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 No. 811-8777
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CREDIT SUISSE HIGH YIELD BOND FUND.
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(Exact Name of Registrant as Specified in Charter)
466 Lexington Avenue, New York, New York 10017-3140
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(Address of Principal Executive Offices) (Zip Code)
J. Kevin Gao, Esq.
Credit Suisse High Yield Bond Fund
466 Lexington Avenue
New York, New York 10017-3140
Registrant's telephone number, including area code: (212) 875-3500
Date of fiscal year end: October 31
Date of reporting period: November 1, 2003 to October 31, 2004
ITEM 1. REPORTS TO STOCKHOLDERS.
CREDIT SUISSE
HIGH YIELD BOND FUND
ANNUAL REPORT
OCTOBER 31, 2004
CREDIT SUISSE HIGH YIELD BOND FUND (the "Fund")
Dear Shareholder:
PERFORMANCE SUMMARY
11/01/03--10/31/04
FUND & BENCHMARKS PERFORMANCE
Fund NAV (as of 10/31/04) $ 4.53
Total Return (based on NAV) 18.98%
Total Return (based on
market value) 25.49%
Citigroup High-Yield
Market Index (CHYMI) 12.28%
MARKET OVERVIEW: POSITIVE HIGH YIELD ENVIRONMENT
In our view, a quickening economic recovery, robust corporate earnings growth
and low nominal interest rates supported a positive environment for high yield
in the Fund's fiscal year. While inflation stayed in check, solid economic
growth and several unexpectedly strong job reports earlier in the year stoked
fears of potentially aggressive tightening by the Fed. But nominal short term
rates remained at a 45-year low of 1.00% for much for the year, rising only
toward summer and into the fall to close the fiscal year period at 1.75%.
In this environment, corporate managements took advantage of strong cashflow and
low interest rates to repair their balance sheets: They earmarked 70% of the new
high yield issuance (which was on a par with 2003's levels) for the replacement
of high-interest debt. Moody's Investor Services' 12-month global trailing
default rate declined from approximately 6.0% at the end of October 2003 to
2.4%, its lowest level since the late 1990s, to close the fiscal year. The end
result was a significant tightening of high yield spreads relative to Treasuries
across the credit quality spectrum.
STRATEGIC REVIEW: SELECTIVE SECTOR POSITIONING
The Fund outperformed its CHYMI benchmark primarily due to its relative
positioning in outperforming industry sectors. The Fund's highest relative
weightings versus the CHYMI benchmark (in chemicals, gaming and cable) accounted
for the largest relative contribution versus the benchmark. Within those
industries, security selection often overcame weaker overall sector performance.
For example, exposure in the portfolio to the gaming industry consisted mainly
of regionally based casinos that operate outside of Las Vegas and Atlantic City.
These smaller operations, which are not as dependent on income from travel and
lodging, experienced superior performance relative to the larger casinos over
the past three years.
We also increased our weighting to chemicals anticipating that profitability
might go up in line with the economic cycle. This strategy worked well for us,
as company earnings rose and commodity prices (which can directly affect
chemical companies' pricing flexibility) surged. Finally, cable television is
one of our longstanding above-market allocations, based not only on our view of
its growth potential, but also its stable cash flows. We owned securities of two
of the biggest high yield cable issuers, each of which generated strong returns.
We appreciate your interest in the Fund and would be pleased to respond to your
questions or comments. Any questions regarding net asset value, performance,
dividends, portfolio management or allocations should be directed to Credit
Suisse Asset Management, LLC at (800) 293-1232. All other inquiries regarding
account information, requests for the latest financial information or other
reports should be directed to the Fund's Shareholder Servicing Agent at (800)
730-6001.
Sincerely yours,
/s/ Richard J. Lindquist
Richard J. Lindquist
President and Chief Investment Officer*
/s/ Michael E Kenneally
Michael E Kenneally
Chief Executive Officer**
HIGH YIELD BONDS ARE LOWER-QUALITY BONDS THAT ARE ALSO KNOWN AS "JUNK
BONDS." SUCH BONDS ENTAIL GREATER RISKS THAN THOSE FOUND IN HIGHER-RATED
SECURITIES.
IN ADDITION TO HISTORICAL INFORMATION, THIS REPORT CONTAINS FORWARD-LOOKING
STATEMENTS, WHICH MAY CONCERN, AMONG OTHER THINGS, DOMESTIC AND FOREIGN MARKET,
INDUSTRY AND ECONOMIC TRENDS AND DEVELOPMENTS AND GOVERNMENT REGULATION AND
THEIR POTENTIAL IMPACT ON THE FUND'S INVESTMENT PORTFOLIO. THESE STATEMENTS ARE
SUBJECT TO RISKS AND UNCERTAINTIES AND ACTUAL TRENDS, DEVELOPMENTS AND
REGULATIONS IN THE FUTURE AND THEIR IMPACT ON THE FUND COULD BE MATERIALLY
DIFFERENT FROM THOSE PROJECTED, ANTICIPATED OR IMPLIED. THE FUND HAS NO
OBLIGATION TO UPDATE OR REVISE FORWARD-LOOKING STATEMENTS.
FROM CREDIT SUISSE ASSET MANAGEMENT, LLC ("CSAM"):
We wish to remind shareholders whose shares are registered in their own name
that they automatically participate in the Fund's dividend reinvestment program
known as the InvestlinkSM Program (the "Program"). The Program can be of value
to shareholders in maintaining their proportional ownership interest in the Fund
in an easy and convenient way. A shareholder whose shares are held in the name
of a broker/dealer or nominee should contact the Fund's Transfer Agent for
details about participating in the Program.
* Richard J. Lindquist, who is a Managing Director of CSAM, is primarily
responsible for management of the Fund's assets. He has served in such
capacity since December 8, 2000. Mr. Lindquist joined CSAM on May 1, 1995
as a result of CSAM's acquisition of CS First Boston Investment Management
Corporation ("CSFBIM"). Prior to joining CSAM and beginning in July, 1989,
he held various offices at CSFBIM. Mr. Lindquist also is President and
Chief Investment Officer of Credit Suisse Asset Management Income Fund,
Inc. (NYSE: CIK).
** Michael E. Kenneally is the Chairman and Global Chief Executive Officer of
CSAM. He has served in these capacities since April 2003. Previously, he
was the Chairman and Chief Investment Officer of Banc of America Capital
Management from 1998 to March 2003. Mr. Kenneally is also Director and/or
Chairman of other investment companies advised by CSAM.
CREDIT SUISSE HIGH YIELD BOND FUND (UNAUDITED)
TOP TEN HOLDINGS
(AS A % OF NET ASSETS AS OF 10/31/2004)
SECURITY DESCRIPTION
1. Huntsman International Holdings LLC 2.09%
0.000% 12/31/09
2. Allied Waste North America, Inc. 1.26%
7.375% 04/15/14
3. Charter Communications Holdings LLC 1.21%
9.920% 04/01/11
4. El Paso Production Holding Company 1.20%
7.750% 06/01/13
5. Chukchansi Economic Development
Authority 1.19%
14.500% 06/15/09
6. Liberty Group Operating, Inc. 1.12%
9.375% 02/01/08
7. BGF Industries, Inc. 1.09%
10.250% 01/15/09
8. Adelphia Communications Corp. 1.08%
10.875% 10/01/10
9. Charter Communications Holdings LLC 1.01%
8.625% 04/01/09
10. Mediacomm LLC Capital Corp. 1.01%
9.500% 01/15/13
CREDIT QUALITY BREAKDOWN
(AS A % OF TOTAL INVESTMENTS AS OF 10/31/2004)
BBB/Baa 0.4%
BB/Ba 10.7
B/B 52.9
CCC/Caa 28.8
CC/Ca 1.1
D 0.2
NR 5.3
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Subtotal 99.4
Equities and Other 0.6
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Total 100.0%
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1
CREDIT SUISSE HIGH YIELD BOND FUND--SCHEDULE OF INVESTMENTS
OCTOBER 31, 2004
PRINCIPAL
AMOUNT VALUE
--------------- ---------------
U.S. CORPORATE BONDS--131.5%
AEROSPACE--0.8%
BE Aerospace, Inc., Series B,
Senior Subordinated Notes
(Callable 03/01/05 @ $100.00)
8.000%, 03/01/08 ~ $ 1,000,000 $ 1,015,000
Sequa Corp., Series B,
Senior Notes
8.875%, 04/01/08 850,000 932,875
---------------
1,947,875
---------------
AIRLINES--0.3%
American Airlines, Inc., Series 01-2,
Pass Thru Certificates
7.800%, 10/01/06 1,000,000 836,974
---------------
AUTOMOBILE MANUFACTURING/VEHICLE PARTS--3.2%
Autocam Corp., Rule 144A,
Senior Subordinated Notes
(Callable 06/15/09 @ $105.44)
10.875%, 06/15/14 ++ 1,000,000 980,000
Collins & Aikman Products Corp.,
Global Company
Guaranteed Notes
(Callable 12/31/06 @ $105.38)
10.750%, 12/31/11 1,250,000 1,253,125
Collins & Aikman Products Corp.,
Rule 144A, Senior
Subordinated Notes
12.875%, 08/15/12 ++ ~ 1,825,000 1,587,750
Dura Operating Corp, Series D,
Company Guaranteed Notes
(Callable 05/01/05 @ $103.00)
9.000%, 05/01/09 1,000,000 962,500
Key Plastics Holdings, Inc.,
Series B, Company
Guaranteed Notes
(Callable 03/15/05 @ $100.00)
10.250%, 03/15/07 ** ^ 250,000 25,000
Metaldyne Corp., Global
Company Guaranteed Notes
(Callable 06/15/07 @ $105.50)
11.000%, 06/15/12 ~ 1,200,000 1,014,000
Motor Coach Industries
International, Inc.,
Company Guaranteed Notes
(Callable 05/01/05 @ $103.75)
11.250%, 05/01/09 150,000 83,250
Stanadyne Corp., Rule 144A,
Senior Subordinated
Notes (Callable 08/15/09 @
$105.00) 10.000%, 08/15/14 ++ 900,000 949,500
Tenneco Automotive, Inc., Series B,
Global Secured Notes
(Callable 07/15/08 @ $105.12)
10.250%, 07/15/13 800,000 936,000
---------------
7,791,125
---------------
BROADBAND--1.2%
Level 3 Communications, Inc.,
Senior Discount Notes
(Callable 12/1/05 @ $101.75)
10.500%, 12/01/08 + ~ 1,175,000 942,938
Level 3 Communications, Inc.,
Senior Notes
(Callable 05/01/05 @ $101.52)
9.125%, 05/01/08 ~ $ 350,000 $ 280,875
Level 3 Financing, Inc.,
Rule 144A, Senior Notes
(Callable 10/15/07 @ $105.38)
10.750%, 10/15/11 ++ 750,000 648,750
Primus Telecommunications
Group, Inc., Global
Senior Notes (Callable
01/15/09 @ $104.00)
8.000%, 01/15/14 ~ 1,500,000 1,083,750
---------------
2,956,313
---------------
BROADCAST/OUTDOOR--1.9%
Emmis Operating Co.,
Global Senior
Subordinated Notes
(Callable 05/15/08 @ $103.44)
6.875%, 05/15/12 ~ 500,000 527,500
Gray Television, Inc.,
Global Company Guaranteed
Notes (Callable 12/15/06 @
$104.62) 9.250%, 12/15/11 1,000,000 1,131,250
Interep National Radio
Sales, Inc., Series B,
Company Guaranteed Notes
(Callable 07/01/05 @ $101.67)
10.000%, 07/01/08 800,000 622,000
Paxson Communications Corp.,
Global Company
Guaranteed Notes
(Callable 01/15/06 @ $106.12)
0.000%, 01/15/09 + 2,000,000 1,750,000
Young Broadcasting, Inc.,
Global Company Guaranteed
Notes (Callable 03/01/06 @
$105.00) 10.000%, 03/01/11 ~ 490,000 516,950
---------------
4,547,700
---------------
BUILDING PRODUCTS--4.6%
Associated Materials, Inc., Rule 144A,
Senior Discount Notes
(Callable 03/1/09 @ $105.63)
0.000%, 03/01/14 ++ + ~ 1,000,000 750,000
Atrium Companies, Inc.,
Series B, Company
Guaranteed Notes
(Callable 05/01/05 @ $103.50)
10.500%, 05/01/09 1,000,000 1,055,000
Building Materials Corp.,
Rule 144A, Senior Notes
(Callable 08/01/09 @ $103.88)
7.750%, 08/01/14 ++ 1,500,000 1,496,250
Building Materials Corp.,
Series B, Senior Notes
8.000%, 10/15/07 500,000 517,500
Dayton Superior Corp.,
Company Guaranteed Notes
(Callable 06/15/07 @ $102.17)
13.000%, 06/15/09 ~ 600,000 597,000
SEE NOTES TO FINANCIAL STATEMENTS.
2
PRINCIPAL
AMOUNT VALUE
--------------- ---------------
Dayton Superior Corp.,
Global Secured Notes
(Callable 6/15/06 @ $105.62)
10.750%, 09/15/08 $ 500,000 $ 535,000
Interface, Inc., Global
Senior Subordinated Notes
(Callable 02/01/09 @ $104.75)
9.500%, 02/01/14 ~ 1,250,000 1,359,375
Norcraft Holdings LP, Rule 144A,
Senior Discount Notes (Callable
09/01/08 @ $104.88)
0.000%, 09/01/12 ++ + 750,000 555,000
Ply Gem Industries, Inc.,
Rule 144A, Senior
Subordinated Notes
(Callable 02/15/08 @ $104.50)
9.000%, 02/15/12 ++ 1,000,000 1,002,500
RMCC Acquisition Co.,
Rule 144A, Senior
Subordinated Notes
(Callable 11/01/08 @ $104.75)
9.500%, 11/01/12 ++ 1,250,000 1,250,000
Texas Industries, Inc.,
Global Senior Notes
(Callable 06/15/07 @ $105.12)
10.250%, 06/15/11 750,000 866,250
Werner Holding Co., Inc.,
Series A, Company
Guaranteed Notes
(Callable 11/15/04 @ $101.67)
10.000%, 11/15/07 ~ 1,350,000 1,255,500
---------------
11,239,375
---------------
CABLE--9.1%
Adelphia Communications
Corp., Rule 144A, Secured
Notes (Callable 02/15/08 @
$105.38) 10.875%, 10/01/10 ++ ** 3,000,000 2,632,500
Atlantic Broadband
Finance LLC, Rule 144A,
Senior Subordinated Notes
(Callable 01/15/09 @ $104.69)
9.375%, 01/15/14 ++ ~ 1,600,000 1,506,000
Cablevision Systems Corp.,
Rule 144A, Senior Notes
8.000%, 04/15/12 ++ 1,500,000 1,620,000
CCO Holdings LLC, Global
Senior Notes (Callable
11/15/08 @ 104.38)
8.750%, 11/15/13 2,100,000 2,105,250
Century Communications Corp.,
Senior Discount Notes
0.000%, 12/31/49 ** 1,000,000 935,000
Charter Communications
Holdings LLC, Senior
Discount Notes (Callable
04/01/05 @ $102.88)
9.920%, 04/01/11 + ~ 3,650,000 2,947,375
Charter Communications
Holdings LLC, Senior
Notes (Callable 04/01/05 @
$102.88) 8.625%, 04/01/09 3,050,000 2,470,500
CSC Holdings, Inc., Senior Notes
7.250%, 07/15/08 85,000 90,631
CSC Holdings, Inc.,
Series B, Senior Notes
7.625%, 04/01/11 ~ $ 1,500,000 $ 1,638,750
DIVA Systems Corp., Series B,
Senior Discount Notes
(Callable 03/01/05 @ $102.10)
12.625%, 03/01/08 ** ^ 1,750,000 4,375
Insight Communications
Company, Inc., Senior
Discount Notes (Callable
02/15/06 @ $106.12)
0.000%, 02/15/11 + ~ 2,000,000 1,965,000
Insight Midwest/Insight
Capital, Senior Notes
(Callable 10/01/05 @ $103.25)
9.750%, 10/01/09 200,000 211,250
Insight Midwest/Insight Capital
Corp., Global Senior Notes
(Callable 11/01/05 @ $105.25)
10.500%, 11/01/10 500,000 556,250
Kabel Deutschland Gmbh,
Rule 144A, Senior Notes
(Callable 07/01/09 @ $105.31)
10.625%, 07/01/14 ++ 1,000,000 1,125,000
Mediacom LLC Capital Corp.,
Senior Notes
(Callable 01/15/06 @ $104.75)
9.500%, 01/15/13 ~ 2,500,000 2,462,500
---------------
22,270,381
---------------
CAPITAL GOODS--1.8%
Blount, Inc., Senior
Subordinated Notes
(Callable 08/01/08 @ $104.44)
8.875%, 08/01/12 1,000,000 1,093,750
Case New Holland Inc,
Rule 144A, Senior Notes
9.250%, 08/01/11 ++ 850,000 973,250
JII Holdings LLC, Global
Secured Notes (Callable
01/01/05 @ $106.50)
13.000%, 04/01/07 1,802,500 1,649,288
Terex Corp., Global Company
Guaranteed Notes
(Callable 01/15/09 @ $103.69)
7.375%, 01/15/14 650,000 698,750
---------------
4,415,038
---------------
CHEMICALS--8.8%
Crompton Corp., Rule 144A,
Senior Notes (Callable
08/01/08 @ $104.94)
9.875%, 08/01/12 ++ ~ 1,000,000 1,107,500
Crystal US Holdings, Rule 144A,
Senior Discount Notes
(Callable 10/01/09 @ $105.25)
0.000%, 10/01/14 ++ + 1,350,000 857,250
Equistar Chemicals LP/
Equistar Funding Corp.,
Global Company Guaranteed
Notes 10.125%, 09/01/08 1,000,000 1,153,750
HMP Equity Holdings Corp.,
Global Senior Discount Notes
(Callable 11/15/04 @ $64.79)
0.000%, 05/15/08 1,100,000 715,000
SEE NOTES TO FINANCIAL STATEMENTS.
3
PRINCIPAL
AMOUNT VALUE
--------------- ---------------
Huntsman Company LLC,
Global Company Guaranteed
Notes (Callable 10/15/07 @
$105.81) 11.625%, 10/15/10 $ 350,000 $ 414,313
Huntsman Company LLC,
Rule 144A, Company
Guaranteed Notes
(Callable 07/15/08 @ $105.75)
11.500%, 07/15/12 ++ 1,200,000 1,356,000
Huntsman International Holdings LLC,
Senior Discount Notes
(Callable 07/01/05 @ $58.33)
0.000%, 12/31/09 9,345,000 5,116,387
IMC Global, Inc., Series B,
Global Company
Guaranteed Notes
(Callable 06/01/06 @ $105.63)
11.250%, 06/01/11 1,450,000 1,711,000
Invista, Rule 144A, Notes
(Callable 05/01/08 @ $104.63)
9.250%, 05/01/12 ++ 500,000 552,500
Lyondell Chemical Co., Global
Company Guaranteed Notes
(Callable 06/01/08 @ $105.25)
10.500%, 06/01/13 1,000,000 1,185,000
Lyondell Chemical Co., Global
Company Guaranteed Notes
(Callable 12/15/05 @ $104.75)
9.500%, 12/15/08 1,400,000 1,533,000
Millennium America, Inc., Global
Company Guaranteed Notes
9.250%, 06/15/08 ~ 800,000 896,000
Nalco Co., Global Senior
Subordinated Notes
(Callable 11/15/08 @ $104.44)
8.875%, 11/15/13 ~ 1,000,000 1,101,250
PolyOne Corp., Global Company
Guaranteed Notes
(Callable 05/15/07 @ $105.31)
10.625%, 05/15/10 ~ 750,000 836,250
Radnor Holdings Corp.,
Global Senior Notes
(Callable 03/15/07 @ $105.50)
11.000%, 03/15/10 ~ 1,000,000 775,000
Resolution Performance
Products LLC, Global Senior
Subordinated Notes
(Callable 11/15/05 @ $106.75)
13.500%, 11/15/10 ~ 1,000,000 995,000
Terra Capital, Inc.,
Global Secured Notes
(Callable 06/01/07 @ $105.75)
11.500%, 06/01/10 ~ 1,000,000 1,135,000
---------------
21,440,200
---------------
COMPETITIVE LOCAL EXCHANGE CARRIER (CLEC)--0.4%
FairPoint Communications, Inc.,
Series B, Senior
Subordinated Notes
(Callable 05/01/05 @ $101.58)
9.500%, 05/01/08 900,000 877,500
---------------
CONSUMER PRODUCTS/TOBACCO--5.1%
Ames True Temper, Inc.,
Rule 144A, Senior
Subordinated Notes
(Callable 07/15/08 @ $105.00)
10.000%, 07/15/12 ++ $ 1,450,000 $ 1,558,750
Amscan Holdings, Inc., Rule 144A,
Senior Subordinated Notes
(Callable 05/01/09 @ $104.38)
8.750%, 05/01/14 ++ 1,050,000 1,060,500
Diamond Brands Operating Corp.,
Company Guaranteed Notes
(Callable 04/15/05 @ $101.69)
10.125%, 04/15/08 ** 3,097,000 77,425
General Binding Corp.,
Company Guaranteed Notes
(Callable 06/01/05 @ $101.56)
9.375%, 06/01/08 ~ 1,050,000 1,076,250
Johnsondiversey Holdings, Inc.,
Global Discount Notes
(Callable 05/15/07 @ $105.34)
0.000%, 05/15/13 + ~ 1,500,000 1,290,000
PCA LLC/PCA Finance Corp.,
Global Senior Notes
11.875%, 08/01/09 1,000,000 955,000
Playtex Products, Inc., Global
Company Guaranteed Notes
(Callable 06/01/06 @ $104.69)
9.375%, 06/01/11 ~ 1,300,000 1,374,750
Prestige Brands, Inc., Rule 144A,
Senior Subordinated Notes
(Callable 04/15/08 @ $104.63)
9.250%, 04/15/12 ++ 1,000,000 1,015,000
Rayovac Corp., Global Senior
Subordinated Notes
(Callable 10/01/08 @ $104.25)
8.500%, 10/01/13 500,000 551,250
Remington Arms Company, Inc.,
Global Company
Guaranteed Notes
(Callable 02/01/07 @ $105.25)
10.500%, 02/01/11 ~ 750,000 667,500
Samsonite Corp., Global Senior
Subordinated Notes
(Callable 06/01/08 @ $104.44)
8.875%, 06/01/11 ~ 1,000,000 1,070,000
Sealy Mattress Co., Global
Senior Subordinated Notes
(Callable 06/15/09 @ $104.13)
8.250%, 06/15/14 1,250,000 1,328,125
United Industries Corp.,
Series D, Global Company
Guaranteed Notes
(Callable 04/01/05 @ $103.29)
9.875%, 04/01/09 425,000 448,375
---------------
12,472,925
---------------
CONTAINERS--3.8%
Berry Plastics Corp., Global
Company Guaranteed Notes
(Callable 07/15/07 @ $105.38)
10.750%, 07/15/12 ~ 1,100,000 1,270,500
Constar International, Inc.,
Senior Subordinated Notes
(Callable 12/01/07 @ $105.50)
11.000%, 12/01/12 ~ 1,200,000 1,152,000
SEE NOTES TO FINANCIAL STATEMENTS.
4
PRINCIPAL
AMOUNT VALUE
--------------- ---------------
Graham Packaging Company, Inc.,
Rule 144A, Senior
Subordinated Notes
(Callable 10/15/09 @ $104.94)
9.875%, 10/15/14 ++ ~ $ 650,000 $ 692,250
Graphic Packaging Inernational,
Corp., Global Senior
Subordinated Notes
(Callable 08/15/08 @ 104.75)
9.500%, 08/15/13 ~ 750,000 868,125
Intertape Polymer US, Inc.,
Rule 144A, Senior
Subordinated Notes
(Callable 08/01/09 @ $104.25)
8.500%, 08/01/14 ++ 1,000,000 998,750
Owens-Brockway Glass
Containers, Global
Company Guaranteed Notes
(Callable 02/15/06 @ $104.44)
8.875%, 02/15/09 1,000,000 1,102,500
Owens-Brockway Glass
Containers, Global Company
Guaranteed Notes
(Callable 05/15/08 @ $104.12)
8.250%, 05/15/13 ~ 750,000 828,750
Pliant Corp., Company
Guaranteed Notes
(Callable 06/01/05 @ $106.50)
13.000%, 06/01/10 ~ 500,000 468,750
Pliant Corp., Global Secured Notes
(Callable 06/15/07 @ $105.56)
0.000%, 06/15/09 + 500,000 447,500
Tekni-Plex, Inc., Series B,
Company Guaranteed Notes
(Callable 06/15/05 @ $106.38)
12.750%, 06/15/10 ~ 500,000 377,500
U.S. Can Corporation, Global
Company Guaranteed Notes
(Callable 07/15/07 @ $105.44)
10.875%, 07/15/10 1,000,000 1,020,000
---------------
9,226,625
---------------
DIVERSIFIED TELECOMMUNICATIONS--1.2%
Qwest Communications
International, Inc., Rule 144A,
Senior Notes (Callable 02/15/09 @
$103.75) 7.500%, 02/15/14 ++ ~ 1,000,000 970,000
Qwest Corp., Notes
5.625%, 11/15/08 ~ 900,000 904,500
Qwest Corp., Rule 144A,
Senior Notes
7.875%, 09/01/11 ++ 900,000 963,000
---------------
2,837,500
---------------
ENERGY - OTHER--5.0%
Amerigas Partners LP
Eagle Finance Corp.,
Series B, Global Senior Notes
(Callable 05/20/06 @ $104.44)
8.875%, 05/20/11 1,060,000 1,166,000
Dynegy Holdings, Inc.,
Rule 144A, Secured Notes
(Callable 07/15/08 @ $105.06)
10.125%, 07/15/13 ++ 1,550,000 1,813,500
Dynegy Holdings, Inc.,
Senior Notes
6.875%, 04/01/11 $ 250,000 $ 243,125
El Paso CGP Co., Notes
6.375%, 02/01/09 500,000 496,250
El Paso CGP Co., Notes
7.750%, 06/15/10 750,000 780,000
El Paso Corp., Senior Notes
7.000%, 05/15/11 ~ 1,000,000 1,010,000
El Paso Natural Gas, Series A,
Global Senior Notes
(Callable 08/01/07 @ $103.81)
7.625%, 08/01/10 1,000,000 1,086,250
El Paso Production Holding
Company, Global Company
Guaranteed Notes
(Callable 06/01/08 @ $103.88)
7.750%, 06/01/13 2,800,000 2,933,000
Giant Industries, Inc., Global
Company Guaranteed Notes
(Callable 05/15/07 @ $105.50)
11.000%, 05/15/12 850,000 1,005,125
Giant Industries, Inc.,
Senior Subordinated Notes
(Callable 05/15/09 @ 104.00)
8.000%, 05/15/14 450,000 471,375
Reliant Resources, Inc.,
Global Secured Notes
(Callable 07/15/08 @ $104.75)
9.500%, 07/15/13 ~ 1,050,000 1,186,500
---------------
12,191,125
---------------
ENVIRONMENTAL SERVICES--1.6%
Allied Waste North America, Inc.,
Series B, Global Senior Notes
(Callable 04/15/09 @ $103.69)
7.375%, 04/15/14 ~ 3,325,000 3,092,250
Waste Services, Inc., Rule 144A,
Senior Subordinated Notes
(Callable 04/15/09 @ $104.75)
9.500%, 04/15/14 ++ ~ 1,000,000 945,000
---------------
4,037,250
---------------
FINANCE--1.5%
Corrections Corporation
of America, Senior Notes,
(Callable 05/01/07 @ $103.75)
7.500%, 05/01/11 500,000 543,125
E*Trade Financial Corp.,
Rule 144A, Senior Notes
(Callable 06/15/08 @ $104.00)
8.000%, 06/15/11 ++ 1,150,000 1,219,000
Rainbow National Services LLC,
Rule 144A, Senior Notes
(Callable 09/01/08 @ $104.38)
8.750%, 09/01/12 ++ 900,000 967,500
Senior Housing Properties
Trust, Senior Notes
8.625%, 01/15/12 800,000 906,000
---------------
3,635,625
---------------
FOOD PROCESSORS/BEVERAGE/BOTTLING--2.2%
Birds Eye Foods, Inc.,
Company Guaranteed Notes
(Callable 11/01/04 @ $103.96)
11.875%, 11/01/08 250,000 261,875
SEE NOTES TO FINANCIAL STATEMENTS.
5
PRINCIPAL
AMOUNT VALUE
--------------- ---------------
Burns Philp Capital
Property, Ltd., Global
Company Guaranteed Notes
(Callable 07/15/07 @ $104.88)
9.750%, 07/15/12 $ 1,000,000 $ 1,105,000
Land O' Lakes, Inc.,
Global Senior Notes
(Callable 11/15/06 @ $104.38)
8.750%, 11/15/11 ~ 1,250,000 1,162,500
Le-Natures, Inc., Rule 144A,
Senior Subordinated Notes
(Callable 06/15/08 @ $104.50)
10.000%, 06/15/13 ++ # 600,000 666,000
Pinnacle Foods Holding Corp.,
Rule 144A, Senior
Subordinated Notes
(Callable 12/01/08 @ $104.13)
8.250%, 12/01/13 ++ 500,000 473,750
Swift & Co., Global
Senior Subordinated Notes
(Callable 10/01/06 @ $106.25)
12.500%, 01/01/10 850,000 949,875
Wornick Co., Rule 144A,
Secured Notes
(Callable 07/15/08 @ $105.44)
10.875%, 07/15/11 ++ 800,000 868,000
---------------
5,487,000
---------------
GAMING--10.9%
Ameristar Casinos, Inc., Global
Company Guaranteed Notes
(Callable 02/15/06 @ $105.38)
10.750%, 02/15/09 1,350,000 1,545,750
Argosy Gaming Co., Global
Senior Subordinated Notes
(Callable 01/15/09 @ $103.50)
7.000%, 01/15/14 1,500,000 1,605,000
Aztar Corp., Global
Senior Subordinated Notes
(Callable 08/15/06 @ $104.50)
9.000%, 08/15/11 1,350,000 1,518,750
Boyd Gaming Corp., Global
Company Guaranteed Notes
(Callable 08/01/05 @ $104.63)
9.250%, 08/01/09 1,200,000 1,314,000
Chukchansi Economic
Development Authority,
Rule 144A, Senior Notes
(Callable 10/01/06 @ $113.00)
14.500%, 06/15/09 ++ 2,300,000 2,909,500
Circus Circus & Eldorado,
Global First Mortgage
(Callable 03/01/07 @ $105.06)
10.125%, 03/01/12 ~ 1,350,000 1,471,500
Hard Rock Hotel, Inc.,
Global Notes (Callable
06/01/08 @ $104.44)
8.875%, 06/01/13 2,200,000 2,409,000
Herbst Gaming, Inc., Rule 144A,
Senior Subordinated Notes
(Callable 06/01/08 @ $104.06)
8.125%, 06/01/12 ++ ~ 1,000,000 1,052,500
Inn of The Mountain Gods,
Global Senior Notes
(Callable 11/15/07 @ $106.00)
12.000%, 11/15/10 1,250,000 1,456,250
Isle of Capri Casinos Inc.,
Global Senior Subordinated Notes
(Callable 03/01/09 @ $103.50)
7.000%, 03/01/14 ~ $ 900,000 $ 936,000
Majestic Star Casino LLC,
Company Guaranteed Notes
(Callable 10/15/07 @ $104.75)
9.500%, 10/15/10 1,600,000 1,660,000
MGM Mirage, Rule 144A,
Senior Notes
6.750%, 09/01/12 ++ 1,000,000 1,065,000
MTR Gaming Group, Inc.,
Series B, Global Company
Guaranteed Notes
(Callable 04/01/07 @ $104.88)
9.750%, 04/01/10 250,000 271,250
Oed Corporation / Diamond Jo,
Rule 144A, Company
Guaranteed Notes
(Callable 04/15/08 @ 104.38)
8.750%, 04/15/12 ++ 1,350,000 1,275,750
Penn National Gaming, Inc.,
Series B, Global Company
Guaranteed Notes
(Callable 03/01/05 @ $105.56)
11.125%, 03/01/08 1,250,000 1,357,812
Riviera Holdings Corp., Global
Company Guaranteed Notes
(Callable 06/15/06 @ $105.50)
11.000%, 06/15/10 1,110,000 1,237,650
Waterford Gaming LLC,
Rule 144A, Senior Notes
(Callable 09/15/08 @ $103.55)
8.625%, 09/15/12 ++ 364,000 389,025
Wheeling Island Gaming, Inc.,
Global Company Guaranteed
Notes (Callable 12/15/05 @
$105.06) 10.125%, 12/15/09 250,000 267,500
Windsor Woodmont Black Hawk,
Series B, First Mortgage Notes
13.000%, 03/15/05 ** 2,456,000 2,462,140
Wynn Las Vegas LLC,
Second Mortgage Notes
(Callable 11/01/06 @ $112.00)
12.000%, 11/01/10 435,000 545,925
---------------
26,750,302
---------------
HEALTHCARE FACILITIES/SUPPLIES--5.8%
Ardent Health Services, Inc.,
Global Senior
Subordinated Notes
(Callable 08/15/08 @ $105.00)
10.000%, 08/15/13 750,000 770,625
Concentra Operating Corp., Global
Company Guaranteed Notes
(Callable 08/15/07 @ $104.75)
9.500%, 08/15/10 1,000,000 1,115,000
Extendicare Health Services, Inc.,
Senior Subordinated Notes
(Callable 05/01/09 @ $103.44)
6.875%, 05/01/14 1,000,000 1,032,500
Fisher Scientific International, Inc.,
Global Senior
Subordinated Notes
(Callable 05/01/07 @ $104.06)
8.125%, 05/01/12 885,000 991,200
SEE NOTES TO FINANCIAL STATEMENTS.
6
PRINCIPAL
AMOUNT VALUE
--------------- ---------------
Hanger Orthopedic Group, Inc.,
Company Guaranteed
Global Notes (Callable
02/15/06 @ $105.19)
10.375%, 02/15/09 ~ $ 500,000 $ 505,000
Magellan Health Services, Inc.,
Series A, Senior Notes
(Callable 11/15/05 @ $104.69)
9.375%, 11/15/08 717,276 780,038
Medquest, Inc., Series B, Global
Company Guaranteed Notes
(Callable 08/15/07 @ $105.94)
11.875%, 08/15/12 ~ 1,000,000 1,165,000
MQ Associates, Inc., Rule 144A,
Senior Discount Notes
(Callable 08/15/08 @ $109.00)
0.000%, 08/15/12 ++ + 2,000,000 1,315,000
Select Medical Corp., Global
Senior Subordinated Notes
(Callable 08/01/08 @ $103.75)
7.500%, 08/01/13 900,000 1,037,250
Tenet Healthcare Corp.,
Rule 144A, Senior Notes
9.875%, 07/01/14 ++ ~ 750,000 789,375
Triad Hospitals, Inc.,
Senior Notes (Callable
5/15/08 @ $103.50)
7.000%, 05/15/12 1,800,000 1,935,000
Triad Hospitals, Inc.,
Senior Subordinated Notes
(Callable 11/15/08 @ $103.50)
7.000%, 11/15/13 1,000,000 1,030,000
Universal Hospital Services, Inc.,
Global Senior Notes (Callable
11/01/07 @ $105.06)
10.125%, 11/01/11 750,000 768,750
Vanguard Health Holding Co.,
Rule 144A, Senior
Subordinated Notes
(Callable 10/01/09 @ $104.50)
9.000%, 10/01/14 ++ 1,000,000 1,050,000
---------------
14,284,738
---------------
HOME BUILDERS--2.0%
KB Home, Senior
Subordinated Notes
8.625%, 12/15/08 650,000 739,375
KB Home, Senior
Subordinated Notes
(Callable 02/15/06 @ $104.75)
9.500%, 02/15/11 ~ 1,000,000 1,115,000
Toll Corp., Senior
Subordinated Notes
(Callable 12/01/06 @ $104.12)
8.250%, 12/01/11 700,000 787,500
WCI Communities, Inc., Global
Company Guaranteed Notes
(Callable 05/01/07 @ $104.56)
9.125%, 05/01/12 ~ 1,000,000 1,115,000
William Lyon Homes, Inc.,
Company Guaranteed Notes
(Callable 04/01/08 @ $105.38)
10.750%, 04/01/13 1,000,000 1,142,500
---------------
4,899,375
---------------
INDUSTRIAL--1.5%
Amsted Industries, Inc.,
Rule 144A, Senior Notes
(Callable 10/15/07 @ $105.12)
10.250%, 10/15/11 ++ $ 1,000,000 $ 1,105,000
Amtrol, Inc., Senior
Subordinated Notes
10.625%, 12/31/06 ~ 450,000 400,500
Polypore, Inc., Rule 144A,
Senior Subordinated Notes
(Callable 05/15/08 @ $104.38)
8.750%, 05/15/12 ++ 1,000,000 1,050,000
Transportation Technologies
Industries, Inc., Rule 144A,
Senior Subordinated Notes
(Callable 03/31/06 @ $102.00)
12.500%, 03/31/10 ++ 1,000,000 1,031,250
---------------
3,586,750
---------------
LEISURE--3.2%
AMC Entertainment, Inc.,
Rule 144A, Senior
Subordinated Notes
(Callable 3/01/09 @ 104.00)
8.000%, 03/01/14 ++ ~ 2,000,000 1,930,000
Bally Total Fitness Holding Corp.,
Global Senior Notes
(Callable 7/15/07 @ $105.25)
10.500%, 07/15/11 ~ 300,000 293,250
Bluegreen Corp., Series B,
Company Guaranteed Notes
(Callable 04/01/05 @ $101.75)
10.500%, 04/01/08 1,150,000 1,185,937
Booth Creek Ski Holdings, Inc.,
Series B, Company
Guaranteed Notes
(Callable 03/15/05 @ $100.00)
12.500%, 03/15/07 1,300,000 1,309,750
Cinemark, Inc., Senior
Discount Notes (Callable
03/15/09 @ $104.88)
0.000%, 03/15/14 + 1,150,000 819,375
Icon Health & Fitness, Inc., Global
Company Guaranteed Notes
(Callable 04/01/07 @ $105.62)
11.250%, 04/01/12 1,000,000 835,000
Six Flags, Inc., Global
Senior Notes (Callable
02/01/06 @ $104.44)
8.875%, 02/01/10 ~ 950,000 914,375
Six Flags, Inc., Global
Senior Notes (Callable
06/01/09 @ $104.81)
9.625%, 06/01/14 ~ 550,000 528,000
---------------
7,815,687
---------------
LODGING--0.6%
Host Marriott LP, Global
Senior Notes (Callable
11/1/08 @ 103.56)
7.125%, 11/01/13 500,000 542,500
John Q. Hammons Hotels,
Series B, Global Notes,
First Mortgage (Callable
05/15/07 @ $104.44)
8.875%, 05/15/12 ~ 890,000 1,027,950
---------------
1,570,450
---------------
SEE NOTES TO FINANCIAL STATEMENTS.
7
PRINCIPAL
AMOUNT VALUE
--------------- ---------------
METALS & MINING--2.2%
AK Steel Corp., Global
Company Guaranteed Notes
(Callable 06/15/07 @ $103.88)
7.750%, 06/15/12 ~ $ 1,000,000 $ 1,017,500
Alpha Natural Resources LLC,,
Rule 144A, Senior Notes
(Callable 06/01/08 @ $105.00)
10.000%, 06/01/12 ++ 1,600,000 1,784,000
Metallurg, Inc., Series B,
Company Guaranteed Notes
(Callable 12/1/05 @ $100.00)
11.000%, 12/01/07 700,000 535,500
UCAR Finance, Inc., Global
Company Guaranteed Notes
(Callable 02/15/07 @ $105.12)
10.250%, 02/15/12 ~ 1,000,000 1,145,000
WCI Steel, Inc., Series B,
Senior Secured Notes
10.000%, 12/01/04 ** 750,000 483,750
Wise Metals Group LLC,
Rule 144A, Secured Notes
(Callable 05/15/08 @ $105.13)
10.250%, 05/15/12 ++ 500,000 500,000
---------------
5,465,750
---------------
PAPER & FOREST PRODUCTS--4.1%
Appleton Papers, Inc., Series B,
Senior Subordinated Notes
(Callable 06/15/09 @ $104.88)
9.750%, 06/15/14 ~ 1,000,000 1,050,000
Caraustar Industries, Inc., Global
Company Guaranteed Notes
(Callable 04/01/06 @ $105.25)
9.875%, 04/01/11 ~ 1,000,000 1,090,000
Cellu Tissue Holdings, Rule 144A,
Secured Notes (Callable
03/15/07 @ $107.31)
9.750%, 03/15/10 ++ 750,000 787,500
Georgia-Pacific Corp., Global
Company Guaranteed Notes
8.875%, 02/01/10 1,200,000 1,419,000
Georgia-Pacific Corp., Global
Company Guaranteed Notes
(Callable 02/01/08 @ $104.69)
9.375%, 02/01/13 1,300,000 1,537,250
Georgia-Pacific Corp.,
Global Senior Notes
8.000%, 01/15/24 750,000 871,875
Newark Group, Inc., Rule 144A,
Subordinated Notes (Callable
03/15/09 @ $104.88)
9.750%, 03/15/14 ++ 2,000,000 2,090,000
Riverside Forest Products,
Global Senior Notes
(Callable 03/01/09 @ $103.94)
7.875%, 03/01/14 1,000,000 1,070,000
---------------
9,915,625
---------------
PUBLISHING--5.9%
CBD Media Holdings, Rule 144A,
Senior Notes (Callable
07/15/08 @ $104.63)
9.250%, 07/15/12 ++ 1,250,000 1,262,500
Dex Media, Inc., Global
Discount Notes (Callable
11/15/08 @ $104.50)
0.000%, 11/15/13 + $ 1,500,000 $ 1,147,500
Dex Media, Inc., Global
Discount Notes (Callable
11/15/08 @ $104.50)
0.000%, 11/15/13 + ~ 500,000 382,500
Dex Media, Inc., Global Notes
(Callable 11/15/08 @ $104.00)
8.000%, 11/15/13 ~ 400,000 430,000
Haights Cross Operating Co.,
Global Company
Guaranteed Notes
(Callable 08/15/08 @ $105.88)
11.750%, 08/15/11 1,200,000 1,327,500
Houghton Mifflin Co., Global
Senior Discount Notes
(Callable 10/15/08 @ $105.75)
0.000%, 10/15/13 + ~ 1,000,000 658,750
Houghton Mifflin Co., Global
Senior Notes (Callable
02/01/07 @ $104.12)
8.250%, 02/01/11 350,000 374,062
Liberty Group Operating, Inc.,
Company Guaranteed Notes
(Callable 02/01/05 @ $101.56)
9.375%, 02/01/08 2,700,000 2,733,750
Liberty Group Publishing, Inc.,
Debentures (Callable
02/01/05 @ $101.94)
11.625%, 02/01/09 + 1,774,000 1,765,130
Morris Publishing Group LLC,
Global Company Guaranteed
Notes (Callable 08/01/08 @
$103.50) 7.000%, 08/01/13 500,000 512,500
Phoenix Color Corp.,
Company Guaranteed Notes
(Callable 02/01/05 @ $103.46)
10.375%, 02/01/09 2,222,000 2,122,010
Primedia, Inc., Rule 144A,
Senior Notes (Callable
05/15/08 @ $104.00)
8.000%, 05/15/13 ++ 500,000 503,750
Sheridan Acquisition Corp.,
Rule 144A, Secured Notes
(Callable 08/15/07 @ $105.12)
10.250%, 08/15/11 ++ 1,000,000 1,090,000
---------------
14,309,952
---------------
RESTAURANTS--2.0%
Buffets, Inc., Global Senior
Subordinated Notes (Callable
07/15/06 @ $105.62)
11.250%, 07/15/10 850,000 909,500
Denny's Corp., Rule 144A,
Senior Notes (Callable
10/01/08 @ $105.00)
10.000%, 10/01/12 ++ 1,350,000 1,407,375
El Pollo Loco, Inc., Global
Secured Notes (Callable
12/15/06 @ $104.63)
9.250%, 12/15/09 750,000 791,250
SEE NOTES TO FINANCIAL STATEMENTS.
8
PRINCIPAL
AMOUNT VALUE
--------------- ---------------
O'Charleys, Inc., Global
Senior Subordinated Notes
(Callable 11/01/08 @ $104.50)
9.000%, 11/01/13 ~ $ 1,000,000 $ 1,060,000
Romacorp Inc
10.500%, 12/31/08 1,007,088 659,643
---------------
4,827,768
---------------
RETAIL - FOOD & DRUG--2.7%
Duane Reade, Inc., Rule 144A,
Senior Subordinated Notes
(Callable 08/01/08 @ $104.88)
9.750%, 08/01/11 ++ ~ 1,750,000 1,688,750
Great Atlantic & Pacific Tea Co., Inc.,
Senior Notes (Callable
12/15/06 @ $104.56)
9.125%, 12/15/11 ~ 1,250,000 1,081,250
Herbalife International, Inc.,
Global Company
Guaranteed Notes
(Callable 07/15/06 @ $105.88)
11.750%, 07/15/10 1,000,000 1,155,000
Nutritional Sourcing Corp., Notes
(Callable 06/05/05 @ $101.00)
10.125%, 08/01/09 500,000 342,500
Pathmark Stores, Inc., Global
Company Guaranteed Notes
(Callable 02/01/07 @ $104.38)
8.750%, 02/01/12 ~ 1,000,000 915,000
Roundy's, Inc., Series B, Global
Company Guaranteed Notes
(Callable 06/15/07 @ $104.44)
8.875%, 06/15/12 ~ 500,000 546,250
Stater Brothers Holdings, Inc.,
Global Senior Notes
(Callable 06/15/08 @ $104.06)
8.125%, 06/15/12 450,000 479,250
Winn-Dixie Stores, Inc., Company
Guaranteed Notes (Callable
04/01/05 @ $104.44)
8.875%, 04/01/08 ~ 450,000 387,000
---------------
6,595,000
---------------
RETAIL STORES--4.6%
Asbury Automotive Group Inc.,
Global Company
Guaranteed Notes (Callable
06/15/07 @ $104.50)
9.000%, 06/15/12 ~ 700,000 742,000
Big 5 Corp., Series B,
Senior Notes (Callable
11/15/04 @ $101.83)
10.875%, 11/15/07 1,125,000 1,153,125
J. Crew Operating Corp., Senior
Subordinated Notes (Callable
10/15/05 @ $100.00)
10.375%, 10/15/07 ~ 2,000,000 2,065,000
Leslie's Poolmart, Inc., Series B,
Senior Notes (Callable
07/15/05 @ $102.59)
10.375%, 07/15/08 1,200,000 1,230,000
Michaels Stores, Inc., Senior Notes
(Callable 07/01/05 @ $104.62)
9.250%, 07/01/09 900,000 975,375
Nebraska Book Company, Inc.,
Global Senior Subordinated
Notes (Callable
03/15/08 @ $104.31)
8.625%, 03/15/12 $ 500,000 $ 508,750
Office Depot, Inc., Global Senior
Subordinated Notes
10.000%, 07/15/08 ~ 1,000,000 1,180,000
Pep Boys--Manny, Moe & Jack,
Series MTNB, Notes
6.920%, 07/07/06 1,150,000 1,178,750
Southern States Cooperative, Inc.,
Rule 144A, Senior Notes
(Callable 11/01/07 @ $108.00)
10.500%, 11/01/10 ++ 1,350,000 1,356,750
United Auto Group, Inc., Global
Company Guaranteed Notes
(Callable 03/15/07 @ $104.81)
9.625%, 03/15/12 ~ 750,000 838,125
---------------
11,227,875
---------------
SATELLITE--1.6%
EchoStar DBS Corp., Rule 144A,
Company Guaranteed Notes
6.625%, 10/01/14 ++ 1,000,000 1,027,500
PanAmSat Corp., Rule 144A,
Company Guaranteed
Senior Notes (Callable
08/15/09 @ $104.50)
9.000%, 08/15/14 ++ ~ 1,000,000 1,065,000
Pegasus Communications Corp.,
Series B, Senior Notes
9.625%, 10/15/05 ** 2,850,000 1,767,000
---------------
3,859,500
---------------
SECONDARY OIL & GAS PRODUCERS--1.9%
Chesapeake Energy Corp., Global
Senior Notes (Callable
08/15/09 @ $103.50)
7.000%, 08/15/14 1,000,000 1,090,000
Chesapeake Energy Corp.,
Senior Notes (Callable
01/15/09 @ $103.44)
6.875%, 01/15/16 ~ 1,093,000 1,174,975
Continental Resources, Inc.,
Company Guaranteed Notes
(Callable 08/01/05 @ $101.71)
10.250%, 08/01/08 1,200,000 1,248,600
Magnum Hunter Resources, Inc.,
Global Company
Guaranteed Notes (Callable
03/15/07 @ $104.80)
9.600%, 03/15/12 423,000 485,393
Whiting Petroleum Corp., Global
Senior Subordinated Notes
(Callable 05/01/08 @ $103.63)
7.250%, 05/01/12 600,000 633,000
---------------
4,631,968
---------------
SERVICES--8.9%
Advanstar Communications, Inc,
Global Secured Note (Callable
02/15/08 @ $105.38)
10.750%, 08/15/10 1,500,000 1,680,000
SEE NOTES TO FINANCIAL STATEMENTS.
9
PRINCIPAL
AMOUNT VALUE
--------------- ---------------
Allied Security Escrow Corp.,
Rule 144A, Senior
Subordinated Notes
(Callable 07/15/08 @ $105.69)
11.375%, 07/15/11 ++ $ 1,250,000 $ 1,318,750
American Color Graphics,
Global Notes (Callable
06/15/07 @ $105.00)
10.000%, 06/15/10 1,200,000 924,000
Diamond Triumph Auto Glass, Inc.,
Company Guaranteed Notes
(Callable 04/01/05 @ $101.54)
9.250%, 04/01/08 400,000 386,000
Equinox Holdings, Inc.,
Senior Notes (Callable
12/15/06 @ $104.50)
9.000%, 12/15/09 ~ 450,000 479,250
Great Lakes Dredge & Dock Corp.,
Global Senior
Subordinated Notes (Callable
12/15/08 @ $103.88)
7.750%, 12/15/13 1,250,000 1,125,000
IESI Corp., Global Company
Guaranteed Notes (Callable
06/15/07 @ $105.12)
10.250%, 06/15/12 1,500,000 1,627,500
Iron Mountain, Inc.,
Company Guaranteed Notes
(Callable 04/01/06 @ $104.31)
8.625%, 04/01/13 1,000,000 1,087,500
La Petite Academy, Inc., Series B,
Company Guaranteed Notes
(Callable 05/15/05 @ $101.67)
10.000%, 05/15/08 1,650,000 1,402,500
Language Line Holdings, Inc.,
Rule 144A, Senior
Subordinated Notes (Callable
06/15/08 @ $105.56)
11.125%, 06/15/12 ++ 750,000 806,250
Mortons Restaurant Group, Inc.,
Global Secured Notes (Callable
07/01/07 @ $105.30)
7.500%, 07/01/10 ~ 1,000,000 965,000
Muzak LLC/Muzak Finance Corp.,
Company Guaranteed Notes
(Callable 03/15/05 @ $103.29)
9.875%, 03/15/09 ~ 450,000 312,750
Muzak LLC/Muzak Finance Corp.,
Global Senior Notes (Callable
02/15/06 @ $105.00)
10.000%, 02/15/09 1,000,000 900,000
National Beef Packing Company
LLC, Global Senior Notes
(Callable 08/01/07 @ $105.25)
10.500%, 08/01/11 1,000,000 1,030,000
Neff Corp., Company
Guaranteed Notes (Callable
06/01/05 @ $101.71)
10.250%, 06/01/08 2,000,000 1,900,000
Rent-A-Center, Inc., Series B,
Global Company
Guaranteed Notes
(Callable 05/01/06 @ $103.75)
7.500%, 05/01/10 500,000 520,625
Salton, Inc., Global Senior
Subordinated Notes (Callable
04/15/05 @ $106.12)
12.250%, 04/15/08 ~ $ 1,500,000 $ 1,222,500
Standard Parking Corp., Company
Guaranteed Notes (Callable
03/15/05 @ $101.54)
9.250%, 03/15/08 700,000 626,500
United Rentals North America Inc.,
Global Senior Subordinated
Notes (Callable
11/15/08 @ $103.88)
7.750%, 11/15/13 ~ 2,000,000 1,945,000
United Rentals North America, Inc.,
Global Senior Subordinated
Notes (Callable
02/15/09 @ $103.50)
7.000%, 02/15/14 ~ 1,000,000 927,500
Wesco Distribution, Inc., Global
Company Guaranteed Notes
(Callable 06/01/05 @ $101.52)
9.125%, 06/01/08 550,000 572,000
---------------
21,758,625
---------------
TECHNOLOGY--4.3%
Advanced Micro Devices, Inc.,
Rule 144A, Senior Notes
(Callable 11/1/08 @ $103.88)
7.750%, 11/01/12 ++ 1,000,000 1,007,500
AMI Semiconductor, Inc., Global
Company Guaranteed Notes
(Callable 02/01/08 @ $105.37)
10.750%, 02/01/13 260,000 306,150
Amkor Technology, Inc., Global
Senior Notes (Callable
05/15/08 @ $103.88)
7.750%, 05/15/13 ~ 1,400,000 1,214,500
Ampex Corp., Secured Notes
12.000%, 08/15/08 1,999,129 679,704
Avaya, Inc., Secured Notes
(Callable 04/01/06 @ $105.56)
11.125%, 04/01/09 ~ 325,000 375,375
Celestica, Inc., Senior
Subordinated Notes
(Callable 07/01/08 @ $103.94)
7.875%, 07/01/11 ~ 250,000 268,750
Danka Business Systems,
Senior Notes (Callable
06/15/07 @ $105.50)
11.000%, 06/15/10 750,000 791,250
Itron, Inc., Rule 144A, Senior
Subordinated Notes (Callable
05/15/08 @ $103.88)
7.750%, 05/15/12 ++ 1,000,000 1,017,500
Lucent Technologies, Inc., Notes
7.250%, 07/15/06 1,000,000 1,065,000
Lucent Technologies, Inc., Notes
5.500%, 11/15/08 ~ 800,000 824,000
Sanmina-SCI Corp., Global
Company Guaranteed Notes
(Callable 01/15/07 @ $105.19)
10.375%, 01/15/10 1,000,000 1,177,500
Viasystems, Inc., Global Senior
Subordinated Notes (Callable
01/15/08 @ $105.25)
10.500%, 01/15/11 750,000 746,250
SEE NOTES TO FINANCIAL STATEMENTS.
10
PRINCIPAL
AMOUNT VALUE
--------------- ---------------
Xerox Corp., Senior Notes
(Callable 06/15/08 @ $103.81)
7.625%, 06/15/13 $ 1,000,000 $ 1,105,000
---------------
10,578,479
---------------
TEXTILE/APPAREL/SHOE MANUFACTURING--1.8%
BGF Industries, Inc., Series B, Senior
Subordinated Notes (Callable
01/15/05 @ $103.50)
10.250%, 01/15/09 2,797,000 2,671,135
Levi Strauss & Co., Global
Senior Notes (Callable
01/15/05 @ $105.81)
11.625%, 01/15/08 550,000 563,750
Levi Strauss & Co., Global
Senior Notes (Callable
12/15/07 @ $106.12)
12.250%, 12/15/12 ~ 1,200,000 1,245,000
---------------
4,479,885
---------------
TOWER--0.7%
American Tower Corp., Rule 144A,
Senior Notes (Callable
10/15/05 @ $100.00)
7.125%, 10/15/12 ++ 500,000 511,250
American Tower, Inc., Company
Guaranteed Global Notes
(Callable 12/01/07 @ $103.62)
7.250%, 12/01/11 500,000 533,750
SBA Telecommunications, Inc.,
Global Senior Discount Notes
(Callable 12/15/07 @ $104.88)
0.000%, 12/15/11 + 850,000 720,375
---------------
1,765,375
---------------
UTILITIES--6.7%
AES Corp., Rule 144A,
Secured Notes (Callable
05/15/08 @ $104.50)
9.000%, 05/15/15 ++ 1,000,000 1,170,000
Allegheny Energy Supply
Company LLC, Global Notes
7.800%, 03/15/11 ~ 1,000,000 1,107,500
Aquila, Inc., Senior Notes
7.625%, 11/15/09 ~ 1,100,000 1,149,500
Calpine Corp., Rule 144A,
Secured Notes (Callable
07/15/08 @ $104.38)
8.750%, 07/15/13 ++ ~ 2,250,000 1,642,500
Calpine Corp., Senior Notes
8.500%, 02/15/11 ~ 1,000,000 577,500
Calpine Generating Co., Rule 144A,
Secured Notes (Callable
04/01/08 @ $103.50)
7.756%, 04/01/10 ++ # 2,500,000 2,400,000
CMS Energy Corp.,
Global Senior Notes
8.900%, 07/15/08 1,000,000 1,120,000
CMS Energy Corp.,
Global Senior Notes
7.750%, 08/01/10 1,000,000 1,100,000
Edison Mission Energy,
Senior Notes
7.730%, 06/15/09 1,300,000 1,391,000
Midwest Generation LLC,
Global Secured Notes
(Callable 05/01/09 @ $104.38)
8.750%, 05/01/34 $ 1,000,000 $ 1,137,500
Mirant Corp., Rule 144A,
Senior Notes
7.400%, 07/15/49 ++ ** ~ 1,100,000 731,500
NRG Energy, Inc., Rule 144A,
Secured Notes (Callable
12/15/08 @ $104.00)
8.000%, 12/15/13 ++ 300,000 331,875
PG&E Corp., Global Secured Notes
(Callable 07/15/06 @ $103.44)
6.875%, 07/15/08 850,000 924,375
Sierra Pacific Resources, Global
Senior Notes (Callable
03/15/09 @ $104.31)
8.625%, 03/15/14 ~ 500,000 570,000
TNP Enterprises, Inc., Series B,
Senior Subordinated Notes
(Callable 04/01/05 @ $105.12)
10.250%, 04/01/10 850,000 918,000
---------------
16,271,250
---------------
WIRELESS--7.6%
AirGate PCS, Inc., Rule 144A,
Secured Notes (Callable
01/01/06 @ $104.69)
9.375%, 09/01/09 ++ ~ 449,900 472,395
AirGate PCS, Inc., Secured Note
(Callable 01/01/06 @ $104.69)
9.375%, 09/01/09 ~ 600,000 630,000
Alamosa Delaware, Inc., Global
Senior Notes (Callable
01/31/08 @ $104.25)
8.500%, 01/31/12 1,250,000 1,331,250
Alamosa Holdings, Inc., Company
Guaranteed Notes (Callable
02/15/05 @ $106.44)
0.000%, 02/15/10 + 1,300,000 1,386,125
American Cellular Corp., Series B,
Global Senior Notes (Callable
08/01/07 @ $105.00)
10.000%, 08/01/11 ~ 1,100,000 929,500
Centennial Communications Corp.,
Global Company Guaranteed
Notes (Callable 06/15/08 @
$105.06) 10.125%, 06/15/13 650,000 708,500
Centennial Communications Corp.,
Rule 144A, Senior Notes
(Callable 02/01/09 @ $104.06)
8.625%, 02/01/14 ++ # 1,950,000 1,979,250
Dobson Communications Corp.,
Global Senior Notes (Callable
10/01/08 @ $104.44)
8.875%, 10/01/13 ~ 1,000,000 677,500
Horizon PCS, Inc., Rule 144A,
Senior Notes (Callable
07/15/08 @ $105.69)
11.375%, 07/15/12 ++ 750,000 798,750
Ipcs Escrow Co., Rule 144A,
Senior Notes (Callable
05/1/08 @ $105.75)
11.500%, 05/01/12 ++ ~ 850,000 930,750
SEE NOTES TO FINANCIAL STATEMENTS.
11
PRINCIPAL
AMOUNT VALUE
--------------- ---------------
Nextel Communications, Inc.,
Global Senior Notes (Callable
02/01/06 @ $104.75)
9.500%, 02/01/11 $ 1,045,000 $ 1,189,994
Nextel Communications, Inc.,
Senior Notes (Callable
08/01/08 @ $103.69)
7.375%, 08/01/15 250,000 278,750
Nextel Partners, Inc., Global
Senior Notes (Callable
07/01/07 @ $104.06)
8.125%, 07/01/11 1,100,000 1,210,000
Rural Cellular Corp., Global
Senior Subordinated Notes
(Callable 01/15/06 @ $104.88)
9.750%, 01/15/10 ~ 1,000,000 865,000
Triton PCS, Inc., Global Company
Guaranteed Notes (Callable
06/01/08 @ $104.25)
8.500%, 06/01/13 ~ 2,000,000 1,845,000
Ubiquitel Operating Co., Global
Senior Notes (Callable
03/01/07 @ $107.41)
9.875%, 03/01/11 1,000,000 1,087,500
Ubiquitel Operating Co.,
Rule 144A, Senior Notes
(Callable 03/01/07 @ $107.41)
9.875%, 03/01/11 ++ ~ 1,150,000 1,250,625
Western Wireless Corp., Global
Senior Notes (Callable
07/15/08 @ $104.62)
9.250%, 07/15/13 1,000,000 1,070,000
---------------
18,640,889
---------------
TOTAL U.S. CORPORATE BONDS
(COST $310,393,661) 321,445,774
---------------
FOREIGN CORPORATE BONDS--9.8%
AUTOMOBILE MANUFACTURING/VEHICLE PARTS--0.4%
Bombardier Recreational Products,
Rule 144A, Senior Subordinated
Notes (Callable 12/15/08 @
$104.19) (Canada)
8.375%, 12/15/13 ++ ~ 800,000 864,000
---------------
BROADBAND--0.4%
Call-Net Enterprises, Inc., Yankee
Company Guaranteed Notes
(Callable 01/01/06 @
$105.31) (Canada)
10.625%, 12/31/08 ~ 1,000,000 955,000
---------------
CABLE--0.4%
Telenet Group Holding NV,
Rule 144A, Senior Notes
(Callable 12/15/08 @
$105.75) (Belgium)
0.000%, 06/15/14 ++ + ~ 1,350,000 1,032,750
---------------
CHEMICALS--2.4%
Acetex Corp., Global Senior Notes
(Callable 08/01/05 @ $105.44)
(Canada) 10.875%, 08/01/09 1,000,000 1,105,000
Avecia Group PLC, Global
Company Guaranteed Notes
(Callable 07/01/05 @ $103.67)
(United Kingdom)
11.000%, 07/01/09 ~ $ 2,535,000 $ 2,395,575
BCP Caylux Holdings
Luxembourg SCA, Rule 144A,
Senior Subordinated
Notes (Callable 06/15/09 @
$104.81) (Luxembourg)
9.625%, 06/15/14 ++ 1,000,000 1,125,000
Rhodia SA, Global Senior
Notes (France)
10.250%, 06/01/10 ~ 1,250,000 1,362,500
---------------
5,988,075
---------------
CONTAINERS--0.6%
Crown European Holdings SA,
Global Secured Notes
(Callable 03/01/07 @ $104.75)
(France) 9.500%, 03/01/11 1,250,000 1,431,250
---------------
GAMING--0.3%
Kerzner International, Ltd.,
Global Company Guaranteed
Notes (Callable 08/15/06 @
$104.44) (Bahamas)
8.875%, 08/15/11 750,000 830,625
---------------
INDUSTRIAL--0.1%
International Utility
Structures, Inc., Yankee
Senior Subordinated Notes
(Callable 02/01/05 @
$101.79) (Canada)
10.750%, 02/01/08 ** 1,020,500 216,856
---------------
LEISURE--0.4%
NCL Corporation Ltd.,
Rule 144A, Senior Notes
(Callable 07/15/09 @
$105.31) (Bermuda)
10.625%, 07/15/14 ++ 1,000,000 1,045,000
---------------
METALS & MINING--1.0%
Gerdau Ameristeel Corp.,
Global Senior Notes
(Callable 07/15/07 @
$105.38) (Canada)
10.375%, 07/15/11 ~ 1,000,000 1,160,000
Ispat Inland ULC, Global
Secured Notes (Callable
4/01/09 @ $104.88) (Canada)
9.750%, 04/01/14 1,000,000 1,220,000
---------------
2,380,000
---------------
PAPER & FOREST PRODUCTS--1.1%
Abitibi Consolidated, Inc.,
Global Notes (Canada)
7.750%, 06/15/11 600,000 639,000
JSG Funding PLC, Global
Senior Notes (Callable
10/01/07 @ $104.81) (Ireland)
9.625%, 10/01/12 750,000 858,750
SEE NOTES TO FINANCIAL STATEMENTS.
12
PRINCIPAL
AMOUNT VALUE
--------------- ---------------
Tembec Industries, Inc.,
Yankee Company Guaranteed
Notes (Callable 06/30/05 @
$102.88) (Canada)
8.625%, 06/30/09 ~ $ 1,200,000 $ 1,227,000
---------------
2,724,750
---------------
RETAIL - FOOD & DRUG--0.4%
Jean Coutu Group (PJC), Inc.,
Rule 144A, Senior
Subordinated Notes
(Callable 08/01/09 @
$104.25) (Canada)
8.500%, 08/01/14 ++ 1,000,000 1,025,000
---------------
SATELLITE--0.6%
New Asat Finance, Ltd.,
Rule 144A, Senior Notes
(Callable 02/01/08 @
$104.62) (Cayman Islands)
9.250%, 02/01/11 ++ ~ 1,700,000 1,496,000
---------------
TRANSPORTATION--0.8%
Sea Containers, Ltd.,
Series B, Yankee Senior
Notes (Callable 02/15/05 @
$100.00) (Bermuda)
7.875%, 02/15/08 ~ 445,000 438,881
Ship Finance
International Ltd.,
Global Senior Notes
(Callable 12/15/08 @
$104.25) (Bermuda)
8.500%, 12/15/13 1,500,000 1,530,000
---------------
1,968,881
---------------
WIRELESS--0.9%
Millicom International
Cellular SA, Rule 144A,
Senior Notes (Callable
12/01/08 @ $105.00)
(Luxembourg)
10.000%, 12/01/13 ++ 750,000 761,250
Polska Telefonica Cyfrowa
International Finance II
SA, Yankee Company
Guaranteed Notes
(Callable 12/01/04 @
$105.62) (Luxembourg)
11.250%, 12/01/09 1,250,000 1,331,250
---------------
2,092,500
---------------
TOTAL FOREIGN CORPORATE BONDS
(COST $23,267,232) 24,050,687
---------------
SHARES
---------------
COMMON STOCKS--0.7%
AUTOMOBILE MANUFACTURING/VEHICLE PARTS--0.0%
Cambridge Industries
Liquidating Trust * 774,557 7,745
---------------
DIVERSIFIED TELECOMMUNICATIONS--0.2%
Versatel Telecom
International NV * 233,772 487,686
---------------
FOOD PROCESSORS/BEVERAGE/BOTTLING--0.0%
Archibald Candy Corp. * ^ 1,291 $ 0
---------------
INDUSTRIAL--0.5%
Crunch Equity Holdings,
Class A * 845 1,140,707
---------------
WIRELESS--0.0%
Dobson Communications Corp.,
Class A * 99,764 132,686
---------------
TOTAL COMMON STOCKS
(COST $2,914,557) 1,768,824
---------------
PREFERRED STOCK--0.0%
WIRELESS--0.0%
Dobson Communications Corp.,
Rule 144A ++
(Cost $265,050) 1,550 80,980
---------------
WARRANTS--0.0%
BROADBAND--0.0%
GT Group Telecom, Inc.,
Rule 144A, strike $0.00
expires 02/01/10 * ++ 6,750 1
Ono Finance PLC,
Subordinated Debentures,
expires 05/31/09 * 5,980 6
---------------
7
---------------
CHEMICALS--0.0%
Huntsman Company LLC,
Rule 144A, strike $0.01,
expires 05/15/11 ++ 250 75,125
---------------
DIVERSIFIED TELECOMMUNICATIONS--0.0%
Versatel Telecom
International NV, strike
$2.81 expires 05/15/08 * ^ 3,000 630
---------------
GAMING--0.0%
Windsor Woodmont Black
Hawk, strike $0.01
expires 03/15/10 * ^ 106 0
---------------
RESTAURANTS--0.0%
New World Restaurant
Group, Inc., strike
$13.00, expires 06/20/06 * 336 0
---------------
SATELLITE--0.0%
Asat Finance LLC,
Rule 144A, strike $18.60,
expires 11/01/06, * ++ 5,000 625
---------------
TECHNOLOGY--0.0%
Viasystems, Inc., expires
01/31/10 * ^ 204,293 0
---------------
TOTAL WARRANTS
(COST $3,972,603) 76,387
---------------
SEE NOTES TO FINANCIAL STATEMENTS.
13
SHARES VALUE
--------------- ---------------
SHORT-TERM INVESTMENTS--12.3%
Dreyfus Cash Management Fund,
Class A, Institutional
Shares, ~~ 15,000,000 $ 15,000,000
Dreyfus Cash Management
Plus Fund, Inc., Institutional
Shares, ~~ 15,000,000 15,000,000
---------------
TOTAL SHORT-TERM INVESTMENTS
(COST $30,000,000) 30,000,000
---------------
PRINCIPAL
AMOUNT
---------------
REPURCHASE AGREEMENTS--29.4%
Bear Stearns & Co.,
1.41%, Dated 10/31/04,
due 11/1/04, proceeds at
maturity $3,060,299,
(fully collateralized by
FHLMC, due 01/15/33 and
FNMA, due 09/25/22.,
Market Value of
collateral is $3,158,064) ~~ $ 3,059,941 3,059,941
Bear Stearns & Co.,
1.80%, Dated 10/31/04,
due 11/1/04, proceeds at
maturity $163,395, (fully
collateralized by FNMA,
due 09/25/22.
Market Value of collateral is
$168,757) ~~ 163,370 163,370
PRINCIPAL
AMOUNT VALUE
--------------- ---------------
Bear Stearns & Co.,
1.80%, Dated 10/31/04,
due 11/1/04, proceeds at
maturity $3,699,688,
(fully collateralized by
U.S. Treasury Strips, due
11/15/15 and U.S.
Treasury Bonds, due
02/15/20. Market
Value of collateral is
$3,808,478) ~~ $ 3,699,133 $ 3,699,133
Bear Stearns & Co.,
1.88%, Dated 10/31/04,
due 11/1/04, proceeds at
maturity $64,911,121
(fully collateralized by
FNMA, due 09/25/22,
FHLMC, due 09/15/31,
FHLMC, due 12/15/32,
FNMA, due 04/25/18,
FHLMC, due 02/15/33,
FHLMC, due 12/15/23,
GNMA, due 01/20/33,
FNMA, due 03/25/16, and
GNMA, due 09/20/30.
Market Value of collateral is
$66,783,134) ~~ 64,900,980 64,900,980
---------------
TOTAL REPURCHASE AGREEMENTS
(COST $71,823,424) 71,823,424
---------------
TOTAL INVESTMENTS--183.7%
(COST $442,636,527) 449,246,076
LIABILITIES IN EXCESS OF
OTHER ASSETS--(83.7%) (204,723,050)
---------------
NET ASSETS--(100.0%) $ 244,523,026
===============
NOTES:
++ Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At October31,
2004, these securities amounted to $88,560,901 or 36.22% of net assets.
+ Step Bond--The interest stated is as of October 31, 2004 and will reset at
a future date.
** Bond in default.
* Non-income producing security.
^ Not readily marketable; security is valued at fair value as determined in
good faith by, or under the direction of, the Board of Trustees.
~ Security or portion thereof is out on loan.
~~ Represents security purchased with cash collateral received for securities
on loan.
# Variable rate obligations--The interest rate shown is the rate as of
October 31, 2004.
SEE NOTES TO FINANCIAL STATEMENTS.
14
CREDIT SUISSE HIGH YIELD BOND FUND--STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2004
ASSETS:
Investments in securities at value, including collateral for
securities on loan of $101,823,424 (Cost $442,636,527) (Note 1, 7) $ 449,246,076(1)
Cash 3,699,146
Interest receivable 8,441,574
Receivable for investments sold 487,400
Prepaid expenses and other assets 25,681
-------------
Total Assets 461,899,877
-------------
LIABILITIES:
Investment advisory fees (Note 2) 298,279
Administrative fees (Note 2) 49,152
Loan payable (Note 5) 113,000,000
Payable upon return of securities loaned (Note 7) 101,823,424
Payable for investments purchased 1,881,500
Interest payable 215,181
Trustees' fees (Note 2) 12,750
Other accrued expenses payable 96,565
-------------
Total Liabilities 217,376,851
=============
NET ASSETS
Applicable to 53,977,630 shares outstanding $ 244,523,026
=============
NET ASSETS CONSIST OF:
Capital stock, $0.001 par value (Note 4) $ 53,978
Paid-in capital (Note 4) 483,932,526
Distributions in excess of net investment income (3,067,445)
Accumulated net realized loss on investments (243,005,582)
Net unrealized appreciation from investments 6,609,549
-------------
Net Assets $ 244,523,026
=============
NET ASSET VALUE PER SHARE ($244,523,026 DIVIDED BY 53,977,630) $ 4.53
=============
MARKET PRICE PER SHARE $ 5.24
=============
(1) Including $93,361,626 of securities on loan.
SEE NOTES TO FINANCIAL STATEMENTS.
15
CREDIT SUISSE HIGH YIELD BOND FUND--STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 2004
INVESTMENT INCOME: (NOTE 1)
Interest $ 33,690,213
Dividends 39,345
Securities lending 424,732
-------------
Total investment income 34,154,290
=============
EXPENSES:
Investment advisory fees (Note 2) 3,462,791
Administrative fees (Note 2) 191,723
Interest and leveraging fees (Note 5) 1,897,127
Legal fees 67,991
Trustees' fees (Note 2) 53,698
Registration fees 49,128
Printing fees (Note 2) 46,971
Audit fees 40,801
Custodian fees 38,398
Insurance expense 30,268
Transfer agent fees 23,032
Miscellaneous expense 5,796
-------------
Total expenses 5,907,724
-------------
NET INVESTMENT INCOME 28,246,566
-------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized loss on investments (4,053,958)
Net change in unrealized appreciation (depreciation) on investments 17,042,720
-------------
Net realized and unrealized gain on investments 12,988,762
-------------
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 41,235,328
=============
SEE NOTES TO FINANCIAL STATEMENTS.
16
CREDIT SUISSE HIGH YIELD BOND FUND--STATEMENTS OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED
10/31/2004 10/31/2003
------------- -------------
OPERATIONS:
Net investment income $ 28,246,566 $ 28,766,087
Net realized loss on investments (4,053,958) (7,773,838)
Net change in unrealized appreciation (depreciation)
on investments 17,042,720 52,453,048
------------- -------------
Net increase in net assets resulting from operations 41,235,328 73,445,297
------------- -------------
DIVIDENDS TO SHAREHOLDERS:
From net investment income (30,957,053) (31,473,607)
------------- -------------
Net decrease in net assets resulting from dividends (30,957,053) (31,473,607)
------------- -------------
CAPITAL SHARE TRANSACTIONS: (Note 4)
Reinvestment of dividends 4,990,024 6,393,847
------------- -------------
Net increase in net assets from capital share transactions 4,990,024 6,393,847
------------- -------------
Net increase in net assets 15,268,299 48,365,537
NET ASSETS:
Beginning of year 229,254,727 180,889,190
------------- -------------
End of year $ 244,523,026 $ 229,254,727
============= =============
Distributions in excess of net investment income $ (3,067,445) $ (2,486,406)
============= =============
SEE NOTES TO FINANCIAL STATEMENTS.
17
CREDIT SUISSE HIGH YIELD BOND FUND--STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED OCTOBER 31, 2004
CASH FLOWS FROM OPERATING ACTIVITIES:
Interest, dividends and securities lending income received $ 30,570,318
Operating expenses paid (5,802,240)
Purchases of long-term securities (237,844,835)
Proceeds from sales of long-term securities 225,396,647
---------------
Net cash provided by operating activities $ 12,319,890
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from borrowings 113,000,000
Repayment of borrowings (105,500,000)
Cash dividends paid (25,967,029)
---------------
Net cash used in financing activities (18,467,029)
---------------
Net decrease in cash (6,147,139)
Cash--beginning of year 9,846,285
---------------
Cash--end of year $ 3,699,146
===============
RECONCILIATION OF NET INCREASE IN NET ASSETS FROM OPERATION TO NET
CASH USED IN OPERATING ACTIVITIES:
Net increase in net assets resulting from operations $ 41,235,328
ADJUSTMENTS TO RECONCILE NET INCREASE IN NET ASSETS FROM OPERATIONS
TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
Increase in dividends and interest receivable $ (15,201)
Decrease in accrued expenses (12,395)
Increase in interest payable 77,013
Increase in prepaid expenses and other assets (2,266)
Increase in advisory fees payable 43,132
Net amortization of discount on investments (3,568,771)
Purchases of long-term securities (237,844,835)
Proceeds from sales of long-term securities 225,396,647
Net change in unrealized appreciation on investments (17,042,720)
Net realized loss on investments 4,053,958
---------------
Total adjustments (28,915,438)
---------------
Net cash provided by operating activities $ 12,319,890
===============
NON-CASH ACTIVITY:
Dividend reinvestments $ 4,990,024
===============
SEE NOTES TO FINANCIAL STATEMENTS.
18
CREDIT SUISSE HIGH YIELD BOND FUND--FINANCIAL HIGHLIGHTS
The table below sets forth financial data for a share of beneficial interest
outstanding throughout the years presented. This information has been derived
from the Fund's financial statements.
YEAR ENDED
---------------------------------------------------------------------------------
10/31/2004 10/31/2003 10/31/2002 10/31/2001
--------------- --------------- --------------- ---------------
Net asset value,
beginning of period $ 4.34 $ 3.53 $ 4.49 $ 6.16
--------------- --------------- --------------- ---------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.53 0.55 0.65(2) 0.84
Net realized and unrealized
gain (loss) on investments 0.24 0.87 (0.80) (1.63)
--------------- --------------- --------------- ---------------
Total from investment
operations 0.77 1.42 (0.15) (0.79)
--------------- --------------- --------------- ---------------
LESS DIVIDENDS:
From net investment
income (0.58) (0.61) (0.71) (0.86)
Distributions from net
realized gains -- -- -- --
Return of capital -- -- (0.10) (0.02)
--------------- --------------- --------------- ---------------
Total dividends to
shareholders (0.58) (0.61) (0.81) (0.88)
--------------- --------------- --------------- ---------------
Offering costs charged to
paid-in-capital -- -- -- --
--------------- --------------- --------------- ---------------
Net asset value, end of
period $ 4.53 $ 4.34 $ 3.53 $ 4.49
=============== =============== =============== ===============
Market value, end of period $ 5.24 $ 4.76 $ 4.10 $ 5.07
=============== =============== =============== ===============
Total return (market value)(4) 25.49% 35.07% (2.15)% (3.21)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s omitted) $ 244,523 $ 229,255 $ 180,889 $ 219,440
Average debt per share $ 2.05 $ 1.81 $ 1.99 $ 2.49
Ratio of operating
expenses to average
net assets 2.51% 2.57% 2.91% 4.29%
Ratio of operating
expense to average
net assets, excluding
interest and leveraging
expenses 1.70% 1.73% 1.78% 1.73%
Ratio of net investment
income to average
net assets 11.99% 13.85% 15.17% 15.22%
Portfolio turnover rate 12.10% 15.96% 33.22% 46.11%
YEAR ENDED
------------------------------------- PERIOD ENDED
10/31/2000 10/31/1999 10/31/1998(1)
--------------- --------------- ---------------
Net asset value,
beginning of period $ 7.98 $ 8.36 $ 10.00
--------------- --------------- ---------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income 0.96(2) 0.98 0.24
Net realized and unrealized
gain (loss) on investments (1.80) (0.38) (1.62)
--------------- --------------- ---------------
Total from investment
operations (0.84) 0.60 (1.38)
--------------- --------------- ---------------
LESS DIVIDENDS:
From net investment
income (0.98) (0.98) (0.24)
Distributions from net
realized gains -- -- --
Return of capital -- -- --
--------------- --------------- ---------------
Total dividends to
shareholders (0.98) (0.98) (0.24)
--------------- --------------- ---------------
Offering costs charged to
paid-in-capital -- 0.00(3) (0.02)
--------------- --------------- ---------------
Net asset value, end of
period $ 6.16 $ 7.98 $ 8.36
=============== =============== ===============
Market value, end of period $ 6.19 $ 8.06 $ 9.56
=============== =============== ===============
Total return (market value)(4) (12.15)% (5.71)% (1.74)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000s omitted) $ 286,838 $ 358,679 $ 359,956
Average debt per share $ 3.47 $ 3.18 $ 1.02
Ratio of operating
expenses to average
net assets 4.81% 3.62% 1.81%(5)
Ratio of operating
expense to average
net assets, excluding
interest and leveraging
expenses 1.61% 1.53% 1.16%(5)
Ratio of net investment
income to average
net assets 12.90% 11.24% 10.48%(5)
Portfolio turnover rate 31.29% 60.23% 15.26%
(1) The fund commenced operations on July 28, 1998.
(2) Based on average shares outstanding.
(3) Amount rounds to less than $0.01.
(4) Total return is based on the change in market price of a share during the
period and assumes reinvestment of dividends and distributions at actual
prices pursuant to the Fund's Dividend Reinvestment Plan. Total return
based on market value, which can be significantly greater or lesser than
the net asset value, may result in substantially different returns.
(5) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
19
CREDIT SUISSE HIGH YIELD BOND FUND--NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 2004
1. SIGNIFICANT ACCOUNTING POLICIES
Credit Suisse High Yield Bond Fund (the "Fund") is a business trust
organized under the laws of the State of Delaware on April 30, 1998. The Fund is
registered with the Securities and Exchange Commission under the Investment
Company Act of 1940, as amended ("Investment Company Act"), as a
non-diversified, closed-end management investment company. The Fund's shares
trade on the New York Stock Exchange under the ticker symbol DHY. The Fund's
primary objective is to seek high current income. The following is a summary of
significant accounting policies consistently followed by the Fund in its
operations and in connection with the preparation of its financial statements.
PORTFOLIO VALUATION: Fixed-income securities (other than short-term
obligations, but including listed issues) are valued based on prices obtained by
one or more independent pricing services approved by the Board of Trustees.
Pricing services use a matrix, formula or other objective method that takes into
consideration market indices, yield curves and other specific adjustments.
Securities (other than fixed-income securities) for which the principal
market is one or more securities exchanges are valued at market value, which is
generally determined using the closing price on the exchange or market on which
the security is primarily traded. If a securities exchange is not the principal
market for a security, such security will, if market quotations are readily
available, be valued at the closing bid price in the over-the-counter market (or
the last sale price in the case of securities reported on the NASDAQ national
market system for which any sales occurred during the day). Securities and other
assets for which market quotations are not readily available are valued at fair
value as determined in good faith by, or under the direction of, the Board of
Trustees under procedures established by the Board of Trustees. Debt obligations
that will mature in 60 days or less are valued on the basis of amortized cost,
which approximates market value, unless it is determined that using this method
would not reflect an investment's fair value.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded as of the trade date. Realized gains and losses from securities
transactions are recorded on the identified cost basis. Interest income is
earned on the accrual basis. Dividend income is recorded on the ex-dividend
date. Accretion of discount and amortization of premium is recognized using
effective interest method.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Fund declares and pays
dividends on a monthly basis. Each dividend is recorded on the ex-dividend date.
Capital gains, if any, net of capital losses, are distributed annually. Income
dividends and capital gain distributions are determined in accordance with
income tax regulations, which may differ from accounting principles generally
accepted in the United States of America ("GAAP"). These differences are
primarily due to differing treatments of income and gains on various investment
securities held by the Fund, timing differences and differing characterization
of distributions made by the Fund.
The Fund's dividend policy is to distribute substantially all of its net
investment income to its shareholders on a monthly basis. However, in order to
provide shareholders with a more consistent yield to the current trading price
of shares of Common Stock of the Fund, the Fund may at times pay out less than
the entire amount of net investment income earned in any particular month and
may at times in any month pay out such accumulated but undistributed income in
addition to net investment income earned in that month. As a result, the
dividends paid by the Fund for any particular month may be more or less than the
amount of net investment income earned by the Fund during such month.
FEDERAL INCOME TAXES: No provision is made for federal taxes as it is the
Fund's intention to continue to qualify for and elect the tax treatment
applicable to regulated investment companies under the Internal
20
Revenue Code of 1986, as amended, and make the requisite distributions to its
shareholders which will be sufficient to relieve it from federal income and
excise taxes.
CASH FLOW INFORMATION: Cash, as used in the Statement of Cash Flows, is the
amount reported in the Statement of Assets and Liabilities. The Fund invests in
securities and distributes dividends from net investment income and net realized
gains, if any (which are either paid in cash or reinvested at the discretion of
shareholders). These activities are reported in the Statement of Changes in Net
Assets. Information on cash payments is presented in the Statement of Cash
Flows. Accounting practices that do not affect reporting activities on a cash
basis include unrealized gain or loss on investment securities and accretion or
amortization income recognized on investment securities.
USE OF ESTIMATES: The preparation of financial statements in conformity
with GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of income and expenses during the reporting period. Actual results could differ
from those estimates.
2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER RELATED PARTY
TRANSACTIONS
The Fund has entered into an Investment Advisory Agreement (the "Advisory
Agreement") with Credit Suisse Asset Management, LLC ("CSAM"). The Advisory
Agreement provides for a fee at the annual rate of 1% of the average weekly
value of the Fund's total assets minus the sum of liabilities (other than
aggregate indebtedness constituting leverage). Under the Advisory Agreement with
the Fund, CSAM provides investment advisory services and order placement
facilities for the Fund and pays all compensation of Trustees of the Fund who
are affiliated persons of CSAM. For the year ended October 31, 2004, investment
advisory fees earned were $3,462,791.
State Street Bank and Trust Company ("SSB") serves as Accounting and
Administrative Agent for the Fund. For its administrative services, SSB receives
a fee, exclusive of out-of-pocket expenses, based upon the following fee
schedule calculated in total for all the Credit Suisse funds/portfolios
administered by SSB and allocated based upon relative average net assets of each
fund/portfolio subject to an annual minimum fee.
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
First $5 billion 0.050% of average daily net assets
Next $5 billion 0.035% of average daily net assets
Over $10 billion 0.020% of average daily net assets
For the year ended October 31, 2004, administrative service fees earned by
SSB (including out-of-pocket expenses) were $191,723.
The Fund pays each Trustee not affiliated with CSAM $1,000 per regular
quarterly board meeting attended and an annual retainer fee of $12,500. In
addition, the Fund reimburses each Trustee for travel and out-of-pocket expenses
relating to his attendance at such meetings.
Merrill Corporation ("Merrill"), an affiliate of CSAM, has been engaged by
the Fund to provide certain financial printing services. For the year ended
October 31, 2004, Merrill was paid $33,256 for its services to the Fund.
21
3. INVESTMENTS
Cost of purchases and proceeds from sales of investment securities,
excluding short-term investments, during the year ended October 31, 2004,
amounted to $142,419,503 and $40,788,605, respectively.
4. FUND SHARES
The Fund has one class of shares of beneficial interest, par value $0.001
per share; an unlimited number of shares are authorized. Transactions in shares
of beneficial interest were as follows:
FOR THE YEAR ENDED FOR THE YEAR ENDED
OCTOBER 31, 2004 OCTOBER 31, 2003
------------------ ------------------
Shares issued through reinvestment of dividends 1,132,804 1,619,036
========= =========
5. NOTES PAYABLE
The Fund has a $150 million line of credit provided by Citibank North
America, Inc., under a Revolving Credit and Security Agreement (the "Agreement")
dated April 12, 2002, as amended from time to time, primarily to leverage its
investment portfolio. Under this Agreement, the Fund may borrow the lesser of
$150 million or 33 1/3% of its gross assets. Interest is payable at the Bank's
Base Rate plus a commission of 0.05%. The Fund pays a program fee of 0.20% of
the average daily amount leveraged, an administration fee of 0.02% of the
average daily amount leveraged and a liquidity fee of 0.15% of the maximum
borrowing limit (currently $150 million). The Fund paid a structuring fee of
$19,000 per quarter until July 2003. The Agreement requires, among other
provisions, that the percentage obtained by dividing total indebtedness for
money borrowed by total assets of the Fund shall not exceed 33 1/3%. At October
31, 2004 the Fund had loans outstanding under the Agreement. During the year
ended October 31, 2004, the Fund had borrowings under the Agreement as follows:
AVERAGE DAILY WEIGHTED AVERAGE MAXIMUM DAILY
LOAN BALANCE INTEREST RATE LOAN OUTSTANDING
--------------- ---------------- ----------------
$ 110,674,863 1.263% $ 115,000,000
6. CONCENTRATION OF RISK
The Fund invests in securities offering high current income, which
generally will be in the lower rating categories of recognized ratings agencies
(commonly known as "junk bonds").
These securities generally involve more credit risk than securities in the
higher rating categories. In addition, the trading market for high yield
securities may be relatively less liquid than the market for higher-rated
securities. The Fund's use of leverage also increases exposure to capital risk.
7. SECURITIES LENDING
The Fund loaned securities during the year ended October 31, 2004 to
certain brokers, with the Fund's custodian acting as lending agent. Upon such
loans, the Fund receives collateral, which is maintained by the custodian and
earns income, in the form of negotiated lender's fees. On a daily basis, the
Fund monitors the market value of securities loaned and maintains collateral
against the securities loaned in an amount not less than the value of the
securities loaned. The Fund may receive collateral in the form of cash or other
eligible securities. Risks may arise upon entering into securities lending to
the extent that the value of the
22
collateral is less than the value of the securities loaned due to changes in the
value of the collateral or the loaned securities. Cash collateral received by
the Fund in connection with securities lending activity is invested in
repurchase agreements with Bear Stearns & Co. or in the Dreyfus Cash Management
Fund and Dreyfus Cash Management Plus Fund, Inc.
The market value of securities on loan to brokers and the value of
collateral held by the Fund with respect to such loans at October 31, 2004 was
as follows:
MARKET VALUE OF VALUE OF
SECURITIES LOANED COLLATERAL RECEIVED
----------------- -------------------
$ 93,361,626 $ 101,823,424
8. FEDERAL INCOME TAXES
Income and capital gain distributions are determined in accordance with
federal income tax regulations, which may differ from GAAP. These differences
are primarily due to differing treatments of losses deferred due to wash sales,
interest accruals from defaulted bonds and income from investments in
partnerships.
The tax characteristics of dividends paid during the years ended October
31, 2004 and 2003 by the Fund were as follows:
ORDINARY INCOME
---------------------------------
2004 2003
-------------- --------------
$ 30,957,053 $ 31,473,607
At October 31, 2004, the components of distributable earnings on a tax
basis for the Fund were as follows:
Undistributed ordinary income $ 665,304
Accumulated net realized loss (242,968,341)
Unrealized appreciation 2,839,559
--------------
$ (239,463,478)
==============
At October 31, 2004, the Fund had capital loss carryforwards of 242,968,341
available to offset possible future capital gains as follows:
EXPIRES OCTOBER 31,
-------------------------------------------------------------------------------------------------------------------
2006 2007 2008 2009 2010 2011 2012
-------------- -------------- -------------- -------------- -------------- ------------- -------------
$ 13,855,150 $ 30,606,551 $ 37,573,747 $ 68,628,620 $ 77,916,490 $ 8,291,239 $ 6,096,544
It is unlikely that the Fund will realize the full benefit of these losses
prior to expiration.
23
At October 31, 2004, the identified cost for federal income tax purposes,
as well as the gross unrealized appreciation from investments for those
securities having an excess of value over cost, gross unrealized depreciation
from investments for those securities having an excess of cost over value and
the net unrealized appreciation from investments were as follows:
GROSS UNREALIZED GROSS UNREALIZED NET UNREALIZED
IDENTIFIED COST APPRECIATION (DEPRECIATION) APPRECIATION
---------------- ---------------- ---------------- --------------
$ 446,406,517 $ 22,401,587 $ (19,562,028) $ 2,839,559
At October 31, 2004, the Fund reclassified $85,924 from paid in capital and
$2,043,524 from accumulated net realized loss from investments to net investment
loss, to adjust for current period permanent book/tax differences which arose
principally from differing book/tax treatments of interest accruals from
defaulted bonds and income from investments in partnerships. Net assets were not
affected by these reclassifications.
9. CONTINGENCIES
In the normal course of business, the Fund may provide general
indemnifications pursuant to certain contracts and organizational documents. The
Fund's maximum exposure under these arrangements is dependent on future claims
that may be made against the Fund and, therefore, cannot be estimated; however,
based on experience, the risk of loss from such claims is considered
remote.
24
CREDIT SUISSE HIGH YIELD BOND FUND--REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Trustees and Shareholders of
Credit Suisse High Yield Bond Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations, of
changes in net assets and of cash flows and the financial highlights present
fairly, in all material respects, the financial position of Credit Suisse High
Yield Bond Fund (the "Fund") at October 31, 2004, the results of its operations
and its cash flows for the year then ended, the changes in its net assets for
each of the two years in the period then ended and the financial highlights for
each of the periods presented, in conformity with the accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements 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 are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at October 31, 2004 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion. The financial
highlights of the fund for the year ended October 31, 2000 were audited by other
independent auditors, whose report dated December 20, 2000 expressed an
unqualified opinion on these financial statements containing those financial
highlights.
PricewaterhouseCoopers LLP
Philadelphia, Pennsylvania
December 15, 2004
25
CREDIT SUISSE HIGH YIELD BOND FUND--ADDITIONAL INFORMATION (UNAUDITED)
DIVIDEND REINVESTMENT PLAN
Referenced below are policies related to the Fund's Automatic Dividend
Reinvestment Plan (the "Plan"). These policies apply to shareholders whose
shares are registered directly with the Fund in their own name. Shareholders
whose shares are purchased through a broker-dealer or nominee should contact
such broker-dealer or nominee regarding questions related to the reinvestment of
the Fund's dividends.
Pursuant to the Fund's Plan, unless a shareholder otherwise elects, all
dividends and capital gain distributions will be automatically reinvested by
EquiServe as agent for Shareholders in administering the Plan (the "Plan
Agent"), in additional shares of the Fund. Shareholders who elect not to
participate in the Plan will receive all dividends and other distributions in
cash paid by check mailed directly to the shareholder of record (or, if the
shares are held in street or other nominee name, then to such nominee) by
EquiServe as the Dividend Disbursing Agent. Such participants may elect not to
participate in the Plan and to receive all dividends and capital gain
distributions in cash by sending written instructions to EquiServe as the
Dividend Disbursing Agent, at the address set forth below. Participation in the
Plan is completely voluntary and may be terminated or resumed at any time
without penalty by written notice if received by the Plan Agent not less than
ten days prior to any dividend record date; otherwise such termination will be
effective with respect to any subsequently declared dividend or other
distribution.
Whenever the Fund declares an income dividend or a capital gain
distribution (collectively referred to as "dividends") payable either in shares
or in cash, non-participants in the Plan will receive cash and participants in
the Plan will receive the equivalent in shares. The shares will be acquired by
the Plan Agent for the participants' accounts, depending upon the circumstances
described below, either (i) through receipt of additional unissued but
authorized shares from the Fund ("newly issued shares") or (ii) by purchase of
outstanding shares on the open market ("open-market purchases") on the NYSE or
elsewhere. If on the record date for the dividend, the net asset value per share
is equal to or less than the market price per share plus estimated brokerage
commissions (such condition being referred to herein as "market premium"), the
Plan Agent will invest the dividend amount in newly issued shares on behalf of
the participants. The number of newly issued shares to be credited to each
participant's account will be determined by dividing the dollar amount of the
dividend by the net asset value per share on the date the shares are issued. If
on the dividend record date the net asset value per share is greater than the
market value (such condition being referred to herein as "market-discount"), the
Plan Agent will invest the dividend amount in shares acquired on behalf of the
participants in open-market purchases.
In the event of a market discount on the dividend record date, the Plan
Agent will have until the last business day before the next date on which the
shares trade on an "ex-dividend" basis or in no event more than 30 days after
the dividend record date (the "last purchase date") to invest the dividend
amount in shares acquired in open-market purchases. It is contemplated that the
Fund will pay monthly income dividends. Therefore, the period during which
open-market purchases can be made will exist only from the record date of the
dividend through the date before the next "ex-dividend" date. If, before the
Plan Agent has completed its open-market purchases, the market price of a share
exceeds the net asset value per share, the average per share purchase price paid
by the Plan Agent may exceed the net asset value of the shares, resulting in the
acquisition of fewer shares than if the dividend had been paid in newly issued
shares on the dividend record date. Because of the foregoing difficulty with
respect to open market purchases, the Plan provides that if the Plan Agent in
unable to invest the full dividend amount in open market purchases during the
purchase period or if the market discount shifts to a market premium during the
purchase period, the Plan Agent may cease making open-market purchases and may
invest the uninvested portion of the dividend amount in newly issued shares at
the net asset value per share at the close of business on the last purchase
date.
26
The Plan Agent maintains all shareholders' accounts in the Plan and
furnishes written confirmation of all transactions in the accounts, including
information needed by shareholders for tax records. Shares in the account of
each Plan participant will be held by the Plan Agent on behalf of the Plan
participant, and each shareholder proxy will include those shares purchased or
received pursuant to the Plan. The Plan Agent will forward all proxy
solicitation materials to participants and vote proxies for shares held pursuant
to the Plan in accordance with the instructions of the participants. In the case
of shareholders such as banks, brokers or nominees that hold shares for others
who are the beneficial owners, the Plan Agent will administer the Plan on the
basis of the number of shares certified from time to time by the record
shareholder and held for the account of beneficial owners who participate in the
Plan.
There will be no brokerage charges with respect to shares issued directly
by the Fund as a result of dividends or capital gains distributions payable
either in shares or in cash. However, each participant will pay a pro rata share
of brokerage commissions incurred with respect to the Plan Agent's open-market
purchases in connection with the reinvestment of dividends.
The automatic reinvestment of dividends will not relieve participants of
any Federal, state or local income tax that may be payable (or required to be
withheld) on such dividends.
Shareholders participating in the Plan may receive benefits not available
to shareholders not participating in the Plan. If the market price (plus
commissions) of the shares is above their net asset value, participants in the
Plan will receive shares of the Fund at less than they could otherwise purchase
them and will have shares with a cash value greater than the value of any cash
distribution they would have received on their shares. If the market price plus
commissions is below the net asset value, participants will receive
distributions in shares with a net asset value greater than the value of any
cash distribution they would have received on their shares. However, there may
be insufficient shares available in the market to make distributions in shares
at prices below the net asset value. Also, since the Fund does not redeem
shares, the price on resale may be more or less than the net asset value.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Fund reserves the right to amend or terminate the Plan. There
is no direct service charge to participants in the Plan; however, the Fund
reserves the right to amend the Plan to include a service charge payable by the
participants.
All correspondence concerning the Plan should be directed to the Plan Agent
at P.O. Box 43010, Providence, RI 02940-3010, 1-800-730-6001.
LEVERAGE--BENEFITS AND RISKS
The use of leverage by the Fund creates an opportunity for increased net
income and capital appreciation for the Fund, but, at the same time, creates
special risks, and there can be no assurance that a leveraging strategy will be
successful during any period in which it is employed. The Fund intends to
utilize leverage to provide the Shareholders with a potentially higher return.
Leverage creates risks for Shareholders including the likelihood of greater
volatility of net asset value and market price of the Fund's shares and the risk
that fluctuations in interest rates on borrowings and short-term debt may affect
the return to Shareholders. To the extent the income or capital appreciation
derived from securities purchased with funds received from leverage exceeds the
cost of leverage, the Fund's return will be greater than if leverage had not
been used. Conversely, if the income or capital appreciation from the securities
purchased with such funds is not sufficient to cover the cost of leverage, the
return to the Fund will be less than if leverage had not been used, and
therefore the amount available for distribution to Shareholders as dividends and
other distributions will be reduced. In the latter case, CSAM in its best
judgment nevertheless may determine to maintain the Fund's leveraged position if
it deems such action to be appropriate under the circumstances. During periods
in which the Fund is utilizing leverage, the Management Fee will be higher than
if the Fund did not utilize a leveraged capital structure because the fee is
calculated as a percentage of the Managed Assets including those
27
purchased with leverage. Certain types of borrowings by the Fund may result in
the Fund's being subject to covenants in credit agreements, including those
relating to asset coverage and portfolio composition requirements. The Fund's
lenders may establish guidelines for borrowing which may impose asset coverage
or portfolio composition requirements that are more stringent than those imposed
by the Investment Company Act. It is not anticipated that these covenants or
guidelines will impede CSAM in managing the Fund's portfolio in accordance with
the Fund's investment objectives and policies.
28
CREDIT SUISSE HIGH YIELD BOND FUND
INFORMATION CONCERNING TRUSTEES AND OFFICERS (UNAUDITED)
NUMBER OF
PORTFOLIOS IN
POSITION(S) TERM OF OFFICE FUND COMPLEX
NAME, ADDRESS HELD AND LENGTH PRINCIPAL OCCUPATION(S) OVERSEEN BY OTHER DIRECTORSHIPS
AND DATE OF BIRTH WITH FUND OF TIME SERVED DURING PAST FIVE YEARS TRUSTEE HELD BY TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
INDEPENDENT TRUSTEES
Enrique R. Arzac Trustee, Since 2001; Professor of Finance and 8 Director of The Adams
Columbia University Nominating current term ends Economics, Graduate Express Company
Graduate School of Committee at the 2005 annual School of Business, (a closed-end investment
Business Chairman and meeting. Columbia University company); Director of
New York, New York Audit since 1971. Petroleum and Resources
10027 Committee Corporation (a closed-
Date of Birth: 02/10/41 Member end investment company)
Lawrence J. Fox Trustee, Since 2001; Partner of Drinker Biddle & 3 Director, Winthrop Trust
One Logan Square Nominating current term ends Reath (law firm) since 1972. Company
18th & Cherry Streets Committee at the 2007
Philadelphia, Member and annual meeting.
Pennsylvania Audit
19103 Committee
Date of Birth: 07/17/43 Chairman
James S. Pasman, Jr. Trustee, Since 2001; Currently retired 43 Director of Education
c/o Credit Suisse Asset Nominating current term ends Management Corp.
Management, LLC and Audit at the 2006 annual
466 Lexington Avenue New Committee meeting.
York, New York Member
10017-3140
Date of Birth: 12/20/30
29
POSITION(S) TERM OF
NAME, ADDRESS HELD OFFICE AND LENGTH PRINCIPAL OCCUPATION(S)
AND DATE OF BIRTH WITH FUND OF TIME SERVED DURING PAST FIVE YEARS
------------------------------------------------------------------------------------------------------------------------
OFFICERS*
Michel E. Kenneally Chairman of the Since 2004 Chairman and Global Chief Executive Officer of
Credit Suisse Asset Fund and Chief CSAM since 2003; Chairman and Chief Investment
Management, LLC Executive Officer Officer of Banc of America Capital Management
466 Lexington Avenue from 1998 to March 2003.
New York, New York
10017-3140
Date of Birth: 3/30/54
Richard J. Lindquist President and Since 2000 Managing Director of CSAM. Associated with CSAM
Credit Suisse Asset Chief Investment since 1995. Officer of other Credit Suisse Funds.
Management, LLC Officer
466 Lexington Avenue
New York, New York
10017-3140
Date of Birth: 06/22/60
Michael A. Pignataro Chief Financial Since 2000 Director and Director of Fund Administration of
Credit Suisse Asset Officer, Vice CSAM; Associated with CSAM since 1984; Officer
Management, LLC President and of other Credit Suisse Funds.
466 Lexington Avenue Secretary
New York, New York
10017-3140
Date of Birth: 11/15/59
Emidio Morizio Chief Compliance Since 2004 Vice President and Global Head of Compliance of
Credit Suisse Asset Officer CSAM; Associated with CSAM since July 2000; Vice
Management, LLC President and Director of Compliance of
466 Lexington Avenue Forstmann-Leff Associates from 1998 to June
New York, New York 2000; Officer of other Credit Suisse Funds
10017-3140
Date of Birth: 09/21/66
Ajay Mehra Chief Since 2004 Director and Deputy General Counsel of CSAM
Credit Suisse Asset Legal Officer since September 2004; Senior Associate of
Management, LLC Shearman & Sterling LLP from September 2000 to
466 Lexington Avenue September 2004; Senior Counsel of the SEC
New York, New York Division of Investment Management from June 1997
10017-3140 to September 2000; Officer of other Credit
Date of Birth: 08/14/70 Suisse Funds
J. Kevin Gao Senior Vice Since 2004 Vice President and legal counsel of CSAM;
Credit Suisse Asset President Associated with CSAM since July 2003; Associated
Management, LLC with the law firm of Willkie Farr & Gallagher
466 Lexington Avenue LLP from 1998 to 2003; Officer of other Credit
New York, New York Suisse Funds
10017-3140
Date of Birth: 10/13/67
Robert M. Rizza Treasurer Since 2001 Assistant Vice President of CSAM; Associated
Credit Suisse Asset with CSAM since 1998; Officer of other Credit
Management, LLC Suisse Funds.
466 Lexington Avenue
New York, New York
10017-3140
Date of Birth: 12/09/65
* The officers of the Fund shown are officers that make policy decisions.
30
ANNUAL CERTIFICATIONS (UNAUDITED)
The Fund's Chief Executive Officer has filed an annual certification with
the NYSE that, as of the date of the certification, he was unaware of any
violation by the Fund of the NYSE's corporate governance listing standards. The
Fund's Chief Executive Officer and Chief Financial Officer have also filed
certifications with the SEC as part of the Fund's Form N-CSR filings that cover
certain public disclosure documents of the Fund, including its annual and
semi-annual reports to stockholders.
31
CREDIT SUISSE HIGH YIELD BOND FUND
TAX INFORMATION LETTER (UNAUDITED) OCTOBER 31, 2004
IMPORTANT TAX INFORMATION FOR CORPORATE SHAREHOLDERS
Corporate shareholders should note for the year ended October 31, 2004, the
percentage of the Fund's investment income (i.e., net investment income plus
short-term capital gains) that qualified for the intercorporate dividends
received deduction is 0.15%.
For the fiscal year ended October 31, 2004, the Fund designates
approximately $39,345, or up to the maximum amount of such dividends allowable
pursuant to the Internal Revenue Code, as qualified dividend income eligible for
reduced tax rates. These lower rates range from 5% to 15% depending on an
individual's tax bracket. If the Fund pay a distribution during calendar year
2004, complete information will be reported in conjunction with Form
1099-DIV.
32
CREDIT SUISSE HIGH YIELD BOND FUND
PROXY VOTING AND PORTFOLIO HOLDINGS INFORMATION (UNAUDITED)
Information regarding how the Credit Suisse High Yield Bond Fund, Inc. (the
"Fund") voted proxies related to its portfolio securities during the 12-month
period ended June 30, 2004, as well as the policies and procedures that the Fund
uses to determine how to vote proxies relating to its portfolio securities are
available:
- By calling 1-800-293-1232
- On the Fund's website, www.csam.com/us
- On the website of the Securities and Exchange Commission,
http://www.sec.gov.
The Fund files a complete schedule of its portfolio holdings for the first
and third quarters of its fiscal year with the SEC on Form N-Q. The Fund's Forms
N-Q are available on the SEC's website at http://www.sec.gov and may be reviewed
and copied at the SEC's Public Reference Room in Washington, DC. Information on
the operation of the SEC's Public Reference Room may be obtained by calling
1-800-SEC-0330.
33
OTHER FUNDS MANAGED BY CREDIT SUISSE ASSET MANAGEMENT, LLC
Credit Suisse Capital Appreciation Fund
Credit Suisse Cash Reserve Fund
Credit Suisse Emerging Markets Fund
Credit Suisse Fixed Income Fund
Credit Suisse Global Fixed Income Fund
Credit Suisse Global Post-Venture Capital Fund
Credit Suisse High Income Fund
Credit Suisse International Focus Fund
Credit Suisse Japan Equity Fund
Credit Suisse Large Cap Value Fund
Credit Suisse Mid-Cap Growth Fund
Credit Suisse New York Municipal Fund
Credit Suisse Select Equity Fund
Credit Suisse Short Duration Bond Fund
Credit Suisse Small Cap Growth Fund
Credit Suisse Small Cap Value Fund
Fund shares are not deposits or other obligations of Credit Suisse Asset
Management, LLC or any affiliate, are not FDIC-insured and are not guaranteed by
Credit Suisse Asset Management, LLC or any affiliate. Fund investments are
subject to investment risks, including loss of your investment. There are
special risk considerations associated with international, global,
emerging-market, small-company, private equity, high-yield debt,
single-industry, single-country and other special, aggressive or concentrated
investment strategies. Past performance cannot guarantee future results.
More complete information about a fund, including charges and expenses, is
provided in the Prospectus, which should be read carefully before investing. You
may obtain copies by calling Credit Suisse Funds at 800-927-2874. For up-to-date
performance, please look in the mutual fund section of your newspaper under
Credit Suisse.
Credit Suisse Asset Management Securities, Inc., Distributor.
34
THE CSAM GROUP OF FUNDS
LITERATURE REQUEST--Call today for free descriptive information on the
closed-end funds listed below at 1-800-293-1232 or visit our website on the
Internet: http://www.csam.com/us.
CLOSED-END FUNDS
SINGLE COUNTRY
The Brazilian Equity Fund, Inc. (BZL)
The Chile Fund, Inc. (CH)
The Indonesia Fund, Inc. (IF)
The First Israel Fund, Inc. (ISL)
MULTIPLE COUNTRY
The Emerging Markets Telecommunications Fund, Inc. (ETF)
The Latin America Equity Fund, Inc. (LAQ)
FIXED INCOME
Credit Suisse Asset Management Income Fund, Inc. (CIK)
35
800-293-1232 - www.csam.com/us CSHYF-2-1004
CREDIT SUISSE HIGH YIELD BOND FUND
466 LEXINGTON AVENUE
NEW YORK, NY 10017
TRUSTEES
Enrique R. Arzac
Lawrence J. Fox
James S. Pasman, Jr.
OFFICERS
Michael E. Kenneally
CHAIRMAN OF THE FUND AND CHIEF EXECUTIVE OFFICER
Richard J. Lindquist
PRESIDENT AND CHIEF INVESTMENT OFFICER
Michael A. Pignataro
CHIEF FINANCIAL OFFICER, VICE PRESIDENT AND SECRETARY
Emidio Morizio
CHIEF COMPLIANCE OFFICER
Ajay Mehra
CHIEF LEGAL OFFICER
J. Kevin Gao
SENIOR VICE PRESIDENT
Robert M. Rizza
TREASURER
INVESTMENT ADVISER
Credit Suisse Asset Management, LLC
466 Lexington Avenue
New York, NY 10017
ADMINISTRATOR
State Street Bank and Trust Co.
225 Franklin Street
Boston, MA 02110
CUSTODIAN
Custodial Trust Company
101 Carnegie Center
Princeton, NJ 08540
SHAREHOLDER SERVICING AGENT
Fleet National Bank
(c/o EquiServe)
P.O. Box 43010
Providence, RI 02940-3010
LEGAL COUNSEL
Willkie Farr & Gallagher LLP
787 7th Avenue
New York, NY 10019
INDEPENDANT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
Two Commerce Square
Philadelphia, Pennsylvania 19103
ITEM 2. CODE OF ETHICS.
The registrant has adopted a code of ethics applicable to its Chief Executive
Officer, President, Chief Financial Officer and Chief Accounting Officer, or
persons performing similar functions. A copy of the code is filed as Exhibit
12(a)(1) to this Form. There were no amendments to the code during the fiscal
year ended October 31, 2004. There were no waivers or implicit waivers from the
code granted by the registrant during the fiscal year ended October 31, 2004.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's governing board has determined that it has two audit committee
financial experts serving on its audit committee: Enrique R. Arzac and James S.
Pasman, Jr. Each audit committee financial expert is "independent" for purposes
of this item.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) through (d). The information in the table below is provided for services
rendered to the registrant by its independent registered public accounting firm,
PricewaterhouseCoopers LLP ("PwC"), for its fiscal years ended October 31, 2003
and October 31, 2004.
2003 2004
--------- ---------
Audit Fees $ 29,580 $ 29,580
Audit-Related Fees(1) $ 11,500 $ 4,500
Tax Fees(2) $ 2,284 $ 2,284
All Other Fees -- --
Total $ 43,364 $ 36,364
(1) Services include agreed-upon procedures in connection with the registrant's
semi-annual financial statements($3,000 per year), the registrant's
third quarter 2004 Form N-Q filing ($1,500), and the Fund's Debt
Covenant Agreement for 2003 ($8,500).
(2) Tax services in connection with the registrant's excise tax calculations
and review of the registrant's applicable tax returns.
The information in the table below is provided with respect to non-audit
services that directly relate to the registrant's operations and financial
reporting and that were rendered by PwC to the registrant's investment adviser,
Credit Suisse Asset Management, LLC ("CSAM"), and any service provider to the
registrant controlling, controlled by or under common control with CSAM that
provided ongoing services to the registrant ("Covered Services Provider"), for
the registrant's fiscal years ended October 31, 2003 and October 31, 2004.
2003 2004
---- ----
Audit-Related Fees N/A N/A
2
Tax Fees N/A N/A
All Other Fees N/A N/A
Total N/A N/A
(e)(1) Pre-Approval Policies and Procedures. The Audit Committee ("Committee")
of the registrant is responsible for pre-approving (i) all audit and permissible
non-audit services to be provided by the independent registered public
accounting firm to the registrant and (ii) all permissible non-audit services to
be provided by the independent registered public accounting firm to CSAM and any
Covered Services Provider if the engagement relates directly to the operations
and financial reporting of the registrant. The Committee may delegate its
responsibility to pre-approve any such audit and permissible non-audit services
to the Chairperson of the Committee, and the Chairperson shall report to the
Committee, at its next regularly scheduled meeting after the Chairperson's
pre-approval of such services, his or her decision(s). The Committee may also
establish detailed pre-approval policies and procedures for pre-approval of such
services in accordance with applicable laws, including the delegation of some or
all of the Committee's pre-approval responsibilities to other persons (other
than CSAM or the registrant's officers). Pre-approval by the Committee of any
permissible non-audit services shall not be required so long as: (i) the
aggregate amount of all such permissible non-audit services provided to the
registrant, CSAM and any Covered Services Provider constitutes not more than 5%
of the total amount of revenues paid by the registrant to its independent
registered public accounting firm during the fiscal year in which the
permissible non-audit services are provided; (ii) the permissible non-audit
services were not recognized by the registrant at the time of the engagement to
be non-audit services; and (iii) such services are promptly brought to the
attention of the Committee and approved by the Committee (or its delegate(s))
prior to the completion of the audit.
(e)(2) The information in the table below sets forth the percentages of fees for
services (other than audit, review or attest services) rendered by PwC to the
registrant for which the pre-approval requirement was waived pursuant to Rule
2-01(c)(7)(i)(C) of Regulation S-X:
2003 2004
---- ----
Audit-Related Fees N/A N/A
Tax Fees N/A N/A
All Other Fees N/A N/A
Total N/A N/A
3
The information in the table below sets forth the percentages of fees for
services (other than audit, review or attest services) rendered by PwC to CSAM
and any Covered Services Provider required to be approved pursuant to Rule
2-01(c)(7)(ii)of Regulation S-X, for the registrant's fiscal years ended October
31, 2003 and October 31, 2004:
2003 2004
---- ----
Audit-Related Fees N/A N/A
Tax Fees N/A N/A
All Other Fees N/A N/A
Total N/A N/A
(f) Not Applicable.
(g) The aggregate fees billed by PwC for non-audit services rendered to the
registrant, CSAM and Covered Service Providers for the fiscal years ended
October 31, 2003 and October 31, 2004 were $13,784 and $6,784, respectively.
(h) Not Applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant has a separately designated standing audit committee established
in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934,
as amended. The members of the committee are Enrique R. Arzac, Laurence Fox and
James S. Pasman, Jr.
ITEM 6. SCHEDULE OF INVESTMENTS.
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.
4
CREDIT SUISSE ASSET MANAGEMENT, LLC
CREDIT SUISSE FUNDS
CREDIT SUISSE INSTITUTIONAL FUNDS
CSAM CLOSED-END FUNDS
PROXY VOTING POLICY AND PROCEDURES
Introduction
Credit Suisse Asset Management, LLC ("CSAM") is a fiduciary that owes each
of its clients duties of care and loyalty with respect to proxy voting. The
duty of care requires CSAM to monitor corporate events and to vote proxies.
To satisfy its duty of loyalty, CSAM must cast proxy votes in the best
interests of each of its clients.
The Credit Suisse Funds, Credit Suisse Institutional Funds, and CSAM
Closed-End Funds (the "Funds"), which have engaged Credit Suisse Asset
Management, LLC as their investment adviser, are of the belief that the
proxy voting process is a means of addressing corporate governance issues
and encouraging corporate actions both of which can enhance shareholder
value.
Policy
The Proxy Voting Policy (the "Policy") set forth below is designed to
ensure that proxies are voted in the best interests of CSAM's clients. The
Policy addresses particular issues and gives a general indication of how
CSAM will vote proxies. The Policy is not exhaustive and does not include
all potential issues.
Proxy Voting Committee
The Proxy Voting Committee will consist of a member of the Portfolio
Management Department, a member of the Legal and Compliance Department, and
a member of the Operations Department (or their designees). The purpose of
the Proxy Voting Committee is to administer the voting of all clients'
proxies in accordance with the Policy. The Proxy Voting Committee will
review the Policy annually to ensure that it is designed to promote the
best interests of CSAM's clients.
For the reasons disclosed below under "Conflicts," the Proxy Voting
Committee has engaged the services of an independent third party
(initially, Institutional Shareholder Services ("ISS")) to assist in issue
analysis and vote recommendation for proxy proposals. Proxy proposals
addressed by the Policy will be voted in accordance with the Policy. Proxy
proposals addressed by the Policy that require a case-by-case analysis will
be voted in accordance with the vote recommendation of ISS. Proxy proposals
not addressed by the Policy will also be voted in accordance with the vote
5
recommendation of ISS. To the extent that the Proxy Voting Committee
proposes to deviate from the Policy or the ISS vote recommendation, the
Committee shall obtain client consent as described below.
CSAM investment professionals may submit a written recommendation to the
Proxy Voting Committee to vote in a manner inconsistent with the Policy
and/or the recommendation of ISS. Such recommendation will set forth its
basis and rationale. In addition, the investment professional must confirm
in writing that he/she is not aware of any conflicts of interest concerning
the proxy matter or provide a full and complete description of the
conflict.
Conflicts
CSAM is the institutional and mutual fund asset management arm of Credit
Suisse First Boston, which is part of Credit Suisse Group, one of the
world's largest financial organizations. As part of a global, full service
investment-bank, broker-dealer, and asset-management organization, CSAM and
its affiliates and personnel may have multiple advisory, transactional,
financial, and other interests in securities, instruments, and companies
that may be purchased or sold by CSAM for its clients' accounts. The
interests of CSAM and/or its affiliates and personnel may conflict with the
interests of CSAM's clients in connection with any proxy issue. In
addition, CSAM may not be able to identify all of the conflicts of interest
relating to any proxy matter.
Consent
In each and every instance in which the Proxy Voting Committee favors
voting in a manner that is inconsistent with the Policy or the vote
recommendation of ISS (including proxy proposals addressed and not
addressed by the Policy), it shall disclose to the client conflicts of
interest information and obtain client consent to vote. Where the client is
a Fund, disclosure shall be made to any one director who is not an
"interested person," as that term is defined under the Investment Company
Act of 1940, as amended, of the Fund.
Recordkeeping
CSAM is required to maintain in an easily accessible place for five years all
records relating to proxy voting.
These records include the following:
- a copy of the Policy;
- a copy of each proxy statement received on behalf of CSAM clients;
6
- a record of each vote cast on behalf of CSAM clients;
- a copy of all documents created by CSAM personnel that were material
to making a decision on a vote or that memorializes the basis for the
decision; and
- a copy of each written request by a client for information on how CSAM
voted proxies, as well as a copy of any written response.
CSAM reserves the right to maintain certain required proxy records with ISS
in accordance with all applicable regulations.
Disclosure
CSAM will describe the Policy to each client. Upon request, CSAM will
provide any client with a copy of the Policy. CSAM will also disclose to
its clients how they can obtain information on their proxy votes.
ISS will capture data necessary for Funds to file Form N-PX on an annual
basis concerning their proxy voting record in accordance with applicable
law.
Procedures
The Proxy Voting Committee will administer the voting of all client
proxies. CSAM has engaged ISS as an independent third party proxy voting
service to assist in the voting of client proxies. ISS will coordinate with
each client's custodian to ensure that proxy materials reviewed by the
custodians are processed in a timely fashion. ISS will provide CSAM with an
analysis of proxy issues and a vote recommendation for proxy proposals. ISS
will refer proxies to the Proxy Voting Committee for instructions when the
application of the Policy is not clear. The Proxy Voting Committee will
notify ISS of any changes to the Policy or deviating thereof.
PROXY VOTING POLICY
Operational Items
Adjourn Meeting
Proposals to provide management with the authority to adjourn an
annual or special meeting will be determined on a case-by-case basis.
Amend Quorum Requirements
Proposals to reduce quorum requirements for shareholder meetings below
a majority of the shares outstanding will be determined on a
case-by-case basis.
7
Amend Minor Bylaws
Generally vote for bylaw or charter changes that are of a housekeeping
nature.
Change Date, Time, or Location of Annual Meeting
Generally vote for management proposals to change the date/time/location of
the annual meeting unless the proposed change is unreasonable. Generally
vote against shareholder proposals to change the date/time/location of the
annual meeting unless the current scheduling or location is unreasonable.
Ratify Auditors
Generally vote for proposals to ratify auditors unless: (1) an auditor has
a financial interest in or association with the company, and is therefore
not independent; (2) fees for non-audit services are excessive, or (3)
there is reason to believe that the independent auditor has rendered an
opinion, which is neither accurate nor indicative of the company's
financial position. Generally vote on a case-by-case basis on shareholder
proposals asking companies to prohibit their auditors from engaging in
non-audit services (or capping the level of non-audit services). Generally
vote on a case-by-case basis on auditor rotation proposals taking into
consideration: (1) tenure of audit firm; (2) establishment and disclosure
of a renewal process whereby the auditor is regularly evaluated for both
audit quality and competitive price; (3) length of the rotation period
advocated in the proposal, and (4) significant audit related issues.
Board of Directors
Voting on Director Nominees in Uncontested Elections
Generally votes on director nominees on a case-by-case basis. Votes may be
withheld: (1) from directors who attended less than 75% of the board and
committee meetings without a valid reason for the absences; (2) implemented
or renewed a dead-hand poison pill; (3) ignored a shareholder proposal that
was approved by a majority of the votes cast for two consecutive years; (4)
ignored a shareholder proposal approved by a majority of the shares
outstanding; (5) have failed to act on takeover offers where the majority
of the shareholders have tendered their shares; (6) are inside directors or
affiliated outside directors and sit on the audit, compensation, or
nominating committee; (7) are inside directors or affiliated outside
directors and the full board serves as the audit, compensation, or
nominating committee or the company does not have one of these committees;
or (8) are audit committee members and the non-audit fees paid to the
auditor are excessive
Cumulative Voting
8
Proposals to eliminate cumulative voting will be determined on a
case-by-case basis. Proposals to restore or provide for cumulative voting
in the absence of sufficient good governance provisions and/or poor
relative shareholder returns will be determined on a case-by-case basis.
Director and Officer Indemnification and Liability Protection
Proposals on director and officer indemnification and liability protection
generally evaluated on a case-by-case basis. Generally vote against
proposals that would: (1) eliminate entirely directors' and officers'
liability for monetary damages for violating the duty of care; or (2)
expand coverage beyond just legal expenses to acts, such as negligence,
that are more serious violations of fiduciary obligation than mere
carelessness. Generally vote for only those proposals providing such
expanded coverage in cases when a director's or officer's legal defense was
unsuccessful if: (1) the director was found to have acted in good faith and
in a manner that he reasonably believed was in the best interests of the
company, and (2) only if the director's legal expenses would be covered.
Filling Vacancies/Removal of Directors
Generally vote against proposals that provide that directors may be removed
only for cause. Generally vote for proposals to restore shareholder ability
to remove directors with or without cause. Proposals that provide that only
continuing directors may elect replacements to fill board vacancies will be
determined on a case-by-case basis. Generally vote for proposals that
permit shareholders to elect directors to fill board vacancies.
Independent Chairman (Separate Chairman/CEO)
Generally vote for shareholder proposals requiring the position of chairman
be filled by an independent director unless there are compelling reasons to
recommend against the proposal, including: (1) designated lead director,
elected by and from the independent board members with clearly delineated
duties; (2) 2/3 independent board; (3) all independent key committees; or
(4) established governance guidelines.
Majority of Independent Directors
Generally vote for shareholder proposals requiring that the board consist
of a majority or substantial majority (two-thirds) of independent directors
unless the board composition already meets the adequate threshold.
Generally vote for shareholder proposals requiring the board audit,
compensation, and/or nominating committees be composed exclusively of
independent directors if they currently do not meet that standard.
Generally withhold votes from insiders and affiliated outsiders sitting on
the audit, compensation, or nominating committees. Generally withhold votes
from insiders and affiliated outsiders on boards that are
9
lacking any of these three panels. Generally withhold votes from insiders
and affiliated outsiders on boards that are not at least majority
independent.
Term Limits
Generally vote against shareholder proposals to limit the tenure of outside
directors.
Proxy Contests
Voting on Director Nominees in Contested Elections
Votes in a contested election of directors should be decided on a
case-by-case basis, with shareholders determining which directors are best
suited to add value for shareholders. The major decision factors are: (1)
company performance relative to its peers; (2) strategy of the incumbents
versus the dissidents; (3) independence of directors/nominees; (4)
experience and skills of board candidates; (5) governance profile of the
company; (6) evidence of management entrenchment; (7) responsiveness to
shareholders; or (8) whether takeover offer has been rebuffed.
Amend Bylaws without Shareholder Consent
Proposals giving the board exclusive authority to amend the bylaws will be
determined on a case-by-case basis. Proposals giving the board the ability
to amend the bylaws in addition to shareholders will be determined on a
case-by-case basis.
Confidential Voting
Generally vote for shareholder proposals requesting that corporations adopt
confidential voting, use independent vote tabulators and use independent
inspectors of election, as long as the proposal includes a provision for
proxy contests as follows: In the case of a contested election, management
should be permitted to request that the dissident group honor its
confidential voting policy. If the dissidents agree, the policy may remain
in place. If the dissidents will not agree, the confidential voting policy
may be waived. Generally vote for management proposals to adopt
confidential voting.
Cumulative Voting
Proposals to eliminate cumulative voting will be determined on a
case-by-case basis. Proposals to restore or provide for cumulative voting
in the absence of sufficient good governance provisions and/or poor
relative shareholder returns will be determined on a case-by-case basis.
10
Antitakeover Defenses and Voting Related Issues
Advance Notice Requirements for Shareholder Proposals/Nominations
Votes on advance notice proposals are determined on a case-by-case basis.
Amend Bylaws without Shareholder Consent
Proposals giving the board exclusive authority to amend the bylaws will be
determined on a case-by-case basis. Generally vote for proposals giving the
board the ability to amend the bylaws in addition to shareholders.
Poison Pills (Shareholder Rights Plans)
Generally vote for shareholder proposals requesting that the company submit
its poison pill to a shareholder vote or redeem it. Votes regarding
management proposals to ratify a poison pill should be determined on a
case-by-case basis. Plans should embody the following attributes: (1) 20%
or higher flip-in or flip-over; (2) two to three year sunset provision; (3)
no dead-hand or no-hand features; or (4) shareholder redemption feature
Shareholders' Ability to Act by Written Consent
Generally vote against proposals to restrict or prohibit shareholders'
ability to take action by written consent. Generally vote for proposals to
allow or make easier shareholder action by written consent.
Shareholders' Ability to Call Special Meetings
Proposals to restrict or prohibit shareholders' ability to call special
meetings or that remove restrictions on the right of shareholders to act
independently of management will be determined on a case-by-case basis.
Supermajority Vote Requirements
Proposals to require a supermajority shareholder vote will be determined on
a case-by-case basis Proposals to lower supermajority vote requirements
will be determined on a case-by-case basis.
Merger and Corporate Restructuring
Appraisal Rights
Generally vote for proposals to restore, or provide shareholders with,
rights of appraisal.
11
Asset Purchases
Generally vote case-by-case on asset purchase proposals, taking into
account: (1) purchase price, including earnout and contingent payments; (2)
fairness opinion; (3) financial and strategic benefits; (4) how the deal
was negotiated; (5) conflicts of interest; (6) other alternatives for the
business; or (7) noncompletion risk (company's going concern prospects,
possible bankruptcy).
Asset Sales
Votes on asset sales should be determined on a case-by-case basis after
considering: (1) impact on the balance sheet/working capital; (2) potential
elimination of diseconomies; (3) anticipated financial and operating
benefits; (4) anticipated use of funds; (5) value received for the asset;
fairness opinion (if any); (6) how the deal was negotiated; or (6)
Conflicts of interest
Conversion of Securities
Votes on proposals regarding conversion of securities are determined on a
case-by-case basis. When evaluating these proposals, should review (1)
dilution to existing shareholders' position; (2) conversion price relative
to market value; (3) financial issues: company's financial situation and
degree of need for capital; effect of the transaction on the company's cost
of capital; (4) control issues: change in management; change in control;
standstill provisions and voting agreements; guaranteed contractual board
and committee seats for investor; veto power over certain corporate
actions; (5) termination penalties; (6) conflict of interest: arm's length
transactions, managerial incentives. Generally vote for the conversion if
it is expected that the company will be subject to onerous penalties or
will be forced to file for bankruptcy if the transaction is not approved.
Corporate Reorganization
Votes on proposals to increase common and/or preferred shares and to issue
shares as part of a debt restructuring plan are determined on a
case-by-case basis, after evaluating: (1) dilution to existing
shareholders' position; (2) terms of the offer; (3) financial issues; (4)
management's efforts to pursue other alternatives; (5) control issues; (6)
conflict of interest. Generally vote for the debt restructuring if it is
expected that the company will file for bankruptcy if the transaction is
not approved.
Reverse Leveraged Buyouts
Votes on proposals to increase common and/or preferred shares and to issue
shares as part of a debt restructuring plan are determined on a
case-by-case basis, after evaluating: (1) dilution to existing
shareholders' position; (2) terms of the offer; (3) financial issues; (4)
management's efforts to pursue other alternatives; (5) control issues; (6)
conflict of interest. Generally vote
12
for the debt restructuring if it is expected that the company will file for
bankruptcy if the transaction is not approved.
Formation of Holding Company
Votes on proposals regarding the formation of a holding company should be
determined on a case-by-case basis taking into consideration: (1) the
reasons for the change; (2) any financial or tax benefits; (3) regulatory
benefits; (4) increases in capital structure; (5) changes to the articles
of incorporation or bylaws of the company. Absent compelling financial
reasons to recommend the transaction, generally vote against the formation
of a holding company if the transaction would include either of the
following: (1) increases in common or preferred stock in excess of the
allowable maximum as calculated a model capital structure; (2) adverse
changes in shareholder rights; (3) going private transactions; (4) votes
going private transactions on a case-by-case basis, taking into account:
(a) offer price/premium; (b) fairness opinion; (c) how the deal was
negotiated; (d) conflicts of interest; (e) other alternatives/offers
considered; (f) noncompletion risk.
Joint Ventures
Vote on a case-by-case basis on proposals to form joint ventures, taking
into account: (1) percentage of assets/business contributed; (2) percentage
ownership; (3) financial and strategic benefits; (4) governance structure;
(5) conflicts of interest; (6) other alternatives; (7) noncompletion risk;
(8) liquidations. Votes on liquidations should be determined on a
case-by-case basis after reviewing: (1) management's efforts to pursue
other alternatives such as mergers; (2) appraisal value of the assets
(including any fairness opinions); (3) compensation plan for executives
managing the liquidation. Generally vote for the liquidation if the company
will file for bankruptcy if the proposal is not approved.
Mergers and Acquisitions
Votes on mergers and acquisitions should be considered on a case-by-case
basis, determining whether the transaction enhances shareholder value by
giving consideration to: (1) prospects of the combined companies; (2)
anticipated financial and operating benefits; (3) offer price; (4) fairness
opinion; (5) how the deal was negotiated; (6) changes in corporate
governance and their impact on shareholder rights; (7) change in the
capital structure; (8) conflicts of interest.
Private Placements
Votes on proposals regarding private placements should be determined on a
case-by-case basis. When evaluating these proposals, should review: (1)
dilution to existing shareholders' position; (2) terms of the offer; (3)
financial issues; (4) management's efforts to pursue alternatives such as
mergers; (5) control issues; (6) conflict of interest. Generally vote for
the
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private placement if it is expected that the company will file for
bankruptcy if the transaction is not approved.
Prepackaged Bankruptcy Plans
Votes on proposals to increase common and/or preferred shares and to issue
shares as part of a debt restructuring plan are determined on a
case-by-case basis, after evaluating: (1) dilution to existing
shareholders' position; (2) terms of the offer; (3) financial issues; (4)
management's efforts to pursue other alternatives; (5) control issues; (6)
conflict of interest. Generally vote for the debt restructuring if it is
expected that the company will file for bankruptcy if the transaction is
not approved.
Recapitalization
Votes case-by-case on recapitalizations (reclassifications of securities),
taking into account: (1) more simplified capital structure; (2) enhanced
liquidity; (3) fairness of conversion terms, including fairness opinion;
(4) impact on voting power and dividends; (5) reasons for the
reclassification; (6) conflicts of interest; (7) other alternatives
considered.
Reverse Stock Splits
Generally vote for management proposals to implement a reverse stock split
when the number of authorized shares will be proportionately reduced.
Generally vote for management proposals to implement a reverse stock split
to avoid delisting. Votes on proposals to implement a reverse stock split
that do not proportionately reduce the number of shares authorized for
issue should be determined on a case-by-case basis.
Spinoffs
Votes on spinoffs should be considered on a case-by-case basis depending
on: (1) tax and regulatory advantages; (2) planned use of the sale
proceeds; (3) valuation of spinoff; fairness opinion; (3) benefits that the
spinoff may have on the parent company including improved market focus; (4)
conflicts of interest; managerial incentives; (5) any changes in corporate
governance and their impact on shareholder rights; (6) change in the
capital structure
Value Maximization Proposals
Vote case-by-case on shareholder proposals seeking to maximize shareholder
value.
Capital Structure
Adjustments to Par Value of Common Stock
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Generally vote for management proposals to reduce the par value of common
stock unless the action is being taken to facilitate an antitakeover device
or some other negative corporate governance action. Generally vote for
management proposals to eliminate par value.
Common Stock Authorization
Votes on proposals to increase the number of shares of common stock
authorized for issuance are determined on a case-by-case basis. Generally
vote against proposals at companies with dual-class capital structures to
increase the number of authorized shares of the class of stock that has
superior voting rights. Generally vote for proposals to approve increases
beyond the allowable increase when a company's shares are in danger of
being delisted or if a company's ability to continue to operate as a going
concern is uncertain.
Dual-class Stock
Generally vote against proposals to create a new class of common stock with
superior voting rights. Generally vote for proposals to create a new class
of nonvoting or subvoting common stock if: (1) it is intended for financing
purposes with minimal or no dilution to current shareholders; (2) it is not
designed to preserve the voting power of an insider or significant
shareholder.
Issue Stock for Use with Rights Plan
Generally vote against proposals that increase authorized common stock for
the explicit purpose of implementing a shareholder rights plan.
Preemptive Rights
Votes regarding shareholder proposals seeking preemptive rights should be
determined on a case-by-case basis after evaluating: (1) the size of the
company; (2) the shareholder base; (3) the liquidity of the stock
Preferred Stock
Generally vote against proposals authorizing the creation of new classes of
preferred stock with unspecified voting, conversion, dividend distribution,
and other rights ("blank check" preferred stock). Generally vote for
proposals to create "declawed" blank check preferred stock (stock that
cannot be used as a takeover defense). Generally vote for proposals to
authorize preferred stock in cases where the company specifies the voting,
dividend, conversion, and other rights of such stock and the terms of the
preferred stock appear reasonable. Generally vote against proposals to
increase the number of blank check preferred stock authorized for issuance
when no shares have been issued or reserved for a specific purpose.
Generally vote case-by-case on proposals to increase the number of blank
check
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preferred shares after analyzing the number of preferred shares available
for issue given a company's industry and performance in terms of
shareholder returns.
Recapitalization
Vote case-by-case on recapitalizations (reclassifications of securities),
taking into account: (1) more simplified capital structure; (2) enhanced
liquidity; (3) fairness of conversion terms, including fairness opinion;
(4) impact on voting power and dividends; (5) reasons for the
reclassification; (6) conflicts of interest; (7) other alternatives
considered.
Reverse Stock Splits
Generally vote for management proposals to implement a reverse stock split
when the number of authorized shares will be proportionately reduced.
Generally vote for management proposals to implement a reverse stock split
to avoid delisting. Votes on proposals to implement a reverse stock split
that do not proportionately reduce the number of shares authorized for
issue should be determined on a case-by-case basis.
Share Repurchase Programs
Generally vote for management proposals to institute open-market share
repurchase plans in which all shareholders may participate on equal terms.
Stock Distributions: Splits and Dividends
Generally vote for management proposals to increase the common share
authorization for a stock split or share dividend, provided that the
increase in authorized shares would not result in an excessive number of
shares available for issuance.
Tracking Stock
Votes on the creation of tracking stock are determined on a case-by-case
basis, weighing the strategic value of the transaction against such factors
as: (1) adverse governance changes; (2) excessive increases in authorized
capital stock; (3) unfair method of distribution; (4) diminution of voting
rights; (5) adverse conversion features; (6) negative impact on stock
option plans; (7) other alternatives such as a spinoff.
Executive and Director Compensation
Executive and Director Compensation
Votes on compensation plans for directors are determined on a case-by-case
basis.
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Stock Plans in Lieu of Cash
Votes for plans which provide participants with the option of taking all or
a portion of their cash compensation in the form of stock are determined on
a case-by-case basis. Generally vote for plans which provide a
dollar-for-dollar cash for stock exchange. Votes for plans which do not
provide a dollar-for-dollar cash for stock exchange should be determined on
a case-by-case basis.
Director Retirement Plans
Generally vote against retirement plans for nonemployee directors.
Generally vote for shareholder proposals to eliminate retirement plans for
nonemployee directors.
Management Proposals Seeking Approval to Reprice Options
Votes on management proposals seeking approval to reprice options are
evaluated on a case-by-case basis giving consideration to the following:
(1) historic trading patterns; (2) rationale for the repricing; (3)
value-for-value exchange; (4) option vesting; (5) term of the option; (6)
exercise price; (7) participants; (8) employee stock purchase plans. Votes
on employee stock purchase plans should be determined on a case-by-case
basis. Generally vote for employee stock purchase plans where: (1) purchase
price is at least 85 percent of fair market value; (2) offering period is
27 months or less, and (3) potential voting power dilution (VPD) is ten
percent or less. Generally vote against employee stock purchase plans where
either: (1) purchase price is less than 85 percent of fair market value;
(2) Offering period is greater than 27 months, or (3) VPD is greater than
ten percent
Incentive Bonus Plans and Tax Deductibility Proposals
Generally vote for proposals that simply amend shareholder-approved
compensation plans to include administrative features or place a cap on the
annual grants any one participant may receive. Generally vote for proposals
to add performance goals to existing compensation plans. Votes to amend
existing plans to increase shares reserved and to qualify for favorable tax
treatment considered on a case-by-case basis. Generally vote for cash or
cash and stock bonus plans that are submitted to shareholders for the
purpose of exempting compensation from taxes if no increase in shares is
requested.
Employee Stock Ownership Plans (ESOPs)
Generally vote for proposals to implement an ESOP or increase authorized
shares for existing ESOPs, unless the number of shares allocated to the
ESOP is excessive (more than five percent of outstanding shares.)
401(k) Employee Benefit Plans
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Generally vote for proposals to implement a 401(k) savings plan for
employees.
Shareholder Proposals Regarding Executive and Director Pay
Generally vote for shareholder proposals seeking additional disclosure of
executive and director pay information, provided the information requested
is relevant to shareholders' needs, would not put the company at a
competitive disadvantage relative to its industry, and is not unduly
burdensome to the company. Generally vote against shareholder proposals
seeking to set absolute levels on compensation or otherwise dictate the
amount or form of compensation. Generally vote against shareholder
proposals requiring director fees be paid in stock only. Generally vote for
shareholder proposals to put option repricings to a shareholder vote. Vote
for shareholders proposals to exclude pension fund income in the
calculation of earnings used in determining executive bonuses/compensation.
Vote on a case-by-case basis for all other shareholder proposals regarding
executive and director pay, taking into account company performance, pay
level versus peers, pay level versus industry, and long term corporate
outlook.
Performance-Based Option Proposals
Generally vote for shareholder proposals advocating the use of
performance-based equity awards (indexed, premium-priced, and
performance-vested options), unless: (1) the proposal is overly
restrictive; or (2) the company demonstrates that it is using a substantial
portion of performance-based awards for its top executives.
Stock Option Expensing
Generally vote for shareholder proposals asking the company to expense
stock options unless the company has already publicly committed to start
expensing by a specific date.
Golden and Tin Parachutes
Generally vote for shareholder proposals to require golden and tin
parachutes to be submitted for shareholder ratification, unless the
proposal requires shareholder approval prior to entering into employment
contracts. Vote on a case-by-case basis on proposals to ratify or cancel
golden or tin parachutes.
May 19, 2004
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Form N-CSR disclosure requirement is not yet effective with respect to the
registrant.
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ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
None.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's board of directors since the registrant
last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(g)
of Schedule 14A in its definitive proxy statement dated January 15, 2004.
ITEM 11. CONTROLS AND PROCEDURES.
(a) As of a date within 90 days from the filing date of this report, the
principal executive officer and principal financial officer concluded that the
registrant's disclosure controls and procedures (as defined in Rule 30a-3(c)
under the Investment Company Act of 1940 (the "Act")) were effective based on
their evaluation of the disclosure controls and procedures required by Rule
30a-3(b) under the Act and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934.
(b) There were no changes in registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the
second fiscal quarter of the period covered by this report that have materially
affected, or are reasonably likely to materially affect, the registrant's
internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Registrant's Code of Ethics is an exhibit to this report.
(a)(2) The certifications of the registrant as required by Rule 30a-2(a)
under the Act are exhibits to this report.
(a)(3) Not applicable.
(b) The certifications of the registrant as required by Rule 30a-2(b) under
the Act are an exhibit to this report.
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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.
CREDIT SUISSE HIGH YIELD BOND FUND
/s/ Michael E. Kenneally
------------------------
Name: Michael E. Kenneally
Title: Chief Executive Officer
Date: January 7, 2005
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.
/s/ Michael E. Kenneally
------------------------
Name: Michael E. Kenneally
Title: Chief Executive Officer
Date: January 7, 2005
/s/ Michael A. Pignataro
------------------------
Name: Michael A. Pignataro
Title: Chief Financial Officer
Date: January 7, 2005
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