UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
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Investment Company Act file number:
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811-05468
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The High Yield
Plus Fund, Inc.
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Exact name of registrant as specified in charter:
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Gateway Center 3,
100 Mulberry Street,
Newark, New Jersey 07102
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Address of principal executive offices:
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Deborah A. Docs
Gateway Center 3,
100 Mulberry Street,
Newark, New
Jersey 07102
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Name and address of agent for service:
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Registrant’s telephone number,
including area code:
973-367-7521
Date of fiscal year end:
3/31/2009
Date of reporting period:
9/30/2008
Item 1 – Reports to Stockholders
The High Yield Plus Fund, Inc.
SEMI- ANNUAL REPORT
September 30, 2008
Directors
Kevin J. Bannon
Linda W. Bynoe
David E. A. Carson
Robert F. Gunia
Michael S. Hyland
Robert E.
La Blanc
Stephen P. Munn
Douglas H. McCorkindale
Richard A. Redeker
Judy A. Rice
Robin B. Smith
Stephen G. Stoneburn
Investment Adviser
Wellington Management Company, LLP
75 State
Street
Boston, MA 02109
Administrator
Prudential Investments LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
Custodian
PFPC Trust Company
400
Bellevue Parkway
Wilmington, DE 19809
Transfer Agent
Computershare Trust Company N.A.
P.O. Box 43011
Providence, RI 02940-3011
Independent Registered Public
Accounting Firm
KPMG LLP
345 Park Avenue
New York, NY 10154
Legal Counsel
Sullivan & Cromwell
LLP
125 Broad Street
New
York, NY 10004
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that The High Yield Plus Fund, Inc. (the
“Fund”) may purchase, from time to time, shares of its common stock at market prices.
The views expressed in this report and the information
about the Fund’s portfolio holdings are for the period covered by this report and are subject to change thereafter.
This report is for stockholder
information. This is not a prospectus intended for use in the purchase or sale of Fund shares.
The High Yield Plus Fund, Inc.
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
For information call toll-free (800) 451-6788
CUSIP 429906100 NYSE Ticker HYP
HYPS
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Letter To Shareholders
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September 30, 2008
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Dear Shareholder:
Market Update
Over the last year there has been a flight to
quality in the fixed income markets. The high yield market posted a -10.5% return for the one year period ended September 30, 2008, as measured by the Lehman Brothers High Yield 2% Capped Index (the “Index”), underperforming
investment-grade bonds as measured by the Lehman Brothers Aggregate Index which returned 3.7%. Within the high yield market we witnessed an analogous trend, with double-B rated securities outperforming single-B’s and triple-C’s.
We remain concerned about the deteriorating housing market and a general lack of credit availability leading to continued and more broad-based economic
weakness. A weaker economy will lead to elevated corporate default rates through the balance of 2008 and 2009. Given our defensive outlook, we are maintaining the Fund’s meaningfully reduced leverage position as well as our up-in-quality bias
and are focused on credits with strong balance sheets and good liquidity positions. We believe it is too early in the credit cycle to position the fund more aggressively.
Fund Performance
The Fund’s total returns for periods ended September 30, 2008 are shown in the following
table. For comparison, we have also provided the returns of the Index, the Lehman Brothers High Yield Index, and the Lipper Closed-End Leveraged High Yield category, an average of 40 closed-end high yield leveraged funds; we would note that the
indices are not levered and that the degree of leverage varies substantially amongst the funds in the group and can affect performance.
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6 Mos
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1 Yr
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3 Yrs*
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High Yield Plus Fund (NAV)
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-6.6
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%
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-11.9
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%
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0.8
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%
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Lipper Closed-End Leveraged High Current Yield
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-14.2
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-24.3
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-5.6
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Lehman Brothers High Yield 2% Issuer Capped Index
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-6.8
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-10.5
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1.1
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Lehman Brothers High Yield Index
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-7.3
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-11.2
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1.1
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The Fund is leveraged and had $16.5 million in loans
outstanding as of September 30, 2008, the same amount of loans outstanding in the Fund as of March 31, 2008. Borrowings fluctuate depending on investment outlook and opportunities. As of September 30, 2008 the Fund’s shares were priced at
$2.32. This price reflected a discount of 23.2% to the Fund’s net asset value of $3.02 per share. (On average, the funds in the Lipper Leveraged Closed End universe were trading at a discount of -22.7% as of September 30, 2008.) On September
30, 2008, the Fund’s monthly dividend rate of $0.025 per share equated to an annualized yield of 12.9% relative to the Fund’s stock price.
Over
the past year, security selection and being underweight lower quality credits contributed to returns. Security selection, specifically within the Gaming and Pharmaceutical sectors was a positive contributor to performance. Sector allocation and
security selection within the Auto and Financial Services sectors, also aided in returns. An overweight to the Construction Machinery sector and security selection within the Transportation and Media Non-cable sectors detracted slightly from
performance.
While valuation has become more
compelling relative to historical ranges, we continue to believe that additional fundamental economic weakness is ahead of us. We are maintaining an up-in-quality bias and remain defensive. The lower-rated credit-quality sectors remain relatively
tight on a historical valuation basis versus the higher-rated sectors. As part of a higher quality portfolio, we think an allocation to bank loans is a compelling strategy. We continue to favor sectors that are less sensitive to the economic cycle,
such as Health Care, Pharmaceuticals, Energy, and Utilities. In contrast, we remain underweight in Autos, Media Non-Cable, Paper, Financial Services, Retail, and Home Construction.
As always, we appreciate your interest in the Fund.
Sincerely yours,
Christopher Jones
Portfolio Manager
Vice President
Wellington Management Company, LLP
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Portfolio of Investments as of September 30, 2008 (Unaudited)
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THE HIGH YIELD PLUS FUND, INC.
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Description
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Moody’s
Ratings†
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Interest
Rate
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Maturity
Date
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Principal
Amount
(000)
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Value
(Note 1)
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LONG-TERM INVESTMENTS—128.7%
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CORPORATE BONDS—122.8%
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Aerospace/Defense—1.2%
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Bombardier Inc., Sr. Unsec’d. Notes, 144A (Canada)
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Ba2
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8.00%
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11/15/14
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$
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225
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$
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222,750
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L-3 Communications Corp., Gtd. Notes
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Ba3
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6.375
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10/15/15
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380
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349,600
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572,350
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Automotive—2.4%
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Ford Motor Credit Co. LLC, Sr. Unsec’d. Notes
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B1
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7.00
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10/01/13
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725
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445,554
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Ford Motor Credit Co. LLC, Sr. Unsec’d. Notes
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B1
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7.241(c)
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04/15/12
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795
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734,984
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1,180,538
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Building Materials—0.8%
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Texas Industries, Inc., Sr. Unsec’d. Notes
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Ba3
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7.25
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07/15/13
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435
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378,450
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Chemicals—1.4%
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KI Holdings, Inc., Zero Coupon (until 11/15/09), Sr. Disc. Notes
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B2
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9.875(a)
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11/15/14
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45
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40,275
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Mosaic Co. (The), Sr. Unsec’d. Notes, 144A
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Baa3
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7.375
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12/01/14
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165
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170,819
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Mosaic Co. (The), Sr. Unsec’d. Notes, 144A
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Baa3
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7.625
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12/01/16
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140
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143,042
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Mosaic Global Holdings, Inc., Sr. Unsec’d. Notes
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Baa3
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7.30
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01/15/28
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100
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97,783
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Terra Capital, Inc., Gtd. Notes
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B1
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7.00
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02/01/17
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220
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209,000
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660,919
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Construction Machinery—2.4%
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Ashtead Capital, Inc., Sr. Sec’d. Notes, 144A
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B1
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9.00
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08/15/16
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125
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107,500
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Ashtead Holdings PLC, Sr. Sec’d. Notes, 144A (United Kingdom)
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B1
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8.625
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08/01/15
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75
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64,500
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Case New Holland, Inc., Gtd. Notes
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Ba3
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7.125
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03/01/14
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280
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254,800
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Neff Corp., Gtd. Notes
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Caa2
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10.00
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06/01/15
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380
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114,000
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RSC Equipment Rental, Inc., Gtd. Notes
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Caa1
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9.50
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12/01/14
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420
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318,150
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United Rentals North America, Inc., Gtd. Notes
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B1
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6.50
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02/15/12
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340
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283,900
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1,142,850
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Consumer Cyclical-Services—1.7%
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Corrections Corp. of America, Gtd. Notes
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Ba2
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6.25
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03/15/13
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95
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88,825
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KAR Holdings, Inc., Gtd. Notes
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Caa1
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10.00
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05/01/15
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485
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373,450
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Service Corp. International, Sr. Unsec’d. Notes
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B1
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7.375
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10/01/14
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140
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127,400
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Service Corp. International, Sr. Unsec’d. Notes
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B1
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7.625
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10/01/18
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280
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250,600
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840,275
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See Notes to Financial Statements.
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4
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Portfolio of Investments as of September 30, 2008 (Unaudited)
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THE HIGH YIELD PLUS FUND, INC.
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Description
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Moody’s
Ratings†
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Interest
Rate
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Maturity
Date
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Principal
Amount
(000)
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Value
(Note 1)
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Diversified Manufacturing—2.3%
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Blaze Recycling & Metals LLC/Blaze Finance Corp., Sr. Sec’d. Notes, 144A
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NR
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10.875%
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07/15/12
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$
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40
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$
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40,100
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Esco Corp., Gtd. Notes, 144A
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B2
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8.625
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12/15/13
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665
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651,700
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SPX Corp., Sr. Notes, 144A
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Ba2
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7.625
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01/01/15
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420
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420,000
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1,111,800
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Energy—9.1%
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Chesapeake Energy Corp., Gtd. Notes
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Ba3
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6.875
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01/15/16
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175
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159,687
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Delta Petroleum Corp., Gtd. Notes
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Caa2
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7.00
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04/01/15
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1,025
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712,375
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Hornbeck Offshore Services, Inc., Gtd. Notes
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Ba3
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6.125
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12/01/14
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60
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54,750
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Newfield Exploration Co., Sr. Sub. Notes
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Ba3
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6.625
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04/15/16
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225
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200,250
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OPTI Canada, Inc., Sr. Sec’d. Notes (Canada)
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B1
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8.25
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12/15/14
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245
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219,275
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OPTI Canada, Inc., Sr. Sec’d. Notes (Canada)
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B1
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7.875
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12/15/14
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350
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309,750
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Petrohawk Energy Corp., Gtd. Notes
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B3
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9.125
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07/15/13
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180
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169,200
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Petrohawk Energy Corp., Sr. Notes, 144A
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B3
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7.875
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06/01/15
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120
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104,400
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Petroplus Finance Ltd., Gtd. Notes, 144A (Bermuda)
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B1
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6.75
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05/01/14
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445
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376,025
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Pioneer Natural Resources Co., Sr. Unsec’d. Notes
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Ba1
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6.875
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05/01/18
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225
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200,332
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Plains Exploration & Production Co., Gtd. Notes
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B1
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7.00
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03/15/17
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75
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65,250
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Plains Exploration & Production Co., Gtd. Notes
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B1
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7.75
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06/15/15
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360
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331,200
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Range Resources Corp., Gtd. Notes
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Ba3
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6.375
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03/15/15
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80
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73,200
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Range Resources Corp., Gtd. Notes
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Ba3
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7.50
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05/15/16
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335
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319,925
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Range Resources Corp., Gtd. Notes
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Ba3
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7.50
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10/01/17
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240
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226,800
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SandRidge Energy, Inc., Sr. Notes, 144A
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B3
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8.00
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06/01/18
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195
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167,700
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Southwestern Energy Co., Sr. Notes, 144A
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Ba2
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7.50
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02/01/18
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130
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126,100
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Western Oil Sands Corp., Sr. Sec’d. Notes (Canada)
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Baa1
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8.375
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05/01/12
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200
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210,989
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Whiting Petroleum Corp., Gtd. Notes
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B1
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7.25
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05/01/13
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220
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204,050
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Whiting Petroleum Corp., Sr. Sub. Notes
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B1
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7.25
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05/01/12
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180
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166,950
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4,398,208
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Entertainment—2.5%
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AMC Entertainment, Inc., Gtd. Notes
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Ba3
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8.625
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08/15/12
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220
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217,800
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AMC Entertainment, Inc., Gtd. Notes
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B2
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11.00
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02/01/16
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400
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394,000
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AMC Entertainment, Inc., Sr. Sub. Notes
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B2
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8.00
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03/01/14
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240
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206,400
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Marquee Holdings, Inc., Sr. Disc. Notes
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B3
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12.00
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08/15/14
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545
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401,938
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1,220,138
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Environmental—1.7%
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Allied Waste North America, Inc., Sr. Sec’d. Notes
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B1
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6.50
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11/15/10
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240
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234,600
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Allied Waste North America, Inc., Sr. Sec’d. Notes, Series B
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B1
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5.75
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02/15/11
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|
605
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579,288
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|
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813,888
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See Notes to Financial Statements.
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5
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|
|
|
|
|
|
Portfolio of Investments as of September 30, 2008 (Unaudited)
|
|
THE HIGH YIELD PLUS FUND, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Moody’s
Ratings†
|
|
Interest
Rate
|
|
Maturity
Date
|
|
Principal
Amount
(000)
|
|
Value
(Note 1)
|
|
|
|
|
|
|
|
|
Financial Institutions—5.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bonten Media Acquistition Co., Gtd. Notes, PIK, 144A
|
|
Caa2
|
|
9.00%
|
|
06/01/15
|
|
$
|
455
|
|
$
|
268,450
|
|
Deluxe Corp., Sr. Unsec’d. Notes
|
|
Ba2
|
|
7.375
|
|
06/01/15
|
|
|
890
|
|
|
756,500
|
|
General Motors Acceptance Corp. LLC, Sr. Unsec’d. Notes
|
|
B3
|
|
6.875
|
|
08/28/12
|
|
|
110
|
|
|
43,722
|
|
General Motors Acceptance Corp. LLC, Sr. Unsec’d. Notes
|
|
B3
|
|
8.00
|
|
11/01/31
|
|
|
1,335
|
|
|
503,665
|
|
Harland Clarke Holdings Corp., Gtd. Notes
|
|
Caa1
|
|
9.50
|
|
05/15/15
|
|
|
230
|
|
|
163,300
|
|
Lender Processing Services, Inc., Sr. Unsec’d. Notes, 144A
|
|
Ba2
|
|
8.125
|
|
07/01/16
|
|
|
260
|
|
|
253,500
|
|
Rouse Co. LP/TRC Co-Issuer, Inc., Sr. Unsec’d. Notes, 144A
|
|
Ba2
|
|
6.75
|
|
05/01/13
|
|
|
795
|
|
|
540,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,529,737
|
|
Food & Beverage—4.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ARAMARK Corp., Gtd. Notes
|
|
B3
|
|
6.301(c)
|
|
02/01/15
|
|
|
460
|
|
|
402,500
|
|
ARAMARK Corp., Gtd. Notes
|
|
B3
|
|
8.50
|
|
02/01/15
|
|
|
420
|
|
|
394,800
|
|
Constellation Brands, Inc., Gtd. Notes
|
|
Ba3
|
|
7.25
|
|
09/01/16
|
|
|
635
|
|
|
584,200
|
|
Constellation Brands, Inc., Gtd. Notes
|
|
Ba3
|
|
7.25
|
|
05/15/17
|
|
|
310
|
|
|
285,200
|
|
Smithfield Foods, Inc., Sr. Unsec’d. Notes
|
|
Ba3
|
|
7.75
|
|
05/15/13
|
|
|
430
|
|
|
361,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,027,900
|
|
Gaming—7.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buffalo Thunder Developement Authority, Sr. Sec’d. Notes, 144A
|
|
B2
|
|
9.375
|
|
12/15/14
|
|
|
615
|
|
|
258,300
|
|
Mandalay Resort Group, Gtd. Notes
|
|
B1
|
|
9.375
|
|
02/15/10
|
|
|
375
|
|
|
345,000
|
|
MGM Mirage, Inc., Gtd. Notes
|
|
Ba2
|
|
6.00
|
|
10/01/09
|
|
|
205
|
|
|
191,675
|
|
MGM Mirage, Inc., Gtd. Notes
|
|
Ba2
|
|
8.50
|
|
09/15/10
|
|
|
510
|
|
|
479,400
|
|
Mohegan Tribal Gaming Authority, Gtd. Notes
|
|
Ba1
|
|
6.125
|
|
02/15/13
|
|
|
135
|
|
|
112,050
|
|
OED Corp./DIAMOND JO LLC, Gtd. Notes
|
|
B2
|
|
8.75
|
|
04/15/12
|
|
|
395
|
|
|
359,450
|
|
River Rock Entertainment Authority (The), Sr. Sec’d. Notes
|
|
B2
|
|
9.75
|
|
11/01/11
|
|
|
415
|
|
|
381,800
|
|
Seneca Gaming Corp., Sr. Unsec’d. Notes
|
|
Ba2
|
|
7.25
|
|
05/01/12
|
|
|
400
|
|
|
348,000
|
|
Station Casinos, Inc., Sr. Sub. Notes
|
|
Caa2
|
|
6.50
|
|
02/01/14
|
|
|
105
|
|
|
30,975
|
|
Virgin River Casino Corp., Sr. Sec’d. Notes
|
|
Caa2
|
|
9.00
|
|
01/15/12
|
|
|
375
|
|
|
255,000
|
|
Wynn Las Vegas Capital Corp., First Mortgage
|
|
Ba2
|
|
6.625
|
|
12/01/14
|
|
|
760
|
|
|
647,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,409,550
|
|
Healthcare—9.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Community Health Systems, Inc., Gtd. Notes
|
|
B3
|
|
8.875
|
|
07/15/15
|
|
|
455
|
|
|
432,250
|
|
HCA, Inc., Sr. Sec’d. Notes, PIK
|
|
B2
|
|
9.625
|
|
11/15/16
|
|
|
845
|
|
|
802,750
|
|
HCA, Inc., Sr. Unsec’d. Notes
|
|
Caa1
|
|
5.75
|
|
03/15/14
|
|
|
85
|
|
|
66,300
|
|
HCA, Inc., Sr. Unsec’d. Notes
|
|
Caa1
|
|
6.375
|
|
01/15/15
|
|
|
1,525
|
|
|
1,200,937
|
|
HCA, Inc., Sr. Unsec’d. Notes
|
|
Caa1
|
|
7.50
|
|
11/06/33
|
|
|
180
|
|
|
127,800
|
|
Omnicare, Inc., Sr. Sub. Notes
|
|
B1
|
|
6.125
|
|
06/01/13
|
|
|
70
|
|
|
62,475
|
|
Tenet Healthcare Corp., Sr. Unsec’d. Notes
|
|
Caa1
|
|
9.875
|
|
07/01/14
|
|
|
1,115
|
|
|
1,087,125
|
|
Universal Hospital Services, Inc., Sr. Sec’d. Notes, PIK
|
|
B3
|
|
8.50
|
|
06/01/15
|
|
|
360
|
|
|
335,700
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
6
|
|
|
|
|
|
|
|
Portfolio of Investments as of September 30, 2008 (Unaudited)
|
|
THE HIGH YIELD PLUS FUND, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Moody’s
Ratings†
|
|
Interest
Rate
|
|
Maturity
Date
|
|
Principal
Amount
(000)
|
|
Value
(Note 1)
|
|
|
|
|
|
|
|
|
Healthcare (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ventas Realty LP/Ventas Capital Corp., Gtd. Notes
|
|
Ba1
|
|
6.75%
|
|
06/01/10
|
|
$
|
60
|
|
$
|
59,700
|
|
Ventas Realty LP/Ventas Capital Corp., Sr. Notes
|
|
Ba1
|
|
6.625
|
|
10/15/14
|
|
|
215
|
|
|
206,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,381,437
|
|
Home Construction—1.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DR Horton, Inc., Gtd. Notes
|
|
Ba2
|
|
5.00
|
|
01/15/09
|
|
|
355
|
|
|
346,125
|
|
DR Horton, Inc., Gtd. Notes
|
|
Ba1
|
|
9.75
|
|
09/15/10
|
|
|
110
|
|
|
108,075
|
|
K. Hovnanian Enterprises, Inc., Sr. Sec’d. Notes, 144A
|
|
Ba3
|
|
11.50
|
|
05/01/13
|
|
|
500
|
|
|
490,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
944,200
|
|
Industrial Other—1.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Blount, Inc., Sr. Sub. Notes
|
|
B2
|
|
8.875
|
|
08/01/12
|
|
|
420
|
|
|
417,900
|
|
RBS Global, Inc./Rexnord LLC, Gtd. Notes
|
|
B3
|
|
9.50
|
|
08/01/14
|
|
|
460
|
|
|
432,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
850,300
|
|
Lodging—0.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Host Hotels & Resorts LP, Sr. Sec’d. Notes
|
|
Ba1
|
|
6.875
|
|
11/01/14
|
|
|
290
|
|
|
250,850
|
|
Host Hotels & Resorts LP, Sr. Sec’d. Notes
|
|
Ba1
|
|
7.125
|
|
11/01/13
|
|
|
100
|
|
|
89,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
339,850
|
|
Media-Cable—7.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cablevision Systems Corp., Sr. Unsec’d. Notes, Series B
|
|
B2
|
|
8.00
|
|
04/15/12
|
|
|
555
|
|
|
521,700
|
|
Charter Communications Holdings II LLC, Gtd. Notes
|
|
NR
|
|
10.25
|
|
10/01/13
|
|
|
185
|
|
|
155,400
|
|
Charter Communications Operating LLC, Sr. Sec’d. Notes, 144A
|
|
B3
|
|
8.00
|
|
04/30/12
|
|
|
540
|
|
|
483,300
|
|
CSC Holdings, Inc., Sr. Notes, Series B
|
|
B1
|
|
8.125
|
|
07/15/09
|
|
|
205
|
|
|
202,950
|
|
CSC Holdings, Inc., Sr. Unsec’d. Notes
|
|
B1
|
|
6.75
|
|
04/15/12
|
|
|
275
|
|
|
251,969
|
|
CSC Holdings, Inc., Sr. Unsec’d. Notes
|
|
B1
|
|
7.625
|
|
07/15/18
|
|
|
340
|
|
|
295,800
|
|
CSC Holdings, Inc., Sr. Unsec’d. Notes
|
|
B1
|
|
7.875
|
|
02/15/18
|
|
|
585
|
|
|
514,800
|
|
FrontierVision LP, Sr. Sub. Notes(d)
|
|
NR
|
|
Zero
|
|
10/15/10
|
|
|
575
|
|
|
44,562
|
|
Mediacom Broadband LLC/Mediacom Broadband Corp., Sr. Unsec’d. Notes
|
|
B3
|
|
8.50
|
|
10/15/15
|
|
|
1,060
|
|
|
874,500
|
|
Shaw Communications, Inc., Sr. Notes (Canada)
|
|
Ba1
|
|
8.25
|
|
04/11/10
|
|
|
30
|
|
|
29,850
|
|
Shaw Communications, Inc., Sr. Unsec’d. Notes (Canada)
|
|
Ba1
|
|
7.25
|
|
04/06/11
|
|
|
15
|
|
|
14,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,389,606
|
|
Media-Non Cable—5.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CanWest Media Works, Inc., Gtd. Notes (Canada)
|
|
B3
|
|
8.00
|
|
09/15/12
|
|
|
325
|
|
|
271,375
|
|
DirecTV Holdings LLC/DirecTV Financing Co., Gtd. Notes
|
|
Ba3
|
|
6.375
|
|
06/15/15
|
|
|
850
|
|
|
748,000
|
|
Intelsat Ltd., Sr. Unsec’d. Notes (Bermuda)
|
|
Caa3
|
|
6.50
|
|
11/01/13
|
|
|
135
|
|
|
86,400
|
|
Intelsat Ltd., Sr. Unsec’d. Notes (Bermuda)
|
|
Caa3
|
|
7.625
|
|
04/15/12
|
|
|
355
|
|
|
268,025
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
7
|
|
|
|
|
|
|
|
Portfolio of Investments as of September 30, 2008 (Unaudited)
|
|
THE HIGH YIELD PLUS FUND, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Moody’s
Ratings†
|
|
Interest
Rate
|
|
Maturity
Date
|
|
Principal
Amount
(000)
|
|
Value
(Note 1)
|
|
|
|
|
|
|
|
|
Media-Non Cable (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nexstar Finance Holdings LLC/Nexstar Finance Holdings, Inc.,
Sr. Disc. Notes
|
|
Caa2
|
|
11.375%
|
|
04/01/13
|
|
$
|
96
|
|
$
|
79,578
|
|
Quebecor Media, Inc., Sr. Unsec’d. Notes (Canada)
|
|
B2
|
|
7.75
|
|
03/15/16
|
|
|
695
|
|
|
608,125
|
|
Quebecor Media, Inc., Sr. Unsec’d. Notes (Canada)
|
|
B2
|
|
7.75
|
|
03/15/16
|
|
|
195
|
|
|
170,625
|
|
R.H. Donnelley Corp., Sr. Disc. Notes
|
|
B3
|
|
6.875
|
|
01/15/13
|
|
|
150
|
|
|
58,500
|
|
R.H. Donnelley Corp., Sr. Unsec’d. Notes
|
|
B3
|
|
6.875
|
|
01/15/13
|
|
|
850
|
|
|
331,500
|
|
R.H. Donnelley Corp., Sr. Unsec’d. Notes
|
|
B3
|
|
8.875
|
|
01/15/16
|
|
|
700
|
|
|
238,000
|
|
R.H. Donnelley Corp., Sr. Unsec’d. Notes, 144A
|
|
B3
|
|
8.875
|
|
10/15/17
|
|
|
50
|
|
|
17,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,877,128
|
|
Metals—7.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Arch Western Finance LLC, Sr. Sec’d. Notes
|
|
B1
|
|
6.75
|
|
07/01/13
|
|
|
220
|
|
|
206,800
|
|
Freeport-McMoRan Copper & Gold, Inc., Sr. Unsec’d. Notes
|
|
Ba2
|
|
8.25
|
|
04/01/15
|
|
|
380
|
|
|
373,350
|
|
Freeport-McMoRan Copper & Gold, Inc., Sr. Unsec’d. Notes
|
|
Ba2
|
|
8.375
|
|
04/01/17
|
|
|
1,160
|
|
|
1,142,600
|
|
Novelis, Inc., Gtd. Notes (Canada)
|
|
B3
|
|
7.25
|
|
02/15/15
|
|
|
325
|
|
|
282,750
|
|
Peabody Energy Corp., Gtd. Notes
|
|
Ba1
|
|
6.875
|
|
03/15/13
|
|
|
485
|
|
|
468,025
|
|
Peabody Energy Corp., Gtd. Notes
|
|
Ba1
|
|
7.375
|
|
11/01/16
|
|
|
415
|
|
|
398,400
|
|
RathGibson, Inc., Gtd. Notes
|
|
B3
|
|
11.25
|
|
02/15/14
|
|
|
180
|
|
|
163,800
|
|
United States Steel Corp., Sr. Unsec’d. Notes
|
|
Baa3
|
|
6.05
|
|
06/01/17
|
|
|
205
|
|
|
178,135
|
|
United States Steel Corp., Sr. Unsec’d. Notes
|
|
Baa3
|
|
7.00
|
|
02/01/18
|
|
|
195
|
|
|
176,038
|
|
Vedanta Resources PLC, Sr. Unsec’d. Notes, 144A (United Kingdom)
|
|
Ba1
|
|
9.50
|
|
07/18/18
|
|
|
520
|
|
|
441,428
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,831,326
|
|
Packaging—0.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ball Corp., Gtd. Notes
|
|
Ba1
|
|
6.625
|
|
03/15/18
|
|
|
125
|
|
|
116,250
|
|
Paper—1.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International Paper Co., Sr. Unsec’d. Notes
|
|
Baa3
|
|
7.95
|
|
06/15/18
|
|
|
310
|
|
|
304,609
|
|
Stone Container Finance Co. of Canada II, Gtd. Notes (Canada)
|
|
B3
|
|
7.375
|
|
07/15/14
|
|
|
630
|
|
|
485,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
789,709
|
|
Pharmaceuticals—2.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Elan Finance PLC/Elan Finance Corp., Gtd. Notes (Ireland)
|
|
B3
|
|
7.75
|
|
11/15/11
|
|
|
640
|
|
|
579,200
|
|
Elan Finance PLC/Elan Finance Corp., Gtd. Notes (Ireland)
|
|
B3
|
|
6.935(c)
|
|
12/01/13
|
|
|
360
|
|
|
295,200
|
|
Elan Finance PLC/Elan Finance Corp., Gtd. Notes (Ireland)
|
|
B3
|
|
8.875
|
|
12/01/13
|
|
|
625
|
|
|
525,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,399,400
|
|
Retailers—2.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dollar General Corp., Gtd. Notes
|
|
Caa1
|
|
10.625
|
|
07/15/15
|
|
|
335
|
|
|
329,975
|
|
HSN, Inc., Sr. Notes, 144A
|
|
Ba2
|
|
11.25
|
|
08/01/16
|
|
|
350
|
|
|
339,500
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
8
|
|
|
|
|
|
|
|
Portfolio of Investments as of September 30, 2008 (Unaudited)
|
|
THE HIGH YIELD PLUS FUND, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Moody’s
Ratings†
|
|
Interest
Rate
|
|
Maturity
Date
|
|
Principal
Amount
(000)
|
|
Value
(Note 1)
|
|
|
|
|
|
|
|
|
Retailers (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lazyday’s RV Center, Inc., Sr. Unsec’d. Notes
|
|
Caa3
|
|
11.75%
|
|
05/15/12
|
|
$
|
246
|
|
$
|
105,780
|
|
Rite Aid Corp., Sr. Sec’d. Notes
|
|
Caa1
|
|
10.375
|
|
07/15/16
|
|
|
355
|
|
|
308,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,084,105
|
|
Technology—4.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
IKON Office Solutions, Inc., Sr. Unsec’d. Notes
|
|
Ba3
|
|
7.75
|
|
09/15/15
|
|
|
840
|
|
|
877,800
|
|
Open Solutions, Inc., Gtd. Notes, 144A
|
|
Caa1
|
|
9.75
|
|
02/01/15
|
|
|
440
|
|
|
286,000
|
|
Sanmina-SCI Corp., Gtd. Notes, 144A
|
|
B1
|
|
5.569(c)
|
|
06/15/10
|
|
|
392
|
|
|
368,480
|
|
Sungard Data Systems, Inc., Gtd. Notes
|
|
Caa1
|
|
9.125
|
|
08/15/13
|
|
|
515
|
|
|
463,500
|
|
Unisys Corp., Sr. Unsec’d. Notes
|
|
B2
|
|
6.875
|
|
03/15/10
|
|
|
190
|
|
|
174,800
|
|
Xerox Corp., Gtd. Notes
|
|
Baa2
|
|
7.625
|
|
06/15/13
|
|
|
225
|
|
|
227,777
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,398,357
|
|
Tobacco—2.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alliance One International, Inc., Gtd. Notes
|
|
B2
|
|
11.00
|
|
05/15/12
|
|
|
695
|
|
|
681,100
|
|
Reynolds American, Inc., Sr. Sec’d. Notes
|
|
Baa3
|
|
7.25
|
|
06/01/13
|
|
|
220
|
|
|
226,073
|
|
Reynolds American, Inc., Sr. Sec’d. Notes
|
|
Baa3
|
|
7.30
|
|
07/15/15
|
|
|
215
|
|
|
215,391
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,122,564
|
|
Transportation—4.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
American Railcar Industries, Inc., Sr. Unsec’d. Notes
|
|
B1
|
|
7.50
|
|
03/01/14
|
|
|
315
|
|
|
278,775
|
|
Avis Budget Car Rental LLC/Avis Budget Finance, Inc., Gtd. Notes
|
|
Ba3
|
|
5.304(c)
|
|
05/15/14
|
|
|
310
|
|
|
190,650
|
|
Avis Budget Car Rental LLC/Avis Budget Finance, Inc., Gtd. Notes
|
|
Ba3
|
|
7.75
|
|
05/15/16
|
|
|
105
|
|
|
65,625
|
|
Continental Airlines, Inc., Pass-Thru Certs.
|
|
Ba1
|
|
9.798
|
|
04/01/21
|
|
|
1,170
|
|
|
895,260
|
|
Hertz Corp. (The), Gtd. Notes
|
|
B1
|
|
8.875
|
|
01/01/14
|
|
|
405
|
|
|
349,313
|
|
Hertz Corp. (The), Gtd. Notes
|
|
B2
|
|
10.50
|
|
01/01/16
|
|
|
315
|
|
|
263,025
|
|
Navios Martime Holding, Inc., Gtd. Notes
|
|
B3
|
|
9.50
|
|
12/15/14
|
|
|
190
|
|
|
174,800
|
|
Ultrapetrol Bahamas Ltd., First Mortgage (Bahamas)
|
|
B2
|
|
9.00
|
|
11/24/14
|
|
|
140
|
|
|
127,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,344,848
|
|
Utilities—17.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AES Corp. (The), Sr. Sec’d. Notes, 144A
|
|
Ba3
|
|
8.75
|
|
05/15/13
|
|
|
53
|
|
|
53,265
|
|
Aquila, Inc., Sr. Unsec’d. Notes
|
|
Baa2
|
|
9.772
|
|
02/01/11
|
|
|
430
|
|
|
445,231
|
|
Aquila, Inc., Sr. Unsec’d. Notes
|
|
Baa2
|
|
14.875
|
|
07/01/12
|
|
|
320
|
|
|
354,024
|
|
Dynegy Holdings, Inc., Sr. Unsec’d. Notes
|
|
B2
|
|
8.375
|
|
05/01/16
|
|
|
205
|
|
|
178,350
|
|
Dynegy Holdings, Inc., Sr. Unsec’d. Notes
|
|
B2
|
|
7.125
|
|
05/15/18
|
|
|
955
|
|
|
721,025
|
|
Dynegy Holdings, Inc., Sr. Unsec’d. Notes
|
|
B2
|
|
7.75
|
|
06/01/19
|
|
|
190
|
|
|
152,000
|
|
Edison Mission Energy, Sr. Unsec’d. Notes
|
|
B1
|
|
7.50
|
|
06/15/13
|
|
|
440
|
|
|
422,400
|
|
Edison Mission Energy, Sr. Unsec’d. Notes
|
|
B1
|
|
7.00
|
|
05/15/17
|
|
|
165
|
|
|
148,500
|
|
Edison Mission Energy, Sr. Unsec’d. Notes
|
|
B1
|
|
7.20
|
|
05/15/19
|
|
|
250
|
|
|
220,000
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
9
|
|
|
|
|
|
|
|
Portfolio of Investments as of September 30, 2008 (Unaudited)
|
|
THE HIGH YIELD PLUS FUND, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Moody’s
Ratings†
|
|
Interest
Rate
|
|
Maturity
Date
|
|
Principal
Amount
(000)
|
|
Value
(Note 1)
|
|
|
|
|
|
|
|
|
Utilities (continued)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
El Paso Corp., Sr. Unsec’d. Notes
|
|
Ba3
|
|
6.75%
|
|
05/15/09
|
|
$
|
250
|
|
$
|
247,845
|
|
El Paso Corp., Sr. Unsec’d. Notes
|
|
Ba3
|
|
7.00
|
|
05/15/11
|
|
|
330
|
|
|
329,312
|
|
Intergen NV, Sr. Sec’d. Notes, 144A
|
|
Ba3
|
|
9.00
|
|
06/30/17
|
|
|
400
|
|
|
400,000
|
|
Ipalco Enterprises, Inc., Sr. Sec’d. Notes, 144A
|
|
Ba3
|
|
7.25
|
|
04/01/16
|
|
|
55
|
|
|
52,525
|
|
Kinder Morgan Finance Co. ULC, Gtd. Notes (Canada)
|
|
Ba1
|
|
5.70
|
|
01/05/16
|
|
|
960
|
|
|
825,600
|
|
Mirant North America LLC, Gtd. Notes
|
|
B1
|
|
7.375
|
|
12/31/13
|
|
|
240
|
|
|
225,600
|
|
NGPL PipeCo. LLC, Sr. Unsec’d. Notes, 144A
|
|
Baa3
|
|
7.119
|
|
12/15/17
|
|
|
425
|
|
|
403,380
|
|
NRG Energy, Inc., Gtd. Notes
|
|
B1
|
|
7.25
|
|
02/01/14
|
|
|
100
|
|
|
92,750
|
|
NRG Energy, Inc., Gtd. Notes
|
|
B1
|
|
7.375
|
|
02/01/16
|
|
|
665
|
|
|
598,500
|
|
NRG Energy, Inc., Gtd. Notes
|
|
B1
|
|
7.375
|
|
01/15/17
|
|
|
180
|
|
|
163,800
|
|
Reliant Energy, Inc., Sr. Sec’d. Notes
|
|
Ba3
|
|
6.75
|
|
12/15/14
|
|
|
435
|
|
|
371,925
|
|
Reliant Energy, Inc., Sr. Unsec’d. Notes
|
|
B1
|
|
7.875
|
|
06/15/17
|
|
|
390
|
|
|
288,600
|
|
TXU Corp., Sr. Unsec’d. Notes
|
|
Caa1
|
|
5.55
|
|
11/15/14
|
|
|
605
|
|
|
451,485
|
|
TXU Corp., Sr. Unsec’d. Notes
|
|
Caa1
|
|
6.50
|
|
11/15/24
|
|
|
465
|
|
|
296,148
|
|
Williams Cos., Inc., Sr. Unsec’d. Notes
|
|
Baa3
|
|
7.125
|
|
09/01/11
|
|
|
765
|
|
|
753,525
|
|
Williams Cos., Inc., Sr. Unsec’d. Notes
|
|
Baa3
|
|
8.125
|
|
03/15/12
|
|
|
130
|
|
|
131,342
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,327,132
|
|
Wireless—4.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Centennial Cellular Operating Co./Centennial Communications Corp., Gtd. Notes
|
|
B2
|
|
10.125
|
|
06/15/13
|
|
|
430
|
|
|
425,700
|
|
Centennial Cellular Operating Co./Centennial Communications Corp.,
Sr. Unsec’d. Notes
|
|
B2
|
|
8.125
|
|
02/01/14
|
|
|
235
|
|
|
232,650
|
|
Cricket Communications, Inc., Gtd. Notes, 144A
|
|
B3
|
|
10.00
|
|
07/15/15
|
|
|
515
|
|
|
491,825
|
|
MetroPCS Wireless, Inc., Gtd. Notes
|
|
Caa1
|
|
9.25
|
|
11/01/14
|
|
|
355
|
|
|
331,925
|
|
Rogers Wireless, Inc., Sr. Sec’d. Notes (Canada)
|
|
Baa3
|
|
9.625
|
|
05/01/11
|
|
|
450
|
|
|
482,226
|
|
Sprint Capital Corp., Gtd. Notes
|
|
Baa3
|
|
6.90
|
|
05/01/19
|
|
|
195
|
|
|
151,125
|
|
Sprint Nextel Corp., Sr. Unsec’d. Notes
|
|
Baa3
|
|
6.00
|
|
12/01/16
|
|
|
295
|
|
|
227,150
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,342,601
|
|
Wirelines—5.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Citizens Communications Corp., Sr. Unsec’d. Notes
|
|
Ba2
|
|
9.25
|
|
05/15/11
|
|
|
975
|
|
|
975,000
|
|
GCI, Inc., Sr. Unsec’d. Notes
|
|
B3
|
|
7.25
|
|
02/15/14
|
|
|
410
|
|
|
356,700
|
|
Qwest Corp., Sr. Unsec’d. Notes
|
|
Ba1
|
|
7.50
|
|
10/01/14
|
|
|
1,145
|
|
|
1,056,262
|
|
Windstream Corp., Gtd. Notes
|
|
Ba3
|
|
8.125
|
|
08/01/13
|
|
|
250
|
|
|
237,500
|
|
Windstream Corp., Gtd. Notes
|
|
Ba3
|
|
8.625
|
|
08/01/16
|
|
|
270
|
|
|
249,075
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,874,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Corporate Bonds (cost $69,039,670)
|
|
|
|
|
|
|
|
|
|
|
|
59,699,953
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
10
|
|
|
|
|
|
|
|
Portfolio of Investments as of September 30, 2008 (Unaudited)
|
|
THE HIGH YIELD PLUS FUND, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Moody’s
Ratings†
|
|
Interest
Rate
|
|
Maturity
Date
|
|
Principal
Amount
(000)
|
|
Value
(Note 1)
|
|
BANK NOTES(c)—5.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer Cyclical-Services—0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bright Horizon
|
|
Ba3
|
|
7.50%
|
|
05/28/15
|
|
$
|
270
|
|
$
|
255,150
|
|
Energy—0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Antero Resources Corp.
|
|
NR
|
|
7.20
|
|
04/12/14
|
|
|
500
|
|
|
445,000
|
|
Entertainment—0.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AMC Entertainment
|
|
B3
|
|
7.819
|
|
06/13/12
|
|
|
199
|
|
|
172,610
|
|
Healthcare—0.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
VWR International, Inc.
|
|
B1
|
|
4.969
|
|
06/29/14
|
|
|
525
|
|
|
437,063
|
|
Paper—0.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Georgia Pacific Corp., Term Loan B
|
|
Ba2
|
|
4.547
|
|
12/20/12
|
|
|
281
|
|
|
247,684
|
|
Pharmaceuticals—0.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mylan
|
|
Ba3
|
|
5.934
|
|
10/02/14
|
|
|
403
|
|
|
372,550
|
|
Utilities—1.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calpine Corp.
|
|
B2
|
|
5.685
|
|
03/29/14
|
|
|
499
|
|
|
422,064
|
|
Texas Competitive Electric Holdings Co. LLC
|
|
Ba3
|
|
6.22
|
|
10/22/14
|
|
|
496
|
|
|
418,711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
840,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Bank Notes (cost $3,117,410)
|
|
|
|
|
|
|
|
|
|
|
|
2,770,832
|
|
COMMON STOCKS—0.1%
|
|
|
|
|
|
|
|
Shares
|
|
|
|
|
|
|
|
|
|
|
Consumer Products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WKI Holding Co., Inc., (cost $1,380,433)(b)(e)
|
|
|
|
|
|
|
|
|
6,031
|
|
|
69,356
|
|
WARRANT—0.1%
|
|
|
|
|
|
|
|
Units
|
|
|
|
|
|
|
|
|
|
|
Chemicals
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hercules, Inc., (cost $0)(b)(e)
|
|
|
|
|
|
|
|
|
230
|
|
|
48,816
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term investments (cost $73,537,513)
|
|
|
|
|
|
|
|
|
|
|
|
62,588,957
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
11
|
|
|
|
|
|
|
|
Portfolio of Investments as of September 30, 2008 (Unaudited)
|
|
THE HIGH YIELD PLUS FUND, INC.
|
|
|
|
|
|
|
|
|
|
Description
|
|
Principal
Amount
(000)
|
|
Value
(Note 1)
|
|
|
|
|
|
|
SHORT-TERM INVESTMENT—2.7%
|
|
|
|
|
|
|
|
REPURCHASE AGREEMENT
|
|
|
|
|
|
|
|
|
|
|
|
JPMorgan Chase Triparty, 1.75% dated 09/30/08, due 10/01/08 in the amount of $1,300,063
(cost $1,300,000; the value of the collateral
including accrued interest was $1,327,318)(f)
|
|
$1,300
|
|
$
|
1,300,000
|
|
|
Total Investments—131.4%
|
|
|
|
|
|
|
|
|
|
|
|
(cost $74,837,513; Note 4)(g)
|
|
|
|
|
63,888,957
|
|
|
Liabilities in excess of other assets—(31.4)%
|
|
|
|
|
(15,268,176
|
)
|
|
|
|
|
|
|
|
|
|
Net Assets—100.0%
|
|
|
|
$
|
48,620,781
|
|
|
|
|
|
|
|
|
|
The following abbreviations are used in Portfolio descriptions:
|
144A
|
Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may not be resold subject to that rule except to qualified institutional buyers. Unless otherwise
noted, 144A securities are deemed to be liquid.
|
|
NR
|
Not Rated by Moody’s or Standard & Poor’s
|
|
†
|
The rating reflected is as of September 30, 2008. Rating of certain bonds may have changed subsequent to that date.
|
|
(a)
|
The rate shown reflects the coupon rate after the step date.
|
|
(b)
|
Non-income producing security.
|
|
(c)
|
Indicates a variable rate security.
|
|
(d)
|
Represents issuer in default on interest payments. Non-income producing security.
|
|
(e)
|
Indicates a security that has been deemed illiquid.
|
|
(f)
|
Repurchase agreement is collateralized by United States Treasuries or federal agency obligations.
|
|
(g)
|
As of September 30, 2008, 3 securities representing $162,734 and 0.3% of net assets were fair valued in accordance with the policies adopted by the Board of Directors. This
amount was valued using Significant Unobservable Inputs (Level 3, as defined below).
|
Various inputs are used in determining the value of the
Portfolio’s investments. These inputs are summarized in the three broad levels listed below.
Level 1—quoted prices in active markets for
identical securities
Level 2—other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds,
credit risk, etc.)
Level 3—significant unobservable inputs (including the Portfolio’s own assumptions in determining the fair value of
investments)
The following is a summary of the inputs used as of September 30, 2008 in valuing the Portfolio’s assets carried at fair value:
|
|
|
|
|
|
|
|
Valuation inputs
|
|
Investments
in Securities
|
|
Other Financial
Instruments*
|
|
Level 1—Quoted Prices
|
|
|
—
|
|
—
|
|
Level 2—Other Significant Observable Inputs
|
|
$
|
63,726,223
|
|
—
|
|
Level 3—Significant Unobservable Inputs
|
|
|
162,734
|
|
—
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
63,888,957
|
|
—
|
|
|
|
|
|
|
|
|
*
|
Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the
unrealized appreciation/depreciation on the instrument.
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
12
|
|
|
|
|
|
|
|
Portfolio of Investments as of September 30, 2008 (Unaudited)
|
|
THE HIGH YIELD PLUS FUND, INC.
|
The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:
|
|
|
|
|
|
|
|
Investments
in Securities
|
|
Balance as of 3/31/08
|
|
$
|
78,238
|
|
Accrued discounts/premiums
|
|
|
—
|
|
Realized gain (loss)
|
|
|
—
|
|
Change in unrealized appreciation (depreciation)
|
|
|
84,496
|
|
Net purchases (sales)
|
|
|
—
|
|
Transfers in and/or out of Level 3
|
|
|
—
|
|
|
|
|
|
|
Balance as of 9/30/08
|
|
$
|
162,734
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
13
|
|
|
|
|
|
|
|
Portfolio of Investments as of September 30, 2008 (Unaudited)
|
|
THE HIGH YIELD PLUS FUND, INC.
|
The industry classification of investments and liabilities in excess of other assets shown as a percentage of net assets as September 30, 2008 were as follows:
|
|
|
|
|
|
Utilities
|
|
18.8
|
%
|
|
Energy
|
|
10.0
|
|
|
Healthcare
|
|
9.9
|
|
|
Metals
|
|
7.9
|
|
|
Gaming
|
|
7.0
|
|
|
Media-Cable
|
|
7.0
|
|
|
Media-Non Cable
|
|
5.9
|
|
|
Wirelines
|
|
5.9
|
|
|
Financial Institutions
|
|
5.2
|
|
|
Technology
|
|
4.9
|
|
|
Transportation
|
|
4.8
|
|
|
Wireless
|
|
4.8
|
|
|
Food & Beverage
|
|
4.2
|
|
|
Pharmaceuticals
|
|
3.7
|
|
|
Entertainment
|
|
2.9
|
|
|
Repurchase Agreement
|
|
2.7
|
|
|
Automotive
|
|
2.4
|
|
|
Construction Machinery
|
|
2.4
|
|
|
Tobacco
|
|
2.3
|
|
|
Diversified Manufacturing
|
|
2.3
|
|
|
Retailers
|
|
2.2
|
|
|
Consumer Cyclical-Services
|
|
2.2
|
|
|
Paper
|
|
2.1
|
|
|
Home Construction
|
|
1.9
|
|
|
Industrial Other
|
|
1.8
|
|
|
Environmental
|
|
1.7
|
|
|
Chemicals
|
|
1.5
|
|
|
Aerospace/Defense
|
|
1.2
|
|
|
Building Materials
|
|
0.8
|
|
|
Lodging
|
|
0.7
|
|
|
Packaging
|
|
0.2
|
|
|
Consumer Products
|
|
0.1
|
|
|
|
|
|
|
|
|
|
131.4
|
%
|
|
Liabilities in excess of other assets
|
|
(31.4
|
)
|
|
|
|
|
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
14
|
|
|
|
|
|
|
|
Statement of Assets and Liabilities (Unaudited)
|
|
THE HIGH YIELD PLUS FUND, INC.
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
Investments, at value (cost $74,837,513)
|
|
$
|
63,888,957
|
|
|
Cash
|
|
|
64,095
|
|
|
Interest receivable
|
|
|
1,666,996
|
|
|
Prepaid expenses
|
|
|
888
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
65,620,936
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Loan payable (Note 5)
|
|
|
16,500,000
|
|
|
Dividends payable (Note 7)
|
|
|
402,206
|
|
|
Accrued expenses
|
|
|
62,609
|
|
|
Investment advisory fee payable
|
|
|
21,429
|
|
|
Administration fee payable
|
|
|
8,489
|
|
|
Loan interest payable
|
|
|
5,422
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
17,000,155
|
|
|
|
|
|
|
|
|
Net Assets
|
|
$
|
48,620,781
|
|
|
|
|
|
|
|
|
Net assets were comprised of:
|
|
|
|
|
|
Common stock, at par
|
|
$
|
160,882
|
|
|
Paid-in capital in excess of par
|
|
|
124,941,913
|
|
|
|
|
|
|
|
|
|
|
|
125,102,795
|
|
|
Undistributed net investment income
|
|
|
76,589
|
|
|
Accumulated net realized loss on investment transactions
|
|
|
(65,610,047
|
)
|
|
Net unrealized depreciation on investments
|
|
|
(10,948,556
|
)
|
|
|
|
|
|
|
|
Net assets, September 30, 2008
|
|
$
|
48,620,781
|
|
|
|
|
|
|
|
|
Net asset value per share ($48,620,781 / 16,088,240)
|
|
|
$3.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
15
|
|
|
THE
HIGH YIELD PLUS FUND, INC.
Statement of Operations (Unaudited)
|
|
|
|
|
|
|
|
|
Six Months
Ended
September 30,
2008
|
|
|
|
|
|
Income
|
|
|
|
|
|
Interest
|
|
$
|
3,001,420
|
|
|
|
|
|
|
|
|
Expenses
|
|
|
|
|
|
Loan interest expense (Note 5)
|
|
|
269,633
|
|
|
Investment advisory fee
|
|
|
135,975
|
|
|
Administration fee
|
|
|
54,308
|
|
|
Custodian’s fees and expenses
|
|
|
30,000
|
|
|
Legal fees and expenses
|
|
|
27,000
|
|
|
Audit fee
|
|
|
14,000
|
|
|
Reports to shareholders
|
|
|
12,000
|
|
|
Registration fees
|
|
|
12,000
|
|
|
Transfer agent’s fees and expenses
|
|
|
9,000
|
|
|
Directors’ fees and expenses
|
|
|
5,000
|
|
|
Miscellaneous
|
|
|
4,207
|
|
|
|
|
|
|
|
|
Total expenses
|
|
|
573,123
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
|
2,428,297
|
|
|
|
|
|
|
|
Realized and Unrealized Gain
(Loss) on Investments
|
|
|
|
|
|
Net realized loss on investment transactions
|
|
|
(1,038,982
|
)
|
|
Net change in unrealized depreciation on investments
|
|
|
(4,678,157
|
)
|
|
|
|
|
|
|
|
Net loss on investments
|
|
|
(5,717,139
|
)
|
|
|
|
|
|
|
Net Decrease in Net Assets
Resulting from Operations
|
|
$
|
(3,288,842
|
)
|
|
|
|
|
|
|
THE HIGH YIELD PLUS FUND, INC.
Statement of Cash Flows (Unaudited)
|
|
|
|
|
|
|
Increase (Decrease) in Cash
|
|
Six Months
Ended
September 30,
2008
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
Interest received
|
|
$
|
2,894,402
|
|
|
Operating expenses paid
|
|
|
(471,357
|
)
|
|
Loan interest and commitment fees paid
|
|
|
(275,793
|
)
|
|
Purchases of long-term portfolio investments
|
|
|
(8,421,885
|
)
|
|
Net payments for purchases of short-term portfolio investments
|
|
|
(700,000
|
)
|
|
Proceeds from sale of long-term portfolio investments
|
|
|
9,365,846
|
|
|
Increase in other assets
|
|
|
(473
|
)
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
2,390,740
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
Cash dividends paid
|
|
|
(2,413,236
|
)
|
|
|
|
|
|
|
|
Net cash used in financing activities
|
|
|
(2,413,236
|
)
|
|
|
|
|
|
|
|
Net decrease in cash
|
|
|
(22,496
|
)
|
|
Cash at beginning of period
|
|
|
86,591
|
|
|
|
|
|
|
|
|
Cash at end of period
|
|
$
|
64,095
|
|
|
|
|
|
|
|
|
Reconciliation of Net Decrease in Net Assets to Net Cash Provided By Operating Activities
|
|
|
|
|
|
Net decrease in net assets resulting from operations
|
|
$
|
(3,288,842
|
)
|
|
|
|
|
|
|
|
Decrease in investments
|
|
|
273,254
|
|
|
Net realized loss on investments
|
|
|
1,038,982
|
|
|
Net increase in unrealized depreciation on investments
|
|
|
4,678,157
|
|
|
Increase in interest receivable
|
|
|
(14,018
|
)
|
|
Increase in other assets
|
|
|
(473
|
)
|
|
Decrease in payable for investments purchased
|
|
|
(122,293
|
)
|
|
Decrease in accrued expenses
|
|
|
(174,027
|
)
|
|
|
|
|
|
|
|
Total adjustments
|
|
|
5,679,582
|
|
|
|
|
|
|
|
|
Net cash flows provided by operating activities
|
|
$
|
2,390,740
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
16
|
|
|
THE
HIGH YIELD PLUS FUND, INC.
Statement of Changes in Net Assets (Unaudited)
|
|
|
|
|
|
|
|
|
|
Increase (Decrease) in
Net Assets
|
|
Six Months
Ended
September 30,
2008
|
|
|
Year Ended
March 31,
2008
|
|
|
|
|
|
|
Operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
$
|
2,428,297
|
|
|
$
|
4,816,815
|
|
|
|
|
|
|
Net realized loss on investment transactions
|
|
|
(1,038,982
|
)
|
|
|
(1,812,742
|
)
|
|
|
|
|
|
Net change in unrealized depreciation on investments
|
|
|
(4,678,157
|
)
|
|
|
(7,653,490
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in net assets resulting from operations
|
|
|
(3,288,842
|
)
|
|
|
(4,649,417
|
)
|
|
|
|
|
|
Dividends from net investment income (Note 1)
|
|
|
(2,413,236
|
)
|
|
|
(4,826,472
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total increase (decrease)
|
|
|
(5,702,078
|
)
|
|
|
(9,475,889
|
)
|
|
|
|
|
|
Net Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
54,322,859
|
|
|
|
63,798,748
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of period(a)
|
|
$
|
48,620,781
|
|
|
$
|
54,322,859
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Includes undistributed net investment income of:
|
|
$
|
76,589
|
|
|
$
|
61,528
|
|
|
|
|
|
|
|
|
|
|
|
THE HIGH YIELD PLUS FUND, INC.
Notes to Financial Statements (Unaudited)
The High Yield Plus Fund, Inc. (the
“Fund”), was organized in Maryland on February 3, 1998, as a diversified closed-end management investment company. The Fund’s primary objective is to provide a high level of current income to shareholders. The Fund seeks to
achieve this objective through investment of at least 80% of its investable assets in publicly or privately offered high yield debt securities rated in the medium to lower categories by recognized rating services or non-rated securities of
comparable quality. As a secondary investment objective, the Fund will seek capital appreciation, but only when consistent with its primary objective. The ability of issuers of debt securities held by the Fund to meet their obligations may be
affected by economic developments in a specific industry or region.
Note 1. Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements.
Securities Valuation:
Securities for which market quotations are readily available—including securities listed on national securities exchanges and
those traded over-the-counter are valued at the last quoted sale price on the valuation date on which the security is traded. If such securities were not traded on the valuation date, but market quotations are readily available, they are valued at
the most recently quoted bid price provided by an independent pricing service or by the principal market makers. Securities for which market quotations are not readily available or for which the pricing agent or market does not provide a valuation
or methodology, or provides a valuation or methodology that, in the judgment of the investment adviser, does not represent fair value are valued by a Valuation Committee appointed by the Board of Directors, in consultation with the adviser. When
determining the fair value of securities some of the factors influencing the valuation include: the nature of any restrictions on disposition of the securities; assessments of the general liquidity of the securities; the issuer’s financial
condition and the markets in which it does business, the cost of the investment; the size of the holding and the capitalization of the issuer; the prices of any recent transactions or bids/offers such securities or any comparable securities; any
available analyst media or other reports or information deemed reliable by the investment adviser regarding the issuer or the markets or industry in which it operates. Using fair value to price securities may result in a value that is different from
a security’s most recent closing price and from the price used by other mutual funds to calculate their net asset value.
Short-term securities which
mature in more than 60 days are valued at current quotations. Short-term securities which mature in 60 days or less are valued at amortized cost, which approximates market value.
Repurchase Agreements:
In connection with transactions in repurchase agreements with United States financial institutions, it is the Fund’s
|
|
|
|
|
Notes to Financial Statements (Unaudited)
|
|
THE HIGH YIELD PLUS FUND, INC.
|
policy that its custodian or designated sub-custodians under triparty repurchase agreements, as the case may be, take possession of the underlying collateral
securities, the value of which exceeds the principal amount of the repurchase transaction, including accrued interest. To the extent that any repurchase transaction exceeds one business day, the value of the collateral is marked to market on a daily
basis to ensure adequacy of the collateral. If the seller defaults and the value of the collateral declines or if bankruptcy proceedings are commenced with respect to the seller of the security, realization of the collateral by the fund may be
delayed or limited.
Foreign Currency Translation:
The books and records of the Fund are maintained in U.S. dollars. Foreign currency
amounts are translated into U.S. dollars on the following basis:
(i) market value of investment securities, other assets and liabilities—at the
current daily rates of exchange;
(ii) purchases and sales of investment securities, income and expenses—at the rates of exchange prevailing on the
respective dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange rates and market values at the close of
the fiscal period, the Fund does not isolate that portion of the results of operations arising as a result of changes in the foreign exchange rates from the fluctuations arising from changes in the market prices of long-term securities held at the
end of the fiscal period. Similarly, the Fund does not isolate the effect of changes in foreign exchange rates from the fluctuations arising from changes in the market prices of long-term portfolio securities sold during the fiscal period.
Accordingly, realized foreign currency gains or losses are included in the reported net realized gains or losses on investment transactions.
Net realized
gains or losses on foreign currency transactions represent net foreign exchange gains or losses from holdings of foreign currencies, currency gains or losses realized between the trade and settlement dates on security transactions, and the
difference between the amounts of dividends, interest and foreign withholding taxes recorded on the Fund’s books and the U.S. dollar equivalent amounts actually received or paid. Net unrealized currency gains or losses from valuing foreign
currency denominated assets and liabilities (other than investments) at period end exchange rates are reflected as a component of net unrealized appreciation (depreciation) on foreign currencies.
Foreign security and currency transactions may involve certain considerations and risks not typically associated with those of domestic origin as a result of, among other
factors, the possibility of political or economic instability and the level of governmental supervision and regulation of foreign securities markets.
Cash Flow Information:
The Fund invests in
securities and pays dividends from net investment income and distributions from net realized gains which are paid in cash or are reinvested at the discretion of shareholders. These activities are reported in the Statement of Changes in Net Assets
and additional information on cash receipts and cash payments is presented in the Statement of Cash Flows. Accounting practices that do not affect reporting activities on a cash basis include carrying investments at value and amortizing discounts
and premiums on debt obligations.
Securities Transactions and Net Investment Income:
Security transactions are recorded on the trade
date. Realized gains or losses on sales of securities are calculated on the identified cost basis. Dividend income is recorded on the ex-dividend date. Interest income, including amortization of premium and accretion of discount on debt securities,
as required is recorded on the accrual basis. Expenses are recorded on the accrual basis.
Dividends and Distributions:
The Fund expects
to pay dividends of net investment income monthly and distribution of net realized capital and currency gain, if any, annually. Dividends and distributions to shareholders, which are determined in accordance with federal income tax regulations,
which are determined in accordance with federal income tax regulations and which may differ from generally accepted accounting principles, are recorded on the ex-dividend date. Permanent book/tax differences relating to income and gains are
reclassified to paid-in capital when they arise.
Federal Income Taxes:
It is the Fund’s policy to continue to meet the requirements
of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its taxable net investment income and capital gains, if any, to its shareholders. Therefore, no federal income tax provision is required.
Estimates:
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts and
disclosures in the financial statements. Actual results could differ from those estimates.
Note 2. Agreements
The Fund has agreements with, among others, Wellington Management Company, LLP (the “Investment Advisor”) and Prudential Investments LLC (the
“Administrator”). The Investment Advisor makes investment decisions on behalf of the Fund; the Administrator provides occupancy and certain clerical and accounting services to the Fund. The Fund bears all other costs and expenses.
The investment advisory agreement provides for the Investment Advisor to receive a fee, computed weekly and payable monthly at an annual rate of 0.50% of
the Fund’s average weekly net assets. The
|
|
|
|
|
Notes to Financial Statements (Unaudited)
|
|
THE HIGH YIELD PLUS FUND, INC.
|
administration agreement provides for the Administrator to receive a fee, computed weekly and payable monthly at an annual rate of 0.20% of the Fund’s
average weekly net assets.
Note 3. Portfolio Securities
Purchases and sales of investment securities,
other than short-term investments for the six months ended September 30, 2008, aggregated $8,299,593 and $9,353,038 respectively.
Note 4. Tax Information
The Fund had a capital loss carryforward as of March 31, 2008, of approximately $62,147,000 of which $8,395,000 expires in 2009, $24,698,000 expires in 2010,
$26,140,000 expires in 2011, $2,626,000 expires in 2012, and $288,000 expires in 2016. Accordingly, no capital gains distribution is expected to be paid to shareholders until net gains have been realized in excess of such carryforward. It is
unlikely whether the Fund will be able to realize the full benefit of the remaining carryforward prior to the expiration dates.
The United States federal
income tax basis of the Fund’s investments and the net unrealized depreciation as of September 30, 2008 were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax Basis of
Investments
|
|
Appreciation
|
|
Depreciation
|
|
|
Net Unrealized
Depreciation
|
|
|
$
|
75,377,277
|
|
$
|
327,458
|
|
$
|
(11,815,778
|
)
|
|
$
|
(11,488,320
|
)
|
The difference between book basis and tax basis was primarily attributable to differences in the treatment of
premium amortization for book and tax purposes.
Management has analyzed the Fund’s tax positions taken on federal income tax returns for all open tax
years and has concluded that as of September 30, 2008, no provision for income tax would be required in the Fund’s financial statements. The Fund’s federal and state income and federal excise tax returns for tax years for which the
applicable statutes of limitations have not expired are subject to examination by the Internal Revenue Service and state departments of revenue.
Note 5. Borrowings
The Fund has a credit agreement with unaffiliated lenders, pursuant to which the lenders obtained a security interest in the assets of the Fund. The maximum commitment
under this agreement is $27,500,000 and
this credit agreement expires on March 24, 2009. Interest on any such borrowings is based on market rates and is payable monthly and at maturity. The
Fund may utilize these borrowings (leverage) in order to increase the potential for gain on amounts invested. There can be no guarantee that these gains will be realized. There are increased risks associated with the use of leverage. The Fund pays
commitment fees at an annual rate of .10 of 1% on any unused portion of the credit facility. Commitment fees are included in “Loan Interest” as reported on the Statement of Operations.
The average daily balance outstanding during the six months ended September 30, 2008 was $16,500,000 at a weighted average interest rate of 3.21%. The maximum face
amount of borrowings outstanding at any month-end during the six months ended September 30, 2008 was $16,500,000.
Note 6. Capital
There are 100 million shares of common stock authorized at $.01 par value per share. During the six months ended September 30, 2008 and the year ended
March 31, 2008 the Fund did not issue any shares in connection with reinvestment of dividends.
Note 7. Dividends
On September 11, 2008, the Board of Directors of the Fund declared dividends of $0.025 per share payable on October 10, 2008, November 14, 2008, and
December 12, 2008, to stockholders of record on September 30, 2008, October 31, 2008 and November 28, 2008 respectively.
Note 8. New Accounting Pronouncements
In March 2008, the FASB released Statement of Financial Accounting Standards No. 161, “Disclosures about Derivative Instruments and Hedging Activities”
(“FAS 161”). FAS 161 requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about fair value amounts of and gains and losses on derivative instruments, and disclosures about
credit-risk-related contingent features in derivative agreements. The application of FAS 161 is required for any reporting period beginning after November 15, 2008. At this time, management is evaluating the implications of FAS 161
and its impact on the financial statements has not yet been determined.
|
|
|
|
|
Supplemental Proxy Information (Unaudited)
|
|
THE HIGH YIELD PLUS FUND, INC.
|
The annual meeting of shareholders of the Fund was held on August 18, 2008 at the offices of Prudential Investments LLC, 100 Mulberry Street, Newark, New Jersey. The
meeting was held for the following purpose:
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
To elect the following directors to serve as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Directors
|
|
Class
|
|
Term
|
|
Expiring
|
|
|
|
Kevin J. Bannon
|
|
I
|
|
2 years
|
|
2010
|
|
|
|
Robert F. Gunia
|
|
II
|
|
3 years
|
|
2011
|
|
|
|
Robert E. La Blanc
|
|
II
|
|
3 years
|
|
2011
|
|
|
|
Douglas H. McCorkindale
|
|
II
|
|
3 years
|
|
2011
|
|
|
|
Robin B. Smith
|
|
II
|
|
3 years
|
|
2011
|
|
|
|
Michael S. Hyland
|
|
II
|
|
3 years
|
|
2011
|
|
|
|
Stephen P. Munn
|
|
III
|
|
1 year
|
|
2009
|
Directors whose term of office continued beyond this meeting are Linda W. Bynoe, David E. A.
Carson, Richard A. Redeker, Judy A. Rice and Stephen G. Stoneburn.
The results of the proxy solicitation on the above matter were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directors
|
|
Votes for
|
|
Votes against
|
|
Votes withheld
|
|
Abstentions
|
|
(1)
|
|
Kevin J. Bannon
|
|
13,748,402
|
|
—
|
|
448,580
|
|
—
|
|
|
|
Robert F. Gunia
|
|
13,750,714
|
|
—
|
|
446,268
|
|
—
|
|
|
|
Michael S. Hyland
|
|
13,642,371
|
|
—
|
|
554,611
|
|
—
|
|
|
|
Robert E. La Blanc
|
|
13,766,158
|
|
—
|
|
430,824
|
|
—
|
|
|
|
Douglas H. McCorkindale
|
|
13,736,278
|
|
—
|
|
460,704
|
|
—
|
|
|
|
Stephen P. Munn
|
|
13,743,602
|
|
—
|
|
453,380
|
|
—
|
|
|
|
Robin B. Smith
|
|
13,750,437
|
|
—
|
|
446,545
|
|
—
|
|
|
|
|
|
Financial Highlights (Unaudited)
|
|
THE HIGH YIELD PLUS FUND, INC.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
Ended
September 30,
2008
|
|
|
Year Ended March 31,
|
|
|
|
|
2008
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
PER SHARE OPERATING PERFORMANCE:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, beginning of period
|
|
$
|
3.38
|
|
|
$
|
3.97
|
|
|
$
|
3.74
|
|
|
$
|
3.85
|
|
|
$
|
4.02
|
|
|
$
|
3.48
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from investment operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investment income
|
|
|
.15
|
|
|
|
.30
|
|
|
|
.30
|
|
|
|
.33
|
|
|
|
.39
|
|
|
|
.44
|
|
|
Net realized and unrealized gain (loss) on investments
|
|
|
(.36
|
)
|
|
|
(.59
|
)
|
|
|
.24
|
|
|
|
(.08
|
)
|
|
|
(.14
|
)
|
|
|
.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total from investment operations
|
|
|
(.21
|
)
|
|
|
(.29
|
)
|
|
|
.54
|
|
|
|
.25
|
|
|
|
.25
|
|
|
|
.96
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less dividends and distributions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends from net investment income
|
|
|
(.15
|
)
|
|
|
(.30
|
)
|
|
|
(.31
|
)
|
|
|
(.36
|
)
|
|
|
(.42
|
)
|
|
|
(.42
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total dividends and distributions
|
|
|
(.15
|
)
|
|
|
(.30
|
)
|
|
|
(.31
|
)
|
|
|
(.36
|
)
|
|
|
(.42
|
)
|
|
|
(.42
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net asset value, end of period(a)
|
|
$
|
3.02
|
|
|
$
|
3.38
|
|
|
$
|
3.97
|
|
|
$
|
3.74
|
|
|
$
|
3.85
|
|
|
$
|
4.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market price per share, end of period(a)
|
|
$
|
2.32
|
|
|
$
|
2.92
|
|
|
$
|
3.62
|
|
|
$
|
3.49
|
|
|
$
|
4.10
|
|
|
$
|
4.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL INVESTMENT RETURN(b):
|
|
|
(16.33
|
)%
|
|
|
(11.71
|
)%
|
|
|
13.45
|
%
|
|
|
(5.86
|
)%
|
|
|
5.24
|
%
|
|
|
31.45
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RATIO/SUPPLEMENTAL DATA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets, end of period (000 omitted)
|
|
$
|
48,621
|
|
|
$
|
54,323
|
|
|
$
|
63,799
|
|
|
$
|
60,174
|
|
|
$
|
61,737
|
|
|
$
|
63,885
|
|
|
Average net assets (000 omitted)
|
|
$
|
54,366
|
|
|
$
|
59,672
|
|
|
$
|
60,884
|
|
|
$
|
61,123
|
|
|
$
|
63,774
|
|
|
$
|
61,020
|
|
|
Ratio to average net assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expenses, before loan interest
|
|
|
1.11
|
%(c)
|
|
|
1.11
|
%
|
|
|
1.20
|
%
|
|
|
1.43
|
%
|
|
|
1.54
|
%
|
|
|
1.52
|
%
|
|
Total expenses
|
|
|
2.10
|
%(c)
|
|
|
3.54
|
%
|
|
|
3.91
|
%
|
|
|
3.56
|
%
|
|
|
2.67
|
%
|
|
|
2.42
|
%
|
|
Net investment income
|
|
|
8.91
|
%(c)
|
|
|
8.07
|
%
|
|
|
7.90
|
%
|
|
|
9.03
|
%
|
|
|
9.80
|
%
|
|
|
11.34
|
%
|
|
Portfolio turnover rate
|
|
|
12
|
%(d)
|
|
|
36
|
%
|
|
|
56
|
%
|
|
|
41
|
%
|
|
|
56
|
%
|
|
|
53
|
%
|
|
Total debt outstanding at end of period (000 omitted)
|
|
$
|
16,500
|
|
|
$
|
16,500
|
|
|
$
|
27,000
|
|
|
$
|
27,500
|
|
|
$
|
28,500
|
|
|
$
|
28,000
|
|
|
Net asset coverage per $1,000 of debt outstanding
|
|
$
|
3,947
|
|
|
$
|
4,299
|
|
|
$
|
3,363
|
|
|
$
|
3,188
|
|
|
$
|
3,166
|
|
|
$
|
3,282
|
|
|
(a)
|
NAV and market value are published in The Wall Street Journal each Monday.
|
|
(b)
|
Total investment return is calculated assuming a purchase of common stock at the current market value on the first day and a sale at the current market value on the last day of each
period reported. Dividends and distributions are assumed for purposes of this calculation to be reinvested at prices obtained under the dividend reinvestment plan. Total investment returns for periods of less than one full year are not annualized.
This calculation does not reflect brokerage commissions.
|
Contained above is selected data for a share of common
stock outstanding, total investment return, ratios to average net assets and other supplemental data for the period indicated. This information is been determined based upon information provided in the financial statements and market price data for
the Fund’s shares.
|
|
|
|
|
|
|
See Notes to Financial Statements.
|
|
21
|
|
|
|
|
|
|
|
Other Information (Unaudited)
|
|
THE HIGH YIELD PLUS FUND, INC.
|
Dividend Reinvestment Plan.
Shareholders may elect to have all distributions of dividends and capital gains automatically reinvested in Fund shares
(“Shares”) pursuant to the Fund’s Dividend Reinvestment Plan (the “Plan”). Shareholders who do not participate in the Plan will receive all distributions in cash paid by check in United States dollars mailed directly to the
shareholders of record (or if the shares are held in street or other nominee name, then to the nominee) by the custodian, as dividend disbursing agent. Shareholders who wish to participate in the Plan should contact the Fund at (800) 451-6788.
Computershare Trust Company, N.A. (the “Plan Agent”) serves as agent for the shareholders in administering the Plan. After the Fund declares a
dividend or capital gains distribution, if (1) the market price is lower than net asset value, the participants in the Plan will receive the equivalent in Shares valued at the market price determined as of the time of purchase (generally, following
the payment date of the dividend or distribution); or if (2) the market price of Shares on the payment date of the dividend or distribution is equal to or exceeds their net asset value, participants will be issued Shares at the higher of net asset
value or 95% of the market price. If net asset value exceeds the market price of Shares on the valuation date or the Fund declares a dividend or other distribution payable only in cash, the Plan Agent will, as agent for the participants, receive the
cash payment and use it to buy Shares in the open market. If, before the Plan Agent has completed its purchases, the market price exceeds the net asset value per share, the average per share purchase price paid by the Plan Agent may exceed the net
asset value per share, resulting in the acquisition of fewer shares than if the dividend or distribution had been paid in shares issued by the Fund. The Fund will not issue Shares under the Plan below net asset value.
There is no charge to participants for reinvesting dividends or capital gain distributions, except for certain brokerage commissions, as described below. The Plan
Agent’s fees for the handling of the reinvestment of dividends and distributions will be paid by the Fund. There will be no brokerage commissions charged with respect to Shares issued directly by the Fund. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan Agent’s open market purchases in connection with the reinvestment of dividends and distributions. The automatic reinvestment of dividends and distributions will not
relieve participants of any federal income tax that may be payable on such dividends or distributions.
The Fund reserves the right to amend or terminate
the Plan upon 90 days’ written notice to shareholders of the Fund.
Participants in the Plan may withdraw from the Plan upon written notice to the Plan
Agent and will receive certificates for whole Shares and cash for fractional Shares.
All correspondence concerning the Plan should be directed to the Plan
Agent, Computershare Trust Company, N.A., c/o Computershare Shareholder Services, P.O. Box 43011, Providence, RI 02940-3011.
Proxy Voting Policies and
Procedures.
The Fund votes proxies related to the portfolio’s securities according to a set of policies and procedures approved by the Fund’s board. A description of the policies and procedures may be obtained, without
charge, by calling (800) 451-6788 or by visiting the SEC’s website at www.sec.gov.
Availability Of Quarterly Portfolio Schedule.
The
Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (the Commission) for the first and third quarters of each fiscal year on Form N-Q. The Fund’s Forms N-Q are available on the Commission’s
website at http://www.sec.gov. The Fund’s Forms N-Q may also be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling (800)
SEC-0330 (732-0330).
Certifications.
The required annual certification for the previous year was submitted to the NYSE. The Fund also has
included the certifications of the Fund’s CEO and CFO required by Section 302 of the Sarbanes-Oxley Act in the Fund’s Form N-CSR filed with the SEC, for the period of this report.
The High Yield Plus Fund, Inc.
Approval of Advisory Agreements
The Board of Directors (the “Board”) of The High
Yield Plus Fund, Inc. (the “Fund”) oversees the management of the Fund, and, as required by law, determines annually whether to renew the Fund’s investment advisory agreement with Wellington Management Company, LLP
(“Wellington”). In considering the renewal of the agreement, the Board, including all of the Independent Directors, met on June 3-5, 2008 and approved the renewal of the agreement through July 31, 2009, after concluding that renewal of the
agreement was in the best interests of the Fund and its shareholders.
In advance of the meetings, the Board received materials relating to the agreement,
and had the opportunity to ask questions and request further information in connection with their consideration. Among other things, the Board considered comparisons with other mutual funds in relevant Peer Universes and Peer Groups. The mutual
funds included in each Peer Universe or Peer Group were objectively determined solely by Lipper Inc., an independent provider of mutual fund data. The comparisons placed the Fund in various quartiles over one-, three-, five- and ten-year periods
ending December 31, 2007, with the first quartile being the best 25% of the mutual funds (for performance, the best performing mutual funds and, for expenses, the lowest cost mutual funds).
In approving the agreement, the Board, including the Independent Directors advised by independent legal counsel, considered the factors they deemed relevant, including
the nature, quality and extent of services provided, the performance of the Fund, the profitability of Wellington, expenses and fees, and the potential for economies of scale that may be shared with the Fund and its shareholders. In their
deliberations, the Directors did not identify any single factor which alone was responsible for the Board’s decision to approve the agreement. In connection with their deliberations, the Board considered information provided by Wellington
throughout the year at regular Board meetings, presentations from portfolio managers and other information, as well as information furnished at or in advance of the meetings on June 3-5, 2008.
The Directors determined that the overall arrangements between the Fund and Wellington are fair and reasonable in light of the services performed, fees charged and such
other matters as the Directors considered relevant in the exercise of their business judgment.
The material factors and conclusions that formed the basis
for the Directors’ reaching their determinations to approve the continuance of the agreement are separately discussed below.
Nature, quality and extent of
services
The Board received and considered information regarding the nature and extent of services provided to the Fund by Wellington. The Board
considered the services provided by Wellington, including but not limited to the provision of investment advisory services to the Fund, adherence to the Fund’s investment restrictions and compliance with applicable Fund policies and procedures.
The Board reviewed the qualifications, backgrounds and responsibilities of the Wellington portfolio managers who are responsible for the day-to-day
management of the Fund’s portfolio. The Board was provided with information pertaining to Wellington’s organizational structure, senior management, investment operations, and other relevant information pertaining to Wellington. The Board
also noted that it received favorable compliance reports from the Fund’s Chief Compliance Officer (CCO) as to Wellington.
The Board concluded that it
was satisfied with the nature, extent and quality of the investment management services provided by Wellington, and that there was a reasonable basis on which to conclude that the Fund benefits from the services provided by Wellington under the
investment advisory agreement.
Performance of The Fund
The
Board received and considered information about the Fund’s historical performance. The Board considered that the Fund’s gross performance in relation to its Peer Universe (the Lipper Debt-Leveraged Closed-End High Current Yield Funds
Performance Universe) was in the second quartile for the one- and three-year periods, although it was in the third quartile over the five- and ten-year periods. The Board also considered that the Fund outperformed its benchmark index for all
periods. The Board concluded that, in light of the Fund’s competitive performance against its benchmark index, it would be in the interest of the Fund and its shareholders to renew the agreement.
Fees and Expenses
The Board considered that the Fund’s actual management
fee (which reflects any subsidies, waivers or expense caps) ranked in the Expense Group’s first quartile, and that the Fund’s net total expenses ranked in the Expense Group’s second quartile. The Board concluded that the management
fee is reasonable in light of the services provided.
Costs of Services and Profits Realized by Wellington
The Board was provided with certain financial information with respect to Wellington, including a pro forma income statement furnished by Wellington which identified the revenues generated for Wellington by the Fund.
However, because Wellington does not maintain financial records which detail profitability on a fund level, the Board was unable to directly consider Wellington’s profitability. The Board recognized that it is difficult to make comparisons of
profitability from fund advisory contracts because comparative information is not generally publicly available and is affected by numerous factors, including the structure of the particular adviser, the types of funds it manages, its business mix,
numerous assumptions regarding allocations and the adviser’s capital structure and cost of capital. Taking these factors into account, the Board concluded that the profitability of Wellington in relation to the services rendered was not
unreasonable.
Economies of Scale
When reviewing and approving
investment company advisory contracts, boards of directors generally also consider the extent to which economies of scale will be realized as the investment company grows and whether fee levels reflect these economies of scale for the benefit of
shareholders. The Board noted, however, that because the Fund is a closed-end fund its size would increase only as a result of any appreciation of its portfolio holdings and when it issues shares in connection with dividend reinvestments. The Board
therefore determined that a consideration of economies of scale was not relevant to its evaluation of the agreement.
Other Benefits to Wellington
The Board considered potential ancillary benefits that might be received by Wellington and its affiliates as a result of their relationship with the Fund. The Board
concluded that potential benefits to be derived by Wellington included those generally resulting from an increase in assets under management, specifically, potential access to additional research resources and benefits to the reputation. The Board
concluded that the benefits derived by Wellington were consistent with the types of benefits generally derived by investment advisers to mutual funds.
After full consideration of these factors, the Board concluded that the approval of the agreement was in the interest of the Fund and its shareholders.
Item 2 – Code of Ethics – Not required, as this is not an annual filing.
Item 3 – Audit Committee Financial Expert – Not required, as this is not an annual filing.
Item 4 – Principal Accountant Fees and Services – Not required, as this is not an annual filing.
Item 5 – Audit Committee of Listed Registrants – Not required, as this is not an annual filing.
Item 6 – Schedule of
Investments – The schedule is included as part of the report to shareholders filed under Item 1 of this Form.
Item 7 – Disclosure of
Proxy Voting Policies and Procedures for Closed-End Management Investment Companies – Not required, as this is not an annual filing.
Item 8
– Portfolio Managers of Closed-End Management Investment Companies – Not required, as this is not an annual filing.
Item 9 – Purchases
of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers – There have been no purchases of equity securities by the registrant or any affiliated purchasers during the period covered by this report.
Item 10 – Submission of Matters to a Vote of Security Holders – Not applicable.
Item 11 – Controls and Procedures
|
|
(a)
|
It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls
and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed,
summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive
officer and principal financial officer in order to allow timely decisions regarding required disclosure.
|
|
|
(b)
|
There has been no significant change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter of the
period covered by this report that has materially affected, or is likely to materially affect, the registrant’s internal control over financial reporting.
|
Item 12 – Exhibits
|
|
(a)
|
(1) Code of Ethics – Not required, as this is not an annual filing.
|
|
|
|
(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.CERT.
|
|
|
|
(3) Any written solicitation to purchase securities under Rule 23c-1. – Not applicable.
|
|
|
(b)
|
Certifications pursuant to Section 906 of the Sarbanes-Oxley Act – Attached hereto as Exhibit EX-99.906CERT.
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant)
The High Yield Plus Fund, Inc.
|
|
|
|
|
|
|
By (Signature and Title)*
|
|
/s/ Deborah A. Docs
|
|
|
|
|
|
Deborah A. Docs
|
|
|
|
|
|
Secretary
|
|
|
|
|
|
|
Date November 24, 2008
|
|
|
|
|
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and on the dates indicated.
|
|
|
|
|
|
By (Signature and Title)*
|
|
/s/ Judy A. Rice
|
|
|
|
|
|
Judy A. Rice
|
|
|
|
|
|
President and Principal Executive Officer
|
|
|
|
|
|
|
Date November 24, 2008
|
|
|
|
|
|
|
|
By (Signature and Title)*
|
|
/s/ Grace C. Torres
|
|
|
|
|
|
Grace C. Torres
|
|
|
|
|
|
Treasurer and Principal Financial Officer
|
|
|
|
|
|
|
Date November 24, 2008
|
|
|
|
*
|
Print the name and title of each signing officer under his or her signature.
|
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