5,157        5,576,037   

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     25   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Electric (cont’d.)

               

CMS Energy Corp.,
Sr. Unsec’d. Notes

  4.250 %   09/30/15     25,144      $ 26,491,115   

Sr. Unsec’d. Notes

  6.550   07/17/17     5,000        5,729,915   

Commonwealth Edison Co.,
First Mortgage

  4.700   04/15/15     10,000        10,502,930   

Consolidated Edison Co. of New York, Inc.,
Sr. Unsec’d. Notes

  5.550   04/01/14     2,500        2,530,073   

Dayton Power & Light Co. (The), First Mortgage, 144A

  1.875   09/15/16     3,450        3,478,187   

Dominion Resources, Inc.,
Sr. Unsec’d. Notes

  1.950   08/15/16     10,100        10,267,125   

DTE Energy Co., Sr. Unsec’d. Notes

  7.625   05/15/14     1,550        1,589,316   

Duke Energy Corp.,
Sr. Unsec’d. Notes

  1.625   08/15/17     17,455        17,344,684   

Sr. Unsec’d. Notes

  2.100   06/15/18(c)     4,350        4,325,027   

Sr. Unsec’d. Notes

  2.150   11/15/16     10,080        10,330,448   

Sr. Unsec’d. Notes

  6.300   02/01/14     17,850        17,928,433   

Enel Finance International NV (Italy),
Gtd. Notes, 144A

  3.875   10/07/14     15,080        15,407,010   

Entergy Corp.,
Sr. Unsec’d. Notes

  3.625   09/15/15     2,500        2,578,820   

Sr. Unsec’d. Notes

  4.700   01/15/17     7,460        8,021,111   

Entergy Louisiana LLC, First Mortgage

  1.875   12/15/14     3,545        3,592,219   

Entergy Texas, Inc., First Mortgage

  3.600   06/01/15     2,475        2,556,655   

Exelon Corp., Sr. Unsec’d. Notes

  4.900   06/15/15(c)     11,718        12,354,323   

FirstEnergy Corp., Sr. Unsec’d. Notes

  2.750   03/15/18(c)     10,850        10,660,885   

Iberdrola Finance Ireland Ltd.
(Ireland), Gtd. Notes, 144A

  3.800   09/11/14     11,025        11,246,294   

Interstate Power & Light Co.,
Sr. Unsec’d. Notes

  3.300   06/15/15     3,200        3,308,787   

IPALCO Enterprises, Inc.,
Sr. Sec’d. Notes, 144A

  7.250   04/01/16     7,745        8,500,138   

LG&E and KU Energy LLC,
Sr. Unsec’d. Notes

  2.125   11/15/15     17,800        18,111,589   

Nevada Power Co., General Ref. Mortgage

  5.875   01/15/15     23,350        24,609,873   

NextEra Energy Capital Holdings, Inc.,
Gtd. Notes

  1.200   06/01/15     5,480        5,508,080   

Gtd. Notes

  2.600   09/01/15     8,300        8,520,423   

 

See Notes to Financial Statements.

 

26  


Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Electric (cont’d.)

               

Niagara Mohawk Power Corp. (United Kingdom),
Sr. Unsec’d. Notes, 144A

  3.553 %   10/01/14     4,750      $ 4,852,638   

Ohio Power Co., Sr. Unsec’d. Notes

  6.000   06/01/16     10,366        11,475,649   

Oncor Electric Delivery Co. LLC,
Sr. Sec’d. Notes

  6.375   01/15/15     3,000        3,165,021   

Peco Energy Co., First Mortgage

  5.000   10/01/14     2,685        2,772,432   

Pepco Holdings, Inc.,
Sr. Unsec’d. Notes

  2.700   10/01/15     5,100        5,229,494   

Progress Energy, Inc.,
Sr. Unsec’d. Notes

  6.050   03/15/14     3,400        3,437,832   

PSEG Power LLC,
Gtd. Notes

  2.450   11/15/18     2,325        2,294,831   

Gtd. Notes

  2.750   09/15/16     16,085        16,656,259   

Southern Co. (The),
Sr. Unsec’d. Notes

  1.950   09/01/16     20,455        20,874,696   

Sr. Unsec’d. Notes

  2.450   09/01/18     7,050        7,156,991   

Sr. Unsec’d. Notes

  4.150   05/15/14     1,500        1,520,007   

Southwestern Electric Power Co.,
Sr. Unsec’d. Notes

  4.900   07/01/15     6,811        7,169,211   

TECO Finance, Inc.,
Gtd. Notes

  4.000   03/15/16     4,000        4,241,100   

Gtd. Notes

  6.572   11/01/17     2,000        2,312,372   

TransAlta Corp (Canada),
Sr. Unsec’d. Notes

  4.750   01/15/15(c)     3,860        4,001,994   

Wisconsin Electric Power Co.,
Sr. Unsec’d. Notes

  6.000   04/01/14     435        440,819   
       

 

 

 
          398,348,709   
       

 

 

 

Energy—Integrated    1.4%

                       

BP Capital Markets PLC
(United Kingdom),
Gtd. Notes

  1.375   11/06/17(c)     12,850        12,654,616   

Gtd. Notes

  1.375   05/10/18(c)     25,300        24,554,890   

Gtd. Notes

  1.846   05/05/17(c)     10,050        10,150,902   

Gtd. Notes, MTN

  2.241   09/26/18     9,950        9,978,716   

Gtd. Notes

  3.200   03/11/16(c)     8,375        8,794,412   

Chevron Corp., Sr. Unsec’d. Notes

  1.718   06/24/18(c)     23,445        23,356,519   

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     27   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Energy—Integrated (cont’d.)

               

PC Financial Partnership (Canada),
Gtd. Notes

  5.000 %   11/15/14     1,598      $ 1,656,105   

Shell International Finance BV (Netherlands), Gtd. Notes

  1.900   08/10/18(c)     3,350        3,330,037   

Suncor Energy, Inc. (Canada),
Sr. Unsec’d. Notes

  6.100   06/01/18     10,718        12,389,558   

Total Capital International SA
(France), Gtd. Notes

  1.500   02/17/17(c)     25,245        25,291,123   
       

 

 

 
          132,156,878   
       

 

 

 

Energy—Other    3.0%

                       

Anadarko Petroleum Corp.,

Sr. Unsec’d. Notes

  6.375   09/15/17     48,705        55,916,701   

Sr. Unsec’d. Notes

  7.625   03/15/14(c)     9,500        9,626,293   

Cameron International Corp.,
Sr. Unsec’d. Notes

  1.169(a)   06/02/14     15,425        15,470,457   

Sr. Unsec’d. Notes

  1.600   04/30/15     3,615        3,637,080   

Sr. Unsec’d. Notes

  6.375   07/15/18(c)     4,309        5,011,126   

Devon Energy Corp.,
Sr. Unsec’d. Notes

  1.875   05/15/17(c)     10,105        10,178,605   

Sr. Unsec’d. Notes

  2.250   12/15/18     11,900        11,775,324   

Sr. Unsec’d. Notes

  2.400   07/15/16     2,000        2,056,580   

Sr. Unsec’d. Notes

  5.625   01/15/14     9,843        9,859,989   

EnCana Holdings Finance Corp.
(Canada), Gtd. Notes

  5.800   05/01/14     5,495        5,589,899   

Hess Corp., Sr. Unsec’d. Notes

  7.000   02/15/14     9,680        9,748,651   

Marathon Petroleum Corp.,
Sr. Unsec’d. Notes

  3.500   03/01/16     4,300        4,490,150   

Nabors Industries, Inc.,
Gtd. Notes

  6.150   02/15/18     15,755        17,704,350   

Gtd. Notes, 144A

  2.350   09/15/16     2,485        2,510,036   

National Oilwell Varco, Inc.,
Sr. Unsec’d. Notes

  1.350   12/01/17(c)     5,360        5,266,061   

Noble Holding International Ltd.,
Gtd. Notes

  2.500   03/15/17     3,095        3,104,793   

Occidental Petroleum Corp.,
Sr. Unsec’d. Notes

  1.750   02/15/17     17,285        17,344,460   

Phillips 66, Gtd. Notes

  2.950   05/01/17(c)     6,430        6,689,708   

 

See Notes to Financial Statements.

 

28  


Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Energy—Other (cont’d.)

               

Pioneer Natural Resources Co.,
Sr. Unsec’d. Notes

  6.650 %   03/15/17     5,250      $ 5,986,013   

Sr. Unsec’d. Notes

  6.875   05/01/18     19,140        22,411,237   

Schlumberger Norge AS,
Gtd. Notes, 144A

  1.250   08/01/17     7,430        7,262,141   

Gtd. Notes, 144A

  1.950   09/14/16     9,210        9,396,549   

Transocean, Inc.,
Gtd. Notes

  2.500   10/15/17(c)     14,120        14,269,587   

Gtd. Notes

  5.050   12/15/16     3,375        3,728,265   

Weatherford International Ltd.,
Gtd. Notes

  5.500   02/15/16     4,850        5,256,372   

Gtd. Notes

  6.350   06/15/17     10,350        11,700,820   

Woodside Finance Ltd. (Australia),
Gtd. Notes, 144A

  4.500   11/10/14     4,800        4,948,493   
       

 

 

 
          280,939,740   
       

 

 

 

Foods    4.1%

               

Anheuser-Busch InBev Worldwide, Inc. (Belgium),
Gtd. Notes

  1.375   07/15/17     31,050        30,984,795   

Gtd. Notes

  5.375   01/15/20     10,000        11,476,570   

Beam, Inc., Sr. Unsec’d. Notes

  1.875   05/15/17     8,465        8,450,889   

Bunge Ltd. Finance Corp., Gtd. Notes

  5.350   04/15/14     4,400        4,455,924   

Cargill, Inc., Sr. Unsec’d. Notes, 144A (original cost $8,084,286; purchased 02/21/12)

  1.900   03/01/17(b)(f)     8,100        8,115,746   

Coca-Cola Enterprises, Inc.,
Sr. Unsec’d. Notes

  2.125   09/15/15     10,000        10,193,560   

Coca-Cola Femsa SAB de CV (Mexico),
Gtd. Notes

  2.375   11/26/18     25,500        25,311,606   

ConAgra Foods, Inc.,
Sr. Unsec’d. Notes

  1.900   01/25/18(c)     13,195        12,953,070   

Sr. Unsec’d. Notes

  2.100   03/15/18     12,275        12,140,098   

ConAgra Foods, Inc.,
Sr. Unsec’d. Notes

  5.875   04/15/14     6,000        6,092,640   

Cott Beverages, Inc., Gtd. Notes

  8.375   11/15/17     204        212,670   

Delhaize Group SA (Belgium),
Gtd. Notes

  6.500   06/15/17(c)     11,745        13,190,716   

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     29   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Foods (cont’d.)

               

Diageo Capital PLC (United Kingdom),
Gtd. Notes

  1.500%   05/11/17(c)     9,235      $ 9,215,062   

Gtd. Notes

  7.375   01/15/14     8,500        8,520,647   

Dr. Pepper Snapple Group, Inc.,
Gtd. Notes

  2.900   01/15/16     14,744        15,302,046   

General Mills, Inc., Sr. Unsec’d. Notes

  5.200   03/17/15     1,000        1,054,368   

Heineken NV (Netherlands),
Sr. Unsec’d. Notes, 144A

  1.400   10/01/17     16,325        16,016,017   

Kellogg Co., Sr. Unsec’d. Notes

  1.750   05/17/17     4,925        4,919,169   

Kraft Foods Group, Inc.,
Sr. Unsec’d. Notes

  2.250   06/05/17     10,720        10,854,783   

Sr. Unsec’d. Notes

  6.125   08/23/18     11,431        13,324,237   

Kroger Co.,
Sr. Unsec’d. Notes

  2.300   01/15/19     4,125        4,104,313   

Kroger Co. (The), Gtd. Notes

  6.400   08/15/17(c)     9,800        11,228,232   

Gtd. Notes

  7.500   01/15/14     9,385        9,406,407   

Mead Johnson Nutrition Co.,
Sr. Unsec’d. Notes

  3.500   11/01/14     13,335        13,627,463   

Molson Coors Brewing Co., Gtd. Notes

  2.000   05/01/17(c)     10,975        11,015,015   

Mondelez International, Inc.,
Sr. Unsec’d. Notes

  4.125   02/09/16     10,250        10,866,620   

Sr. Unsec’d. Notes

  6.750   02/19/14     1,000        1,007,749   

Nabisco, Inc., Sr. Unsec’d. Notes

  7.550   06/15/15(c)     4,393        4,810,599   

SABMiller Holdings, Inc.
(United Kingdom), Gtd. Notes, 144A

  2.450   01/15/17     30,990        31,733,326   

Starbucks Corp., Sr. Unsec’d. Notes

  2.000   12/05/18     8,045        7,975,427   

Tesco PLC (United Kingdom),
Sr. Unsec’d. Notes, 144A

  2.000   12/05/14     11,350        11,492,953   

Tyson Foods, Inc., Gtd. Notes

  6.600(a)   04/01/16     11,050        12,334,640   

WM Wrigley Jr Co.,
Sr. Unsec’d. Notes, 144A

  2.000   10/20/17     7,390        7,369,471   

Sr. Unsec’d. Notes, 144A

  2.900   10/21/19     2,550        2,528,919   

Woolworths Ltd. (Australia), Gtd. Notes, 144A

  2.550   09/22/15     1,766        1,815,784   

Yum! Brands, Inc.,
Sr. Unsec’d. Notes

  4.250   09/15/15     10,345        10,922,137   

Sr. Unsec’d. Notes

  6.250   04/15/16     5,300        5,877,493   
       

 

 

 
          380,901,161   
       

 

 

 

 

See Notes to Financial Statements.

 

30  


Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Healthcare & Pharmaceutical    6.1%

                   

AbbVie, Inc.,
Sr. Unsec’d. Notes

  1.750%   11/06/17     39,375      $ 39,307,551   

Sr. Unsec’d. Notes

  2.000   11/06/18     15,000        14,838,150   

Actavis PLC, Sr. Unsec’d. Notes

  1.875   10/01/17     14,010        13,863,890   

Allergan, Inc., Sr. Unsec’d. Notes

  5.750   04/01/16     15,900        17,588,898   

Amgen, Inc.,
Sr. Unsec’d. Notes

  2.125   05/15/17(c)     26,975        27,316,369   

Sr. Unsec’d. Notes

  2.300   06/15/16     23,775        24,512,667   

Sr. Unsec’d. Notes

  6.150   06/01/18(c)     6,000        7,005,798   

AstraZeneca PLC (United Kingdom), Sr. Unsec’d. Notes

  5.900   09/15/17     10,000        11,434,660   

Baxter International, Inc.,
Sr. Unsec’d. Notes

  1.850   01/15/17     6,765        6,837,731   

Sr. Unsec’d. Notes

  1.850   06/15/18     6,190        6,112,575   

Sr. Unsec’d. Notes

  4.000   03/01/14     1,990        2,000,917   

Cardinal Health, Inc.,
Sr. Unsec’d. Notes

  1.700   03/15/18     9,455        9,252,758   

Sr. Unsec’d. Notes

  1.900   06/15/17     8,050        8,067,082   

CareFusion Corp., Sr. Unsec’d. Notes

  5.125   08/01/14     16,475        16,891,241   

Celgene Corp.,
Sr. Unsec’d. Notes

  1.900   08/15/17     5,555        5,528,714   

Sr. Unsec’d. Notes

  2.300   08/15/18     17,100        17,006,104   

Sr. Unsec’d. Notes

  2.450   10/15/15(c)     6,840        7,026,629   

Covidien International Finance SA, Gtd. Notes

  1.350   05/29/15     11,020        11,100,843   

CR Bard, Inc., Sr. Unsec’d. Notes

  1.375   01/15/18     11,225        10,828,836   

Edwards Lifesciences Corp.,
Sr. Unsec’d. Notes

  2.875   10/15/18     10,525        10,463,576   

Express Scripts Holding Co.,
Gtd. Notes

  2.100   02/12/15     6,675        6,771,741   

Gtd. Notes

  2.650   02/15/17     26,467        27,278,875   

Gtd. Notes

  3.125   05/15/16     7,300        7,619,105   

Gtd. Notes

  3.500   11/15/16     18,110        19,146,182   

Gilead Sciences, Inc.,
Sr. Unsec’d. Notes

  3.050   12/01/16(c)     9,700        10,241,968   

GlaxoSmithKline Capital PLC (United Kingdom), Gtd. Notes

  1.500   05/08/17     24,125        24,135,760   

Laboratory Corp. of America Holdings,
Sr. Unsec’d. Notes

  2.200   08/23/17     14,785        14,833,199   

Sr. Unsec’d. Notes

  2.500   11/01/18(c)     8,100        7,988,617   

Sr. Unsec’d. Notes

  5.625   12/15/15     4,372        4,746,938   

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     31   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Healthcare & Pharmaceutical (cont’d.)

               

Life Technologies Corp.,
Sr. Unsec’d. Notes

  3.500%   01/15/16     14,150      $ 14,739,376   

Sr. Unsec’d. Notes

  4.400   03/01/15     4,500        4,685,004   

McKesson Corp.,
Sr. Unsec’d. Notes

  3.250   03/01/16(c)     2,310        2,407,447   

Sr. Unsec’d. Notes

  6.500   02/15/14     5,910        5,950,448   

Medco Health Solutions, Inc.,
Gtd. Notes

  2.750   09/15/15     3,355        3,463,273   

Gtd. Notes

  7.125   03/15/18     2,810        3,339,033   

Medtronic, Inc., Sr. Unsec’d. Notes

  4.500   03/15/14     1,000        1,008,012   

Merck & Co., Inc., Sr. Unsec’d. Notes

  1.300   05/18/18(c)     14,340        13,947,242   

Mylan, Inc.,
Gtd. Notes, 144A

  2.600   06/24/18     7,855        7,859,548   

Sr. Unsec’d. Notes

  2.550   03/28/19     3,195        3,163,114   

Perrigo Co. PLC, Gtd. Notes, 144A

  2.300   11/08/18(c)     8,350        8,241,684   

Roche Holdings, Inc. (Switzerland),
Gtd. Notes, 144A

  6.000   03/01/19     16,982        19,872,931   

Sanofi (France), Sr. Unsec’d. Notes

  1.250   04/10/18     8,225        8,007,975   

Teva Pharmaceutical Finance Co. BV
(Israel), Gtd. Notes

  2.400   11/10/16     18,420        18,951,749   

Thermo Fisher Scientific, Inc.,
Sr. Unsec’d. Notes

  2.250   08/15/16(c)     33,005        33,753,520   

Sr. Unsec’d. Notes

  2.400   02/01/19     4,985        4,938,595   

Thermo Fisher Scientific, Inc.,
Sr. Unsec’d. Notes

  3.200   03/01/16(c)     6,385        6,675,486   

Warner Chilcott Co. LLC/Warner
Chilcott Finance LLC, Gtd. Notes

  7.750   09/15/18     6,000        6,495,000   

Zoetis, Inc., Sr. Unsec’d. Notes

  1.150   02/01/16     4,850        4,855,505   

Sr. Unsec’d. Notes

  1.875   02/01/18     10,650        10,562,478   
       

 

 

 
          572,664,794   
       

 

 

 

Healthcare Insurance    2.1%

                       

Aetna, Inc. Sr. Unsec’d. Notes

  1.500   11/15/17     3,000        2,955,876   

Sr. Unsec’d. Notes

  1.750   05/15/17     10,655        10,618,176   

Sr. Unsec’d. Notes

  6.000   06/15/16(c)     20,370        22,768,466   

Sr. Unsec’d. Notes

  6.500   09/15/18     2,650        3,121,533   

Cigna Corp., Sr. Unsec’d. Notes

  2.750   11/15/16     20,415        21,248,381   

Coventry Health Care, Inc.,
Sr. Unsec’d. Notes

  5.950   03/15/17     19,180        21,684,620   

Sr. Unsec’d. Notes

  6.300   08/15/14     10,575        10,946,468   

 

See Notes to Financial Statements.

 

32  


Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Healthcare Insurance (cont’d.)

               

Humana, Inc., Sr. Unsec’d. Notes

  6.450%   06/01/16     3,500      $ 3,910,956   

UnitedHealth Group, Inc.,
Sr. Unsec’d. Notes

  1.400   10/15/17     4,750        4,690,027   

Sr. Unsec’d. Notes

  5.375   03/15/16     23,015        25,192,564   

Sr. Unsec’d. Notes

  6.000   02/15/18     15,075        17,416,359   

WellPoint, Inc., Sr. Unsec’d. Notes

  1.875   01/15/18     41,195        40,734,069   

Sr. Unsec’d. Notes

  2.300   07/15/18(c)     12,975        12,872,030   
       

 

 

 
          198,159,525   
       

 

 

 

Insurance    3.3%

                       

Allied World Assurance Co. Ltd.,
Gtd. Notes

  7.500   08/01/16     5,090        5,843,310   

American International Group, Inc.,
Sr. Unsec’d. Notes

  3.800   03/22/17     39,295        41,963,091   

Sr. Unsec’d. Notes

  4.875   09/15/16     14,225        15,623,702   

Sr. Unsec’d. Notes

  5.050   10/01/15     5,000        5,355,220   

Sr. Unsec’d. Notes, MTN

  5.450   05/18/17(c)     18,736        20,941,602   

Sr. Unsec’d. Notes, MTN

  5.600   10/18/16(c)     2,500        2,785,373   

Sr. Unsec’d. Notes, MTN

  5.850   01/16/18     15,000        17,205,750   

Aon Corp., Gtd. Notes

  3.125   05/27/16     4,665        4,864,989   

Gtd. Notes

  3.500   09/30/15     7,315        7,634,578   

Axis Capital Holdings Ltd., Sr. Unsec’d. Notes

  5.750   12/01/14     5,180        5,412,313   

Berkshire Hathaway Finance Corp.,
Gtd. Notes

  2.900   10/15/20     25,375        25,164,083   

Endurance Specialty Holdings Ltd., Sr. Unsec’d. Notes

  6.150   10/15/15     4,639        4,993,670   

Hartford Financial Services Group, Inc.,
Sr. Unsec’d. Notes

  4.000   03/30/15(c)     16,425        17,063,818   

Sr. Unsec’d. Notes

  4.000   10/15/17     7,500        7,977,158   

Liberty Mutual Group, Inc.,
Sr. Unsec’d. Notes, 144A

  5.750   03/15/14(c)     4,955        5,004,441   

Sr. Unsec’d. Notes, 144A

  6.700   08/15/16     3,135        3,541,807   

Lincoln National Corp.,
Sr. Unsec’d. Notes

  4.300   06/15/15     7,135        7,480,077   

Sr. Unsec’d. Notes

  4.750   02/15/14     3,255        3,270,966   

Markel Corp., Sr. Unsec’d. Notes

  7.125   09/30/19     11,401        13,574,772   

Marsh & McLennan Cos., Inc.,
Sr. Unsec’d. Notes, MTN

  2.550   10/15/18     5,875        5,883,660   

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     33   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Insurance (cont’d.)

               

MetLife, Inc.,
Sr. Unsec’d. Notes

  1.756%(a)   12/15/17     12,125      $ 11,996,390   

Sr. Unsec’d. Notes

  5.000   06/15/15     5,000        5,307,080   

Metropolitan Life Global Funding I,
Sec’d. Notes, 144A

  1.500   01/10/18     18,310        17,808,379   

Sr. Sec’d. Notes, 144A

  2.500   09/29/15(c)     6,645        6,843,872   

New York Life Global Funding,
Sec’d. Notes, 144A

  2.100   01/02/19     20,570        20,341,879   

Principal Financial Group, Inc.,
Gtd. Notes

  1.850   11/15/17(c)     5,995        5,940,775   

Willis Group Holdings PLC, Gtd. Notes

  4.125   03/15/16     4,065        4,255,787   

XL Group PLC (Ireland),
Sr. Unsec’d. Notes

  5.250   09/15/14     6,300        6,493,423   

XLIT Ltd (Ireland), Gtd. Notes

  2.300   12/15/18     8,750        8,594,154   
       

 

 

 
          309,166,119   
       

 

 

 

Lodging    1.6%

                       

Carnival Corp., Gtd. Notes

  1.875   12/15/17     25,560        25,394,729   

Marriott International, Inc.,
Sr. Unsec’d. Notes

  3.000   03/01/19     15,350        15,457,542   

Sr. Unsec’d. Notes

  5.810   11/10/15     22,840        24,814,381   

Sr. Unsec’d. Notes

  6.375   06/15/17     9,400        10,714,957   

Starwood Hotels & Resorts
Worldwide, Inc.,
Sr. Unsec’d. Notes

  6.750   05/15/18     3,000        3,472,239   

Sr. Unsec’d. Notes

  7.150   12/01/19     10,218        12,201,855   

Starwood Hotels & Resorts
Worldwide, Inc.,
Sr. Unsec’d. Notes

  7.375   11/15/15     16,528        18,329,883   

Wyndham Worldwide Corp.,
Sr. Unsec’d. Notes

  2.500   03/01/18     4,190        4,175,779   

Sr. Unsec’d. Notes

  2.950   03/01/17     29,568        29,989,314   
       

 

 

 
          144,550,679   
       

 

 

 

Media & Entertainment    2.2%

                       

Belo Corp., Gtd. Notes

  8.000   11/15/16     4,400        4,587,000   

British Sky Broadcasting Group PLC
(United Kingdom), Gtd. Notes, 144A

  6.100   02/15/18     10,000        11,384,480   

CBS Corp., Gtd. Notes (original cost $7,687,511; purchased 06/11/12-12/16/13)

  1.950   07/01/17(b)(f)     7,702        7,715,964   

 

See Notes to Financial Statements.

 

34  


Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Media & Entertainment (cont’d.)

               

Cedar Fair LP/Canada’s Wonderland
Co./Magnum Management Corp.,
Gtd. Notes

  9.125 %   08/01/18     13,700      $ 14,864,500   

News America, Inc.,
Gtd. Notes

  5.650   08/15/20     7,180        8,045,836   

Gtd. Notes

  8.000   10/17/16     30,452        35,842,583   

Nielsen Finance LLC/Nielsen Finance
Co. (Netherlands), Gtd. Notes

  7.750   10/15/18(c)     8,000        8,640,000   

Thomson Reuters Corp. (Canada),
Sr. Unsec’d. Notes

  1.300   02/23/17(c)     8,700        8,661,624   

Time Warner, Inc.,
Gtd. Notes

  3.150   07/15/15     13,200        13,675,094   

Gtd. Notes

  5.875   11/15/16     31,037        35,015,105   

Viacom, Inc.,
Sr. Unsec’d. Notes

  1.250   02/27/15     9,250        9,296,065   

Sr. Unsec’d. Notes

  2.500   12/15/16     9,025        9,333,556   

Sr. Unsec’d. Notes

  2.500   09/01/18     6,290        6,340,704   

Sr. Unsec’d. Notes

  4.250   09/15/15     4,195        4,426,107   

Sr. Unsec’d. Notes

  4.375   09/15/14     16,850        17,289,465   

Sr. Unsec’d. Notes

  6.250   04/30/16     9,660        10,771,596   
       

 

 

 
          205,889,679   
       

 

 

 

Metals    1.6%

                       

Anglo American Capital PLC (United Kingdom), Gtd. Notes, 144A

  9.375   04/08/14     5,080        5,192,613   

ArcelorMittal (Luxembourg),
Sr. Unsec’d. Notes

  4.250(a)   03/01/16(c)     6,330        6,606,938   

ArcelorMittal SA (Luxembourg),
Sr. Unsec’d. Notes

  9.500(a)   02/15/15     2,395        2,601,569   

BHP Billiton Finance USA Ltd. (Australia),
Gtd. Notes

  1.625   02/24/17     14,645        14,684,688   

Gtd. Notes

  2.050   09/30/18(c)     12,950        12,948,407   

FMG Resources (August 2006) Pty Ltd. (Australia), Gtd. Notes, 144A

  7.000   11/01/15(c)     10,936        11,346,100   

Freeport-McMoran Copper &
Gold, Inc.,
Gtd. Notes

  2.375   03/15/18     595        593,546   

Sr. Unsec’d. Notes

  2.150   03/01/17     11,150        11,222,653   

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     35   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Metals (cont’d.)

                       

Rio Tinto Finance USA Ltd. (United Kingdom),
Gtd. Notes

  2.250 %   09/20/16     2,108      $ 2,169,509   

Gtd. Notes

  2.500   05/20/16     4,235        4,367,386   

Gtd. Notes

  8.950   05/01/14     26,975        27,707,722   

Teck Resources Ltd. (Canada),
Gtd. Notes

  2.500   02/01/18(c)     14,075        14,159,985   

Xstrata Finance Canada Ltd.
(Canada),
Gtd. Notes, 144A

  2.050(a)   10/23/15     7,825        7,924,589   

Gtd. Notes, 144A

  2.700(a)   10/25/17(c)     7,880        7,969,446   

Gtd. Notes, 144A

  2.850   11/10/14     23,375        23,699,445   
       

 

 

 
          153,194,596   
       

 

 

 

Non-Captive Finance    3.2%

                       

Air Lease Corp., Sr. Unsec’d. Notes

  5.625(a)   04/01/17(c)     2,665        2,934,831   

CIT Group, Inc.,
Sr. Unsec’d. Notes, 144A

  4.750   02/15/15(c)     10,000        10,362,500   

General Electric Capital Corp.,
Sr. Unsec’d. Notes, MTN

  1.000   01/08/16(c)     49,875        49,999,688   

Sr. Unsec’d. Notes, MTN

  1.500   07/12/16(c)     49,675        50,200,114   

Sr. Unsec’d. Notes, MTN

  1.600   11/20/17(c)     9,500        9,437,471   

Sr. Unsec’d. Notes

  1.625   04/02/18(c)     30,000        29,681,430   

Sr. Unsec’d. Notes, MTN

  2.300   04/27/17(c)     25,350        26,056,581   

Sr. Unsec’d. Notes, MTN

  5.625   05/01/18(c)     37,626        43,208,494   

Sr. Unsec’d. Notes, MTN

  6.000   08/07/19(c)     10,000        11,733,120   

International Lease Finance Corp.,
Sr. Sec’d. Notes, 144A

  6.500   09/01/14     1,910        1,974,463   

Sr. Unsec’d. Notes

  3.875   04/15/18(c)     1,000        1,002,500   

Sr. Unsec’d. Notes

  5.750   05/15/16     3,750        4,017,188   

NYSE Euronext, Sr. Unsec’d. Notes

  2.000   10/05/17     19,880        19,905,864   

SLM Corp.,
Sr. Unsec’d. Notes, MTN

  3.875   09/10/15     6,950        7,184,563   

Sr. Unsec’d. Notes

  5.000   04/15/15(c)     12,310        12,879,338   

Sr. Unsec’d. Notes, MTN

  5.050   11/14/14     3,000        3,097,500   

Sr. Unsec’d. Notes, MTN

  6.000   01/25/17(c)     9,565        10,354,113   

Sr. Unsec’d. Notes, MTN

  6.250   01/25/16     3,490        3,769,200   
       

 

 

 
          297,798,958   
       

 

 

 

 

See Notes to Financial Statements.

 

36  


Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Packaging

               

Bemis Co, Inc, Sr. Unsec’d. Notes

  5.650 %   08/01/14     3,775      $ 3,880,440   

Paper    0.8%

               

Domtar Corp., Gtd. Notes

  7.125   08/15/15     8,085        8,749,619   

Georgia-Pacific LLC, Sr. Unsec’d.
Notes (original cost $3,485,580; purchased 06/05/12)

  7.700   06/15/15(b)(f)     3,000        3,284,760   

International Paper Co.,
Sr. Unsec’d. Notes

  5.250   04/01/16     4,500        4,869,459   

Sr. Unsec’d. Notes

  7.950   06/15/18     31,901        38,749,889   

International Paper Co.,
Sr. Unsec’d. Notes

  9.375   05/15/19     8,295        10,880,344   

Rock-Tenn Co., Gtd. Notes

  4.450   03/01/19(c)     5,325        5,616,810   
       

 

 

 
          72,150,881   
       

 

 

 

Pipelines & Other    1.5%

               

Atmos Energy Corp.,
Sr. Unsec’d. Notes

  4.950   10/15/14     950        981,415   

Buckeye Partners LP,
Sr. Unsec’d. Notes

  2.650   11/15/18     5,610        5,527,567   

DCP Midstream Operating LP,
Gtd. Notes

  2.500   12/01/17     8,990        8,951,325   

Energy Transfer Partners LP,
Sr. Unsec’d. Notes

  8.500   04/15/14     2,005        2,047,183   

Enterprise Products Operating LLC,
Gtd. Notes

  1.250   08/13/15     5,575        5,612,040   

Gtd. Notes

  3.200   02/01/16     2,190        2,284,459   

Gtd. Notes

  3.700   06/01/15     2,400        2,498,705   

Gtd. Notes

  6.650   04/15/18     3,400        3,979,241   

Kinder Morgan Energy Partners LP,
Sr. Unsec’d. Notes

  2.650   02/01/19     8,300        8,207,953   

Sr. Unsec’d. Notes

  3.500   03/01/16(c)     10,061        10,523,474   

Sr. Unsec’d. Notes

  5.625   02/15/15     3,600        3,785,058   

Sr. Unsec’d. Notes

  6.000   02/01/17(c)     4,900        5,492,361   

Magellan Midstream Partners LP,
Sr. Unsec’d. Notes

  5.650   10/15/16     3,990        4,461,171   

Sr. Unsec’d. Notes

  6.450   06/01/14     5,000        5,121,280   

ONEOK Partners LP,
Gtd. Notes

  2.000   10/01/17     13,030        12,966,322   

Gtd. Notes

  3.200   09/15/18(c)     9,185        9,391,855   

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     37   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Pipelines & Other (cont’d.)

                       

Sempra Energy,
Sr. Unsec’d. Notes

  2.000%   03/15/14     8,710      $ 8,736,914   

Sr. Unsec’d. Notes

  2.300   04/01/17(c)     12,390        12,550,488   

Spectra Energy Partners LP,
Sr. Unsec’d. Notes

  2.950   09/25/18(c)     14,115        14,307,317   

Western Gas Partners LP,
Sr. Unsec’d. Notes

  2.600   08/15/18     5,985        5,911,379   

Williams Partners LP,
Sr. Unsec’d. Notes

  3.800   02/15/15     8,300        8,574,904   

Williams Partners LP/Williams
Partners Finance Corp., Sr. Unsec’d. Notes

  7.250   02/01/17     1,000        1,153,141   
       

 

 

 
          143,065,552   
       

 

 

 

Railroads    0.7%

               

Burlington Northern Santa Fe LLC,
Sr. Unsec’d. Notes

  4.875   01/15/15     5,000        5,212,750   

Sr. Unsec’d. Notes

  6.875   02/15/16     2,000        2,226,902   

Burlington Northern Santa Fe LLC,
Sr. Unsec’d. Notes

  7.000   02/01/14     5,000        5,024,955   

CSX Corp.,
Sr. Unsec’d. Notes

  5.300   02/15/14     4,000        4,021,700   

Sr. Unsec’d. Notes

  6.250   04/01/15     2,000        2,137,688   

Sr. Unsec’d. Notes

  6.250   03/15/18     11,608        13,415,006   

Sr. Unsec’d. Notes

  7.375   02/01/19     15,175        18,410,477   

Norfolk Southern Corp.,
Sr. Unsec’d. Notes

  7.700   05/15/17     6,810        8,083,136   

Union Pacific Corp., Sr. Unsec’d. Notes

  5.125   02/15/14     3,000        3,016,023   
       

 

 

 
          61,548,637   
       

 

 

 

Real Estate Investment Trusts    1.4%

               

Duke Realty LP, Gtd. Notes

  7.375   02/15/15     4,535        4,850,740   

HCP, Inc., Sr. Unsec’d. Notes

  2.700   02/01/14     3,565        3,570,565   

Hospitality Properties Trust,
Sr. Unsec’d. Notes

  7.875   08/15/14     3,300        3,326,786   

Kilroy Realty LP, Gtd. Notes

  5.000   11/03/15     2,675        2,849,466   

KimCo. Realty Corp.,
Sr. Unsec’d. Notes

  5.700   05/01/17     3,235        3,614,394   

 

See Notes to Financial Statements.

 

38  


Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Real Estate Investment Trusts (cont’d.)

                       

Liberty Property LP, Sr. Unsec’d. Notes

  5.650 %   08/15/14     7,955      $ 8,182,553   

Mack-Cali Realty LP, Sr. Unsec’d. Notes

  2.500   12/15/17     13,340        13,198,062   

Realty Income Corp.,
Sr. Unsec’d. Notes

  2.000   01/31/18     7,800        7,639,008   

Sr. Unsec’d. Notes

  5.500   11/15/15     6,500        7,016,341   

Sr. Unsec’d. Notes

  5.950   09/15/16     1,700        1,889,135   

Simon Property Group LP,
Sr. Unsec’d. Notes, 144A

  1.500   02/01/18(c)
    11,910        11,570,053   

Sr. Unsec’d. Notes

  2.800   01/30/17(c)     1,685        1,742,806   

Sr. Unsec’d. Notes

  4.200   02/01/15     2,280        2,347,032   

Sr. Unsec’d. Notes

  5.250   12/01/16     5,800        6,419,811   

Sr. Unsec’d. Notes

  5.750   12/01/15     12,088        13,093,226   

Sr. Unsec’d. Notes

  5.875   03/01/17(c)     8,025        9,000,415   

Sr. Unsec’d. Notes

  6.100   05/01/16(c)     9,640        10,645,452   

Sr. Unsec’d. Notes

  6.125   05/30/18     2,774        3,211,776   

Sr. Unsec’d. Notes

  6.750   05/15/14     4,975        5,009,850   

Ventas Realty LP/Ventas Capital Corp.,
Gtd. Notes

  2.000   02/15/18     8,035        7,898,445   
       

 

 

 
          127,075,916   
       

 

 

 

Retailers    1.5%

               

AutoZone, Inc.,
Sr. Unsec’d. Notes

  5.500   11/15/15     7,400        8,009,353   

Sr. Unsec’d. Notes

  5.750   01/15/15     13,024        13,681,373   

Costco Wholesale Corp.,
Sr. Unsec’d. Notes

  1.125   12/15/17     10        9,824   

CVS Caremark Corp.,
Sr. Unsec’d. Notes

  2.250   12/05/18     34,250        34,239,999   

Sr. Unsec’d. Notes

  3.250   05/18/15     7,500        7,752,420   

Sr. Unsec’d. Notes

  4.875   09/15/14     2,000        2,059,850   

Dollar General Corp.,
Sr. Unsec’d. Notes

  1.875   04/15/18(c)     26,920        26,041,654   

Lowe’s Cos., Inc., Sr. Unsec’d. Notes

  1.625   04/15/17     10,535        10,497,706   

Macy’s Retail Holdings, Inc.,
Gtd. Notes

  5.750   07/15/14     8,471        8,697,667   

Gtd. Notes

  5.900   12/01/16     8,844        9,920,120   

Nordstrom, Inc., Sr. Unsec’d. Notes

  6.750   06/01/14     13,433        13,778,201   

Walgreen Co., Sr. Unsec’d. Notes

  1.800   09/15/17     8,760        8,820,698   
       

 

 

 
          143,508,865   
       

 

 

 

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     39   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Technology    4.0%

               

Amphenol Corp., Sr. Unsec’d. Notes

  4.750 %   11/15/14     3,550      $ 3,668,197   

Anixter, Inc., Gtd. Notes

  10.000   03/15/14     9,425        9,578,156   

Apple, Inc., Sr. Unsec’d. Notes

  1.000   05/03/18(c)     17,600        17,018,267   

Arrow Electronics, Inc.,
Sr. Unsec’d. Notes

  3.000   03/01/18     5,425        5,427,794   

Sr. Unsec’d. Notes

  3.375   11/01/15     1,625        1,681,685   

CA, Inc.,
Sr. Unsec’d. Notes

  2.875   08/15/18(c)     7,865        7,844,244   

Sr. Unsec’d. Notes

  6.125(a)   12/01/14     7,000        7,322,273   

EMC Corp.,
Sr. Unsec’d. Notes

  1.875   06/01/18     32,460        32,091,254   

Equifax, Inc., Sr. Unsec’d. Notes

  4.450   12/01/14     14,625        15,083,289   

Fidelity National Information Services, Inc.,
Gtd. Notes

  2.000   04/15/18     7,500        7,292,978   

Fiserv, Inc.,
Gtd. Notes

  3.125   10/01/15     1,670        1,729,024   

Gtd. Notes

  3.125   06/15/16     34,775        36,287,921   

Hewlett-Packard Co.,
Sr. Unsec’d. Notes

  2.350   03/15/15     15,000        15,234,735   

Sr. Unsec’d. Notes

  2.600   09/15/17(c)     14,150        14,377,037   

Sr. Unsec’d. Notes

  3.300   12/09/16     8,126        8,504,883   

Sr. Unsec’d. Notes

  4.750   06/02/14     10,000        10,160,130   

Sr. Unsec’d. Notes

  6.125   03/01/14     2,800        2,823,713   

Intel Corp., Sr. Unsec’d. Notes

  1.350   12/15/17     35,325        34,913,075   

International Business Machines
Corp., Sr. Unsec’d. Notes

  1.250   02/06/17(c)     15,300        15,260,174   

Intuit, Inc., Sr. Unsec’d. Notes

  5.750   03/15/17     1,320        1,475,874   

Maxim Integrated Products, Inc.,
Sr. Unsec’d. Notes

  2.500   11/15/18     13,825        13,708,179   

NXP BV/NXP Funding LLC
(Netherlands), Gtd. Notes, 144A

  3.750   06/01/18(c)     4,825        4,861,188   

Oracle Corp.,
Sr. Unsec’d. Notes

  1.200   10/15/17     21,770        21,422,943   

Sr. Unsec’d. Notes

  2.375   01/15/19(c)     32,440        32,730,403   

Seagate HDD Cayman,
Gtd. Notes, 144A

  3.750   11/15/18(c)     6,245        6,315,256   

SunGard Data Systems, Inc.,
Sr. Sec’d. Notes

  4.875   01/15/14     2,000        2,000,000   

 

See Notes to Financial Statements.

 

40  


Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Technology (cont’d.)

               

TransUnion LLC/TransUnion Financing Corp.,
Gtd. Notes

  11.375 %   06/15/18     4,425      $ 4,823,250   

Tyco Electronics Group SA
(Switzerland), Gtd. Notes

  1.600   02/03/15     4,710        4,756,346   

Xerox Corp.,
Sr. Unsec’d. Notes

  1.058(a)   05/16/14     6,460        6,465,342   

Sr. Unsec’d. Notes

  2.950   03/15/17(c)     2,010        2,063,444   

Sr. Unsec’d. Notes

  4.250   02/15/15     16,135        16,738,901   

Sr. Unsec’d. Notes

  8.250   05/15/14     9,280        9,528,713   
       

 

 

 
          373,188,668   
       

 

 

 

Telecommunications    6.2%

               

America Movil SAB de CV (Mexico),
Gtd. Notes

  2.375   09/08/16     24,770        25,492,541   

Gtd. Notes

  3.625   03/30/15     7,200        7,434,036   

Gtd. Notes

  5.500   03/01/14(c)     6,350        6,397,625   

Gtd. Notes

  5.750   01/15/15     2,600        2,722,200   

AT&T, Inc.,
Sr. Unsec’d. Notes

  1.400   12/01/17(c)     9,590        9,454,254   

Sr. Unsec’d. Notes

  1.600   02/15/17     27,100        27,062,033   

Sr. Unsec’d. Notes

  2.400   08/15/16(c)     16,925        17,404,756   

Sr. Unsec’d. Notes

  2.500   08/15/15     29,840        30,636,609   

Sr. Unsec’d. Notes

  2.950   05/15/16     15,420        16,079,159   

British Telecommunications PLC
(United Kingdom),
Sr. Unsec’d. Notes

  2.000   06/22/15     18,705        19,033,927   

Sr. Unsec’d. Notes

  5.950   01/15/18     33,835        38,689,240   

CC Holdings GS V LLC/Crown Castle
GS III Corp., Sr. Sec’d. Notes

  2.381   12/15/17(c)     15,090        14,946,373   

CenturyLink, Inc.,
Sr. Unsec’d. Notes

  5.000   02/15/15     9,190        9,534,625   

Sr. Unsec’d. Notes

  5.150   06/15/17(c)     10,450        11,207,625   

Deutsche Telekom International
Finance BV (Netherlands),
Gtd. Notes, 144A

  2.250   03/06/17     20,425        20,715,954   

Gtd. Notes, 144A

  3.125   04/11/16     8,800        9,165,482   

Embarq Corp., Sr. Unsec’d. Notes
(original cost $9,496,667; purchased 02/13/12)

  7.082   06/01/16(b)(f)     8,480        9,475,544   

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     41   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Telecommunications (cont’d.)

               

Frontier Communications Corp.,
Sr. Unsec’d. Notes

  8.250 %   05/01/14     66      $ 67,485   

Nippon Telegraph & Telephone Corp.
(Japan), General Ref. Mortgage

  1.400   07/18/17     8,720        8,615,002   

Orange SA (France),
Sr. Unsec’d. Notes

  2.125   09/16/15     4,360        4,443,786   

Sr. Unsec’d. Notes

  2.750   09/14/16(c)     10,225        10,618,131   

Sr. Unsec’d. Notes

  4.375   07/08/14     5,720        5,828,085   

Qwest Corp.,
Sr. Unsec’d. Notes

  6.500   06/01/17     8,500        9,605,646   

Sr. Unsec’d. Notes

  8.375   05/01/16     8,679        9,917,103   

Sprint Communications, Inc.,
Gtd. Notes, 144A

  9.000   11/15/18     7,000        8,435,000   

Telecom Italia Capital SA (Italy),
Gtd. Notes

  6.175   06/18/14     3,655        3,737,238   

Telefonica Emisiones SAU (Spain), Gtd. Notes

  4.949   01/15/15     4,740        4,927,524   

Verizon Communications, Inc.,
Sr. Unsec’d. Notes

  1.100   11/01/17     13,100        12,745,056   

Sr. Unsec’d. Notes

  2.000   11/01/16(c)     49,575        50,584,397   

Sr. Unsec’d. Notes

  3.000   04/01/16     19,250        20,073,977   

Sr. Unsec’d. Notes

  3.650   09/14/18(c)     59,530        63,016,315   

Sr. Unsec’d. Notes

  6.350   04/01/19     30,000        35,261,700   

Vodafone Group PLC (United Kingdom),
Sr. Unsec’d. Notes

  1.250   09/26/17     24,270        23,716,183   

Sr. Unsec’d. Notes

  1.625   03/20/17     24,750        24,741,214   

Sr. Unsec’d. Notes

  5.000   09/15/15(c)     5,175        5,533,560   
       

 

 

 
          577,319,385   
       

 

 

 

Tobacco    1.8%

               

Altria Group, Inc.,
Gtd. Notes

  4.125   09/11/15(c)     5,430        5,729,975   

Gtd. Notes

  7.750   02/06/14     15,150        15,248,490   

Gtd. Notes

  9.250   08/06/19     5,353        7,051,555   

Gtd. Notes

  9.700   11/10/18     4,906        6,448,407   

Imperial Tobacco Finance PLC (United Kingdom), Gtd. Notes, 144A

  2.050   02/11/18     26,140        25,847,755   

Lorillard Tobacco Co.,
Gtd. Notes

  2.300   08/21/17(c)     11,600        11,625,578   

Gtd. Notes

  3.500   08/04/16(c)     16,264        17,113,713   

Gtd. Notes

  6.875   05/01/20(c)     9,285        10,715,568   

 

See Notes to Financial Statements.

 

42  


Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

CORPORATE BONDS (Continued)

  

Tobacco (cont’d.)

               

Philip Morris International, Inc.,
Sr. Unsec’d. Notes

  1.125%   08/21/17(c)     23,615      $ 23,149,785   

Sr. Unsec’d. Notes

  1.875   01/15/19(c)     22,900        22,379,094   

Reynolds American, Inc.,
Gtd. Notes

  1.050   10/30/15     6,800        6,821,624   

Gtd. Notes

  6.750   06/15/17     10,400        11,904,474   
       

 

 

 
          164,036,018   
       

 

 

 

TOTAL CORPORATE BONDS
(cost $8,389,999,001)

          8,491,482,358   
       

 

 

 

FOREIGN AGENCIES    1.1%

  

CNOOC Finance 2013 Ltd. (China), Gtd. Notes

  1.750   05/09/18(c)     8,450        8,259,909   

Electricite de France SA (France),
Sr. Unsec’d. Notes, 144A

  5.500   01/26/14     6,725        6,743,427   

Export-Import Bank of Korea
(South Korea),
Sr. Unsec’d. Notes

  4.125   09/09/15     11,000        11,556,380   

Sr. Unsec’d. Notes

  5.875   01/14/15     5,000        5,254,375   

Gazprom OAO Via Gaz Capital SA (Russia),
Sr. Unsec’d. Notes, 144A

  8.125   07/31/14     4,200        4,368,840   

Korea Development Bank (The) (South Korea),
Sr. Unsec’d. Notes

  3.875   05/04/17     9,500        10,013,285   

Sr. Unsec’d. Notes

  4.375   08/10/15     5,800        6,099,587   

Korea Hydro & Nuclear Power Co. Ltd.
(South Korea),
Sr. Unsec’d. Notes, 144A

  6.250   06/17/14     2,000        2,046,346   

Korea National Oil Corp. (South Korea),
Sr. Unsec’d. Notes, 144A

  5.375   07/30/14     5,000        5,124,660   

Petrobras Global Finance BV (Brazil),
Gtd. Notes

  2.000   05/20/16     15,595        15,582,664   

Petrobras International Finance Co. (Brazil),
Gtd. Notes

  3.500   02/06/17(c)     11,405        11,509,367   

Gtd. Notes

  3.875   01/27/16     4,100        4,220,794   

Statoil ASA (Germany), Gtd. Notes

  1.950   11/08/18(c)     11,575        11,476,173   
       

 

 

 

TOTAL FOREIGN AGENCIES
(cost $100,426,457)

          102,255,807   
       

 

 

 

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     43   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

Description   Interest
Rate
  Maturity
Date
  Principal
Amount (000)#
    Value (Note 1)  

MUNICIPAL BONDS    0.6%

       

California    0.2%

                       

Catholic Health Initiatives,
Sec’d. Notes

  1.600 %   11/01/17     2,100      $ 2,035,421   

Unsec’d. Notes

  2.600   08/01/18(c)     5,270        5,287,301   

State of California, GO Var. Purp.

  4.850   10/01/14     3,200        3,297,184   

State of California, GO Var. Purp. 3

  5.250   04/01/14     7,750        7,848,115   
       

 

 

 
          18,468,021   
       

 

 

 

Illinois    0.4%

                       

State of Illinois, GO

  4.421   01/01/15     32,070        33,096,857   
       

 

 

 

TOTAL MUNICIPAL BONDS
(cost $51,051,100)

          51,564,878   
       

 

 

 
           

Shares

       

PREFERRED STOCK

       

Banking

                       

Citigroup Capital XIII, 7.875%,
(Capital Security, fixed to floating preferred)(a)
(cost $3,342,000)

        132,000        3,597,000   
       

 

 

 
           

Principal
Amount (000)#

       

U.S. TREASURY OBLIGATIONS    0.1%

  

U.S. Treasury Notes

  1.500   12/31/18     11,645        11,513,994   

U.S. Treasury Notes

  2.375   02/28/15(g)     800        820,031   
       

 

 

 

TOTAL U.S. TREASURY OBLIGATIONS
(cost $12,361,132)

          12,334,025   
       

 

 

 

TOTAL LONG-TERM INVESTMENTS
(cost $9,107,802,132)

          9,198,275,871   
       

 

 

 

 

See Notes to Financial Statements.

 

44  


Description           Shares     Value (Note 1)  

SHORT-TERM INVESTMENT    7.5%

   

AFFILIATED MONEY MARKET MUTUAL FUND

   

Prudential Investment Portfolios 2 - Prudential Core
Taxable Money Market Fund
(cost $703,727,142; includes $671,759,100 of cash collateral received for securities on loan) (Note 3)(h)(i)

    703,727,142      $ 703,727,142   
       

 

 

 

TOTAL INVESTMENTS    106.2%
(cost $9,811,529,274; Note 5)

      9,902,003,013   

Liabilities in excess of other assets(j)    (6.2)%

      (580,526,720
       

 

 

 

NET ASSETS    100.0%

    $ 9,321,476,293   
       

 

 

 

  

 

The following abbreviations are used in the Portfolio descriptions:

144A—Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise noted, 144A securities are deemed to be liquid.

GMTN—Global Medium Term Note

GO—General Obligation

MTN—Medium Term Note

# Principal amount is shown in U.S. dollars unless otherwise stated.
(a) Variable rate instrument. The interest rate shown reflects the rate in effect at December 31, 2013.
(b) Indicates a security or securities that have been deemed illiquid.
(c) All or a portion of security is on loan. The aggregate market value of such securities, including those sold and pending settlement, is $655,061,386; cash collateral of $671,759,100 (included in liabilities) was received with which the Fund purchased highly liquid short-term investments.
(d) Represents issuer in default on interest payments and/or principal payment; non-income producing security.
(e) Security is post-maturity.
(f) Indicates a restricted security; the aggregate original cost of the restricted securities is $85,777,731. The aggregate value, $86,041,817, is approximately 0.9% of net assets.
(g) Represents security, or a portion thereof, segregated as collateral for futures contracts.
(h) Prudential Investments LLC, the manager of the Fund, also serves as manager of the Prudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund.
(i) Represents security, or a portion thereof, purchased with cash collateral received for securities on loan.
(j) Includes net unrealized appreciation (depreciation) on the following derivative contracts held at reporting period end:

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     45   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

 

Futures contracts outstanding at December 31, 2013:

 

Number of
Contracts
    Type   Expiration
Date
    Value at
Trade Date
    Value at
December 31,
2013
    Unrealized
Appreciation
(Depreciation)
 
  Long Position:        
  5,427      2 Year U.S. Treasury Notes     Mar. 2014      $ 1,195,253,795      $ 1,192,922,437      $ (2,331,358
  Short Position:        
  8,058      5 Year U.S. Treasury Notes     Mar. 2014        974,298,891        961,420,125        12,878,766   
         

 

 

 
          $ 10,547,408   
         

 

 

 

 

Credit default swap agreements outstanding at December 31, 2013:

 

Reference
Entity/
Obligation

  Termination
Date
    Fixed
Rate
    Notional
Amount
(000)#(4)
    Fair
Value
    Upfront
Premiums
Paid
(Received)
    Unrealized
Depreciation
   

Counterparty

Over-the-counter credit default swaps on corporate issues—Buy Protection(1):

Boston Scientific Corp.

    06/20/14        1.000%        3,120      $ (14,787   $ 6,955      $ (21,742  

Morgan Stanley

CMS Energy Corp.

    09/20/15        1.000%        14,500        (220,632     256,267        (476,899  

Deutsche Bank

Duke Energy Corp.

    03/20/14        0.700%        1,000        (1,745            (1,745  

Goldman Sachs & Co.

Enel Finance International NV

    09/20/14        1.000%        5,000        (34,809     7,099        (41,908  

Goldman Sachs & Co.

SLM Corp.

    06/20/14        5.000%        3,000        (71,402     55,019        (126,421  

JPMorgan Chase

       

 

 

   

 

 

   

 

 

   
        $ (343,375   $ 325,340      $ (668,715  
       

 

 

   

 

 

   

 

 

   

 

See Notes to Financial Statements.

 

46  


Reference
Entity/
Obligation

  Termination
Date
    Fixed
Rate
    Notional
Amount
(000)#(4)
    Implied
Credit
Spread at
December 31,
2013(3)

(Unaudited)
    Fair
Value
    Upfront
Premiums
Paid
(Received)
   

Unrealized
Appreciation
(Depreciation)

 

Counterparty

Over-the-counter credit default swaps on corporate issues—Sell Protection(2):

Astrazeneca PLC

    03/20/14        1.600%        2,000        0.056   $ 7,816      $     

$       7,816

 

Morgan Stanley

Berkshire Hathaway, Inc.

    03/20/15        1.000%        10,000        0.239     104,601        (188,736  

293,337

 

Deutsche Bank

Berkshire Hathaway, Inc.

    03/20/15        1.000%        10,000        0.239     104,601        (177,792  

282,393

 

Goldman Sachs & Co.

Berkshire Hathaway, Inc.

    03/20/17        1.000%        15,000        0.239     287,570        (359,547  

647,117

 

Credit Suisse

Wal-Mart Stores, Inc.

    12/20/14        1.000%        10,000        0.053     99,555        270,152      (170,597)  

JPMorgan Chase

         

 

 

   

 

 

   

 

 
          $ 604,143      $ (455,923  

$1,060,066

 
         

 

 

   

 

 

   

 

 

The Fund entered into credit default swaps as the protection seller on corporate issues to take an active short position with respect to the likelihood of a particular issuer’s default.

 

(1) If the Fund is a buyer of protection, it pays the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) receive from the seller of protection an amount equal to the notional amount of the swap and make delivery of the referenced obligation or underlying securities comprising the referenced index or (ii) receive a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.
(2) If the Fund is a seller of protection, it receives the fixed rate. When a credit event occurs, as defined under the terms of that particular swap agreement, the Fund will either (i) pay the buyer of protection an amount equal to the notional amount of the swap and take delivery of the referenced obligation or underlying securities comprising the referenced obligation or (ii) pay a net settlement amount in the form of cash or securities equal to the notional amount of the swap less the recovery value of the referenced obligation or underlying securities comprising the referenced index.
(3) Implied credit spreads, represented in absolute terms, utilized in determining the fair value of credit default swap agreements on corporate issues or sovereign issues of an emerging country as of period end serve as an indicator of the current status of the payment/performance risk and represent the likelihood of risk of default for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include up-front payments required to be made to enter into the agreement. Wider credit spreads represent a deterioration of the referenced entity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.
(4) Notional amount represents the maximum potential amount the Fund could be required to pay as a seller of credit protection or receive as a buyer of credit protection if a credit event occurs as defined under the terms of that particular swap agreement.
# Notional Amount is shown in U.S. dollars unless otherwise stated.

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     47   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

 

Various inputs are used in determining the value of the Fund’s investments. These inputs are summarized in the three broad levels listed below.

 

Level 1—quoted prices generally in active markets for identical securities.

 

Level 2—other significant observable inputs including, but not limited to, quoted prices for similar securities, interest rates and yield curves, prepayment speeds, foreign currency exchange rates, and amortized cost.

 

Level 3—significant unobservable inputs for securities valued in accordance with Board approved fair valuation procedures. The following is a summary of the inputs used as of December 31, 2013 in valuing such portfolio securities:

 

     Level 1      Level 2      Level 3  

Investments in Securities

        

Commercial Mortgage-Backed Securities

   $       $ 537,041,803       $   

Corporate Bonds

             8,418,158,059         73,324,299   

Foreign Agencies

             102,255,807           

Municipal Bonds

             51,564,878           

Preferred Stock

     3,597,000                   

U.S. Treasury Obligations

             12,334,025           

Affiliated Money Market Mutual Fund

     703,727,142                   

Other Financial Instruments*

        

Futures Contracts

     10,547,408                   

Credit Default Swap Agreements

             393,096         (1,745
  

 

 

    

 

 

    

 

 

 

Total

   $ 717,871,550       $ 9,121,747,668       $ 73,322,554   
  

 

 

    

 

 

    

 

 

 

 

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:

 

     Corporate
Bonds
    Credit
Default
swaps
 

Balance as of 12/31/12

   $ 39,417,161      $ (8,030

Realized gain (loss)

     (343,385     ** 

Change in unrealized appreciation (depreciation)***

     750,938        6,285   

Purchases

     41,713,182          

Sales

     (8,213,597       

Accrued discount/premium

              

Transfers into Level 3

              

Transfers out of Level 3

              
  

 

 

   

 

 

 

Balance as of 12/31/13

   $ 73,324,299      $ (1,745
  

 

 

   

 

 

 

 

See Notes to Financial Statements.

 

48  


 

*  Other financial instruments are derivative instruments not reflected in the Schedule of Investments, such as futures, forwards and swap contracts, which are recorded at the unrealized appreciation/depreciation on the instrument.
**  The realized loss incurred during the period for other financial instruments was $(7,097).
*** Of which, $415,832 was included in Net Assets relating to securities held at the reporting period end.

 

Level 3 securities as presented in the table above are being fair valued using pricing methodologies approved by the Board of Directors, which contain unobservable inputs. Such methodologies include, but not limited to, using prices provided by a single broker/dealer, the cost of the investment and prices of any recent transactions or bids/offers for such securities or any comparable securities.

 

The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as of December 31, 2013 was as follows:

 

Banking

     24.4

Affiliated Money Market Mutual Fund (including 7.2% of collateral received for securities on loan)

     7.5   

Telecommunications

     6.2   

Healthcare & Pharmaceutical

     6.1   

Commercial Mortgage-Backed Securities

     5.8   

Automotive

     4.3   

Electric

     4.3   

Foods

     4.1   

Technology

     4.0   

Insurance

     3.3   

Non-Captive Finance

     3.2   

Capital Goods

     3.1   

Energy—Other

     3.0   

Cable

     2.9   

Media & Entertainment

     2.2   

Healthcare Insurance

     2.1   

Tobacco

     1.8   

Chemicals

     1.7   

Lodging

     1.6

Metals

     1.6   

Consumer

     1.5   

Pipelines & Other

     1.5   

Retailers

     1.5   

Energy—Integrated

     1.4   

Real Estate Investment Trusts

     1.4   

Foreign Agencies

     1.1   

Aerospace & Defense

     1.0   

Airlines

     0.9   

Paper

     0.8   

Railroads

     0.7   

Municipal Bonds

     0.6   

Building Materials & Construction

     0.3   

Brokerage

     0.2   

U.S. Treasury Obligations

     0.1   
  

 

 

 
     106.2   

Liabilities in excess of other assets

     (6.2
  

 

 

 
     100.0
  

 

 

 

 

The Fund invested in derivative instruments during the reporting period. The primary types of risk associated with these derivative instruments are credit risk and interest rate risk. The effect of such derivative instruments on the Fund’s financial position and financial performance as reflected in the Statement of Assets and Liabilities and Statement of Operations is presented in the of summary below.

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     49   


 

Portfolio of Investments

 

as of December 31, 2013 continued

 

 

Fair values of derivative instruments as of December 31, 2013 as presented in the Statement of Assets and Liabilities:

 

Derivatives not designated
as hedging instruments,
carried at fair value

  

Asset Derivatives

   

Liability Derivatives

 
  

Balance Sheet
Location

   Fair
Value
   

Balance Sheet
Location

   Fair
Value
 
Credit contracts    Unrealized appreciation on swap agreements    $ 1,230,663      Unrealized depreciation on swap agreements    $ 839,312   
Credit contracts    Premiums paid for swap agreements      595,492      Premiums received for swap agreements      726,075   
Interest rate contracts    Due from broker—variation margin      12,878,766   Due from broker—variation margin      2,331,358
     

 

 

      

 

 

 

Total

      $ 14,704,921         $ 3,896,745   
     

 

 

      

 

 

 

 

* Includes cumulative appreciation/depreciation of futures contracts as reported in the schedule of open futures contracts. Only unsettled variation margin receivable (payable) is reported within the Statement of Assets and Liabilities.

 

The effects of derivative instruments on the Statement of Operations for the year ended December 31, 2013 are as follows:

 

Amount of Realized Gain or (Loss) on Derivatives Recognized in Income

 

Derivatives not designated as hedging
instruments, carried at fair value

   Futures      Swaps     Total  

Credit contracts

   $       $ 473,112      $ 473,112   

Interest rate contracts

     11,190,693         (130     11,190,563   
  

 

 

    

 

 

   

 

 

 

Total

   $ 11,190,693       $ 472,982      $ 11,663,675   
  

 

 

    

 

 

   

 

 

 

 

Change in Unrealized Appreciation or (Depreciation) on Derivatives Recognized in Income

 

Derivatives not designated as hedging
instruments, carried at fair value

   Futures      Swaps      Total  

Credit contracts

   $       $ 643,114       $ 643,114   

Interest rate contracts

     9,112,264                 9,112,264   
  

 

 

    

 

 

    

 

 

 

Total

   $ 9,112,264       $ 643,114       $ 9,755,378   
  

 

 

    

 

 

    

 

 

 

 

See Notes to Financial Statements.

 

50  


For the year ended December 31, 2013, the Fund’s average volume of derivative activities is as follows:

 

Futures Long Position
(Value at Trade Date)
    Futures Short Position
(Value at Trade Date)
 
$ 1,841,578,262      $ 877,372,219   
Credit Default
Swaps as Buyer
(Notional Amount in USD (000))
    Credit Default
Swaps as Writer
(Notional Amount in USD (000))
 
  $32,620        $47,000   

 

The Portfolio invested in financial instruments and derivatives during the reporting period that are either offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements that permit offsetting as well as instruments subject to collateral arrangements. The information about offsetting and related netting arrangements for assets and liabilities is presented in the summary below.

 

Offsetting of financial instrument and derivative assets and liabilities:

 

Description

 

Gross Amounts
Recognized

  Gross Amounts
not subject to
netting
    Gross Amounts
Offset in the
Statement of
Financial Position
    Net Amounts
Presented in the
Statement of
Financial Position
 

Assets:

       

Securities on loan

  $655,061,386   $   —              $   —              $ 655,061,386   

Exchange-traded and cleared derivatives

  895,140            —                895,140   

Over-the-counter derivatives*

  1,230,663            —                1,230,663   
       

 

 

 
          657,187,189   
       

 

 

 

Liabilities:

       

Over-the-counter derivatives*

  (839,312)            —                (839,312
       

 

 

 
 

Collateral Amounts Pledged/(Received):

  

 
 

Exchange-traded and cleared derivatives

  

      
 

Over-the-counter derivatives

  

    (218,040
 

Securities on loan

  

    (655,061,386
       

 

 

 
 

Net Amount

  

  $ 1,068,451   
       

 

 

 

 

* Over-the-counter derivatives may consist of forward foreign currency exchange contracts, options contracts and swap agreements. The amounts disclosed above represent the exposure to one or more counterparties. For further detail on individual derivative contracts and the corresponding unrealized appreciation (depreciation) by counterparty, see the Portfolio of Investments.

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     51   


 

Statement of Assets and Liabilities

 

as of December 31, 2013

 

Assets

        

Investments at value, including securities on loan of $655,061,386:

  

Unaffiliated Investments (cost $9,107,802,132)

   $ 9,198,275,871  

Affiliated Investments (cost $703,727,142)

     703,727,142  

Cash

     6,966,649  

Dividends and interest receivable

     84,012,604  

Receivable for Fund shares sold

     32,944,078  

Receivable for investments sold

     21,646,550  

Unrealized appreciation on swap agreements

     1,230,663  

Due from broker—variation margin

     895,140  

Premiums paid for swap agreements

     595,492  

Prepaid expenses

     85,464  
  

 

 

 

Total assets

     10,050,379,653  
  

 

 

 

Liabilities

        

Payable to broker for collateral for securities on loan

     671,759,100  

Payable for Fund shares reacquired

     41,332,298  

Dividends payable

     6,956,545  

Management fee payable

     3,191,638  

Distribution fee payable

     2,382,033  

Accrued expenses

     1,313,358  

Unrealized depreciation on swap agreements

     839,312  

Premiums received for swap agreements

     726,075  

Payable for investments purchased

     324,610  

Affiliated transfer agent fee payable

     73,804  

Deferred directors’ fees

     4,587  
  

 

 

 

Total liabilities

     728,903,360  
  

 

 

 

Net Assets

   $ 9,321,476,293  
  

 

 

 
          

Net assets were comprised of:

  

Common stock, at par

   $ 8,215,242  

Paid-in capital in excess of par

     9,372,518,996  
  

 

 

 
     9,380,734,238  

Undistributed net investment income

     186,053   

Accumulated net realized loss on investment transactions

     (160,858,072 )

Net unrealized appreciation on investments

     101,414,074  
  

 

 

 

Net assets, December 31, 2013

   $ 9,321,476,293  
  

 

 

 

 

See Notes to Financial Statements.

 

52  


 

Class A

        

Net asset value and redemption price per share
($2,791,686,117 ÷ 246,320,284 shares of common stock issued and outstanding)

     $11.33   

Maximum sales charge (3.25% of offering price)

     0.38   
  

 

 

 

Maximum offering price to public

     $11.71   
  

 

 

 

Class B

        

Net asset value, offering price and redemption price per share
($57,649,217 ÷ 5,086,607 shares of common stock issued and outstanding)

     $11.33   
  

 

 

 

Class C

        

Net asset value, offering price and redemption price per share
($1,970,166,559 ÷ 173,826,770 shares of common stock issued and outstanding)

     $11.33   
  

 

 

 

Class Q

        

Net asset value, offering price and redemption price per share
($80,059,198 ÷ 7,047,502 shares of common stock issued and outstanding)

     $11.36   
  

 

 

 

Class R

        

Net asset value, offering price and redemption price per share
($111,181,034 ÷ 9,809,528 shares of common stock issued and outstanding)

     $11.33   
  

 

 

 

Class Z

        

Net asset value, offering price and redemption price per share
($4,310,734,168 ÷ 379,433,511 shares of common stock issued and outstanding)

     $11.36   
  

 

 

 

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     53   


 

Statement of Operations

 

Year Ended December 31, 2013

 

Net Investment Income

        

Income

  

Interest income

   $ 252,251,589  

Affiliated income from securities loaned, net

     868,421  

Unaffiliated dividend income

     259,872  

Affiliated dividend income

     142,201  
  

 

 

 

Total income

     253,522,083  
  

 

 

 

Expenses

  

Management fee

     37,954,730  

Distribution fee—Class A

     8,153,297   

Distribution fee—Class B

     599,718  

Distribution fee—Class C

     21,232,481  

Distribution fee—Class R

     587,051   

Transfer agent’s fees and expenses (including affiliated expense of $571,000) (Note 3)

     8,115,000  

Custodian’s fees and expenses

     964,000  

Reports to shareholders

     453,000  

Registration fees

     411,000  

Directors’ fees

     197,000  

Insurance

     144,000  

Legal fees and expenses

     82,000  

Audit fee

     33,000  

Miscellaneous

     45,533  
  

 

 

 

Total expenses

     78,971,810   

Distribution fee waivers (Note 2)

     (1,554,567
  

 

 

 

Net expenses

     77,417,243   
  

 

 

 

Net investment income

     176,104,840  
  

 

 

 

Realized And Unrealized Gain (Loss) On Investment Transactions

        

Net realized gain on:

  

Investment transactions

     54,192,427  

Futures transactions

     11,190,693  

Swap agreement transactions

     472,982  
  

 

 

 
     65,856,102  
  

 

 

 

Net change in unrealized appreciation (depreciation) on:

  

Investments

     (175,188,538

Futures contracts

     9,112,264  

Swap agreements

     643,114  
  

 

 

 
     (165,433,160
  

 

 

 

Net loss on investment transactions

     (99,577,058
  

 

 

 

Net Increase In Net Assets Resulting From Operations

   $ 76,527,782  
  

 

 

 

 

See Notes to Financial Statements.

 

54  


 

Statement of Changes in Net Assets

 

     Year Ended December 31,  
     2013      2012  

Increase (Decrease) In Net Assets

                 

Operations

     

Net investment income

   $ 176,104,840      $ 173,070,203  

Net realized gain on investment transactions

     65,856,102        28,474,463   

Net change in unrealized appreciation (depreciation) on investments

     (165,433,160      171,328,109  
  

 

 

    

 

 

 

Net increase in net assets resulting from operations

     76,527,782        372,872,775   
  

 

 

    

 

 

 

Dividends from net investment income (Note 1)

     

Class A

     (78,909,212      (69,127,462

Class B

     (1,290,312      (1,326,026

Class C

     (45,668,550      (46,109,089

Class Q

     (2,231,911      (1,614,386

Class R

     (2,088,266      (876,867

Class Z

     (139,953,844      (127,587,287
  

 

 

    

 

 

 
     (270,142,095      (246,641,117
  

 

 

    

 

 

 

Fund share transactions (Net of share conversions) (Note 6)

     

Net proceeds from shares sold

     4,647,903,752        5,302,165,864  

Net asset value of shares issued in reinvestment of dividends

     182,081,852        161,000,576  

Cost of shares reacquired

     (4,766,116,399      (2,193,647,932
  

 

 

    

 

 

 

Net increase in net assets from Fund share transactions

     63,869,205        3,269,518,508  
  

 

 

    

 

 

 

Total increase (decrease)

     (129,745,108 )      3,395,750,166  

Net Assets:

                 

Beginning of year

     9,451,221,401        6,055,471,235  
  

 

 

    

 

 

 

End of year(a)

   $ 9,321,476,293      $ 9,451,221,401  
  

 

 

    

 

 

 

(a) Includes undistributed net investment income of:

   $ 186,053       $ 29,293   
  

 

 

    

 

 

 

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     55   


 

Notes to Financial Statements

 

Prudential Short-Term Corporate Bond Fund, Inc. (the “Fund”), is an open-end management investment company, registered under the Investment Company Act of 1940, as amended, (“1940 Act”). The Fund’s investment objective is high current income consistent with the preservation of principal.

 

Note 1. Accounting Policies

 

The following accounting policies conform to U.S. generally accepted accounting principles. The Fund consistently follows such policies in the preparation of its financial statements.

 

Security Valuation: The Fund holds securities and other assets that are fair valued at the close of each day the New York Stock Exchange (“NYSE”) is open for trading. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Board of Directors (the “Board”) has adopted Valuation Procedures for security valuation under which fair valuation responsibilities have been delegated to Prudential Investments LLC (“PI” or “Manager”). Under the current Valuation Procedures, the established Valuation Committee is responsible for supervising the valuation of portfolio securities and other assets. The Valuation Procedures permit the Fund to utilize independent pricing vendor services, quotations from market makers, and alternative valuation methods when market quotations are either not readily available or not deemed representative of fair value. A record of the Valuation Committee’s actions is subject to the Board’s review, approval, and ratification at its next regularly-scheduled quarterly meeting.

 

Various inputs determine how the Fund’s investments are valued, all of which are categorized according to the three broad levels (Level 1, 2, or 3) detailed in the table following the Portfolio of Investments.

 

Common stocks, exchange-traded funds, and derivative instruments that are traded on a national securities exchange are valued at the last sale price as of the close of trading on the applicable exchange. Securities traded via NASDAQ are valued at the NASDAQ official closing price. To the extent these securities are valued at the last sale price or NASDAQ official closing price, they are classified as Level 1 in the fair value hierarchy.

 

56  


In the event that no sale or official closing price on valuation date exists, these securities are generally valued at the mean between the last reported bid and asked prices, or at the last bid price in the absence of an asked price. These securities are classified as Level 2 in the fair value hierarchy, as the inputs are observable and considered to be significant to the valuation.

 

Common stocks traded on foreign securities exchanges are valued using pricing vendor services that provide model prices derived using adjustment factors based on information such as local closing price, relevant general and sector indices, currency fluctuations, depositary receipts, and futures, as applicable. Securities valued using such model prices are classified as Level 2 in the fair value hierarchy, as the adjustment factors are observable and considered to be significant to the valuation.

 

Investments in open-end, non-exchange-traded mutual funds are valued at their net asset values as of the close of the NYSE on the date of valuation. These securities are classified as Level 1 in the fair value hierarchy since they may be purchased or sold at their net asset values on the date of valuation.

 

Fixed income securities traded in the over-the-counter market are generally valued at prices provided by approved independent pricing vendors. The pricing vendors provide these prices after evaluating observable inputs including, but not limited to yield curves, yield spreads, credit ratings, deal terms, tranche level attributes, default rates, cash flows, prepayment speeds, broker/dealer quotations, and reported trades. Securities valued using such vendor prices are classified as Level 2 in the fair value hierarchy.

 

Over-the-counter derivative instruments are generally valued using pricing vendor services, which derive the valuation based on inputs such as underlying asset prices, indices, spreads, interest rates, and exchange rates. These instruments are categorized as Level 2 in the fair value hierarchy.

 

Securities and other assets that cannot be priced according to the methods described above are valued based on pricing methodologies approved by the Board. In the event that significant unobservable inputs are used when determining such valuations, the securities will be classified as Level 3 in the fair value hierarchy.

 

When determining the fair value of securities, some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessment of the general liquidity of the securities; the issuer’s financial condition and the markets in which it does business; the cost of the investment; the size of the

 

Prudential Short-Term Corporate Bond Fund, Inc.     57   


Notes to Financial Statements

 

continued

 

holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst media or other reports or information deemed reliable by the investment adviser regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from a security’s most recent closing price and from the price used by other mutual funds to calculate their net asset values.

 

Restricted and Illiquid Securities: Subject to guidelines adopted by the Board, the Fund may invest up to 15% of its net assets in illiquid securities, including those which are restricted as to disposition under securities law (“restricted securities”). Restricted securities are valued pursuant to the valuation procedures noted above. Illiquid securities are those that, because of the absence of a readily available market or due to legal or contractual restrictions on resale, cannot be sold within seven days in the ordinary course of business at approximately the amount at which the Fund has valued the investment. Therefore, the Fund may find it difficult to sell illiquid securities at the time considered most advantageous by its Subadviser and may incur expenses that would not be incurred in the sale of securities that were freely marketable. Certain securities that would otherwise be considered illiquid because of legal restrictions on resale to the general public may be traded among qualified institutional buyers under Rule 144A of the Securities Act of 1933. These Rule 144A securities, as well as commercial paper that is sold in private placements under Section 4(2) of the Securities Act, may be deemed liquid by the Fund’s Subadviser under the guidelines adopted by the Fund. However, the liquidity of the Fund’s investments in Rule 144A securities could be impaired if trading does not develop or declines.

 

Financial Futures Contracts: A financial futures contract is an agreement to purchase (long) or sell (short) an agreed amount of securities at a set price for delivery on a future date. Upon entering into a financial futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount. This amount is known as the “initial margin.” Subsequent payments, known as “variation margin,” are made or received by the Fund each day, depending on the daily fluctuations in the value of the underlying security. Such variation margin is recorded for financial statement purposes on a daily basis as unrealized gain (loss). When the contract expires or is closed, the gain (loss) is realized and is presented in the Statement of Operations as net realized gain (loss) on financial futures contracts. Financial futures contracts involve elements of risk in excess of the amounts reflected on the Statement of Assets and Liabilities.

 

58  


The Fund invested in financial futures contracts in order to gain market exposure to certain sectors and for yield curve and duration management. Should interest rates move unexpectedly, the Fund may not achieve the anticipated benefits of the financial futures contracts and may realize a loss. The use of futures transactions involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates and the underlying hedged assets. With exchange-traded futures contracts, there is minimal counterparty credit risk to the Fund since the exchanges’ clearinghouse acts as counterparty to all exchange traded futures and guarantees the futures contracts against default.

 

Swap Agreements: The Fund may enter into credit default, interest rate, total return and other forms of swap agreements. A swap agreement is an agreement to exchange the return generated by one instrument for the return generated by another instrument. Swap agreements are negotiated in the over-the-counter market and may be executed either directly with the counterparty (“OTC Traded”) or through a central clearing facility, such as a registered commodities exchange (“Exchange Traded”). Swap agreements are valued daily at current market value and any change in value is included in the net unrealized appreciation or depreciation on investments.

 

Payments received or paid by the Fund are recorded as realized gains or losses upon termination or maturity of the swap. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities. Swap agreements outstanding at reporting date, if any, are listed on the Portfolio of Investments.

 

Credit Default Swaps: Credit default swaps involve one party (the protection buyer) making a stream of payments to another party (the protection seller) in exchange for the right to receive a specified payment in the event of a default or as a result of a default (collectively a “credit event”) for the referenced entity, typically corporate issues or sovereign issues of an emerging country, on its obligation; or in the event of a write-down, principal shortfall, interest shortfall or default of all or part of the referenced entities comprising a credit index.

 

The Fund is subject to credit risk in the normal course of pursuing its investment objectives. The Fund entered into credit default swaps to provide a measure of protection against defaults of the issuers. The Fund sold protection using credit default swaps to take an active short position with respect to the likelihood of a particular issuer’s default. The Fund’s maximum risk of loss from counterparty credit risk for purchased credit default swaps is the inability of the counterparty to honor the contract up to the notional value based on a credit event.

 

Prudential Short-Term Corporate Bond Fund, Inc.     59   


 

Notes to Financial Statements

 

continued

 

 

As a seller of protection on credit default swap agreements, the Fund generally receives an agreed upon payment from the buyer of protection throughout the term of the swap, provided no credit event occurs. As the seller, the Portfolio effectively increases its investment risk because, in addition to its total net assets, the Portfolio may be subject to investment exposure on the notional amount of the swap.

 

The maximum amount of the payment that the Fund, as a seller of protection, could be required to make under a credit default swap agreement would be equal to the notional amount of the underlying security or index contract as a result of a credit event. This potential amount will be partially offset by any recovery values of the respective referenced obligations, or net amounts received from the settlement of buy protection credit default swap agreements which the Fund entered for the same referenced entity or index. As a buyer of protection, the Fund generally receives an amount up to the notional value of the swap if a credit event occurs.

 

Implied credit spreads, represented in absolute terms, utilized in determining the market value of credit default swap agreements on corporate or sovereign issues of an emerging country as of period end are disclosed in the footnotes to the Portfolio of Investments, if applicable. These spreads serve as indicators of the current status of the payment/performance risk and represent the likelihood of default risk for the credit derivative. The implied credit spread of a particular referenced entity reflects the cost of buying/selling protection and may include upfront payments required to enter into the agreement. For credit default swap agreements on asset-backed securities and credit indices, the quoted market prices and resulting values serve as indicators of the current status of the payment/performance risk. Wider credit spreads and increased market value in absolute terms, when compared to the notional amount of the swap, represent a deterioration of the referenced entity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement.

 

Master Netting Arrangements: The Fund is subject to various Master Agreements, or netting arrangements, with select counterparties. A master netting arrangement between the Fund and the counterparty permits the Fund to offset amounts payable by the Fund to the same counterparty against amounts to be received; and by the receipt of collateral from the counterparty by the Fund to cover the Fund’s exposure to the counterparty. However, there is no assurance that such mitigating factors are easily enforceable. The right to set-off exists when all the conditions are met such that each of the parties owes the other determinable amounts, the reporting party has the

 

60  


right to set-off the amount owed with the amount owed by the other party, the reporting party intends to set-off and the right of set-off is enforceable by law. During the reporting period, there were no instances where the right of set-off existed and management has not elected to offset.

 

The Fund is a party to ISDA (International Swaps and Derivatives Association, Inc.) Master Agreements (Master Agreements) with certain counterparties that govern over-the-counter derivative and foreign exchange contracts entered into from time to time. The Master Agreements may contain provisions regarding, among other things, the parties’ general obligations, representations, agreements, collateral requirements, events of default and early termination. With respect to certain counterparties, in accordance with the terms of the Master Agreements, collateral posted to the Fund is held in a segregated account by the Fund’s custodian and with respect to those amounts which can be sold or re-pledged, is presented in the Portfolio of Investments. Collateral pledged by the Fund is segregated by the Fund’s custodian and identified in the Portfolio of Investments. Collateral can be in the form of cash or debt securities issued by the U.S. Government or related agencies or other securities as agreed to by the Fund and the applicable counterparty. Collateral requirements are determined based on the Fund’s net position with each counterparty. Termination events applicable to the Fund may occur upon a decline in the Fund’s net assets below a specified threshold over a certain period of time. Termination events applicable to counterparties may occur upon a decline in the counterparty’s long-term and short-term credit ratings below a specified level. In each case, upon occurrence, the other party may elect to terminate early and cause settlement of all derivative and foreign exchange contracts outstanding, including the payment of any losses and costs resulting from such early termination, as reasonably determined by the terminating party. Any decision by one or more of the Fund’s counterparties to elect early termination could impact the Fund’s future derivative activity.

 

In addition to each instrument’s primary underlying risk exposure (e.g. interest rate, credit, equity or foreign exchange, etc.), swap agreements involve, to varying degrees, elements of credit, market and documentation risk. Such risks involve the possibility that no liquid market for these agreements will exist, the counterparty to the agreement may default on its obligation to perform or disagree on the contractual terms of the agreement, and changes in net interest rates will be unfavorable. In connection with these agreements, securities in the portfolio may be identified or received as collateral from the counterparty in accordance with the terms of the respective swap agreements to provide or receive assets of value and to serve as recourse in the event of default or bankruptcy/insolvency of either party. Such over-the-counter derivative agreements include conditions which, when materialized, give the counterparty the right to cause an early termination of the transactions under

 

Prudential Short-Term Corporate Bond Fund, Inc.     61   


 

Notes to Financial Statements

 

continued

 

those agreements. Any election by the counterparty for early termination of the contract(s) may impact the amounts reported on financial statements.

 

As of December 31, 2013, the Fund has not met conditions under such agreements which give the counterparty the right to call for an early termination.

 

Forward currency contracts, written options, short sales, swaps and financial futures contracts involve elements of both market and credit risk in excess of the amounts reflected on the Statement of Assets and Liabilities. Such risks may be mitigated by engaging in master netting arrangements.

 

Securities Lending: The Fund may lend its portfolio securities to banks and broker-dealers. The loans are secured by collateral at least equal to the market value of the securities loaned. Collateral pledged by each borrower is invested in a highly liquid short-term money market fund and is marked to market daily, based on the previous day’s market value, such that the value of the collateral exceeds the value of the loaned securities. Loans are subject to termination at the option of the borrower or the Fund. Upon termination of the loan, the borrower will return to the Fund securities identical to the loaned securities. Should the borrower of the securities fail financially, the Fund has the right to repurchase the securities in the open market using the collateral. The Fund recognizes income, net of any rebate and securities lending agent fees, for lending its securities, and any interest on the investment of cash received as collateral. The Fund also continues to receive interest and dividends or amounts equivalent thereto, on the securities loaned and recognizes any unrealized gain or loss in the market price of the securities loaned that may occur during the term of the loan.

 

Securities Transactions and Net Investment Income: Securities transactions are recorded on the trade date. Realized gains or losses from investment and currency transactions are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income, including amortization of premium and accretion of discount on debt securities, as required, is recorded on the accrual basis. Expenses are recorded on an accrual basis, which may require the use of certain estimates by management, that may differ from actual.

 

Net investment income or loss (other than distribution fees, which are charged directly to the respective class and transfer agency fees specific to Class Q shares which are charged to that share class) and unrealized and realized gains or losses are allocated daily to each class of shares based upon the relative proportion of adjusted net assets of each class at the beginning of the day.

 

62  


Dividends and Distributions: The Fund expects to pay dividends from net investment income monthly and distributions from net realized capital gains, if any, annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-dividend date. Permanent book/tax differences relating to income and gains are reclassified amongst undistributed net investment income, accumulated net realized gain or loss and paid-in capital in excess of par, as appropriate.

 

Taxes: It is the Fund’s policy to continue to meet the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required.

 

Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts and disclosures in the financial statements. Actual results could differ from those estimates.

 

Note 2. Agreements

 

The Fund has a management agreement with PI. Pursuant to this agreement, PI has responsibility for all investment advisory services and supervises the subadviser’s performance of such services. PI has entered into a subadvisory agreement with Prudential Investment Management, Inc. (“PIM”). The subadvisory agreement provides that PIM will furnish investment advisory services in connection with the management of the Fund. In connection therewith, PIM is obligated to keep certain books and records of the Fund. PI pays for the services of PIM, the cost of compensation of officers of the Fund, occupancy and certain clerical and bookkeeping costs of the Fund. The Fund bears all other cost and expenses.

 

The management fee paid to PI is computed daily and payable monthly, at an annual rate of .40% of the average daily net assets of the Fund.

 

The Fund has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), which acts as the distributor of its Class A, Class B, Class C, Class Q, Class R, and Class Z shares. The Fund compensates PIMS for distributing and servicing the Fund’s Class A, Class B, Class C, and Class R shares pursuant to plans of distribution (the “Class A, B, C, and R Plans”), regardless of expenses actually incurred. The distribution fees are accrued daily and payable monthly. No distribution or service fees are paid to PIMS as distributor of the Class Q or Class Z shares of the Fund.

 

Prudential Short-Term Corporate Bond Fund, Inc.     63   


 

Notes to Financial Statements

 

continued

 

 

Pursuant to the Class A, B, C, and R Plans, the Fund compensates PIMS for distribution-related activities at an annual rate of up to .30%, 1%, 1%, and .75% of the average daily net assets of the Class A, B, C, and R shares, respectively. For the year ended December 31, 2013, PIMS contractually agreed to limit such fees to .25% and .50% of the average daily net assets of the Class A and Class R shares, respectively.

 

PIMS has advised the Fund that it received $2,468,751 in front-end sales charges resulting from sales of Class A shares during the year ended December 31, 2013. From these fees, PIMS paid such sales charges to affiliated broker-dealers, which in turn paid commissions to salespersons and incurred other distribution costs.

 

PIMS has advised the Fund that for the year ended December 31, 2013, it received $176,168, $108,134 and $588,014 in contingent deferred sales charges imposed upon redemptions by certain Class A, Class B and Class C shareholders, respectively.

 

PI, PIM and PIMS are indirect, wholly-owned subsidiaries of Prudential Financial, Inc. (“Prudential”).

 

Note 3. Other Transactions with Affiliates

 

Prudential Mutual Fund Services LLC (“PMFS”), an affiliate of PI and an indirect wholly-owned subsidiary of Prudential, serves as the Fund’s transfer agent. Transfer agent’s fees and expenses in the Statement of Operations include certain out-of-pocket expenses paid to non-affiliates, where applicable.

 

PIM is the Fund’s securities lending agent. For the year ended December 31, 2013, PIM has been compensated $259,222 for these services.

 

The Fund invests in the Prudential Core Taxable Money Market Fund (the “Core Fund”), a portfolio of the Prudential Investment Portfolios 2, registered under the 1940 Act and managed by PI. Earnings from the Core Fund are disclosed on the Statement of Operations as affiliated dividend income.

 

Note 4. Portfolio Securities

 

Purchases and sales of portfolio securities, other than short-term investments and U.S. Government securities, for the year ended December 31, 2013, were $3,426,237,770 and $3,177,968,090 respectively.

 

64  


Note 5. Distributions and Tax Information

 

Distributions to shareholders, which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-dividend date. In order to present undistributed net investment income, accumulated net realized loss on investment transactions and paid-in capital in excess of par on the Statement of Assets and Liabilities that more closely represent their tax character, certain adjustments have been made to undistributed net investment income, accumulated net realized loss on investment transactions and paid-in capital in excess of par. For the year ended December 31, 2013, the adjustments were to increase undistributed net investment income by $94,194,015, increase accumulated net realized loss on investment transactions by $88,863,385 and decrease paid-in capital in excess of par by $5,330,630 due to differences in the treatment for book and tax purposes of accreting market discount and amortization of premiums, certain transactions involving swaps, paydown gains/losses, write off of capital loss carryforward due to expiration and other book to tax adjustments. Net investment income, net realized gain on investment transactions and net assets were not affected by this change.

 

For the years ended December 31, 2013 and December 31, 2012, the tax character of dividends paid by the Fund were $270,142,095 and $246,641,117 of ordinary income, respectively.

 

As of December 31, 2013, the accumulated undistributed earnings on a tax basis was $194,031. This differs from the amount shown on the Statement of Assets and Liabilities primarily due to cumulative timing differences between financial and tax reporting.

 

The United States federal income tax basis of the Fund’s investments and the net unrealized depreciation as of December 31, 2013 were as follows:

 

Tax Basis

 

Appreciation

 

Depreciation

 

Net
Unrealized
Depreciation

 

Other Cost
Basis
Adjustments

 

Total Net
Unrealized
Depreciation

$9,939,202,517   $111,186,595   $(148,386,099)   $(37,199,504)   $389,537   $(36,809,967)

 

The difference between book basis and tax basis is primarily attributable to the deferred losses on wash sales and differences in the treatment of accreting market discount and premium amortization for book and tax purposes. Other cost basis adjustments are primarily attributable to unrealized appreciation on swaps.

 

 

Prudential Short-Term Corporate Bond Fund, Inc.     65   


 

Notes to Financial Statements

 

continued

 

Under the Regulated Investment Company Modernization Act of 2010 (the “Act”), the Fund is permitted to carryforward net capital losses realized on or after January 1, 2011 (“post-enactment losses”) for an unlimited period. Post-enactment losses are required to be utilized before the utilization of losses incurred prior to the effective date of the Act. As a result of this ordering rule, capital loss carryforwards related to taxable years ending before December 31, 2011 (“pre-enactment losses”) may have an increased likelihood to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law. The Fund utilized approximately $12,302,000 of its capital loss carryforward to offset net taxable gains realized in the fiscal year ended December 31, 2013. Additionally, approximately $5,329,000 of its capital loss carryforward was written off unused due to expiration. No capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such losses. As of December 31, 2013, the pre and post-enactment losses were approximately:

 

Post-Enactment Losses:

   $ 5,378,000   
  

 

 

 

Pre-Enactment Losses:

  

Expiring 2014

   $ 7,851,000   

Expiring 2015

     1,945,000   

Expiring 2018

     1,604,000   
  

 

 

 
   $ 11,400,000   
  

 

 

 

 

The Fund elected to treat post-October capital losses of approximately $5,860,000 as having been incurred in the following fiscal year (December 31, 2014).

 

Management has analyzed the Fund’s tax positions taken on federal income tax returns for all open tax years and has concluded that no provision for income tax is required in the Fund’s financial statements for the current reporting period. The Fund’s federal and state income and federal excise tax returns for tax years for which the applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.

 

Note 6. Capital

 

The Fund offers Class A, Class B, Class C, Class Q, Class R, and Class Z shares. Class A shares are sold with a front-end sales charge of up to 3.25%. All investors who purchased Class A shares in an amount of $1 million or more and sell these

 

66  


shares within 18 months of purchase are subject to a contingent deferred sales charge (“CDSC”) of .50%. The Class A CDSC is waived for purchases by certain retirement or benefit plans. Class B shares are sold with a CDSC of 3% which decreases by 1% annually to 1% in the third and fourth years and 0% in the fifth year. Class B shares automatically convert to Class A shares on a quarterly basis, approximately five years after purchase. Class C shares are sold with a CDSC of 1% on sales of shares made within 12 months of purchase. A special exchange privilege is also available for shareholders who qualify to purchase Class A shares at net asset value. Class R shares are available to certain retirement plans, clearing and settlement firms. Class Q, Class R and Class Z shares are not subject to any sales or redemption charge and are offered exclusively for sale to a limited group of investors.

 

Under certain circumstances, an exchange may be made from specified share classes of the Fund to one or more other share classes of the Fund as presented in the table of transactions in shares of common stock.

 

There are 2 billion shares of common stock authorized at $.01 par value per share, divided into six classes, designated Class A, Class B, Class C, Class Q, Class R, and Class Z common stock. Class A shares consists of 475 million authorized shares, Class B consists of 25 million authorized shares, Class C consists of 400 million authorized shares, Class Q and Class R shares each consist of 100 million authorized shares, and Class Z shares consist of 900 million authorized shares.

 

Transactions in shares of common stock were as follows:

 

Class A

     Shares      Amount  

Year ended December 31, 2013:

       

Shares sold

       113,014,502      $ 1,292,292,112  

Shares issued in reinvestment of dividends

       5,843,266        66,677,465  

Shares reacquired

       (95,935,658      (1,095,916,335
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       22,922,110        263,053,242  

Shares issued upon conversion from Class B, Class C and Class Z

       1,266,059        14,463,620   

Shares reacquired upon conversion into Class Z

       (2,455,416      (28,055,115
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       21,732,753      $ 249,461,747  
    

 

 

    

 

 

 

Year ended December 31, 2012:

       

Shares sold

       121,449,092      $ 1,399,663,304  

Shares issued in reinvestment of dividends

       5,017,932        57,863,096  

Shares reacquired

       (55,133,828      (635,188,582
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       71,333,196        822,337,818  

Shares issued upon conversion from Class B and Class Z

       1,655,965        19,097,397  

Shares reacquired upon conversion into Class Z

       (3,987,290      (45,924,296
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       69,001,871      $ 795,510,919  
    

 

 

    

 

 

 

 

Prudential Short-Term Corporate Bond Fund, Inc.     67   


 

Notes to Financial Statements

 

continued

 

Class B

     Shares      Amount  

Year ended December 31, 2013:

       

Shares sold

       1,338,904      $ 15,320,046  

Shares issued in reinvestment of dividends

       104,829        1,196,585  

Shares reacquired

       (1,293,807      (14,767,743
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       149,926        1,748,888  

Shares reacquired upon conversion into Class A

       (184,257      (2,100,454
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       (34,331    $ (351,566
    

 

 

    

 

 

 

Year ended December 31, 2012:

       

Shares sold

       1,819,804      $ 20,959,092  

Shares issued in reinvestment of dividends

       105,022        1,210,895  

Shares reacquired

       (790,670      (9,099,668
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       1,134,156        13,070,319  

Shares reacquired upon conversion into Class A

       (215,652      (2,485,387
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       918,504      $ 10,584,932  
    

 

 

    

 

 

 

Class C

               

Year ended December 31, 2013:

       

Shares sold

       44,642,519      $ 511,518,153  

Shares issued in reinvestment of dividends

       2,972,382        33,933,732  

Shares reacquired

       (56,092,602      (639,717,512
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       (8,477,701      (94,265,627

Shares reacquired upon conversion into Class A and Class Z

       (2,407,452      (27,462,307
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       (10,885,153    $ (121,727,934
    

 

 

    

 

 

 

Year ended December 31, 2012:

       

Shares sold

       74,335,452      $ 856,352,012  

Shares issued in reinvestment of dividends

       2,879,478        33,202,331  

Shares reacquired

       (29,042,522      (334,496,868
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       48,172,408        555,057,475  

Shares reacquired upon conversion into Class Z

       (863,133      (9,975,928
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       47,309,275      $ 545,081,547  
    

 

 

    

 

 

 

 

68  


Class Q

     Shares      Amount  

Year ended December 31, 2013:

       

Shares sold

       2,228,320      $ 25,467,491  

Shares issued in reinvestment of dividends

       195,105        2,230,857  

Shares reacquired

       (313,226      (3,579,271
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       2,110,199      $ 24,119,077  
    

 

 

    

 

 

 

Period ended December 31, 2012*:

       

Shares sold

       660,057      $ 7,640,115  

Shares issued in reinvestment of dividends

       139,625        1,614,386  

Shares reacquired

       (442,979      (5,115,846
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       356,703        4,138,655  

Shares issued upon conversion from Class Z

       4,580,600         52,905,927   
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       4,937,303      $ 57,044,582  
    

 

 

    

 

 

 

Class R

               

Year ended December 31, 2013:

       

Shares sold

       7,258,556      $ 82,890,363  

Shares issued in reinvestment of dividends

       168,943        1,925,253  

Shares reacquired

       (1,657,654      (18,922,458
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       5,769,845      $ 65,893,158  
    

 

 

    

 

 

 

Year ended December 31, 2012:

       

Shares sold

       2,787,496      $ 32,187,717  

Shares issued in reinvestment of dividends

       63,423        731,605  

Shares reacquired

       (789,788      (9,105,066
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       2,061,131      $ 23,814,256  
    

 

 

    

 

 

 

Class Z

               

Year ended December 31, 2013:

       

Shares sold

       237,289,264      $ 2,720,415,587  

Shares issued in reinvestment of dividends

       6,652,386        76,117,960  

Shares reacquired

       (261,349,202      (2,993,213,080
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       (17,407,552      (196,679,533

Shares issued upon conversion from Class A and Class C

       4,800,881        54,939,361   

Shares reacquired upon conversion into Class A

       (1,028,759      (11,785,105
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       (13,635,430    $ (153,525,277
    

 

 

    

 

 

 

Year ended December 31, 2012:

       

Shares sold

       258,564,277      $ 2,985,363,624  

Shares issued in reinvestment of dividends

       5,742,225        66,378,263  

Shares reacquired

       (103,978,289      (1,200,641,902
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding before conversion

       160,328,213        1,851,099,985  

Shares issued upon conversion from Class A and Class C

       4,838,597        55,900,224  

Shares reacquired upon conversion into Class A and Class Q

       (6,015,505      (69,517,937
    

 

 

    

 

 

 

Net increase (decrease) in shares outstanding

       159,151,305      $ 1,837,482,272  
    

 

 

    

 

 

 

 

* Commencement of offering on March 2, 2012.

 

Prudential Short-Term Corporate Bond Fund, Inc.     69   


 

Notes to Financial Statements

 

continued

 

 

Note 7. Borrowings

 

The Fund, along with other affiliated registered investment companies (the “Funds”), is a party to a Syndicated Credit Agreement (“SCA”) with a group of banks. The purpose of the SCA is to provide an alternative source of temporary funding for capital share redemptions. The SCA provides for a commitment of $900 million for the period November 5, 2013 through November 4, 2014. The Funds pay an annualized commitment fee of 0.08% on the unused portion of the SCA. Prior to November 5, 2013, the Funds had another SCA with substantially similar terms. Interest on any borrowings under the SCA is paid at contracted market rates. The commitment fee for the unused amount is accrued daily and paid quarterly.

 

The Fund did not utilize the SCA during the year ended December 31, 2013.

 

70  


 

Financial Highlights

 

Class A Shares        
      Year Ended December 31,   
      2013     2012     2011     2010     2009  
Per Share Operating Performance(a):                                        
Net Asset Value, Beginning Of Year     $11.56        $11.35        $11.47        $11.40        $10.47   
Income (loss) from investment operations:                                        
Net investment income     .22        .26        .32        .35        .40   
Net realized and unrealized gain (loss) on investment transactions     (.12     .33        (.01     .19        .99   
Total from investment operations     .10        .59        .31        .54        1.39   
Less Dividends:                                        
Dividends from net investment income     (.33     (.38     (.43     (.47     (.46
Capital Contributions(f):     -        -        -        - (b)      -   
Net asset value, end of year     $ 11.33        $11.56        $11.35        $11.47        $11.40   
Total Return(c):     .89%        5.23%        2.77%        4.78%        13.53%   
Ratios/Supplemental Data:                              
Net assets, end of year (000)     $2,791,686        $2,596,682        $1,765,432        $1,601,862        $1,132,207   
Average net assets (000)     $2,717,633        $2,125,935        $1,685,849        $1,459,695        $ 641,058   
Ratios to average net assets(d):                                        

Expenses after waivers(e)

    .76%        .78%        .77%        .77%        .81%   
Expenses before waivers     .81%        .83%        .82%        .82%        .86%   
Net investment income     1.91%        2.30%        2.77%        3.02%        3.58%   
Portfolio turnover rate     65%        78%        77%        82%        196%   

 

(a) Calculated based on average shares outstanding during the year.

(b) Less than $.005 per share.

(c) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(d) Does not include expenses of the underlying portfolio in which the Fund invests.

(e) The distributor of the Fund has contractually agreed to limit its distribution and service (12b-1) fees to .25% of the average daily net assets of the Class A shares.

(f) The Fund received payments related to a former affiliate’s and to an unaffiliated-third party’s settlement of regulatory proceedings involving allegations of improper trading in Fund shares during the fiscal year ended December 31, 2010. The Fund was not involved in the proceedings or in the calculation of the amount of settlement.

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     71   


 

Financial Highlights

 

continued

 

Class B Shares  
      Year Ended December 31,  
      2013     2012     2011     2010     2009  
Per Share Operating Performance(a):                                        
Net Asset Value, Beginning Of Year     $11.56        $11.35        $11 .47        $11.40        $10.47   
Income (loss) from investment operations:                                        
Net investment income     .13        .18        .23        .26        .31   
Net realized and unrealized gain (loss) on investment transactions     (.11     .32        - (b)      .19        1.00   
Total from investment operations     .02        .50        .23        .45        1.31   
Less Dividends:                                        
Dividends from net investment income     (.25     (.29     (.35     (.38     (.38
Capital Contributions(e):     -        -        -        - (b)      -   
Net asset value, end of year     $11.33        $11.56        $11 .35        $11.47        $11.40   
Total Return(c):     .14%        4.44%        2.01%        4.01%        12.64%   
Ratios/Supplemental Data:  
Net assets, end of year (000)     $57,649       $59,209       $47,686       $38,478       $20,847  
Average net assets (000)     $59,969       $52,940       $43,517       $29,898       $14,980  
Ratios to average net assets(d):                                        
Expenses     1.51%        1 .53%        1.52%        1.52%        1.56%   
Net investment income     1.16%        1 .56%        2.01%        2.26%        2.83%   
Portfolio turnover rate     65%        78%        77%        82%        196%   

 

(a) Calculated based on average shares outstanding during the year.

(b) Less than $.005 per share.

(c) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(d) Does not include expenses of the underlying portfolio in which the Fund invests.

(e) The Fund received payments related to a former affiliate’s and to an unaffiliated-third party’s settlement of regulatory proceedings involving allegations of improper trading in Fund shares during the fiscal year ended December 31, 2010. The Fund was not involved in the proceedings or in the calculation of the amount of settlement.

 

See Notes to Financial Statements.

 

72  


 

Class C Shares  
      Year Ended December 31,  
      2013     2012     2011     2010     2009  
Per Share Operating Performance(a):                                        
Net Asset Value, Beginning Of Year     $11.56        $11.35        $11.48        $11.40        $10.47   
Income (loss) from investment operations:                                        
Net investment income     .13        .18        .23        .27        .34   
Net realized and unrealized gain (loss) on investment transactions     (.11     .32        (.01     .20        1.01   
Total from investment operations     .02        .50        .22        .47        1.35   
Less Dividends:                                        
Dividends from net investment income     (.25     (.29     (.35     (.39     (.42
Capital Contributions(f):     -        -        -        - (b)      -   
Net asset value, end of year     $11.33        $11.56        $11.35        $11.48        $11.40   
Total Return(c):     .14%        4.45%        1.92%        4.19%        13.05%   
Ratios/Supplemental Data:  
Net assets, end of year (000)     $1,970,167       $2,135,745       $1,559,205       $1,345,828       $789,883  
Average net assets (000)     $2,123,254       $1,842,751       $1,401,509       $1,133,925       $341,332  
Ratios to average net assets(d):                                        
Expenses(e)     1.51%        1.53%        1.52%        1.45%        1.31%   
Net investment income     1.16%        1.55%        2.01%        2.33%        3.08%   
Portfolio turnover rate     65%        78%        77%        82%        196%   

 

(a) Calculated based on average shares outstanding during the year.
(b) Less than $.005 per share.

(c) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(d) Does not include expenses of the underlying portfolio in which the Fund invests.

(e) The distributor of the Fund contractually agreed to limit its distribution and service (12b-1) fees to .75% of the average daily net assets of the Class C shares through April 30, 2010.

(f) The Fund received payments related to a former affiliate’s and to an unaffiliated-third party’s settlement of regulatory proceedings involving allegations of improper trading in Fund shares during the fiscal year ended December 31, 2010. The Fund was not involved in the proceedings or in the calculation of the amount of settlement.

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     73   


 

Financial Highlights

 

continued

 

Class Q Shares  
      Year Ended
December 31,
2013
          March 2,
2012(a)
through
December 31,
2012
 
Per Share Operating Performance(b):                    
Net Asset Value, Beginning Of Period     $11.59            $11.55   
Income (loss) from investment operations:                    
Net investment income     .26            .23   
Net realized and unrealized gain (loss) on investment transactions     (.12         .15   
Total from investment operations     .14            .38   
Less Dividends:                    
Dividends from net investment income     (.37         (.34
Net asset value, end of period     $11.36            $11.59   
Total Return(c):     1.24%            3.34%   
Ratios/Supplemental Data:                
Net assets, end of period (000)     $80,059           $57,217  
Average net assets (000)     $68,760           $54,722  
Ratios to average net assets(d):                    
Expenses     .42%            .43% (e) 
Net investment income     2.25%            2.43% (e) 
Portfolio turnover rate     65%            78% (f) 

 

(a) Commencement of offering.

(b) Calculated based on average shares outstanding during the period.

(c) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each period reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles. Total returns for periods of less than one full year are not annualized.

(d) Does not include expenses of the underlying portfolio in which the Fund invests.

(e) Annualized.

(f) Not annualized.

 

See Notes to Financial Statements.

 

74  


 

Class R Shares  
      Year Ended December 31,  
      2013     2012     2011     2010     2009  
Per Share Operating Performance(a):                                        
Net Asset Value, Beginning Of Year     $11.56        $11.35        $11.47        $11.40        $10.47   
Income (loss) from investment operations:                                        
Net investment income     .19        .23        .29        .32        .36   
Net realized and unrealized gain (loss) on investment transactions     (.12     .33        (.01     .19        1.01   
Total from investment operations     .07        .56        .28        .51        1.37   
Less Dividends:                                        
Dividends from net investment income     (.30     (.35     (.40     (.44     (.44
Capital Contributions(f):     -        -        -        - (b)      -   
Net asset value, end of year     $11.33        $11.56        $11.35        $11.47        $11.40   
Total Return(c):     .65%        4.96%        2.51%        4.52%        13.25%   
Ratios/Supplemental Data:  
Net assets, end of year (000)     $111,181       $46,706       $22,451       $16,009       $6,982  
Average net assets (000)     $78,272       $29,321       $20,172       $11,902       $2,614  
Ratios to average net assets(d):                                        

Expenses after waivers(e)

    1.01%        1.03%        1.02%        1.02%        1.06%   
Expenses before waivers     1.26%        1.28%        1.27%        1.27%        1.31%   
Net investment income     1.67%        2.04%        2.50%        2.76%        3.34%   
Portfolio turnover rate     65%        78%        77%        82%        196%   

 

(a) Calculated based on average shares outstanding during the year.

(b) Less than $.005 per share.

(c) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(d) Does not include expenses of the underlying portfolio in which the Fund invests.

(e) The distributor of the Fund has contractually agreed to limit its distribution and service (12b-1) fees to .50% of the average daily net assets of the Class R shares.

(f) The Fund received payments related to a former affiliate’s and to an unaffiliated-third party’s settlement of regulatory proceedings involving allegations of improper trading in Fund shares during the fiscal year ended December 31, 2010. The Fund was not involved in the proceedings or in the calculation of the amount of settlement.

 

See Notes to Financial Statements.

 

Prudential Short-Term Corporate Bond Fund, Inc.     75   


 

Financial Highlights

 

continued

 

Class Z Shares  
      Year Ended December 31,  
      2013     2012     2011     2010     2009  
Per Share Operating Performance(a):                                        
Net Asset Value, Beginning Of Year     $11.59        $11.37        $11.50        $11.42        $10.50   
Income (loss) from investment operations:                                        
Net investment income     .25        .29        .34        .38        .43   
Net realized and unrealized gain (loss) on investment transactions     (.12     .34        (.01     .20        .98   
Total from investment operations     .13        .63        .33        .58        1.41   
Less Dividends:                                        
Dividends from net investment income     (.36     (.41     (.46     (.50     (.49
Capital Contributions(e):     -        -        -        - (b)      -   
Net asset value, end of year     $11.36        $11.59        $11.37        $11.50        $11.42   
Total Return(c):     1.15%        5.58%        2.95%        5.14%        13.69%   
Ratios/Supplemental Data:  
Net assets, end of year (000)     $4,310,734       $4,555,662       $2,660,697       $1,205,119       $673,025  
Average net assets (000)     $4,440,951       $3,647,207       $1,692,922       $979,716       $325,438  
Ratios to average net assets(d):                                        
Expenses     .51%        .53%        .52%        .52%        .56%   
Net investment income     2.16%        2.55%        2.97%        3.26%        3.83%   
Portfolio turnover rate     65%        78%        77%        82%        196%   

 

(a) Calculated based on average shares outstanding during the year.

(b) Less than $.005 per share.

(c) Total return is calculated assuming a purchase of a share on the first day and a sale on the last day of each year reported, and includes reinvestment of dividends and distributions. Total returns may reflect adjustments to conform to generally accepted accounting principles.

(d) Does not include expenses of the underlying portfolio in which the Fund invests.

(e) The Fund received payments related to a former affiliate’s and to an unaffiliated-third party’s settlement of regulatory proceedings involving allegations of improper trading in Fund shares during the fiscal year ended December 31, 2010. The Fund was not involved in the proceedings or in the calculation of the amount of settlement.

 

See Notes to Financial Statements.

 

76  


Report of Independent Registered Public

Accounting Firm

 

The Board of Directors and Shareholders

Prudential Short-Term Corporate Bond Fund, Inc.:

 

We have audited the accompanying statement of assets and liabilities of Prudential Short-Term Corporate Bond Fund, Inc. (hereafter referred to as the “Fund”), including the portfolio of investments, as of December 31, 2013, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2013, by correspondence with the custodian, transfer agent and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Fund as of December 31, 2013, and the results of its operations, the changes in its net assets and the financial highlights for the periods described in the first paragraph above, in conformity with U.S. generally accepted accounting principles.

 

LOGO

 

New York, New York

February 19, 2014

 

Prudential Short-Term Corporate Bond Fund, Inc.     77   


Federal Income Tax Information

 

(Unaudited)

 

For the year ended December 31, 2013, the Fund reports the maximum amount allowable but not less than 84.28% as interest related dividends in accordance with Sections 871(k)(1) and 881(e)(1) of the Internal Revenue Code.

 

Interest-related dividends do not include any distributions paid by a fund with respect to Fund tax years beginning after December 31, 2013. Consequently, this provision expires with respect to such distributions paid after the Fund’s fiscal year end.

 

78  


INFORMATION ABOUT BOARD MEMBERS AND OFFICERS

(Unaudited)

Information about Board Members and Officers of the Fund is set forth below. Board Members who are not deemed to be “interested persons” of the Fund, as defined in the 1940 Act, are referred to as “Independent Board Members.” Board Members who are deemed to be “interested persons” of the Fund are referred to as “Interested Board Members.” The Board Members are responsible for the overall supervision of the operations of the Fund and perform the various duties imposed on the directors of investment companies by the 1940 Act. The Board in turn elects the Officers, who are responsible for administering the day-to-day operations of the Fund.

 

Independent Board Members (1)

Name, Address, Age

Position(s)

Portfolios Overseen

 

Principal Occupation(s) During Past Five

Years

  Other Directorships Held

Ellen S. Alberding (55)

Board Member

Portfolios Overseen: 67

  President and Board Member, The Joyce Foundation (charitable foundation) (since 2002); Vice Chair, City Colleges of Chicago (community college system) (since 2011); Trustee, Skills for America’s Future (national initiative to connect employers to community colleges) (since 2011); Trustee, National Park Foundation (charitable foundation for national park system) (since 2009); Trustee, Economic Club of Chicago (since 2009).   None.

Kevin J. Bannon (61)

Board Member

Portfolios Overseen: 67

  Managing Director (since April 2008) and Chief Investment Officer (since October 2008) of Highmount Capital LLC (registered investment adviser); formerly Executive Vice President and Chief Investment Officer (April 1993-August 2007) of Bank of New York Company; President (May 2003-May 2007) of BNY Hamilton Family of Mutual Funds.   Director of Urstadt Biddle Properties (since September 2008).

Linda W. Bynoe (61)

Board Member

Portfolios Overseen: 67

  President and Chief Executive Officer (since March 1995) and formerly Chief Operating Officer (December 1989-February 1995) of Telemat Ltd. (management consulting); formerly Vice President (January 1985-June 1989) at Morgan Stanley & Co (broker-dealer).   Director of Simon Property Group, Inc. (retail real estate) (May 2003-May 2012); Director of Anixter International, Inc. (communication products distributor) (since January 2006); Director of Northern Trust Corporation (financial services) (since April 2006); Trustee of Equity Residential (residential real estate) (since December 2009).

 

Prudential Short-Term Corporate Bond Fund, Inc.


Independent Board Members (1)

Name, Address, Age

Position(s)

Portfolios Overseen

 

Principal Occupation(s) During Past Five

Years

  Other Directorships Held

Keith F. Hartstein (57)

Board Member

Portfolios Overseen: 67

  Formerly President and Chief Executive Officer (2005-2012), Senior Vice President (2004-2005), Senior Vice President of Sales and Marketing (1997-2004), and various executive management positions (1990-1997), John Hancock Funds, LLC (asset management); Chairman, Investment Company Institute’s Sales Force Marketing Committee (2003-2008).   None.

Michael S. Hyland, CFA

(68)

Board Member

Portfolios Overseen: 67

  Independent Consultant (since February 2005); formerly Senior Managing Director (July 2001-February 2005) of Bear Stearns & Co, Inc.; Global Partner, INVESCO (1999-2001); Managing Director and President of Salomon Brothers Asset Management (1989-1999).   None.

Douglas H. McCorkindale

(74)

Board Member

Portfolios Overseen: 67

  Formerly Chairman (February 2001-June 2006), Chief Executive Officer (June 2000-July 2005), President (September 1997-July 2005) and Vice Chairman (March 1984-May 2000) of Gannett Co. Inc. (publishing and media).   Director of Lockheed Martin Corp. (aerospace and defense) (since
May 2001).

Stephen P. Munn (71)

Board Member

Portfolios Overseen: 67

  Lead Director (since 2007) and formerly Chairman (1993-2007) of Carlisle Companies Incorporated (manufacturer of industrial products).   Lead Director (since 2007) of Carlisle Companies Incorporated (manufacturer of industrial products).

James E. Quinn (62)

Board Member

Portfolios Overseen: 67

  Formerly President (2003-2012) and Director (2003-2008), and Vice Chairman and Director (1998-2003), Tiffany & Company (jewelry retailing); Director, Mutual of America Capital Management Corporation (asset management) (since 1996); Director, Hofstra University (since 2008); Vice Chairman, Museum of the City of New York (since 1984).  

Director of Deckers Outdoor Corporation

(footwear manufacturer) (since 2011).

Richard A. Redeker (70)

Board Member &

Independent Chair

Portfolios Overseen: 67

  Retired Mutual Fund Senior Executive (44 years); Management Consultant; Independent Directors Council (organization of 2,800 Independent Mutual Fund Directors)-Executive Committee, Chair of Policy Steering Committee, Governing Council.   None.

 

Visit our website at www.prudentialfunds.com


Independent Board Members (1)

Name, Address, Age

Position(s)

Portfolios Overseen

 

Principal Occupation(s) During Past Five

Years

  Other Directorships Held

Robin B. Smith (74)

Board Member

Portfolios Overseen: 67

  Chairman of the Board (since January 2003) of Publishers Clearing House (direct marketing); Member of the Board of Directors of ADLPartner (marketing) (since December 2010); formerly Chairman and Chief Executive Officer (August 1996-January 2003) of Publishers Clearing House.   Formerly Director of BellSouth Corporation (telecommunications) (1992-2006).

Stephen G. Stoneburn (70)

Board Member

Portfolios Overseen: 67

  Chairman, (since July 2011), President and Chief Executive Officer (since June 1996) of Quadrant Media Corp. (publishing company); formerly President (June 1995-June 1996) of Argus Integrated Media, Inc.; Senior Vice President and Managing Director (January 1993-1995) of Cowles Business Media; Senior Vice President of Fairchild Publications, Inc. (1975-1989).   None.

 

Interested Board Members (1)

       

Name, Address, Age

Position(s)

Portfolios Overseen

 

Principal Occupation(s) During Past Five

Years

  Other Directorships Held

Stuart S. Parker (51)

Board Member & President

Portfolios Overseen: 67

  President of Prudential Investments LLC (since January 2012); Executive Vice President of Prudential Investment Management Services LLC (since December 2012); Executive Vice President of Jennison Associates LLC and Head of Retail Distribution of Prudential Investments LLC (June 2005 - December 2011).   None.

Scott E. Benjamin (40)

Board Member & Vice

President

Portfolios Overseen: 67

  Executive Vice President (since June 2009) of Prudential Investments LLC; Executive Vice President (June 2009-June 2012) and Vice President (since June 2012) of Prudential Investment Management Services LLC; Executive Vice President (since September 2009) of AST Investment Services, Inc.; Senior Vice President of Product Development and Marketing, Prudential Investments (since February 2006); Vice President of Product Development and Product Management, Prudential Investments (2003-2006).   None.

 

(1)  

The year that each Board Member joined the Fund’s Board is as follows:

Ellen S. Alberding, 2013; Kevin J. Bannon, 2008; Linda W. Bynoe, 2005; Keith F. Hartstein, 2013; Michael S. Hyland, 2008; Douglas H. McCorkindale, 2003; Stephen P. Munn, 2008; James E. Quinn, 2013; Richard A. Redeker, 1993; Robin B. Smith, 2003; Stephen G. Stoneburn, 2003; Stuart S. Parker, Board Member and President since 2012; Scott E. Benjamin, Board Member since 2010 and Vice President since 2009.

 

Prudential Short-Term Corporate Bond Fund, Inc.


Fund Officers (a)

       

Name, Address and Age

Position with Fund

  Principal Occupation(s) During Past Five Years  

Length of

Service as

Fund Officer

Raymond A. O’Hara (58)

Chief Legal Officer

  Vice President and Corporate Counsel (since July 2010) of Prudential Insurance Company of America (Prudential); Vice President (March 2011-Present) of Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey; Vice President and Corporate Counsel (March 2011-Present) of Prudential Annuities Life Assurance Corporation; Chief Legal Officer of Prudential Investments LLC (since June 2012); Chief Legal Officer of Prudential Mutual Fund Services LLC (since June 2012) and Corporate Counsel of AST Investment Services, Inc. (since June 2012); formerly Assistant Vice President and Corporate Counsel (September 2008-July 2010) of The Hartford Financial Services Group, Inc.; formerly Associate (September 1980-December 1987) and Partner (January 1988–August 2008) of Blazzard & Hasenauer, P.C. (formerly, Blazzard, Grodd & Hasenauer, P.C.).   Since 2012

Deborah A. Docs (56)

Secretary

  Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President (since December 1996) and Assistant Secretary (since March 1999) of Prudential Investments LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.   Since 2004

Jonathan D. Shain (55)

Assistant Secretary

  Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2001) of Prudential Investments LLC; Vice President and Assistant Secretary (since February 2001) of Prudential Mutual Fund Services LLC; formerly Vice President and Assistant Secretary (May 2003-June 2005) of AST Investment Services, Inc.   Since 2005

Claudia DiGiacomo (39)

Assistant Secretary

  Vice President and Corporate Counsel (since January 2005) of Prudential; Vice President and Assistant Secretary of Prudential Investments LLC (since December 2005); Associate at Sidley Austin Brown & Wood LLP (1999-2004).   Since 2005

Andrew R. French (51)

Assistant Secretary

  Vice President and Corporate Counsel (since February 2010) of Prudential; formerly Director and Corporate Counsel (2006-2010) of Prudential; Vice President and Assistant Secretary (since January 2007) of Prudential Investments LLC; Vice President and Assistant Secretary (since January 2007) of Prudential Mutual Fund Services LLC.   Since 2006

 

Visit our website at www.prudentialfunds.com


Fund Officers (a)

       

Name, Address and Age

Position with Fund

 

Principal Occupation(s) During Past Five

Years

 

Length of

Service as

Fund Officer

Amanda S. Ryan (36)

Assistant Secretary

  Director and Corporate Counsel (since March 2012) of Prudential; Director and Assistant Secretary (since June 2012) of Prudential Investments LLC; Associate at Ropes & Gray LLP (2008-2012).   Since 2012

Bruce Karpati (44)

Chief Compliance Officer

  Chief Compliance Officer of the Prudential Investments Funds, Target Funds, Advanced Series Trust, the Prudential Series Fund and Prudential’s Gibraltar Fund, Inc. (May 2013 - Present); formerly National Chief (May 2012 - May 2013) and Co-Chief (January 2010 - May 2012) of the Asset Management Unit, Division of Enforcement, of the U.S. Securities and Exchange Commission; Assistant Regional Director (January 2005 - January 2010) of the U.S. Securities and Exchange Commission.   Since 2013

Theresa C. Thompson (51)

Deputy Chief Compliance Officer

  Vice President, Compliance, Prudential Investments LLC (since April 2004); and Director, Compliance, Prudential Investments LLC (2001-2004).   Since 2008

Richard W. Kinville (45)

Anti-Money Laundering

Compliance Officer

  Vice President, Corporate Compliance, Anti-Money Laundering Unit (since January 2005) of Prudential; committee member of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (since January 2007); formerly Investigator and Supervisor in the Special Investigations Unit for the New York Central Mutual Fire Insurance Company (August 1994-January 1999); Investigator in AXA Financial’s Internal Audit Department and Manager in AXA’s Anti-Money Laundering Office (January 1999-January 2005); first chair of the American Council of Life Insurers Anti-Money Laundering and Critical Infrastructure Committee (June 2007-December 2009).   Since 2011

Grace C. Torres (54)

Treasurer and Principal Financial and Accounting Officer

  Assistant Treasurer (since March 1999) and Senior Vice President (since September 1999) of Prudential Investments LLC; Assistant Treasurer (since May 2003) and Vice President (since June 2005) of AST Investment Services, Inc.; Senior Vice President and Assistant Treasurer (since May 2003) of Prudential Annuities Advisory Services, Inc.; formerly Senior Vice President (May 2003-June 2005) of AST Investment Services, Inc.   Since 1998

M. Sadiq Peshimam (50)

Assistant Treasurer

  Vice President (since 2005) of Prudential Investments LLC.   Since 2006

Peter Parrella (55)

Assistant Treasurer

  Vice President (since 2007) and Director (2004-2007) within Prudential Mutual Fund Administration; formerly Tax Manager at SSB Citi Fund Management LLC (1997-2004).   Since 2007

 

(a)  

Excludes Mr. Parker and Mr. Benjamin, interested Board Members who also serve as President and Vice President, respectively.

 

Prudential Short-Term Corporate Bond Fund, Inc.


Explanatory Notes to Tables:

 

 

Board Members are deemed to be “Interested,” as defined in the 1940 Act, by reason of their affiliation with Prudential Investments LLC and/or an affiliate of Prudential Investments LLC.

 

 

Unless otherwise noted, the address of all Board Members and Officers is c/o Prudential Investments LLC, Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102-4077.

 

 

There is no set term of office for Board Members or Officers. The Board Members have adopted a retirement policy, which calls for the retirement of Board Members on December 31 of the year in which they reach the age of 75.

 

 

“Other Directorships Held” includes only directorships of companies required to register or file reports with the SEC under the 1934 Act (that is, “public companies”) or other investment companies registered under the 1940 Act.

 

 

“Portfolios Overseen” includes all investment companies managed by Prudential Investments LLC. The investment companies for which Prudential Investments LLC serves as manager include the Prudential Investments Mutual Funds, The Prudential Variable Contract Accounts, Target Mutual Funds, Prudential Short Duration High Yield Fund, Inc., Prudential Global Short Duration High Yield Fund, Inc., The Prudential Series Fund, Prudential’s Gibraltar Fund, Inc. and the Advanced Series Trust.

 

Visit our website at www.prudentialfunds.com


n     MAIL   n     TELEPHONE   n     WEBSITE

Gateway Center Three

100 Mulberry Street

Newark, NJ 07102

  (800) 225-1852
  www.prudentialfunds.com

 

PROXY VOTING
The Board of Directors of the Fund has delegated to the Fund’s investment subadviser the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. A description of these proxy voting policies and procedures is available without charge, upon request, by calling (800) 225-1852 or by visiting the Securities and Exchange Commission’s website at www.sec.gov. Information regarding how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available on the Fund’s website and on the Commission’s website.

 

DIRECTORS
Ellen S. Alberding Kevin J. Bannon Scott E. Benjamin Linda W. Bynoe Keith F. Hartstein  Michael S. Hyland Douglas H. McCorkindale Stephen P. Munn Stuart S. Parker James E. Quinn Richard A. Redeker Robin B. Smith Stephen G. Stoneburn

 

OFFICERS
Stuart S. Parker, President Scott E. Benjamin, Vice President Grace C. Torres, Treasurer and Principal Financial and Accounting Officer Raymond A. O’Hara, Chief Legal Officer Deborah A. Docs, Secretary Bruce Karpati, Chief Compliance Officer Theresa C. Thompson, Deputy Chief Compliance Officer Richard W. Kinville, Anti-Money Laundering Compliance Officer Jonathan D. Shain, Assistant Secretary Claudia DiGiacomo, Assistant Secretary Amanda S. Ryan, Assistant Secretary Andrew R. French, Assistant Secretary M. Sadiq Peshimam, Assistant Treasurer Peter Parrella, Assistant Treasurer

 

MANAGER   Prudential Investments LLC    Gateway Center Three

100 Mulberry Street

Newark, NJ 07102

 

INVESTMENT SUBADVISER   Prudential Investment
Management, Inc.
   Gateway Center Two

100 Mulberry Street

Newark, NJ 07102

 

DISTRIBUTOR   Prudential Investment
Management Services LLC
   Gateway Center Three

100 Mulberry Street

Newark, NJ 07102

 

CUSTODIAN   The Bank of New York Mellon    One Wall Street

New York, NY 10286

 

TRANSFER AGENT   Prudential Mutual Fund
Services LLC
   PO Box 9658

Providence, RI 02940

 

INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
  KPMG LLP    345 Park Avenue

New York, NY 10154

 

FUND COUNSEL   Willkie Farr & Gallagher LLP    787 Seventh Avenue

New York, NY 10019


An investor should consider the investment objectives, risks, charges, and expenses of the Fund carefully before investing. The prospectus and summary prospectus contain this and other information about the Fund. An investor may obtain a prospectus and summary prospectus by visiting our website at www.prudentialfunds.com or by calling (800) 225-1852. The prospectus and summary prospectus should be read carefully before investing.

 

E-DELIVERY
To receive your mutual fund documents online, go to www.prudentialfunds.com/edelivery and enroll. Instead of receiving printed documents by mail, you will receive notification via email when new materials are available. You can cancel your enrollment or change your email address at any time by visiting the website address above.

 

SHAREHOLDER COMMUNICATIONS WITH DIRECTORS
Shareholders can communicate directly with the Board of Directors by writing to the Chair of the Board, Prudential Short-Term Corporate Bond Fund, Inc., Prudential Investments, Attn: Board of Directors, 100 Mulberry Street, Gateway Center Three, Newark, NJ 07102. Shareholders can communicate directly with an individual Director by writing to the same address. Communications are not screened before being delivered to the addressee.

 

AVAILABILITY OF PORTFOLIO SCHEDULE
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s website at www.sec.gov . The Fund’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation and location of the Public Reference Room may be obtained by calling 1-800-SEC-0330. The Fund’s schedule of portfolio holdings is also available on the Fund’s website as of the end of each month.

 

The Fund’s Statement of Additional Information contains additional information about the Fund’s Directors and is available without charge, upon request, by calling (800) 225-1852.

 

Mutual Funds:

ARE NOT INSURED BY THE FDIC OR ANY
FEDERAL GOVERNMENT AGENCY
  MAY LOSE VALUE   ARE NOT A DEPOSIT OF OR GUARANTEED
BY ANY BANK OR ANY BANK AFFILIATE


LOGO

 

 

PRUDENTIAL SHORT-TERM CORPORATE BOND FUND, INC.

 

SHARE CLASS   A   B   C   Q   R   Z
NASDAQ   PBSMX   PSMBX   PIFCX   PSTQX   JDTRX   PIFZX
CUSIP   74441R102   74441R201   74441R300   74441R607   74441R409   74441R508

 

MF140E    0257592-00001-00


Item 2 – Code of Ethics — See Exhibit (a)

As of the end of the period covered by this report, the registrant has adopted a code of ethics (the “Section 406 Standards for Investment Companies – Ethical Standards for Principal Executive and Financial Officers”) that applies to the registrant’s Principal Executive Officer and Principal Financial Officer; the registrant’s Principal Financial Officer also serves as the Principal Accounting Officer.

The registrant hereby undertakes to provide any person, without charge, upon request, a copy of the code of ethics. To request a copy of the code of ethics, contact the registrant 800-225-1852, and ask for a copy of the Section 406 Standards for Investment Companies - Ethical Standards for Principal Executive and Financial Officers.

Item 3 – Audit Committee Financial Expert –

The registrant’s Board has determined that Mr. Stephen P. Munn, member of the Board’s Audit Committee is an “audit committee financial expert,” and that he is “independent,” for purposes of this Item.

Item 4 – Principal Accountant Fees and Services –

(a) Audit Fees

For the fiscal years ended December 31, 2013 and December 31, 2012, KPMG LLP (“KPMG”), the Registrant’s principal accountant, billed the Registrant $32,500 and $32,500, respectively, for professional services rendered for the audit of the Registrant’s annual financial statements or services that are normally provided in connection with statutory and regulatory filings.

(b) Audit-Related Fees

None.

(c) Tax Fees

None.

(d) All Other Fees

None.

(e) (1)  Audit Committee Pre-Approval Policies and Procedures


THE PRUDENTIAL MUTUAL FUNDS

AUDIT COMMITTEE POLICY

on

Pre-Approval of Services Provided by the Independent Accountants

The Audit Committee of each Prudential Mutual Fund is charged with the responsibility to monitor the independence of the Fund’s independent accountants. As part of this responsibility, the Audit Committee must pre-approve any independent accounting firm’s engagement to render audit and/or permissible non-audit services, as required by law. In evaluating a proposed engagement of the independent accountants, the Audit Committee will assess the effect that the engagement might reasonably be expected to have on the accountant’s independence. The Committee’s evaluation will be based on:

 

   

a review of the nature of the professional services expected to be provided,

 

   

a review of the safeguards put into place by the accounting firm to safeguard independence, and

 

   

periodic meetings with the accounting firm.

Policy for Audit and Non-Audit Services Provided to the Funds

On an annual basis, the scope of audits for each Fund, audit fees and expenses, and audit-related and non-audit services (and fees proposed in respect thereof) proposed to be performed by the Fund’s independent accountants will be presented by the Treasurer and the independent accountants to the Audit Committee for review and, as appropriate, approval prior to the initiation of such services. Such presentation shall be accompanied by confirmation by both the Treasurer and the independent accountants that the proposed services will not adversely affect the independence of the independent accountants. Proposed services shall be described in sufficient detail to enable the Audit Committee to assess the appropriateness of such services and fees, and the compatibility of the provision of such services with the auditor’s independence. The Committee shall receive periodic reports on the progress of the audit and other services which are approved by the Committee or by the Committee Chair pursuant to authority delegated in this Policy.

The categories of services enumerated under “Audit Services”, “Audit-related Services”, and “Tax Services” are intended to provide guidance to the Treasurer and the independent accountants as to those categories of services which the Committee believes are generally consistent with the independence of the independent accountants and which the Committee (or the Committee Chair) would expect upon the presentation of specific proposals to pre-approve. The enumerated categories are not intended as an exclusive list of audit, audit-related or tax services, which the Committee (or the Committee Chair) would consider for pre-approval.

Audit Services

The following categories of audit services are considered to be consistent with the role of the Fund’s independent accountants:

 

   

Annual Fund financial statement audits


   

Seed audits (related to new product filings, as required)

 

   

SEC and regulatory filings and consents

Audit-related Services

The following categories of audit-related services are considered to be consistent with the role of the Fund’s independent accountants:

 

   

Accounting consultations

 

   

Fund merger support services

 

   

Agreed Upon Procedure Reports

 

   

Attestation Reports

 

   

Other Internal Control Reports

Individual audit-related services that fall within one of these categories and are not presented to the Audit Committee as part of the annual pre-approval process will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $50,000.

Tax Services

The following categories of tax services are considered to be consistent with the role of the Fund’s independent accountants:

 

   

Tax compliance services related to the filing or amendment of the following:

 

   

Federal, state and local income tax compliance; and,

 

   

Sales and use tax compliance

 

   

Timely RIC qualification reviews

 

   

Tax distribution analysis and planning

 

   

Tax authority examination services

 

   

Tax appeals support services

 

   

Accounting methods studies

 

   

Fund merger support services

 

   

Tax consulting services and related projects

Individual tax services that fall within one of these categories and are not presented to the Audit Committee as part of the annual pre-approval process will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $50,000.

Other Non-audit Services

Certain non-audit services that the independent accountants are legally permitted to render will be subject to pre-approval by the Committee or by one or more Committee members to whom the Committee has delegated this authority and who will report to the full Committee any pre-approval decisions made pursuant to this Policy. Non-audit services presented for pre-approval pursuant to this paragraph will be accompanied by a confirmation from both the Treasurer and the independent accountants that the proposed services will not adversely affect the independence of the independent accountants.


Proscribed Services

The Fund’s independent accountants will not render services in the following categories of non-audit services:

 

   

Bookkeeping or other services related to the accounting records or financial statements of the Fund

 

   

Financial information systems design and implementation

 

   

Appraisal or valuation services, fairness opinions, or contribution-in-kind reports

 

   

Actuarial services

 

   

Internal audit outsourcing services

 

   

Management functions or human resources

 

   

Broker or dealer, investment adviser, or investment banking services

 

   

Legal services and expert services unrelated to the audit

 

   

Any other service that the Public Company Accounting Oversight Board determines, by regulation, is impermissible.

Pre-approval of Non-Audit Services Provided to Other Entities Within the Prudential Fund Complex

Certain non-audit services provided to Prudential Investments LLC or any of its affiliates that also provide ongoing services to the Prudential Mutual Funds will be subject to pre-approval by the Audit Committee. The only non-audit services provided to these entities that will require pre-approval are those related directly to the operations and financial reporting of the Funds . Individual projects that are not presented to the Audit Committee as part of the annual pre-approval process will be subject to pre-approval by the Committee Chair (or any other Committee member on whom this responsibility has been delegated) so long as the estimated fee for those services does not exceed $50,000. Services presented for pre-approval pursuant to this paragraph will be accompanied by a confirmation from both the Treasurer and the independent accountants that the proposed services will not adversely affect the independence of the independent accountants.

Although the Audit Committee will not pre-approve all services provided to Prudential Investments LLC and its affiliates, the Committee will receive an annual report from the Fund’s independent accounting firm showing the aggregate fees for all services provided to Prudential Investments and its affiliates.

 

(e) (2)  Percentage of services referred to in 4(b) – 4(d) that were approved by the audit committee

Not applicable.

(f) Percentage of hours expended attributable to work performed by other than full time employees of principal accountant if greater than 50%.


The percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees was 0%.

(g) Non-Audit Fees

Not applicable to Registrant for the fiscal years 2013 and 2012. The aggregate non-audit fees billed by KPMG for services rendered to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant for the fiscal years 2013 and 2012 was $0 and $0, respectively.

(h) Principal Accountant’s Independence

Not applicable as KPMG has not provided non-audit services to the registrant’s investment adviser and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X.

Item 5 – Audit Committee of Listed Registrants – Not applicable.

Item 6 – Schedule of Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form.

Item 7 – Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not applicable.

Item 8 – Portfolio Managers of Closed-End Management Investment Companies – Not applicable.

Item 9  – Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – Not

applicable.

Item 10 – Submission of Matters to a Vote of Security Holders – Not applicable.

Item 11 – Controls and Procedures

 

  (a) It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

 

  (b) There has been no significant change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter of the period covered by this report that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting.


Item 12 – Exhibits

 

  (a) (1) Code of Ethics – Attached hereto as Exhibit EX-99.CODE-ETH

(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.CERT.

(3) Any written solicitation to purchase securities under Rule 23c-1. – Not applicable.

 

  (b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.906CERT.


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.

Registrant:         Prudential Short-Term Corporate Bond Fund, Inc.

By:  

/s/ Deborah A. Docs

  Deborah A. Docs
  Secretary
Date:   February 19, 2014

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:  

/s/ Stuart S. Parker

  Stuart S. Parker
 

President and Principal

Executive Officer

Date:   February 19, 2014
By:  

/s/ Grace C. Torres

  Grace C. Torres
 

Treasurer and Principal

Financial Officer

Date:   February 19, 2014
Grafico Azioni Rainmaker Systems (CE) (USOTC:VCTL)
Storico
Da Mag 2024 a Giu 2024 Clicca qui per i Grafici di Rainmaker Systems (CE)
Grafico Azioni Rainmaker Systems (CE) (USOTC:VCTL)
Storico
Da Giu 2023 a Giu 2024 Clicca qui per i Grafici di Rainmaker Systems (CE)