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FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number | 811-5399 | |||||||
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The New America High Income Fund, Inc | ||||||||
(Exact name of registrant as specified in charter) | ||||||||
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33 Broad Street Boston, MA |
| 02109 | ||||||
(Address of principal executive offices) |
| (Zip code) | ||||||
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Ellen E. Terry, 33 Broad St., Boston, MA 02109 | ||||||||
(Name and address of agent for service) | ||||||||
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Registrant’s telephone number, including area code: | 617-263-6400 |
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Date of fiscal year end: | 12/31 |
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Date of reporting period: | 1/1/19 - 6/30/19 |
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Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. Section 3507.
| Persons who are to respond to the collection of information |
| contained in this form are not required to respond unless the |
SEC 2569 (5-08) | form displays a currently valid OMB control number. |
Item 1. Report to Stockholders
August 8, 2019
Dear Shareholder,
We are pleased to report to our shareholders on the results of The New America High Income Fund (the "Fund") for the period ended June 30, 2019. The Fund's net asset value (the "NAV") was $9.86 as of June 30th. The market price for the Fund's shares ended the period at $8.87, representing a market price discount of 10.0%. The Fund paid dividends totaling $0.275 per share from earnings during the six month period. The annualized dividend yield on a share of common stock purchased at the year-end 2018 price of $7.56 was 8.7%
As of June 30th, the Fund's outstanding borrowings through its credit facility (the "Facility") with the Bank of Nova Scotia was $91 million, unchanged from borrowings at year-end. The borrowings represented approximately 28.3% of the Fund's total assets. Amounts borrowed under the Facility bear interest at an adjustable rate based on a margin above LIBOR. The interest rate on the Facility as of June 30th was 3.25%. While the market value-weighted average current yield of 6.91% on the Fund's portfolio remains attractive compared with the interest rate of 3.25% paid on the Facility, the yield spread has continued to narrow. As of June 30th, the yield spread between the cost of borrowing and the portfolio's market value-weighted average current yield was 3.66 percentage points, compared with 4.05 percentage points as of December 31st. The Fund's leverage contributed approximately 14% of the net income earned in the period, compared to 17% of the net income in 2018 and 20% of the net income earned in 2017.
We remind our shareholders that there is no certainty that the dividend will remain at the current level. The dividend can be affected by portfolio results, the cost and amount of leverage, market conditions, the extent to which the portfolio is fully invested and operating expenses, among other factors. Leverage magnifies the effect of price movements on the Fund's net asset value per share. The Fund's leverage increases the Fund's total return in periods of positive high yield market performance. Of course, the opposite is true in an unfavorable high yield market.
Total Returns for the Periods Ending June 30, 2019 | |||||||||||
1 Year | 3 Years Cumulative | ||||||||||
New America High Income Fund (Stock Price and Dividends)* | 11.63 | % | 31.37 | % | |||||||
New America High Income Fund (NAV and Dividends)* | 10.73 | % | 32.13 | % | |||||||
Credit Suisse High Yield Index | 7.12 | % | 24.41 | % |
Sources: Credit Suisse and The New America High Income Fund, Inc.
Past performance is no guarantee of future results. Total return assumes the reinvestment of dividends.
The Credit Suisse High Yield Index is an unmanaged index. Unlike the Fund, the Index has no trading activity, expenses or leverage.
* Returns are historical and are calculated by determining the percentage change in net asset value or market value with all distributions reinvested. Distributions are assumed to be reinvested at prices obtained under the Fund's dividend reinvestment plan. Because the Fund's shares may trade at either a discount or premium to the Fund's net asset value per share, returns based upon the stock price and dividends will tend to differ from those derived from the underlying change in net asset value and dividends. The variance between the Fund's total return based on stock price and dividends and the total return based on the Fund's NAV and dividends is due to the widening of the stock price discount to the NAV over the last year.
1
Commentary by T. Rowe Price Associates, Inc.
Market Review
The high yield market returned almost 10% for the six months ended June 30th, the strongest start to the year since 2009, according to the Credit Suisse High Yield Index (the "Index"). U.S. Treasury yields fell as slowing economic growth and tariff concerns led to increasingly dovish signals from the Federal Reserve (the "Fed") and other developed market central banks. The benchmark U.S. 10 Year Treasury note's yield dropped from 2.7% to 2.0%, its lowest level since November 2016, and yields of other maturities also declined significantly. While the Fed left its short-term lending rate unchanged during the period, the central bank noted increased uncertainties around the economic outlook at its June meeting. Fed policymakers, who have been advocating a patient approach to interest rate adjustments, signaled a willingness to cut rates if necessary to sustain the expansion. Trade tensions with China and Mexico added confusion during the period. Tariffs on imports from Mexico were suspended and an announcement of a truce to temporarily prevent the imposition of further tariffs on Chinese goods eventually appeased the markets.
Amid mounting trade tensions, equity market losses, and commodities weakness in May, high yield bond prices fell, marking the only month of high yield market losses through the first half of the year. All industries posted gains except energy. Higher credit quality issues within the high yield sector outperformed due to the positive rate backdrop. The yield spread of the Index tightened by more than 120 basis points during the six month period ended June 30th, ending the period at 452 basis points over U.S. 10 Year Treasuries, with a yield-to-worst of 6.3%, which were lower than the twenty year averages of approximately 607 basis points and 8.9%, respectively.
Net investor cash inflows to the high yield market have occurred in every month, except May, of this year, after the high yield market experienced more than $45 billion in redemptions in 2018. Gross new issue activity increased from the first quarter to the second. Year-to-date gross new issue volume is up 11% from the same period in 2018 as issuers tap the high yield market again after elevated use of leveraged loan issuance the previous two years. The proceeds of most new issues were used to refinance existing debt to lower coupons and extend debt maturities, thereby strengthening issuers' balance sheets and lowering high yield market default expectations.
The J.P. Morgan par-weighted default rate tracked lower, ending June at approximately 1.5%, lower than the twenty year average of 3.1%. In the first six months of the year, 20 companies defaulted on $20.9 billion of debt. The energy sector has accounted for the highest percentage of high yield debt defaults year-to-date, affecting $5.8 billion of bonds and loans. Nonetheless, limited default activity suggests overall credit quality in the asset class remains healthy.
Strategy Review
The high yield bond asset class has produced only six calendar years of losses in the last 40 years, and has never had two consecutive negative years of performance. We believe returns in the second half of the year may not be as strong as the outsized gains in the first half. While valuations are attractive compared with many alternative fixed income sectors, they are not as compelling as they were at the start of the year. The portfolio's duration is shorter than that of the Index, consistent with a more defensive strategy.
The portfolio's investments in health care companies Avantor and Bausch Health were notable relative performance contributors. Avantor, a leading provider of product and service solutions to laboratory and production companies,
2
has become one of our highest-conviction holdings. The company's recently completed initial public offering was supportive for the credit, as a large portion of the proceeds will be used to pay down Avantor's debt. The portfolio is invested in securities throughout Avantor's capital structure, including bonds and convertible preferred stock. Bausch Health is a global company that develops, manufactures and markets a broad range of pharmaceutical, medical device and over-the-counter products. Although it carries significant debt on its balance sheet, management has been making progress on reducing leverage. Moreover, we believe that the company's fundamentals are improving, as Bausch has a highly stable, growing business in contact lenses and ophthalmology.
Charter Communications a leading broadband communications company and the second-largest U.S. cable company, was a top relative performance contributor. Charter is a credit that has a combination of a relatively high interest rate and low default outlook and may be a candidate for further credit upgrades. The company posted solid results in the first quarter of 2019 as revenue increased year over year, capital expenditures declined, and its liquidity position remained strong. Netflix, another cable industry investment, also contributed to relative returns. With a growing content library, nearly unlimited shelf space, and an everyday low price, the company is almost single-handedly disrupting the traditional linear pay television ecosystem.
The energy sector continues to be a source of volatility as oil prices fluctuate based on geopolitical developments throughout the globe. The Fund is underweight the industry and invested in relatively high quality issuers. In addition, energy investments are focused on midstream companies due to their more defensive characteristics within the oil ecosystem. Targa Resources is a leading midstream company with a diverse and high-quality asset base. The company's growth strategy is focused on the best-in-class Permian Basin. The company's gathering and processing assets in the Permian Basin are well integrated with its Gulf Coast downstream assets. Commodity price exposure is low, and Targa's management maintains financial policies that should contribute to a stable credit profile.
Floating rate bank loans represent the largest off-Index allocation in the portfolio at 8.3% of assets at the end of June. The senior secured status and a low duration profile of bank loans have historically produced less volatile returns compared with high yield bonds. In the rising rate environment throughout 2017 and 2018, the floating rate feature of bank loans reset coupons higher as rates increased. The portfolio's allocation to bank loans peaked at 9.6% of portfolio assets in April 2019. However, these characteristics resulted in the Fund's bank loan investments underperforming high yield bonds in the strong high yield bond market of the first half of the year. Although the Fed appears to be moving to a more accommodative interest rate posture, removing the potential benefit of higher coupons, a 6% yield in senior secured debt offered by many bank loans appears to remain attractive.
Outlook
The macroeconomic backdrop is having a significant influence on market sentiment, while individual high yield company fundamentals remain largely solid. Slowing economic growth from the first quarter, the Fed's interest rate strategy, trade tensions, and the upcoming election have created a cloud of uncertainty that is likely to persist—particularly if the Fed remains on hold. Investors are eagerly anticipating an "insurance" rate cut that would support the performance of financial markets, but this may not occur. Nevertheless, the current environment is broadly supportive of fixed income strategies, as coupon payments provide a reliable income source that enhances the appeal of bonds amid turbulent market conditions.
3
The high yield asset class continues to demonstrate its resilience. After posting a loss in 2018, the high yield market began this year with its strongest quarterly performance in 10 years resulting in the Index's six-month return of 10%. Steady economic growth, albeit at a slower pace, creates a healthy environment for below investment-grade companies. Growth may be at a "sweet spot"—strong enough for businesses to grow and improve credit quality, but not so strong that the Fed aggressively raises interest rates. We believe default activity may remain low over the next 12 months. Renewed cash inflows in recognition of the attractive 6%—7% yield offered by the asset class are also market supportive.
As always, we aim to deliver high current income while seeking to contain volatility inherent in this market. Our team maintains a commitment to credit research and risk-conscious investing that has led to favorable returns for our high yield clients over various market cycles.
Sincerely,
Ellen E. Terry President The New America High Income Fund, Inc. | Mark Vaselkiv Vice President T. Rowe Price Associates, Inc. |
Past performance is no guarantee of future results. The views expressed in this update are as of the date of this letter. These views and any portfolio holdings discussed in the update are subject to change at any time based on market or other conditions. The Fund and T. Rowe Price Associates, Inc. disclaim any duty to update these views, which may not be relied upon as investment advice. In addition, references to specific companies' securities should not be regarded as investment recommendations or indicative of the Fund's portfolio as a whole.
4
The New America High Income Fund, Inc.
Industry Summary June 30, 2019 (Unaudited) | As a Percent of Total Investments* | ||||||
Energy | 13.03 | % | |||||
Cable Operators | 10.09 | % | |||||
Financial | 9.21 | % | |||||
Healthcare | 8.35 | % | |||||
Utilities | 6.62 | % | |||||
Services | 5.51 | % | |||||
Metals & Mining | 4.69 | % | |||||
Broadcasting | 4.56 | % | |||||
Gaming | 4.08 | % | |||||
Wireless Communications | 3.88 | % | |||||
Satellites | 3.76 | % | |||||
Information Technology | 3.34 | % | |||||
Chemicals | 2.71 | % | |||||
Food/Tobacco | 2.35 | % | |||||
Other Telecommunications | 2.15 | % | |||||
Container | 1.92 | % | |||||
Automotive | 1.83 | % | |||||
Entertainment & Leisure | 1.65 | % | |||||
United States Treasury Obligations | 1.51 | % | |||||
Manufacturing | 1.39 | % | |||||
Consumer Products | 1.35 | % | |||||
Aerospace & Defense | 1.19 | % | |||||
Supermarkets | 1.05 | % | |||||
Building Products | 0.78 | % | |||||
Restaurants | 0.45 | % | |||||
Building & Real Estate | 0.28 | % | |||||
Lodging | 0.27 | % | |||||
Retail | 0.25 | % | |||||
Publishing | 0.21 | % | |||||
Airlines | 0.04 | % | |||||
Short-Term Investments | 1.50 | % | |||||
Total Investments | 100.00 | % |
* Percentages do not match the industry percentages in the Schedule of Investments because due to the Fund's leverage total investments exceed net assets by 1.39 times.
Moody's Investors Service Ratings (1) June 30, 2019 (Unaudited) | As a Percent of Total Investments | ||||||
Short-Term Investments P-1 | 1.50 | % | |||||
Aaa | 1.51 | % | |||||
Baa2 | 0.18 | % | |||||
Baa3 | 1.88 | % | |||||
Total Baa | 2.06 | % | |||||
Ba1 | 4.81 | % | |||||
Ba2 | 7.66 | % | |||||
Ba3 | 14.26 | % | |||||
Total Ba | 26.73 | % | |||||
B1 | 11.08 | % | |||||
B2 | 16.38 | % | |||||
B3 | 21.58 | % | |||||
Total B | 49.04 | % | |||||
Caa1 | 9.20 | % | |||||
Caa2 | 4.53 | % | |||||
Total Caa | 13.73 | % | |||||
Ca | 0.22 | % | |||||
Unrated | 2.79 | % | |||||
Equity | 2.42 | % | |||||
Total Investments | 100.00 | % |
(1) SOURCE: Moody's Investors Service, Inc. This table compiles the ratings assigned by Moody's to the Fund's holdings.
5
The New America High Income Fund, Inc.
Schedule of Investments — June 30, 2019 (Unaudited) (Dollar Amounts in Thousands)
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
CORPORATE DEBT SECURITIES — 119.00% (d)(f) | |||||||||||||||
Aerospace & Defense — 1.25% | |||||||||||||||
$ | 10 | Bombardier, Inc., Senior Notes, 6%, 10/15/22 (g) | Caa1 | $ | 10 | ||||||||||
885 | Bombardier, Inc., Senior Notes, 8.75%, 12/01/21 (g) | Caa1 | 962 | ||||||||||||
1,830 | Transdigm Holdings UK, plc, Senior Notes, 6.25%, 03/15/26 (g) | Ba3 | 1,912 | ||||||||||||
2,884 | |||||||||||||||
Airlines — .06% | |||||||||||||||
74 | American Airlines Group, Senior Notes, 5.625%, 07/15/22 (g) | (e) | 76 | ||||||||||||
55 | United Continental Holdings, Senior Notes, 5%, 02/01/24 | Ba3 | 57 | ||||||||||||
133 | |||||||||||||||
Automotive — 1.71% | |||||||||||||||
1,006 | Ford Motor Credit Company, LLC, Senior Notes, 5.75%, 02/01/21 | Baa3 | 1,047 | ||||||||||||
1,890 | Panther BF Aggregator 2 L.P., Senior Notes, 8.50%, 05/5/27 (g) | B3 | 1,947 | ||||||||||||
1,080 | Tesla Inc., Senior Notes, 5.30%, 08/15/25 (g) | Caa1 | 948 | ||||||||||||
3,942 | |||||||||||||||
Broadcasting — 5.67% | |||||||||||||||
900 | Clear Channel Worldwide Holdings, Inc., Senior Notes, 6.50%, 11/15/22 | B2 | 919 | ||||||||||||
970 | Clear Channel Worldwide Holdings, Inc., Senior Notes, 6.50%, 11/15/22 | B2 | 989 | ||||||||||||
2,335 | Clear Channel Worldwide Holdings, Inc., Senior Subordinated Notes, 9.25%, 02/15/24 (g) | Caa1 | 2,533 | ||||||||||||
128 | iHeart Communications, Inc., Senior Notes, 6.375%, 05/01/26 | B1 | 136 | ||||||||||||
1,837 | iHeart Communications, Inc., Senior Notes, 8.375%, 05/01/27 | Caa1 | 1,924 |
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
$ | 800 | Lionsgate Capital Holdings LLC, Senior Notes, 6.375%, 02/01/24 (g) | B2 | $ | 841 | ||||||||||
1,365 | MDC Partners, Inc., Senior Notes, 6.50%, 05/01/24 (g) | B3 | 1,256 | ||||||||||||
630 | Nexstar Broadcasting, Inc., Senior Notes, 5.625%, 08/01/24 (g) | B3 | 652 | ||||||||||||
550 | Nexstar Escrow, Inc., Senior Notes, 5.625%, 07/15/27 (g) | B3 | 562 | ||||||||||||
445 | Outfront Media Capital, LLC, Senior Notes, 5%, 08/15/27 (g) | B1 | 456 | ||||||||||||
560 | Sirius XM Radio, Inc., Senior Notes, 4.625%, 07/15/24 (g) | Ba3 | 573 | ||||||||||||
620 | Sirius XM Radio, Inc., Senior Notes, 5%, 08/01/27 (g) | Ba3 | 630 | ||||||||||||
700 | Townsquare Media, Inc., Senior Notes, 6.50%, 04/01/23 (g) | B3 | 693 | ||||||||||||
930 | Univision Communications, Senior Notes, 5.125%, 05/15/23 (g) | B2 | 907 | ||||||||||||
13,071 | |||||||||||||||
Building & Real Estate — .40% | |||||||||||||||
425 | Taylor Morrison Communities, Inc., Senior Notes, 5.875%, 04/15/23 (g) | Ba3 | 446 | ||||||||||||
470 | Weekley Homes LLC, Senior Notes, 6.625%, 08/15/25 | B3 | 465 | ||||||||||||
911 | |||||||||||||||
Building Products — .87% | |||||||||||||||
680 | ABC Supply Company, Inc., Senior Notes, 5.875%, 05/15/26 (g) | B3 | 709 | ||||||||||||
295 | New Enterprise Stone and Lime Company, Inc., Senior Notes, 6.25%, 03/15/26 (g) | B2 | 299 | ||||||||||||
470 | PGT Innovations, Inc., Senior Notes, 6.75%, 08/01/26 (g) | B2 | 498 | ||||||||||||
290 | Summit Materials LLC, Senior Notes, 5.125%, 06/01/25 (g) | B3 | 291 |
The accompanying notes are an integral part of these financial statements.
6
The New America High Income Fund, Inc.
Schedule of Investments — June 30, 2019 (Unaudited) — Continued (Dollar Amounts in Thousands)
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
CORPORATE DEBT SECURITIES — continued | |||||||||||||||
$ | 200 | Summit Materials LLC, Senior Notes, 6.50%, 03/15/27 (g) | B3 | $ | 208 | ||||||||||
2,005 | |||||||||||||||
Cable Operators — 14.03% | |||||||||||||||
1,600 | Altice Financing S.A., Senior Notes, 7.50%, 05/15/26 (g) | B2 | 1,608 | ||||||||||||
1,400 | Altice France S.A., Senior Notes, 7.375%, 05/01/26 (g) | B2 | 1,435 | ||||||||||||
605 | Altice France S.A., Senior Notes, 8.125%, 02/01/27 (g) | B2 | 634 | ||||||||||||
2,890 | Altice Luxembourg S.A., Senior Notes, 7.625%, 02/15/25 (g) | Caa1 | 2,713 | ||||||||||||
60 | Altice Luxembourg S.A., Senior Notes, 7.75%, 05/15/22 (g) | Caa1 | 61 | ||||||||||||
1,120 | Altice Luxembourg S.A., Senior Notes, 10.50%, 05/15/27 (g) | Caa1 | 1,148 | ||||||||||||
475 | C&W Senior Financing Designated Activity, Senior Notes, 6.875%, 09/15/27 (g) | B2 | 489 | ||||||||||||
2,260 | CCO Holdings, LLC, Senior Notes, 5.00%, 02/01/28 (g) | B1 | 2,308 | ||||||||||||
1,658 | CCO Holdings, LLC, Senior Notes, 5.125%, 05/01/27 (g) | B1 | 1,716 | ||||||||||||
660 | CCO Holdings, LLC, Senior Notes, 5.375%, 06/01/29 (g) | B1 | 681 | ||||||||||||
1,130 | CCO Holdings, LLC, Senior Notes, 5.50%, 05/01/26 (g) | B1 | 1,181 | ||||||||||||
1,210 | CSC Holdings, LLC, Senior Notes, 6.50%, 02/01/29 (g) | Ba3 | 1,317 | ||||||||||||
1,300 | CSC Holdings, LLC, Senior Notes, 6.625%, 10/15/25 (g) | Ba3 | 1,391 | ||||||||||||
605 | CSC Holdings, LLC, Senior Notes, 7.50%, 04/01/28 (g) | B3 | 665 | ||||||||||||
1,215 | CSC Holdings, LLC, Senior Notes, 7.75%, 07/15/25 (g) | B3 | 1,309 | ||||||||||||
1,135 | CSC Holdings, LLC, Senior Notes, 10.875%, 10/15/25 (g) | B3 | 1,298 | ||||||||||||
590 | Dish DBS Corporation, Senior Notes, 6.75%, 06/01/21 | B1 | 618 |
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
$ | 835 | Dish DBS Corporation, Senior Notes, 7.75%, 07/01/26 | B1 | $ | 818 | ||||||||||
770 | Netflix, Inc., Senior Notes, 5.375%, 11/15/29 (g) | Ba3 | 818 | ||||||||||||
1,555 | Netflix, Inc., Senior Notes, 5.875%, 11/15/28 | Ba3 | 1,714 | ||||||||||||
2,625 | Netflix, Inc., Senior Notes, 6.375%, 05/15/29 (g) | Ba3 | 2,976 | ||||||||||||
665 | Radiate Holdco, Senior Notes, 6.875%, 02/15/23 (g) | (e) | 665 | ||||||||||||
615 | UPCB Finance IV Ltd, Senior Notes, 5.375%, 01/15/25 (g) | Ba3 | 632 | ||||||||||||
310 | Videotron Ltee, Senior Notes, 5%, 07/15/22 | Ba1 | 325 | ||||||||||||
355 | Videotron Ltee, Senior Notes, 5.125%, 04/15/27 (g) | Ba1 | 371 | ||||||||||||
485 | Virgin Media Finance, Plc, Senior Notes, 6%, 10/15/24 (g) | B2 | 503 | ||||||||||||
490 | Virgin Media Secured Finance, Plc, Senior Notes, 5.25%, 01/15/26 (g) | Ba3 | 499 | ||||||||||||
490 | Virgin Media Secured Finance, Plc, Senior Notes, 5.50%, 08/15/26 (g) | Ba3 | 506 | ||||||||||||
1,186 | VTR Finance B.V., Senior Notes, 6.875%, 01/15/24 (g) | B1 | 1,225 | ||||||||||||
695 | Ziggo Bond Finance B.V., Senior Notes, 6%, 01/15/27 (g) | B3 | 698 | ||||||||||||
32,322 | |||||||||||||||
Chemicals — 3.60% | |||||||||||||||
1,065 | Consolidated Energy Finance, Senior Notes, 6.50%, 05/15/26 (g) | B1 | 1,057 | ||||||||||||
420 | Consolidated Energy Finance, Senior Notes, 6.875%, 06/15/25 (g) | B1 | 429 | ||||||||||||
1,440 | CVR Partners, L.P., Senior Notes, 9.25%, 06/15/23 (g) | B2 | 1,501 | ||||||||||||
540 | Element Solutions, Inc., Senior Notes, 5.875%, 12/01/25 (g) | B2 | 562 | ||||||||||||
1,520 | Kissner Holdings L.P., Senior Notes, 8.375%, 12/01/22 (g) | B3 | 1,579 |
The accompanying notes are an integral part of these financial statements.
7
The New America High Income Fund, Inc.
Schedule of Investments — June 30, 2019 (Unaudited) — Continued (Dollar Amounts in Thousands)
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
CORPORATE DEBT SECURITIES — continued | |||||||||||||||
$ | 270 | Koppers, Inc., Senior Notes, 6%, 02/15/25 (g) | B1 | $ | 253 | ||||||||||
200 | Kraton Polymers LLC, Senior Notes, 5.25%, 05/15/26 (g) (EUR) | B3 | 235 | ||||||||||||
1,225 | Kraton Polymers LLC, Senior Notes, 7%, 04/15/25 (g) | B3 | 1,240 | ||||||||||||
630 | Neon Holdings, Inc., Senior Notes, 10.125%, 04/01/26 (g) | B3 | 621 | ||||||||||||
780 | OCI N.V., Senior Notes, 6.625%, 04/15/23 (g) | B1 | 813 | ||||||||||||
8,290 | |||||||||||||||
Consumer Products — 1.76% | |||||||||||||||
605 | Avon International, Operating Company, Senior Notes, 7.875%, 08/15/22 (g) | Ba1 | 628 | ||||||||||||
223 | Central Garden and Pet Company, Senior Notes, 5.125%, 02/01/28 | B1 | 219 | ||||||||||||
235 | Energizer Holdings, Inc., Senior Notes, 7.75%, 01/15/27 (g) | B2 | 254 | ||||||||||||
450 | Lifetime Fitness, Inc., Senior Notes, 8.50%, 06/15/23 (g) | Caa1 | 460 | ||||||||||||
950 | Prestige Brands, Inc., Senior Notes, 6.375%, 03/01/24 (g) | Caa1 | 993 | ||||||||||||
670 | Tempur Sealy International, Inc., Senior Notes, 5.50%, 06/15/26 | B1 | 695 | ||||||||||||
775 | Tempur Sealy International, Inc., Senior Notes, 5.625%, 10/15/23 | B1 | 800 | ||||||||||||
4,049 | |||||||||||||||
Container — 2.34% | |||||||||||||||
1,580 | Ardagh Packaging Finance plc, Senior Notes, 7.25%, 05/15/24 (g) | B3 | 1,667 | ||||||||||||
155 | Berry Global Escrow Corporation, Senior Notes, 5.625%, 07/15/27 (g) | B2 | 161 | ||||||||||||
1,650 | BWAY Holding Company, Inc., Senior Notes, 7.25%, 04/15/25 (g) | Caa2 | 1,592 |
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
$ | 100 | Crown Cork and Seal Company, Inc., Senior Notes, 7.375%, 12/15/26 | B1 | $ | 116 | ||||||||||
350 | Kleopatra Holdings 1 S.C.A., Senior Notes, 8.50%, 06/30/23 (k) (EUR) | (e) | 221 | ||||||||||||
325 | Pactiv Corporation, Senior Notes, 7.95%, 12/15/25 | Caa1 | 354 | ||||||||||||
1,235 | Reynolds Group Issuer, Inc., Senior Notes, 7%, 07/15/24 (g) | Caa1 | 1,274 | ||||||||||||
5,385 | |||||||||||||||
Energy — 16.09% | |||||||||||||||
633 | Archrock Partners, Senior Notes, 6%, 10/01/22 | B3 | 641 | ||||||||||||
555 | Archrock Partners, Senior Notes, 6.875%, 04/01/27 (g) | B2 | 580 | ||||||||||||
190 | Ascent Resources Utica Holdings, LLC, Senior Notes, 10%, 04/01/22 (g) | B2 | 201 | ||||||||||||
757 | Berry Petroleum Company, LLC, Senior Notes, 7%, 02/15/26 (g) | B3 | 732 | ||||||||||||
445 | Brazos Val Longhorn, Senior Notes, 6.875%, 02/01/25 | B2 | 425 | ||||||||||||
515 | Bruin E&P Partners, LLC, Senior Notes, 8.875%, 08/01/23 (g) | B3 | 435 | ||||||||||||
470 | Carrizo Oil & Gas, Inc., Senior Notes, 6.25%, 04/15/23 | B2 | 453 | ||||||||||||
905 | Carrizo Oil & Gas, Inc., Senior Notes, 8.25%, 07/15/25 | B2 | 882 | ||||||||||||
475 | Centennial Resource Production, LLC, Senior Notes, 6.875%, 04/01/27 (g) | B3 | 480 | ||||||||||||
795 | Cheniere Corpus Christi Holdings, LLC, Senior Notes, 5.125%, 06/30/27 | Ba2 | 864 | ||||||||||||
525 | Cheniere Corpus Christi Holdings, LLC, Senior Notes, 5.875%, 03/31/25 | Ba2 | 585 | ||||||||||||
800 | Cheniere Corpus Christi Holdings, LLC, Senior Notes, 7%, 06/30/24 | Ba2 | 920 |
The accompanying notes are an integral part of these financial statements.
8
The New America High Income Fund, Inc.
Schedule of Investments — June 30, 2019 (Unaudited) — Continued (Dollar Amounts in Thousands)
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
CORPORATE DEBT SECURITIES — continued | |||||||||||||||
$ | 275 | Cheniere Energy Partners, L.P., Senior Notes, 5.625%, 10/01/26 (g) | Ba2 | $ | 289 | ||||||||||
1,265 | Covey Park Energy, LLC, Senior Notes, 7.50%, 05/15/25 (g) | B3 | 911 | ||||||||||||
1,190 | CrownRock, L.P., Senior Notes, 5.625%, 10/15/25 (g) | B2 | 1,193 | ||||||||||||
284 | CSI Compressco LP, Senior Notes, 7.25%, 08/15/22 | Caa2 | 255 | ||||||||||||
580 | CSI Compressco LP, Senior Notes, 7.50%, 04/01/25 (g) | B1 | 569 | ||||||||||||
795 | DCP Midstream, LLC, Senior Notes, 6.75%, 09/15/37 (g) | Ba2 | 851 | ||||||||||||
650 | DCP Midstream, LLC, Senior Notes, 7.375%, (h) | B1 | 630 | ||||||||||||
470 | DCP Midstream, LLC, Senior Notes, 8.125%, 08/16/30 | Ba2 | 573 | ||||||||||||
465 | Endeavor Energy Resources, L.P., Senior Notes. 5.50%, 01/30/26 (g) | B2 | 482 | ||||||||||||
598 | Endeavor Energy Resources, L.P., Senior Notes. 5.75%, 01/30/28 (g) | B2 | 632 | ||||||||||||
1,090 | Exterran NRG Solutions, Senior Notes, 8.125%, 05/01/25 | B1 | 1,106 | ||||||||||||
1,120 | Gulfport Energy Corporation, Senior Notes, 6.375%, 05/15/25 | B1 | 858 | ||||||||||||
1,291 | Jagged Peak Energy LLC, Senior Notes, 5.875%, 05/01/26 | B3 | 1,259 | ||||||||||||
625 | Kosmos Energy Ltd., Senior Notes, 7.125%, 04/04/26 (g) | (e) | 630 | ||||||||||||
1,765 | Magnolia Oil and Gas Operating LLC, Senior Notes, 6%, 08/01/26 (g) | B3 | 1,800 | ||||||||||||
1,745 | Matador Resources Company, Senior Notes, 5.875%, 09/15/26 | B2 | 1,762 | ||||||||||||
1,410 | NGL Energy Partners L.P., Senior Notes, 7.50%, 11/01/23 | B2 | 1,473 |
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
$ | 690 | NGL Energy Partners L.P., Senior Notes, 7.50%, 04/15/26 (g) | B2 | $ | 718 | ||||||||||
595 | Noble Holdings International, Ltd., Senior Notes, 8.95%, 04/01/45 | Caa1 | 386 | ||||||||||||
435 | Nustar Logistics, L.P., Senior Notes, 5.625%, 04/28/27 | Ba2 | 438 | ||||||||||||
500 | Nustar Logistics, L.P., Senior Notes, 6%, 06/01/26 | Ba2 | 516 | ||||||||||||
860 | Parsley Energy, LLC, Senior Notes, 5.625%, 10/15/27 (g) | B1 | 894 | ||||||||||||
1,165 | PDC Energy, Senior Notes, 5.75%, 05/15/26 | B1 | 1,153 | ||||||||||||
655 | Petrobras Global Finance, Senior Notes, 7.25%, 03/17/44 | Ba2 | 730 | ||||||||||||
1,675 | Petrobras Global Finance, Senior Notes, 7.375%, 01/17/27 | Ba2 | 1,924 | ||||||||||||
3,020 | Seven Generations Energy Ltd., Senior Notes, 5.375%, 09/30/25 (g) | Ba3 | 2,907 | ||||||||||||
240 | Summit Midstream Holdings, LLC, Senior Notes, 5.50%, 08/15/22 | B1 | 230 | ||||||||||||
230 | Summit Midstream Holdings, LLC, Senior Notes, 5.75%, 04/15/25 | B1 | 202 | ||||||||||||
320 | Summit Midstream Partners, LP, Senior Notes, 9.50%, (h) | B3 | 291 | ||||||||||||
795 | Tallgrass Energy Partners, L.P., Senior Notes, 5.50%, 09/15/24 (g) | Ba3 | 821 | ||||||||||||
295 | Targa Resources Partners, L.P., Senior Notes, 6.50%, 07/15/27 (g) | Ba3 | 322 | ||||||||||||
435 | Targa Resources Partners, L.P., Senior Notes, 6.875%, 01/15/29 (g) | Ba3 | 482 | ||||||||||||
785 | TransMontaigne Partners, L.P., Senior Notes 6.125%, 02/15/26 | B3 | 752 | ||||||||||||
473 | Transocean, Inc., Senior Notes, 5.875%, 01/15/24 (g) | B1 | 480 |
The accompanying notes are an integral part of these financial statements.
9
The New America High Income Fund, Inc.
Schedule of Investments — June 30, 2019 (Unaudited) — Continued (Dollar Amounts in Thousands)
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
CORPORATE DEBT SECURITIES — continued | |||||||||||||||
$ | 450 | USA Compression Partners, L.P., Senior Notes, 6.875%, 04/01/26 | B3 | $ | 475 | ||||||||||
390 | USA Compression Partners, L.P., Senior Notes, 6.875%, 09/01/27 (g) | B3 | 410 | ||||||||||||
85 | Vine Oil & Gas, L.P., Senior Notes, 8.75%, 04/15/23 (g) | Caa1 | 55 | ||||||||||||
640 | Vine Oil & Gas, L.P., Senior Notes, 9.75%, 04/15/23 (g) | Caa1 | 411 | ||||||||||||
37,068 | |||||||||||||||
Entertainment & Leisure — 2.30% | |||||||||||||||
1,450 | AMC Entertainment Holdings, Senior Subordinated Notes, 5.75%, 06/15/25 | B3 | 1,343 | ||||||||||||
243 | AMC Entertainment Holdings, Senior Subordinated Notes, 5.875%, 11/15/26 | B3 | 219 | ||||||||||||
215 | Cedar Fair, L. P., Senior Notes, 5.25%, 07/15/29 (g) | B1 | 219 | ||||||||||||
650 | Cedar Fair, L. P., Senior Notes, 5.375%, 04/15/27 | B1 | 674 | ||||||||||||
1,680 | Merlin Entertainment plc, Senior Notes, 5.75%, 06/15/26 (g) | Ba2 | 1,764 | ||||||||||||
365 | Pinnacle Bidco, Plc, Senior Notes, 6.375%, 02/15/25 (g) (GBP) | B3 | 489 | ||||||||||||
545 | Silversea Cruise Finance Ltd., Senior Notes, 7.25%, 02/01/25 (g) | Baa2 | 586 | ||||||||||||
5,294 | |||||||||||||||
Financial — 12.43% | |||||||||||||||
695 | Acrisure, LLC, Senior Notes, 7%, 11/15/25 (g) | Caa2 | 628 | ||||||||||||
620 | Acrisure, LLC, Senior Notes, 8.125%, 02/15/24 (g) | B2 | 640 | ||||||||||||
610 | AmWins Group, Inc., Senior Notes, 7.75%, 07/01/26 (g) | Caa1 | 631 | ||||||||||||
815 | Avolon Holdings Funding Ltd., Senior Notes, 5.50%, 01/15/23 (g) | Baa3 | 869 | ||||||||||||
1,485 | Banco Do Brasil S.A. (Cayman), 9% (h) | B2 | 1,630 |
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
$ | 700 | Banco Santander S.A., Senior Notes, 6.75%, (h) (EUR) | Ba1 | $ | 867 | ||||||||||
345 | Barclays PLC, 7.875%, (h) (GBP) | Ba3 | 464 | ||||||||||||
340 | Barclays PLC, 7.875%, (h) (GBP) | Ba3 | 457 | ||||||||||||
330 | Cabot Financial (Luxembourg) S.A., Senior Notes, 7.50%, 10/01/23 (GBP) | B1 | 433 | ||||||||||||
300 | Cabot Financial (Luxembourg) S.A., Senior Notes, 7.50%, 10/01/23 (g) (GBP) | B1 | 393 | ||||||||||||
325 | CIT Group, Inc., Senior Notes, 5.25%, 03/07/25 | Ba1 | 356 | ||||||||||||
295 | CIT Group, Inc., Subordinate Notes, 6.125%, 03/09/28 | Ba1 | 336 | ||||||||||||
390 | Credit Agricole SA, 6.50%, (h) (EUR) | (e) | 483 | ||||||||||||
765 | Credit Suisse Group AG, 7.125%, (h) | Ba2 | 806 | ||||||||||||
885 | Credit Suisse Group AG, 7.50%, (g)(h) | (e) | 975 | ||||||||||||
755 | DAE Funding, LLC, Senior Notes, 5%, 08/01/24 (g) | Ba2 | 784 | ||||||||||||
780 | DAE Funding, LLC, Senior Notes, 5.25%, 11/15/21 (g) | Ba2 | 808 | ||||||||||||
1,200 | Discover Financial Services, Senior Notes, 10.25%, 07/15/19 | Baa3 | 1,203 | ||||||||||||
750 | DNB Bank ASA, Senior Notes, 6.50%, (h) | Baa3 | 791 | ||||||||||||
585 | GTCR AP Finance, Inc., Senior Notes, 8%, 05/15/27 (g) | Caa2 | 589 | ||||||||||||
620 | Hub Holdings LLC, Senior Notes, 7%, 05/01/26 (g) | Caa2 | 629 | ||||||||||||
860 | Icahn Enterprises, L.P., Senior Notes, 6.25%, 05/15/26 (g) | Ba3 | 869 | ||||||||||||
980 | Itau Unibankco Holding S.A., Senior Notes, 6.125%, (g)(h) | B2 | 997 | ||||||||||||
325 | Ladder Capital Finance Holdings LLLP, Senior Notes, 5.875%, 08/01/21 (g) | Ba3 | 329 |
The accompanying notes are an integral part of these financial statements.
10
The New America High Income Fund, Inc.
Schedule of Investments — June 30, 2019 (Unaudited) — Continued (Dollar Amounts in Thousands)
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
CORPORATE DEBT SECURITIES — continued | |||||||||||||||
$ | 2,035 | LPL Holdings, Inc., Senior Notes, 5.75%, 09/15/25 (g) | B2 | $ | 2,088 | ||||||||||
895 | Nationstar Mortgage LLC, Senior Notes, 6.50%, 07/01/21 | B2 | 895 | ||||||||||||
635 | Nationstar Mortgage LLC, Senior Notes, 8.125%, 07/15/23 (g) | B2 | 646 | ||||||||||||
1,115 | Navient Corporation, Senior Notes, 6.125%, 03/25/24 | Ba3 | 1,143 | ||||||||||||
215 | Navient Corporation, Senior Notes, 6.75%, 06/25/25 | Ba3 | 223 | ||||||||||||
325 | Navient Corporation, Senior Notes, 6.75%, 06/15/26 | Ba3 | 337 | ||||||||||||
600 | Navient Corporation, Senior Notes, 7.25%, 09/25/23 | Ba3 | 642 | ||||||||||||
900 | NFP Corporation, Senior Notes, 6.875%, 07/15/25 (g) | Caa2 | 889 | ||||||||||||
740 | Royal Bank of Scotland Group, plc, Junior Subordinated Notes, 8.625% (h) | Ba2 | 795 | ||||||||||||
755 | Springleaf Finance Corporation, Senior Notes, 6.125%, 03/15/24 | Ba3 | 812 | ||||||||||||
390 | Springleaf Finance Corporation, Senior Notes, 6.625%, 01/15/28 | Ba3 | 409 | ||||||||||||
810 | Springleaf Finance Corporation, Senior Notes, 6.875%, 03/15/25 | Ba3 | 885 | ||||||||||||
300 | Springleaf Finance Corporation, Senior Notes, 7.125%, 03/15/26 | Ba3 | 327 | ||||||||||||
450 | Standard Chartered PLC, 7.50%, (g)(h) | Ba1 | 476 | ||||||||||||
1,050 | UBS Group AG, Senior Notes, 7.125%, (h) | Ba1 | 1,105 | ||||||||||||
28,639 | |||||||||||||||
Food/Tobacco — 3.27% | |||||||||||||||
1,425 | B&G Foods, Inc., Senior Notes, 5.25%, 04/01/25 | B2 | 1,439 | ||||||||||||
1,405 | Chobani LLC., Senior Notes, 7.50%, 04/15/25 (g) | Caa2 | 1,310 |
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
$ | 770 | Cosan Luxembourg S.A., Senior Notes, 7%, 01/20/27 (g) | Ba2 | $ | 839 | ||||||||||
245 | Darling Ingredients, Inc., Senior Notes, 5.25%, 04/15/27 (g) | Ba3 | 256 | ||||||||||||
520 | FAGE International S.A., Senior Notes, 5.625%, 08/15/26 (g) | B1 | 456 | ||||||||||||
1,330 | Minerva Luxembourg S.A., Senior Notes, 6.50%, 09/20/26 (g) | (e) | 1,381 | ||||||||||||
485 | Post Holdings, Inc., Senior Notes, 5.625%, 01/15/28 (g) | B2 | 498 | ||||||||||||
330 | Post Holdings, Inc., Senior Notes, 5.75%, 03/01/27 (g) | B2 | 340 | ||||||||||||
335 | Post Holdings, Inc., Senior Notes, 8%, 07/15/25 (g) | B2 | 359 | ||||||||||||
700 | Sigma Holdco., B.V., Senior Notes, 7.875%, 05/15/26 (g) | B3 | 649 | ||||||||||||
7,527 | |||||||||||||||
Gaming — 5.47% | |||||||||||||||
580 | Boyd Gaming Corporation, Senior Notes, 6%, 08/15/26 | B3 | 610 | ||||||||||||
1,095 | Caesar's Resorts, Senior Notes, 5.25%, 10/15/25 (g) | B3 | 1,095 | ||||||||||||
275 | Cirsa Finance International, S.A.R.L., Senior Notes, 6.25%, 12/20/23 (g) (EUR) | B2 | 339 | ||||||||||||
1,280 | Cirsa Finance International, S.A.R.L., Senior Notes, 7.875%, 12/20/23 (g) | B2 | 1,355 | ||||||||||||
593 | Eldorado Resorts, Inc., Senior Notes, 6%, 09/15/26 | B2 | 646 | ||||||||||||
640 | International Game Technology Plc, Senior Notes, 6.25%, 01/15/27 (g) | Ba2 | 700 | ||||||||||||
240 | Melco Resorts Finance Limited, Senior Notes, 5.25%, 04/26/26 (g) | Ba2 | 240 | ||||||||||||
315 | MGM China Holdings, Limited, Senior Notes, 5.375%, 05/15/24 (g) | Ba3 | 323 |
The accompanying notes are an integral part of these financial statements.
11
The New America High Income Fund, Inc.
Schedule of Investments — June 30, 2019 (Unaudited) — Continued (Dollar Amounts in Thousands)
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
CORPORATE DEBT SECURITIES — continued | |||||||||||||||
$ | 315 | MGM China Holdings, Limited, Senior Notes, 5.875%, 05/15/26 (g) | Ba3 | $ | 324 | ||||||||||
435 | MGM Growth Prop. Operating Partnership L.P., Senior Notes, 5.75%, 02/01/27 (g) | B1 | 468 | ||||||||||||
845 | MGM Resorts International, Senior Notes, 5.50%, 04/15/27 | Ba3 | 886 | ||||||||||||
605 | MGM Resorts International, Senior Notes, 6%, 03/15/23 | Ba3 | 655 | ||||||||||||
1,240 | Scientific Games International Inc., Senior Notes, 8.25%, 03/15/26 (g) | Caa1 | 1,296 | ||||||||||||
657 | Scientific Games International Inc., Senior Notes, 10%, 12/01/22 | Caa1 | 690 | ||||||||||||
1,235 | Stars Group Holdings B.V., Senior Notes, 7%, 07/15/26 (g) | Caa1 | 1,306 | ||||||||||||
322 | VICI Properties, Senior Notes, 8%, 10/15/23 | B1 | 354 | ||||||||||||
820 | Wynn Las Vegas, LLC, Senior Notes, 5.25%, 05/15/27 (g) | B1 | 823 | ||||||||||||
505 | Wynn Macau Ltd., Senior Notes, 5.50%, 10/01/27 (g) | B1 | 491 | ||||||||||||
12,601 | |||||||||||||||
Healthcare — 9.93% | |||||||||||||||
770 | Avantor Inc., Senior Notes, 6%, 10/01/24 (g) | B2 | 818 | ||||||||||||
4,505 | Avantor Inc., Senior Notes, 9%, 10/01/25 (g) | B3 | 5,012 | ||||||||||||
1,495 | Bausch Health Companies, Inc., Senior Notes, 7%, 03/15/24 (g) | Ba2 | 1,585 | ||||||||||||
760 | Bausch Health Companies, Inc., Senior Notes, 7.25%, 05/30/29 (g) | B3 | 789 | ||||||||||||
1,920 | Bausch Health Companies, Inc., Senior Notes, 8.50%, 01/31/27 (g) | B3 | 2,107 |
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
$ | 1,060 | Bausch Health Companies, Inc., Senior Notes, 9%, 12/15/25 (g) | B3 | $ | 1,182 | ||||||||||
1,600 | Bausch Health Companies, Inc., Senior Notes, 9.25%, 04/01/26 (g) | B3 | 1,788 | ||||||||||||
155 | Catalent Pharma Solutions, Inc., Senior Notes, 5%, 07/15/27 (g) | B3 | 158 | ||||||||||||
655 | Change Healthcare Holdings LLC, Senior Notes, 5.75%, 03/01/25 (g) | Caa1 | 665 | ||||||||||||
850 | DaVita Healthcare Partners, Inc., Senior Notes, 5%, 05/01/25 | Ba3 | 840 | ||||||||||||
850 | DaVita Healthcare Partners, Inc., Senior Notes, 5.125%, 07/15/24 | Ba3 | 850 | ||||||||||||
230 | Eagle Holding Company II, LLC, Senior Notes, 7.625%, 05/15/22 (g) | Caa1 | 233 | ||||||||||||
1,075 | Eagle Holding Company II, LLC, Senior Notes, 7.75%, 05/15/22 (g) | Caa1 | 1,088 | ||||||||||||
230 | HCA, Incorporated, Senior Notes, 5.625%, 09/01/28 | Ba2 | 249 | ||||||||||||
575 | HCA, Incorporated, Senior Notes, 5.875%, 02/15/26 | Ba2 | 635 | ||||||||||||
450 | HCA, Incorporated, Senior Notes, 5.875%, 02/01/29 | Ba2 | 493 | ||||||||||||
275 | Hill-Rom Holdings, Inc., Senior Notes, 5.75%, 09/01/23 (g) | Ba3 | 284 | ||||||||||||
450 | MPT Operating Partnership, L.P., Senior Notes, 6.375%, 03/01/24 | Ba1 | 472 | ||||||||||||
25 | NVA Holdings, Inc, Senior Notes, 6.875%, 04/01/26 (g) | Caa2 | 26 | ||||||||||||
210 | Regional Care Hospital Partners Holdings, Inc., Senior Notes, 8.25%, 05/01/23 (g) | B1 | 223 | ||||||||||||
1,030 | Regional Care Hospital Partners Holdings, Inc., Senior Notes, 9.75%, 12/01/26 (g) | Caa1 | 1,079 |
The accompanying notes are an integral part of these financial statements.
12
The New America High Income Fund, Inc.
Schedule of Investments — June 30, 2019 (Unaudited) — Continued (Dollar Amounts in Thousands)
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
CORPORATE DEBT SECURITIES — continued | |||||||||||||||
$ | 655 | Tenet Healthcare Corporation, Senior Notes, 5.125%, 05/01/25 | Ba3 | $ | 660 | ||||||||||
860 | Tenet Healthcare Corporation, Senior Notes, 6.25%, 02/01/27 (g) | Ba3 | 890 | ||||||||||||
805 | Teva Pharma Finance Netherlands III BV, Senior Notes, 6%, 04/15/24 | Ba2 | 761 | ||||||||||||
22,887 | |||||||||||||||
Information Technology — 3.59% | |||||||||||||||
255 | CommScope Finance, LLC, Senior Notes, 5.50%, 03/01/24 (g) | Ba1 | 262 | ||||||||||||
470 | CommScope Finance, LLC, Senior Notes, 8.25%, 03/01/27 (g) | B1 | 478 | ||||||||||||
60 | EIG Investors Corporation, Senior Notes, 10.875%, 02/01/24 | Caa1 | 64 | ||||||||||||
630 | Qorvo, Inc., Senior Notes, 5.50%, 07/15/26 | Ba1 | 663 | ||||||||||||
610 | Refinitiv US Holdings, Inc., Senior Notes, 6.25%, 05/15/26 (g) | B2 | 628 | ||||||||||||
310 | Refinitiv US Holdings, Inc., Senior Notes, 6.875%, 11/15/26 (g) (EUR) | Caa2 | 359 | ||||||||||||
1,105 | Refinitiv US Holdings, Inc., Senior Notes, 8.25%, 11/15/26 (g) | Caa2 | 1,138 | ||||||||||||
2,195 | Solera, LLC, Senior Notes, 10.50%, 03/01/24 (g) | Caa1 | 2,379 | ||||||||||||
1,420 | SS&C Technologies, Inc., Senior Notes, 5.50%, 09/30/27 (g) | B2 | 1,473 | ||||||||||||
780 | Uber Technologies, Inc., Senior Notes, 7.50%, 11/01/23 (g) | B3 | 827 | ||||||||||||
8,271 | |||||||||||||||
Lodging — .38% | |||||||||||||||
825 | Marriott Ownership Resorts, Inc., Senior Notes, 6.50%, 09/15/26 | Ba3 | 879 |
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
Manufacturing — 1.42% | |||||||||||||||
$ | 1,509 | Apex Tool Group, LLC, Senior Notes, 9%, 02/15/23 (g) | Caa1 | $ | 1,345 | ||||||||||
260 | Colfax Corporation, Senior Notes, 6%, 02/15/24 (g) | Ba2 | 275 | ||||||||||||
170 | Colfax Corporation, Senior Notes, 6.375%, 02/15/26 (g) | Ba2 | 182 | ||||||||||||
180 | Park-Ohio Industries, Inc., Senior Notes, 6.625%, 04/15/27 | B3 | 180 | ||||||||||||
1,055 | Sensata Technologies UK Financing Company plc, Senior Notes, 6.25%, 02/15/26 (g) | Ba3 | 1,120 | ||||||||||||
150 | Welbilt, Inc., Senior Notes, 9.50%, 02/15/24 | Caa1 | 162 | ||||||||||||
3,264 | |||||||||||||||
Metals & Mining — 6.14% | |||||||||||||||
200 | Alcoa Nederland Holding B.V., Senior Notes, 6.75%, 09/30/24 (g) | Ba1 | 210 | ||||||||||||
600 | Alcoa Nederland Holding B.V., Senior Notes, 7%, 09/30/26 (g) | Ba1 | 644 | ||||||||||||
600 | Aleris International, Inc., Senior Notes, 10.75%, 07/15/23 (g) | Caa2 | 627 | ||||||||||||
1,170 | Big River Steel, LLC, Senior Notes, 7.25%, 09/01/25 (g) | B3 | 1,227 | ||||||||||||
1,000 | Constellium N.V., Senior Notes, 5.75%, 05/15/24 (g) | B2 | 1,026 | ||||||||||||
1,795 | Constellium N.V., Senior Notes, 6.625%, 03/01/25 (g) | B2 | 1,867 | ||||||||||||
340 | First Quantum Minerals, LLC, Senior Notes, 7.25%, 05/15/22 (g) | Caa1 | 337 | ||||||||||||
610 | FMG Resources Pty. Ltd., Senior Notes, 5.125%, 05/15/24 (g) | Ba1 | 631 | ||||||||||||
505 | FMG Resources Pty. Ltd., Senior Notes, 5.125%, 03/15/23 (g) | Ba1 | 521 | ||||||||||||
845 | Freeport McMoran, Inc., Senior Notes, 5.40%, 11/14/34 | Ba1 | 805 |
The accompanying notes are an integral part of these financial statements.
13
The New America High Income Fund, Inc.
Schedule of Investments — June 30, 2019 (Unaudited) — Continued (Dollar Amounts in Thousands)
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
CORPORATE DEBT SECURITIES — continued | |||||||||||||||
$ | 210 | Hecla Mining Company, Senior Notes, 6.875%, 05/01/21 | Caa2 | $ | 199 | ||||||||||
595 | HudBay Minerals, Inc., Senior Notes, 7.25%, 01/15/23 (g) | B3 | 614 | ||||||||||||
530 | Mineral Resources Ltd., Senior Notes, 8.125%, 05/01/27 (g) | Ba3 | 552 | ||||||||||||
785 | New Gold Inc., Senior Notes, 6.375%, 05/15/25 (g) | Caa1 | 652 | ||||||||||||
485 | Novelis Corporation, Senior Notes, 6.25%, 08/15/24 (g) | B2 | 507 | ||||||||||||
880 | Ryerson Inc., Senior Secured Notes, 11%, 05/15/22 (g) | Caa1 | 933 | ||||||||||||
320 | Steel Dynamics, Inc., Senior Notes, 5%, 12/15/26 | Ba1 | 334 | ||||||||||||
165 | Steel Dynamics, Inc., Senior Notes, 5.50%, 10/01/24 | Ba1 | 171 | ||||||||||||
2,175 | Zekelman Industries, Senior Notes, 9.875%, 06/15/23 (g) | B3 | 2,292 | ||||||||||||
14,149 | |||||||||||||||
Other Telecommunications — 2.48% | |||||||||||||||
625 | Century Link Inc., Senior Notes, 7.50%, 04/01/24 | B2 | 691 | ||||||||||||
335 | Frontier Communications Corporation, Senior Notes, 8.50%, 04/01/26 (g) | B3 | 324 | ||||||||||||
555 | GCI Liberty, Inc., Senior Notes, 6.625%, 06/15/24 (g) | B3 | 581 | ||||||||||||
505 | GTT Communications, Inc., Senior Notes, 7.875%, 12/31/24 (g) | Caa1 | 412 | ||||||||||||
225 | Level 3 Financing, Inc., Senior Notes, 5.25%, 03/15/26 | Ba3 | 233 | ||||||||||||
275 | Level 3 Financing, Inc., Senior Notes, 5.375%, 05/01/25 | Ba3 | 284 | ||||||||||||
1,575 | Zayo Group, LLC, Global Notes, 5.75%, 01/15/27 (g) | B3 | 1,599 | ||||||||||||
1,555 | Zayo Group, LLC, Global Notes, 6.375%, 05/15/25 | B3 | 1,584 | ||||||||||||
5,708 |
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
Publishing — .29% | |||||||||||||||
$ | 800 | Harland Clarke Holdings Corporation, Senior Notes, 8.375%, 08/15/22 (g) | B2 | $ | 676 | ||||||||||
Restaurants — .63% | |||||||||||||||
723 | YUM Brands, Inc., Senior Notes, 5.35%, 11/01/43 | B2 | 647 | ||||||||||||
760 | YUM Brands, Inc., Senior Notes, 6.875%, 11/15/37 | B2 | 800 | ||||||||||||
1,447 | |||||||||||||||
Retail — .12% | |||||||||||||||
255 | William Carter Company, Senior Notes, 5.625%, 03/15/27 (g) | Ba2 | 267 | ||||||||||||
Satellites — 5.23% | |||||||||||||||
480 | Gogo Intermediate Financing, Senior Notes, 9.875%, 05/01/24 (g) | B3 | 494 | ||||||||||||
1,750 | Hughes Satellite Systems, Inc., Senior Notes, 6.625%, 08/01/26 | B3 | 1,840 | ||||||||||||
800 | Intelsat Connect Finance, Senior Notes, 9.50%, 02/15/23 (g) | Ca | 706 | ||||||||||||
1,595 | Intelsat Jackson Holdings Ltd., Senior Notes, 8.50%, 10/15/24 (g) | Caa2 | 1,579 | ||||||||||||
2,960 | Intelsat Jackson Holdings Ltd., Senior Notes, 9.50%, 09/30/22 (g) | B1 | 3,441 | ||||||||||||
575 | Intelsat Jackson Holdings Ltd., Senior Notes, 9.75%, 07/15/25 (g) | Caa2 | 588 | ||||||||||||
1,260 | Iridium Communications, Inc., Senior Notes, 10.25%, 04/15/23 (g) | Caa1 | 1,370 | ||||||||||||
1,450 | Telesat Canada, Senior Notes, 8.875%, 11/15/24 (g) | B3 | 1,570 | ||||||||||||
450 | Viasat, Inc., Senior Notes, 5.625%, 04/15/27 (g) | B1 | 468 | ||||||||||||
12,056 | |||||||||||||||
Services — 5.23% | |||||||||||||||
935 | ADT Security Corporation, Senior Notes, 4.875%, 07/15/32 (g) | Ba3 | 795 |
The accompanying notes are an integral part of these financial statements.
14
The New America High Income Fund, Inc.
Schedule of Investments — June 30, 2019 (Unaudited) — Continued (Dollar Amounts in Thousands)
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
CORPORATE DEBT SECURITIES — continued | |||||||||||||||
$ | 540 | Allied Universal Holdco, LLC, Senior Secured Notes, 6.625%, 07/15/26 (g) | B3 | $ | 549 | ||||||||||
730 | Ascend Learning, LLC, Senior Notes, 6.875%, 08/01/25 (g) | Caa2 | 743 | ||||||||||||
867 | Avis Budget Car Rental, LLC, Senior Notes, 6.375%, 04/01/24 (g) | B1 | 906 | ||||||||||||
640 | EG Global Finance plc, Senior Notes, 6.75%, 02/07/25 (g) | B2 | 635 | ||||||||||||
790 | Fair Isaac Corporation, Senior Notes, 5.25%, 05/15/26 (g) | Ba2 | 823 | ||||||||||||
60 | GFL Enironmental, Inc., Senior Notes, 7%, 06/01/26 (g) | Caa2 | 61 | ||||||||||||
855 | GFL Enironmental, Inc., Senior Notes, 8.50%, 05/01/27 (g) | Caa2 | 919 | ||||||||||||
250 | Grubhub Holdings, Inc., Senior Notes, 5.50%, 07/01/27 (g) | Ba3 | 257 | ||||||||||||
250 | Harsco Corporation, Senior Notes, 5.75%, 07/31/27 (g) | Ba2 | 260 | ||||||||||||
800 | HD Supply, Senior Notes, 5.375%, 10/15/26 (g) | Ba3 | 844 | ||||||||||||
1,440 | H&E Equipment Services, Senior Notes, 5.625%, 09/01/25 | B2 | 1,480 | ||||||||||||
1,470 | Laureate Education, Inc., Senior Notes, 8.25%, 05/01/25 (g) | B3 | 1,606 | ||||||||||||
660 | Prime Security Services Borrower, LLC, Senior Notes, 5.25%, 04/15/24 (g) | Ba3 | 672 | ||||||||||||
709 | Prime Security Services Borrower, LLC, Senior Notes, 9.25%, 05/15/23 (g) | B3 | 744 | ||||||||||||
185 | Promontoria Holdings, Senior Notes, 6.75%, 08/15/23 (g) (EUR) | B2 | 202 | ||||||||||||
520 | United Rentals (North America), Inc., Senior Notes, 6.50%, 12/15/26 | Ba3 | 563 | ||||||||||||
12,059 |
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
Supermarkets — 1.45% | |||||||||||||||
$ | 1,007 | Albertsons Companies, LLC, Senior Notes, 6.625%, 06/15/24 | B3 | $ | 1,042 | ||||||||||
370 | Albertsons Companies, LLC, Senior Notes, 7.45%, 08/01/29 | (e) | 358 | ||||||||||||
895 | Albertsons Companies, LLC, Senior Notes, 7.50%, 03/15/26 (g) | B3 | 955 | ||||||||||||
220 | Albertsons Companies, LLC, Senior Notes, 8%, 05/01/31 | (e) | 215 | ||||||||||||
680 | Iceland Bondco, Plc, Senior Notes, 4.625%, 03/15/25 (GBP) | B2 | 776 | ||||||||||||
3,346 | |||||||||||||||
Utilities — 7.59% | |||||||||||||||
535 | AES Corporation, Senior Notes, 5.125%, 09/01/27 | Ba1 | 564 | ||||||||||||
1,200 | AES Corporation, Senior Notes, 6%, 05/15/26 | Ba1 | 1,275 | ||||||||||||
380 | Calpine Corporation, Senior Notes, 5.875%, 01/15/24 (g) | Ba2 | 390 | ||||||||||||
1,378 | Clearway Energy Operating LLC, Senior Notes, 5.75%, 10/15/25 (g) | Ba2 | 1,406 | ||||||||||||
378 | DPL Inc., Senior Notes, 7.25%, 10/15/21 | Ba1 | 407 | ||||||||||||
523 | Edison International, Senior Notes, 2.40%, 09/15/22 | Baa3 | 494 | ||||||||||||
635 | Eskom Holdings SOC Limited, Senior Notes, 6.75%, 08/06/23 | B3 | 666 | ||||||||||||
1,695 | General Electric Company, Senior Notes, 5% (h) | Baa3 | 1,627 | ||||||||||||
815 | NextEra Energy Operating Partners, L.P., Senior Notes, 4.25%, 09/15/24 (g) | Ba1 | 819 | ||||||||||||
570 | NextEra Energy Operating Partners, L.P., Senior Notes, 4.25%, 07/15/24 (g) | Ba1 | 574 | ||||||||||||
670 | NextEra Energy Operating Partners, L.P., Senior Notes, 4.50%, 09/15/27 (g) | Ba1 | 662 |
The accompanying notes are an integral part of these financial statements.
15
The New America High Income Fund, Inc.
Schedule of Investments — June 30, 2019 (Unaudited) — Continued (Dollar Amounts in Thousands)
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
CORPORATE DEBT SECURITIES — continued | |||||||||||||||
$ | 620 | NiSource, Incorporated, Senior Notes, 5.65%, (h) | Ba1 | $ | 605 | ||||||||||
340 | NRG Energy, Inc., Senior Notes, 5.25%, 06/15/29 (g) | Ba3 | 363 | ||||||||||||
540 | NRG Energy, Inc., Senior Notes, 6.625%, 01/15/27 | Ba3 | 587 | ||||||||||||
2,795 | NRG Energy, Inc., Senior Notes, 7.25%, 05/15/26 | Ba3 | 3,078 | ||||||||||||
190 | Terraform Power Operating, Senior Notes, 4.25%, 01/31/23 (g) | B1 | 190 | ||||||||||||
1,795 | TerraForm Global Operating, LLC, Senior Notes 6.125%, 03/01/26 (g) | Ba3 | 1,799 | ||||||||||||
145 | Vistra Energy Corporation, Senior Notes, 8%, 01/15/25 (g) | Ba3 | 153 | ||||||||||||
530 | Vistra Energy Corporation, Senior Notes, 8.125%, 01/30/26 (g) | Ba3 | 570 | ||||||||||||
390 | Vistra Operations Company, LLC, Senior Notes, 5%, 07/31/27 (g) | Ba3 | 404 | ||||||||||||
800 | Vistra Operations Company, LLC, Senior Notes, 5.50%, 09/01/26 (g) | Ba3 | 845 | ||||||||||||
17,478 | |||||||||||||||
Wireless Communications — 3.27% | |||||||||||||||
770 | MTN (Mauritius) Investments, Ltd., Senior Notes, 6.50%, 10/13/26 | Ba1 | 833 | ||||||||||||
590 | Sprint Capital Corporation, Senior Notes, 8.75%, 03/15/32 | B3 | 684 | ||||||||||||
1,590 | Sprint Communications, Inc., Senior Notes, 11.50%, 11/15/21 | B3 | 1,840 | ||||||||||||
1,245 | Sprint Corporation, Senior Notes, 7.125%, 06/15/24 | B3 | 1,317 | ||||||||||||
1,045 | Sprint Corporation, Senior Notes, 7.25%, 09/15/21 | B3 | 1,110 | ||||||||||||
1,455 | T-Mobile, USA, Inc., Senior Notes, 6.50%, 01/15/26 | Ba2 | 1,564 |
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
$ | 180 | VB-S1 Issuer LLC, Senior Notes, 6.901%, 06/15/46 (g) | (e) | $ | 186 | ||||||||||
7,534 | |||||||||||||||
Total Corporate Debt Securities (Total cost of $270,240) | 274,142 | ||||||||||||||
UNITED STATES TREASURY OBLIGATIONS — 2.10% (d)(f) | |||||||||||||||
4,770 | U.S. Treasury Notes, 2.125%, 03/31/24 | Aaa | 4,848 | ||||||||||||
Total United States Treasury Obligations (Total cost of $4,737) | 4,848 | ||||||||||||||
CONVERTIBLE DEBT SECURITIES — .58% (d)(f) | |||||||||||||||
Automotive — .54% | |||||||||||||||
1,298 | Tesla Energy Operations, Senior Notes, 1.625%, 11/01/19 | (e) | 1,251 | ||||||||||||
Energy — .04% | |||||||||||||||
115 | Cheniere Energy, Inc., Senior Notes, 4.25%, 03/15/45 | (e) | 90 | ||||||||||||
Total Convertible Debt Securities (Total cost of $1,315) | 1,341 | ||||||||||||||
BANK DEBT SECURITIES — 11.99% (d)(f) | |||||||||||||||
Aerospace & Defense — .40% | |||||||||||||||
325 | Dynasty Acquisition Co., Inc., 6.330%, 04/06/26/26 | B2 | 326 | ||||||||||||
605 | Dynasty Acquisition Co., Inc., 6.330%, 04/06/26/26 | B2 | 607 | ||||||||||||
933 | |||||||||||||||
Automotive — .28% | |||||||||||||||
355 | Panther BF Aggregator 2 LP, 5.902%, 04/30/26 | Ba3 | 352 | ||||||||||||
322 | Truck Hero, Inc., 6.152%, 04/21/24 | B2 | 301 | ||||||||||||
653 | |||||||||||||||
Broadcasting — .43% | |||||||||||||||
570 | iHeart Communications, Inc., 8.443%, 01/30/20 (a)(b) | (e) | 418 | ||||||||||||
560 | iHeart Communications, Inc., 6.579%, 05/01/26 | B1 | 560 | ||||||||||||
978 |
The accompanying notes are an integral part of these financial statements.
16
The New America High Income Fund, Inc.
Schedule of Investments — June 30, 2019 (Unaudited) — Continued (Dollar Amounts in Thousands)
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
BANK DEBT SECURITIES — continued | |||||||||||||||
Building Products — .21% | |||||||||||||||
$ | 516 | SRS Distribution, Inc., 5.652%, 05/23/25 | B3 | $ | 494 | ||||||||||
Chemicals — .18% | |||||||||||||||
421 | Consolidated Energy Finance, S.A., 4.901%, 05/07/25 | Ba2 | 409 | ||||||||||||
Consumer Products — .11% | |||||||||||||||
267 | ABG Intermediate Holdings 2, LLC, 5.902%, 09/26/24 | B1 | 260 | ||||||||||||
Container — .33% | |||||||||||||||
792 | BWAY Holding Company, Inc., 5.853%, 04/03/24 | B2 | 764 | ||||||||||||
Energy — .82% | |||||||||||||||
361 | Brazos Delaware II, LLC, 6.383%, 05/21/25 | B3 | 339 | ||||||||||||
977 | Felix Energy LLC, 9.062%, 08/09/22, Acquisition Date 08/09/17, Cost $967 (i)(j) | (e) | 967 | ||||||||||||
584 | Tallgrass Holdco, 7.080%, 03/11/26 | B1 | 586 | ||||||||||||
1,892 | |||||||||||||||
Financial — .38% | |||||||||||||||
597 | Edelman Financial Center LLC, 5.644%, 07/21/25 | B1 | 595 | ||||||||||||
297 | Hub International Limited, 5.586%, 04/25/25 | B2 | 289 | ||||||||||||
884 | |||||||||||||||
Gaming — .21% | |||||||||||||||
483 | Scientific Games International, Inc., 5.231%, 08/14/24 | Ba3 | 476 | ||||||||||||
Healthcare — 1.04% | |||||||||||||||
516 | Medplast Holdings, Inc., 6.080%, 07/02/25 | B1 | 514 | ||||||||||||
627 | Regional Care Hospital Partners, 6.904%, 11/17/25 | B1 | 623 | ||||||||||||
798 | Wink Holdco, Inc., 5.402%, 12/02/24 | B2 | 779 | ||||||||||||
470 | Wink Holdco, Inc., 9.16%, 11/03/25 | Caa1 | 472 | ||||||||||||
2,388 |
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
Informational Technologies — 1.06% | |||||||||||||||
$ | 515 | CommScope, Inc., 5.652%, 04/06/26 | Ba1 | $ | 513 | ||||||||||
793 | Cypress Intermediate Holdings III, Inc., 5.16% 04/26/24 | B2 | 781 | ||||||||||||
537 | Financial & Risk US Holdings, Inc., 6.152%, 10/01/25 | B2 | 521 | ||||||||||||
634 | Infor (US) Inc., 5.080%, 02/01/22 | Ba3 | 632 | ||||||||||||
2,447 | |||||||||||||||
Manufacturing — .14% | |||||||||||||||
317 | Filtration Group Corporation, 5.402%, 03/29/25 | B2 | 316 | ||||||||||||
Metals and Mining — .39% | |||||||||||||||
787 | Aleris International, Inc., 7.152%, 02/27/23 | B3 | 787 | ||||||||||||
104 | Big River Steel, LLC, 7.330%, 08/23/23 | B3 | 104 | ||||||||||||
891 | |||||||||||||||
Other Telecommunications — .51% | |||||||||||||||
475 | GTT Communications, Inc., 5.15%, 05/31/25 | B2 | 425 | ||||||||||||
788 | Stonepeak Claremont Merger, 5.402%, 03/20/24 | B2 | 753 | ||||||||||||
1,178 | |||||||||||||||
Retail — .23% | |||||||||||||||
602 | Jo-Ann Stores, Inc., 11.841%, 05/21/24 | Caa1 | 527 | ||||||||||||
Services — 2.43% | |||||||||||||||
1,563 | Kronos, Inc., 5.579%, 11/01/23 | B2 | 1,559 | ||||||||||||
1,650 | Kronos, Inc., 10.829%, 11/01/24 | Caa2 | 1,703 | ||||||||||||
320 | Renaissance Holding Corp., 9.481%, 05/29/26 | Caa2 | 304 | ||||||||||||
625 | Travelport Finance (Luxembourg) S.a.r.l., 7.541%, 05/29/26 | B2 | 587 | ||||||||||||
1,177 | Ultimate Software Group, Inc., 6.080%, 05/04/26 | B2 | 1,178 | ||||||||||||
263 | USAGM Holdco, LLC, 6.152%, 07/28/22 | B2 | 262 | ||||||||||||
5,593 |
The accompanying notes are an integral part of these financial statements.
17
The New America High Income Fund, Inc.
Schedule of Investments — June 30, 2019 (Unaudited) — Continued (Dollar Amounts in Thousands)
Principal Amount/Units | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
BANK DEBT SECURITIES — continued | |||||||||||||||
Utilities — .71% | |||||||||||||||
$ | 632 | Brookfield Wec Holdings, Inc., 5.902%, 08/01/25 | B2 | $ | 630 | ||||||||||
758 | PG&E Corp., 4.69%, 12/31/20 | (e) | 759 | ||||||||||||
252 | PG&E Corp., Delayed Draw, 1.125%, 12/31/20 | (e) | 253 | ||||||||||||
1,642 | |||||||||||||||
Wireless Communications — 2.13% | |||||||||||||||
4,840 | Asurion LLC, 8.902%, 08/04/25 | B3 | 4,904 | ||||||||||||
Total Bank Debt Securities (Total cost of $27,959) | 27,629 |
Shares | |||
PREFERRED STOCK — 2.99% (d)(f) | |||
Energy — 1.05% |
2,250 | Targa Resources Corp., Series A, Convertible, 9.50%, Acquisition Date 10/26/17, Cost $2,520 (j) | (e) | 2,428 | ||||||||||||
Healthcare — .64% | |||||||||||||||
22,270 | Avantor, Inc., Series A, Convertible, 6.25%, | (e) | 1,473 | ||||||||||||
Manufacturing — .38% | |||||||||||||||
790 | Danaher Corporation, Convertible, 4.75% | (e) | 873 | ||||||||||||
Utilities — .92% | |||||||||||||||
18,950 | American Electric Power, Convertible, 6.125%, | (e) | 1,014 | ||||||||||||
8,400 | NextEra Energy, Inc., Equity Unit, 6.123% | (e) | 545 | ||||||||||||
4,914 | Sempra Energy, Convertible, 6% | (e) | 548 | ||||||||||||
2,107 | |||||||||||||||
Total Preferred Stock (Total cost of $6,301) | 6,881 | ||||||||||||||
COMMON STOCK — .29% (d)(f) | |||||||||||||||
53,919 | Clear Channel Outdoor Holdings, Inc. (c) |
| 254 | ||||||||||||
13,500 | Frontera Energy Corporation |
| 140 |
Shares | Moody's Rating (Unaudited) | Value (Note 1) | |||||||||||||
14,736 | Frontera Energy Corporation (CAD) |
| $ | 152 | |||||||||||
7,693 | iHeart Communications, Inc., (c) |
| 116 | ||||||||||||
662 | |||||||||||||||
Total Common Stock (Total cost of $1,632) | 662 | ||||||||||||||
WARRANTS — .09% (d)(f) | |||||||||||||||
14,928 | iHeart Communications, Inc., warrants, (c) | 205 | |||||||||||||
Total Warrants (Total cost of $264) | 205 |
Principal Amount/Units | |||
SHORT-TERM INVESTMENTS — 2.08% (d)(f) |
$ | 4,800 | Starbird Funding Corporation, Commercial Paper Due 07/01/19, Discount of 2.38% (g) |
| 4,800 | |||||||||||
Total Short-Term Investments (Total cost of $4,800) | 4,800 | ||||||||||||||
TOTAL INVESTMENTS — 139.12 (Total cost of $317,248) | 320,508 | ||||||||||||||
CASH AND OTHER ASSETS LESS LIABILITIES — (39.12)% (d) | (90,132 | ) | |||||||||||||
NET ASSETS — 100.00% | $ | 230,376 |
(a) Denotes income is not being accrued.
(b) Denotes issuer is in bankruptcy proceedings.
(c) Non-income producing.
(d) Percentages indicated are based on total net assets to common shareholders of $230,376.
(e) Not rated.
(f) All of the Fund's investments and other assets are pledged as collateral in accordance with a credit agreement with The Bank of Nova Scotia.
(g) Securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers in transactions exempt from registration. Unless otherwise noted, 144A Securities are deemed to be liquid. See Note 1 of the Note to Schedule of Investments for valuation policy. Total market value of Rule 144A securities amounted to $189,246 as of June 30, 2019.
The accompanying notes are an integral part of these financial statements.
18
The New America High Income Fund, Inc.
Schedule of Investments — June 30, 2019 (Unaudited) — Continued (Dollar Amounts in Thousands)
(h) Perpetual security with no stated maturity date.
(i) Level 3 in fair value hierarchy. See Note 1.
(j) Security cannot be offered for public resale without first being registered under the Securities Act of 1933 (restricted security). Total market value of restricted securities (excluding Rule 144A securities) amounted to $3,395 or 1.47% of total net assets as of June 30, 2019.
(k) Pay-In-Kind
(CAD) Canadian Dollar
(EUR) Euro
(GBP) British Pound
The accompanying notes are an integral part of these financial statements.
19
The New America High Income Fund, Inc.
Statement of Assets and Liabilities
June 30, 2019 (Unaudited)
(Dollars in thousands, except shares and per share amounts)
Assets: | |||||||
INVESTMENTS IN SECURITIES, at value (Identified cost of $317,248 see Schedule of Investments and Note 1) | $ | 320,508 | |||||
CASH | 342 | ||||||
RECEIVABLES: | |||||||
Investment securities sold | 208 | ||||||
Interest and dividends | 4,979 | ||||||
PREPAID EXPENSES | 44 | ||||||
UNREALIZED GAIN ON CURRENCY AND FORWARD CURRENCY EXCHANGE CONTRACTS (Notes 1 and 7) | 99 | ||||||
Total assets | $ | 326,180 | |||||
Liabilities: | |||||||
CREDIT AGREEMENT (Note 4) | $ | 91,000 | |||||
PAYABLES: | |||||||
Investment securities purchased | 4,321 | ||||||
Dividend on common stock | 61 | ||||||
Interest on loan (Note 4) | 25 | ||||||
ACCRUED EXPENSES (Note 3) | 340 | ||||||
UNREALIZED LOSS ON CURRENCY AND FORWARD CURRENCY EXCHANGE CONTRACTS (Notes 1 and 7) | 57 | ||||||
Total liabilities | $ | 95,804 | |||||
Net Assets | $ | 230,376 | |||||
Represented By: | |||||||
COMMON STOCK: | |||||||
$0.01 par value, 40,000,000 shares authorized, 23,368,918 shares issued and outstanding | $ | 234 | |||||
CAPITAL IN EXCESS OF PAR VALUE | 239,612 | ||||||
DISTRIBUTABLE EARNINGS | (9,470 | ) | |||||
Net Assets Applicable To Common Stock (Equivalent to $9.86 per share, based on 23,368,918 shares outstanding) | $ | 230,376 |
Statement of Operations
For the Six Months Ended
June 30, 2019 (Unaudited) (Dollars in thousands)
Investment Income: (Note 1) | |||||||
Interest income | $ | 9,965 | |||||
Dividend income | 178 | ||||||
Other income | 5 | ||||||
Total investment income | $ | 10,148 | |||||
Expenses: | |||||||
Cost of leverage: | |||||||
Interest expense (Note 4) | $ | 1,521 | |||||
Loan fees (Note 4) | 7 | ||||||
Total cost of leverage | $ | 1,528 | |||||
Professional services: | |||||||
Investment Advisor (Note 3) | $ | 543 | |||||
Custodian and transfer agent | 137 | ||||||
Legal | 115 | ||||||
Audit | 29 | ||||||
Total professional services | $ | 824 | |||||
Administrative: | |||||||
General administrative (Note 6) | $ | 246 | |||||
Directors | 135 | ||||||
Insurance | 66 | ||||||
Shareholder communications | 18 | ||||||
Miscellaneous | 18 | ||||||
NYSE | 13 | ||||||
Total administrative | $ | 496 | |||||
Total expenses | $ | 2,848 | |||||
Net investment income | $ | 7,300 | |||||
Realized and Unrealized Gain (Loss) on Investment Activities: | |||||||
Realized loss on investments and currencies, net | $ | (2,278 | ) | ||||
Change in net unrealized appreciation on investments and other financial instruments | $ | 23,887 | |||||
Net gain on investments | $ | 21,609 | |||||
Net increase in net assets resulting from operations | $ | 28,909 |
The accompanying notes are an integral part of these financial statements.
20
The New America High Income Fund, Inc.
Statements of Changes in Net Assets (Dollars in thousands, except shares and per share amounts)
Six Months Ended June 30, 2019 (Unaudited) | For the Year Ended December 31, 2018 | ||||||||||
From Operations: | |||||||||||
Net investment income | $ | 7,300 | $ | 15,427 | |||||||
Realized gain (loss) on investments and currencies, net | (2,278 | ) | (2,155 | ) | |||||||
Change in net unrealized appreciation (depreciation) on investments and other financial instruments | 23,887 | (27,358 | ) | ||||||||
Net increase (decrease) in net assets resulting from operations | $ | 28,909 | $ | (14,086 | ) | ||||||
Distributions to Common Stockholders: | |||||||||||
Distributable earnings ($.28 and $.70 per share in 2019 and 2018, respectively) | $ | (6,426 | ) | $ | (16,265 | ) | |||||
Total net increase (decrease) in net assets | $ | 22,483 | $ | (30,351 | ) | ||||||
Net Assets Applicable to Common Stock: | |||||||||||
Beginning of period | $ | 207,893 | $ | 238,244 | |||||||
End of period | $ | 230,376 | $ | 207,893 |
The accompanying notes are an integral part of these financial statements.
21
The New America High Income Fund, Inc.
Financial Highlights
Selected Per Share Data and Ratios
For Each Share of Common Stock Outstanding Throughout the Period
For the Six Months Ended June 30, 2019 | For the Years Ended December 31, | ||||||||||||||||||||||||||
(Unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||||
NET ASSET VALUE: | |||||||||||||||||||||||||||
Beginning of period | $ | 8.90 | $ | 10.19 | $ | 9.89 | $ | 8.84 | $ | 10.09 | $ | 10.58 | |||||||||||||||
NET INVESTMENT INCOME | .31 | .66 | .71 | .75 | .76 | .80 | |||||||||||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND OTHER FINANCIAL INSTRUMENTS | .93 | (1.25 | ) | .30 | 1.06 | (1.20 | ) | (.45 | ) | ||||||||||||||||||
TOTAL FROM INVESTMENT OPERATIONS | 1.24 | (.59 | ) | 1.01 | 1.81 | (.44 | ) | .35 | �� | ||||||||||||||||||
DISTRIBUTIONS TO COMMON SHAREHOLDERS: | |||||||||||||||||||||||||||
From net investment income | (.28 | ) | (.70 | ) | (.71 | ) | (.76 | ) | (.81 | ) | (.84 | ) | |||||||||||||||
TOTAL DISTRIBUTIONS | (.28 | ) | (.70 | ) | (.71 | ) | (.76 | ) | (.81 | ) | (.84 | ) | |||||||||||||||
NET ASSET VALUE: | |||||||||||||||||||||||||||
End of period | $ | 9.86 | $ | 8.90 | $ | 10.19 | $ | 9.89 | $ | 8.84 | $ | 10.09 | |||||||||||||||
PER SHARE MARKET VALUE: | |||||||||||||||||||||||||||
End of period | $ | 8.87 | $ | 7.56 | $ | 9.40 | $ | 9.26 | $ | 7.66 | $ | 8,94 | |||||||||||||||
TOTAL INVESTMENT RETURN† | 21.10 | % | (12.70 | )% | 9.19 | % | 31.68 | % | (5.68 | )% | 1.02 | % |
† Total investment return is calculated assuming a purchase of $1,000 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 year reported. Dividends and distributions are assumed for purposes of this calculation to be reinvested at prices obtained under the dividend reinvestment plan. This calculation does not reflect brokerage commissions.
The accompanying notes are an integral part of these financial statements.
22
The New America High Income Fund, Inc.
Financial Highlights
Selected Per Share Data and Ratios
For Each Share of Common Stock Outstanding Throughout the Period — Continued
For the Six Months Ended June 30, 2019 | For the Years Ended December 31, | ||||||||||||||||||||||||||
(Unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||||
NET ASSETS, END OF PERIOD, APPLICABLE TO COMMON STOCK (a) | $ | 230,376 | $ | 207,893 | $ | 238,244 | $ | 231,092 | $ | 206,523 | $ | 235,742 | |||||||||||||||
EXPENSE RATIOS: | |||||||||||||||||||||||||||
Ratio of interest expense to average net assets | 1.36 | %* | 1.16 | % | .76 | % | .55 | % | .42 | % | .40 | % | |||||||||||||||
Ratio of leverage expenses to average net assets | .01 | %* | .01 | % | .01 | % | .01 | % | .01 | % | — | ||||||||||||||||
Ratio of operating expenses to average net assets | 1.19 | %* | 1.18 | % | 1.14 | % | 1.26 | % | 1.20 | % | 1.14 | % | |||||||||||||||
RATIO OF TOTAL EXPENSES TO AVERAGE NET ASSETS | 2.56 | %* | 2.35 | % | 1.91 | % | 1.82 | % | 1.63 | % | 1.54 | % | |||||||||||||||
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS | 6.57 | %* | 6.77 | % | 6.92 | % | 7.90 | % | 7.65 | % | 7.41 | % | |||||||||||||||
PORTFOLIO TURNOVER RATE | 42.70 | % | 71.56 | % | 70.11 | % | 77.10 | % | 71.73 | % | 48.26 | % |
(a) Dollars in thousands.
* Annualized
The accompanying notes are an integral part of these financial statements.
23
The New America High Income Fund, Inc.
Information Regarding
Senior Securities
For the Six Months Ended June 30, 2019 | As of December 31, | ||||||||||||||||||||||||||
(Unaudited) | 2018 | 2017 | 2016 | 2015 | 2014 | ||||||||||||||||||||||
TOTAL AMOUNT OUTSTANDING: | |||||||||||||||||||||||||||
Credit Agreement | $ | 91,000,000 | $ | 91,000,000 | $ | 91,000,000 | $ | 91,000,000 | $ | 80,000,000 | $ | 90,000,000 | |||||||||||||||
ASSET COVERAGE: | |||||||||||||||||||||||||||
Per $1,000 borrowed under Credit Agreement (1) | $ | 3,532 | $ | 3,285 | $ | 3,618 | $ | 3,539 | $ | 3,582 | $ | 3,619 | |||||||||||||||
Credit Agreement Asset Coverage (2) | 353 | % | 328 | % | 362 | % | 354 | % | 358 | % | 362 | % |
(1) Calculated by subtracting the Fund's total liabilities excluding the amount borrowed under the credit facility, from the Fund's total assets and dividing such amount by the amount borrowed under the credit facility, (per $1,000 of amount borrowed).
(2) Calculated by subtracting the Fund's total liabilities excluding the amount borrowed under the credit facility, from the Fund's total assets and dividing such amount by the amount borrowed under the credit facility.
The accompanying notes are an integral part of these financial statements.
24
The New America High Income Fund, Inc.
Statement of Cash Flows (Dollars in thousands)
For the Six Months Ended June 30, 2019 (Unaudited) | |||||||
Cash Flows From Operating Activities: | |||||||
Purchases of portfolio securities | $ | (132,683 | ) | ||||
Sales of portfolio securities | 132,996 | ||||||
Net purchases, sales and maturities of short-term securities | 187 | ||||||
Interest and dividends received | 10,671 | ||||||
Operating expenses paid | (2,785 | ) | |||||
Net cash provided by operating activities | $ | 8,386 | |||||
Cash Flows From Financing Activities: | |||||||
Common stock dividends | $ | (8,368 | ) | ||||
Net cash used by financing activities | $ | (8,368 | ) | ||||
Net Increase in Cash | $ | 18 | |||||
Cash at Beginning of Period | 324 | ||||||
Cash at End of Period | $ | 342 | |||||
Reconciliation of Net Increase in Net Assets Resulting from Operations to Net Cash Provided by Operating Activities: | |||||||
Purchases of portfolio securities | $ | (132,683 | ) | ||||
Sales of portfolio securities | 132,996 | ||||||
Net purchases, sales and maturities of short-term securities | 187 | ||||||
Net increase in net assets resulting from operations | 28,909 | ||||||
Amortization of interest | 308 | ||||||
Net realized loss on investments and currencies | 2,278 | ||||||
Change in net unrealized appreciation on investments and other financial instruments | (23,887 | ) | |||||
Decrease in interest and dividend receivable | 219 | ||||||
Decrease in prepaid expenses | 51 | ||||||
Increase in accrued expenses and other payables | 8 | ||||||
Net cash provided by operating activities | $ | 8,386 |
The accompanying notes are an integral part of these financial statements.
25
The New America High Income Fund, Inc.
Notes to Financial Statements
June 30, 2019 (Unaudited)
(1) Significant Accounting and Other Policies
The New America High Income Fund, Inc. (the Fund) was organized as a corporation in the state of Maryland on November 19, 1987 and is registered with the Securities and Exchange Commission as a diversified, closed-end investment company under the Investment Company Act of 1940. The Fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 "Financial Services Investment Companies". The Fund commenced operations on February 26, 1988. The investment objective of the Fund is to provide high current income while seeking to preserve stockholders' capital through investment in a professionally managed, diversified portfolio of "high yield" fixed-income securities.
The Fund invests primarily in fixed maturity corporate debt securities that are rated less than investment grade. Risk of loss upon default by the issuer is significantly greater with respect to such securities compared to investment grade securities because these securities are generally unsecured and are often subordinated to other creditors of the issuer and because these issuers usually have high levels of indebtedness and are more sensitive to adverse economic conditions, such as a recession, than are investment grade issuers. In some cases, the collection of principal and timely receipt of interest is dependent upon the issuer attaining improved operating results, selling assets or obtaining additional financing.
The Fund may focus its investments in certain industries, subjecting it to greater risk than a Fund that is more diversified. See the schedule of investments for information on individual securities as well as industry diversification and credit quality ratings.
The Fund's financial statements have been prepared in conformity with accounting principles generally accepted in the United States for investment companies that require the management of the Fund to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.
The following is a summary of significant accounting policies consistently followed by the Fund, which are in conformity with those generally accepted in the investment company industry.
(a) Valuation of Investments—Except as otherwise described below, the Fund's investments are valued based on evaluated bid prices provided by an independent pricing service. Independent pricing services provide prices based primarily on quotations from dealers and brokers, market transactions, data accessed from quotations services, offering sheets obtained from dealers and various relationships among similar securities. Investments whose primary market is on an exchange are valued at the last sale price on the day of valuation. Short-term investments with original maturities of 60 days or less are stated at amortized cost, which approximates the fair value of such investments. Following procedures approved by the Board of Directors, investments for which market prices are not yet provided by an independent pricing service (primarily newly issued fixed-income corporate bonds and notes) shall be valued at the most recently quoted bid price provided by a principal market maker for the security. Other investments for which market quotations are not readily available are valued in good faith at fair value using methods approved by the Board of Directors. Fair value measurement is further discussed in section (f) of this footnote.
(b) Foreign Currency—Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U. S. dollar amounts on the respective dates of such transactions.
26
The New America High Income Fund, Inc.
Notes to Financial Statements — Continued
June 30, 2019 (Unaudited)
The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transaction, 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 of the amounts actually received or paid. Net unrealized foreign exchange gains and losses arise from changes in the fair values of assets and liabilities, other than investments in securities at fiscal period end, resulting from changes in exchange rates.
(c) Foreign Currency Forward Exchange Contracts—The Fund may enter into foreign currency forward exchange contracts to hedge against foreign currency exchange rate risks on its non-U.S. dollar denominated investment securities. When entering into a forward currency contract, the Fund agrees to receive or deliver a fixed quantity of foreign currency for an agreed upon price on an agreed future date. The Fund's net equity therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is included in the statement of assets and liabilities. Realized and unrealized gains and losses are included in the statement of operations. These instruments involve market risk, credit risk or both kinds of risks, in excess of the amount recognized in the statement of assets and liabilities. Risks arise from the possible inability of counterparties to meet the terms of their contracts and from movement in currency and securities values and interest rates.
(d) Securities Transactions and Net Investment Income—Securities transactions are recorded on trade
date. Realized gains or losses on sales of securities are calculated on the identified cost basis. Interest income is accrued on a daily basis. Discount on short-term investments is amortized to investment income. Premiums or discounts on corporate debt securities are amortized based on the interest method for financial reporting purposes. All income on original issue discount and step interest bonds is accrued based on the effective interest method. The Fund does not amortize market premiums or discounts for tax purposes. Dividend payments received in the form of additional securities are recorded on the ex-dividend date in an amount equal to the value of the security on such date.
(e) Federal Income Taxes—It is the Fund's policy to comply with the requirements of the Internal Revenue Code of 1986, as amended, applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders each year. Accordingly, no federal income tax provision is required.
(f) Fair Value Measurement—The Fund applies ASC 820 "Fair Value Measurements and Disclosures". This standard establishes the definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements.
The three levels of the fair value hierarchy under ASC 820 are described below:
Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities that the Fund has the ability to access.
Level 2—Observable inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument on an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.
27
The New America High Income Fund, Inc.
Notes to Financial Statements — Continued
June 30, 2019 (Unaudited)
Level 3—Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Fund's own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.
The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in level 3.
The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
A description of the valuation techniques applied to the Fund's major asset and liability categories is as follows.
Debt securities (corporate, U.S. Treasury, convertible & bank debt). The fair value of debt securities is provided by independent pricing services using quotations from dealers and brokers, market transactions, data from quotations services, offering sheets and various relationships between securities. While most corporate bonds are categorized in level 2 of the fair value hierarchy, there may be instances where less observable inputs necessitate a level 3 categorization.
Equity securities (preferred and common stock). Equity securities for which the primary market is on an exchange will be valued at the last sale price on the day of valuation and are categorized in level 1 of the fair value hierarchy. Other equity securities traded in inactive markets or valued by independent pricing services using methods similar to debt securities are categorized in level 2. The fair value of equity securities in which observable inputs are unavailable are categorized in level 3.
Short-term investments. Short-term investments are valued using amortized cost, which approximates fair value. To the extent the inputs are observable and timely the values would be categorized in level 2 of the fair value hierarchy.
Forwards are valued at the unrealized gain or loss on the contract as measured by the difference between the forward exchange rates at the date of entry into the contract and the forward rates at the reporting date. Forwards are categorized in level 2 of the fair value hierarchy.
The following is a summary of the inputs used as of June 30, 2019 in valuing the Fund's investments:
Level 1 | Level 2 | Level 3 | Total Value | ||||||||||||||||
Quoted Prices (000's) | Significant Observable Inputs (000's) | Significant Unobservable Inputs (000's) | (000's) | ||||||||||||||||
Investments | |||||||||||||||||||
Debt Securities* | $ | — | $ | 302,145 | $ | 967 | $ | 303,112 | |||||||||||
United States Treasury Obligations | — | 4,848 | — | 4,848 | |||||||||||||||
Preferred Stock | |||||||||||||||||||
Energy | — | 2,428 | — | 2,428 | |||||||||||||||
Healthcare | 1,473 | — | — | 1,473 | |||||||||||||||
Manufacturing | 873 | — | — | 873 | |||||||||||||||
Utilities | 2,107 | — | — | 2,107 | |||||||||||||||
Common Stock | |||||||||||||||||||
Broadcasting | 370 | — | — | 370 | |||||||||||||||
Energy | 292 | — | — | 292 | |||||||||||||||
Warrants | |||||||||||||||||||
Broadcasting | — | 205 | — | 205 | |||||||||||||||
Short-Term Investments | — | 4,800 | — | 4,800 | |||||||||||||||
Total Investments | $ | 5,115 | $ | 314,426 | $ | 967 | $ | 320,508 |
28
The New America High Income Fund, Inc.
Notes to Financial Statements — Continued
June 30, 2019 (Unaudited)
Level 1 | Level 2 | Level 3 | Total Value | ||||||||||||||||
Quoted Prices (000's) | Significant Observable Inputs (000's) | Significant Unobservable Inputs (000's) | (000's) | ||||||||||||||||
Forward Currency Exchange Contracts | $ | — | $ | 42 | $ | — | $ | 42 |
* Debt Securities — Type of debt and industries are shown on the Schedule of Investments.
The Fund owned one Level 3 security at June 30, 2019. It is identified on the Schedule of Investments with a footnote (i) and has a value of $967,000. The value was determined by the Valuation Committee of the Fund's investment advisor, T. Rowe Price, under procedures approved by the Board of Directors. The techniques used to arrive at this valuation take into account the occurrence of company specific or industry events, liquidity, and other market factors.
The following is a reconciliation of Fund investments using Level 3 inputs for the period:
Securities (000's) | |||||||
Balance, December 31, 2018 | $ | 898 | |||||
Net purchases/(sales) | 3 | ||||||
Change in unrealized appreciation (depreciation) | 5 | ||||||
Realized gain | 61 | ||||||
Balance, June 30, 2019 | $ | 967 |
Level 1 and Level 2 assets are evaluated on a quarterly basis for changes in listings or delistings on national exchanges.
Transfers between levels are recognized at the value at the end of the reporting period. During the six months ended June 30, 2019, the Fund recognized no transfers between Levels 1 and 2.
(2) Tax Matters and Distributions
At June 30, 2019, the total cost of securities (including temporary cash investments) for federal income tax purposes was approximately $318,172,000. Aggregate
gross unrealized gain on securities in which there was an excess of value over tax cost was approximately $8,168,000. Aggregate gross unrealized loss on securities in which there was an excess of tax cost over value was approximately $5,832,000. Net unrealized gain on investments for tax purposes at June 30, 2019 was approximately $2,336,000.
At December 31, 2018, the Fund had approximate capital loss carryforwards available to offset future capital gains, if any, to the extent provided by regulations:
Carryover Available | Character | Expiration Date | |||||||||
$ | 5,466,000 | Short-term | None | ||||||||
5,024,000 | Long-term | None | |||||||||
$ | 10,490,000 |
As a result of the passage of the Regulated Investment Company Modernization Act of 2010 (the "Act"), losses incurred in the 2011 fiscal year and beyond retain their character as short-term or long-term, have no expiration date and are utilized before the capital losses incurred prior to the enactment of the Act. At December 31, 2018, the Fund had total non-expiring capital loss carryforwards of $10,490,000.
It is the policy of the Fund to reduce future distributions of realized gains to shareholders to the extent of the unexpired capital loss carryforwards.
The tax character of distributions paid to common shareholders in 2018 and 2017 of approximately $16,430,000 and $16,357,000, respectively, was from ordinary income.
As of December 31, 2018, the components of distributable earnings on a tax basis were approximately:
Unrealized Gain Investments | $ | (21,468,000 | ) | ||||
Capital Loss Carryforwards | (10,490,000 | ) | |||||
Undistributed Net Investment Income | 5,000 | ||||||
$ | (31,953,000 | ) |
29
The New America High Income Fund, Inc.
Notes to Financial Statements — Continued
June 30, 2019 (Unaudited)
The difference between components of distributable earnings on a tax basis and amounts in accordance with generally accepted accounting principals ("GAAP") are primarily due to market discount and premium adjustments, wash sales, and the recognition of unrealized gain on currency forward contracts. GAAP also requires components related to permanent differences of net assets to be classified differently for financial reporting purposes than for tax reporting purposes. These differences have no net effect on the net asset value of the Fund. As of December 31, 2018, there were no financial reporting reclassifications recorded to the net asset accounts.
Distributions on common stock are declared based upon annual projections of the Fund's investment company taxable income. The Fund records all dividends and distributions payable to shareholders on the ex-dividend date and declares and distributes income dividends monthly.
The Fund is required to amortize market discounts and premiums for financial reporting purposes. This results in additional interest income in some years and decreased interest income in others for financial reporting purposes only. The Fund does not amortize market discounts or premiums for tax purposes. Therefore, the additional or decreased interest income for financial reporting purposes does not result in additional or decreased common stock dividend income.
The Fund recognizes the tax benefits of uncertain tax positions only where the position is "more likely than not" to be sustained assuming examination by tax authorities. Management has analyzed the Fund's tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions taken on returns filed for open tax years 2015-2017, or expected to be taken in the Fund's 2018 tax returns. The Fund is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.
(3) Investment Advisory Agreement
T. Rowe Price Associates, Inc. (T. Rowe Price), the Fund's Investment Advisor, earned approximately $543,000 in management fees during the six months ended June 30, 2019. Management fees paid by the Fund to T. Rowe Price were calculated at 0.50% on the first $50,000,000 of the Fund's average weekly net assets, 0.40% on the next $50 million and 0.30% on average weekly net assets in excess of $100 million. T. Rowe Price's fee is calculated based on assets attributable to the Fund's common stock and senior securities. At June 30, 2019, the fee payable to T. Rowe Price was approximately $91,000, which was included in accrued expenses on the accompanying statement of assets and liabilities.
(4) Bank Credit Agreement
The Fund has a credit agreement with The Bank of Nova Scotia pursuant to which the Fund may borrow up to an aggregate amount of $100,000,000. On June 30, 2019 the total amount outstanding on the loan was $91,000,000. The term of the facility has been extended to October 2019. Amounts borrowed under the credit facility bear interest at an adjustable rate based on a margin above LIBOR. The rate paid on these borrowings is approximately 3.25% and will be in effect until July 31, 2019 at which time the rate will be reset. For the six months ended June 30, 2019 the weighted average rate on the loan was approximately 3.37% and the maximum amount borrowed during the period was $91,000,000.
The Fund pays a commitment fee to The Bank of Nova Scotia at a rate of .15% per annum for any unused portion of borrowings not to exceed $100,000,000. For the six months ended June 30, 2019 the Fund paid approximately $7,000 for this commitment.
The Fund has granted to The Bank of Nova Scotia a security interest in the investments and other assets of the Fund in accordance with the Credit Agreement.
30
The New America High Income Fund, Inc.
Notes to Financial Statements — Continued
June 30, 2019 (Unaudited)
(5) Purchases and Sales of Securities
Purchases and proceeds of sales or maturities of long-term securities during the six months ended June 30, 2019 were approximately:
Cost of purchases | $ | 132,364,000 | |||||
Proceeds of sales or maturities | $ | 131,897,000 |
(6) Related Party Transactions
The Fund paid approximately $93,000 during the six months ended June 30, 2019 to the president of the Fund for her services as an officer and employee of the Fund.
(7) Derivative Contracts (Currency Amounts in Thousands)
Forward Currency Exchange Contracts—As of June 30, 2019 the Fund had forward currency exchange contracts outstanding as follows:
Counterparty | Settlement Date | Receive (Deliver) | Asset | Liability | Unrealized Appreciation (Depreciation) | ||||||||||||||||||
State Street Bank | 7/26/19 | CAD | (405 | ) | $ | 303 | $ | 310 | $ | (7 | ) | ||||||||||||
HSBC Bank | 7/26/19 | GBP | 53 | 67 | 69 | (2 | ) | ||||||||||||||||
Citibank | 7/26/19 | GBP | (2,435 | ) | 3,183 | 3,096 | 87 | ||||||||||||||||
Royal Bank of Canada | 8/23/19 | EUR | 264 | 302 | 300 | 2 | |||||||||||||||||
JP Morgan | 8/23/19 | EUR | 890 | 1,016 | 1,006 | 10 | |||||||||||||||||
HSBC Bank | 8/23/19 | EUR | 117 | 134 | 134 | — | |||||||||||||||||
Citibank | 8/23/19 | EUR | 108 | 123 | 123 | — | |||||||||||||||||
UBS | 8/23/19 | EUR | 298 | 340 | 340 | — | |||||||||||||||||
Citibank | 8/23/19 | EUR | (1,020 | ) | 1,152 | 1,165 | (13 | ) | |||||||||||||||
State Street Bank | 8/23/19 | EUR | (1,020 | ) | 1,153 | 1,165 | (12 | ) | |||||||||||||||
State Street Bank | 8/23/19 | EUR | (1,020 | ) | 1,152 | 1,165 | (13 | ) | |||||||||||||||
State Street Bank | 8/23/19 | EUR | (1,021 | ) | 1,156 | 1,166 | (10 | ) | |||||||||||||||
Net unrealized gain on open forward currency exchange contracts | $ | 42 |
Fair Value of Derivative Instruments—The fair value of derivative instruments as of June 30, 2019 was as follows:
Asset Derivatives June 30, 2019 | |||||||||||
Statement of Assets and Liabilities Location | Fair Value | ||||||||||
Forward currency contracts | Unrealized gain on currency and forward currency exchange contracts | $ | 99 | ||||||||
Unrealized loss on currency and forward currency exchange contracts | (57 | ) |
The effect of derivative instruments that are included on the Statement of Operations for the six months ended June 30, 2019 was as follows:
Amount of Realized Gain on Derivatives | |||||||
Realized gain (loss) on investments and currencies, net | |||||||
Forward currency contracts | $ | 198 |
31
The New America High Income Fund, Inc.
Notes to Financial Statements — Continued
June 30, 2019 (Unaudited)
Change in Unrealized Depreciation on Derivatives | |||||||
Change in net unrealized appreciation (depreciation) on investments and other financial instruments | |||||||
Forward currency contracts | $ | (82 | ) |
(8) Recent Accounting Pronouncement
In August 2018, the Financial Accounting Standards Board issued Accounting Standard Update ("ASU") 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). The primary focus of ASU 2018-13 is to improve the effectiveness of the disclosure requirements for fair value measurements. The changes affect all companies that are required to include fair value
measurement disclosures. In general, the amendments in ASU 2018-13 are effective for all entities for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019. An entity is permitted to early adopt the removed or modified disclosures upon the issuance of ASU 2018-13 and may delay adoption of the additional disclosures, which are required for public companies only, until their effective date. Management is currently evaluating the impact these changes will have on the Fund's financial statements and disclosures.
(9) Subsequent Events
The Fund has evaluated the need for additional disclosures and/or adjustments resulting from subsequent events through the date the financial statements were issued. Based on this evaluation, no adjustments were required to the financial statements as of June 30, 2019.
32
The New America High Income Fund, Inc.
Notes to Financial Statements — Continued
Supplemental Information (Unaudited)
Availability of Portfolio Holdings
The Fund provides a complete schedule of its portfolio holdings quarterly. The lists of holdings as of the end of the second and fourth quarters appear in the Fund's semi-annual and annual reports to shareholders, respectively. The schedules of portfolio holdings as of the end of the first and third quarters are filed with the Securities and Exchange Commission (the "SEC") on Form N-Q (the "Forms") within 60 days of the end of the first and third quarters. Shareholders can look up the Forms on the SEC's web site at www.sec.gov. The Forms may also be reviewed and copied at the SEC's public reference room in Washington, D.C. You may call the SEC at 1-800-SEC-0330 for information about the SEC's web site and their public reference room. In addition, the Forms may be reviewed on the Fund's web site at www.newamerica-hyb.com.
Compliance with CFTC Regulation of Transactions in Commodity Interests
The Fund does not currently intend to engage in transactions in commodity interests such as futures contracts, options on futures contracts, and swaps. However, the Fund may in the future enter into interest rate transactions, such as swaps, caps, collars and floors for the purpose or with the effect of hedging its portfolio and/or its payment obligations with respect to senior securities. In addition, the Fund has reserved the right, subject to the approval of the Board of Directors, to purchase and sell financial futures contracts and options on such futures contracts for the purpose of hedging its portfolio securities (or portfolio securities which it expects to acquire) against anticipated changes in prevailing interest rates. To the extent it engages in transactions in commodity interests, the Fund expects their use to be limited such that the Fund may claim the exclusion from the definition of the term "commodity pool operator" available under Regulation 4.5 of the Commodity Futures Trading Commission under the Commodity Exchange Act, and will not therefor be subject to regulation as a pool operator under the Commodity Exchange Act.
Common Stock Transactions
The Fund may purchase shares of its Common Stock in the open market when the Common Stock trades at a discount to net asset value or at other times if the Fund determines such purchases are advisable. There can be no assurance that the Fund will take such action in the event of a market discount to net asset value or that Fund purchases will reduce a discount.
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The New America High Income Fund, Inc.
Directors
Joseph L. Bower
Bernard J. Korman
Stuart A. McFarland
Marguerite A. Piret
Oleg M. Pohotsky
Ellen E. Terry
Officer
Ellen E. Terry – President, Treasurer, Secretary
Investment Advisor
T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, Maryland 21202
Administrator
The New America High Income Fund, Inc.
33 Broad Street
Boston, MA 02109
(617) 263-6400
Custodian
State Street Corporation
One Lincoln Street
Boston, MA 02111
Transfer Agent
American Stock Transfer & Trust Company, LLC
6201 15th Avenue
Brooklyn, NY 11219
(800) 937-5449
Web site: www.astfinancial.com
Listed: NYSE
Symbol: HYB
Web site: www.newamerica-hyb.com
34
American Stock Transfer & Trust Company
59 Maiden Lane
New York, NY 10038
The New
America
High Income
Fund, Inc.
Semi-Annual
Report
June 30, 2019
Item 2 - |
| Code of Ethics - Not required in semi-annual filing. |
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Item 3 - |
| Audit Committee Financial Experts - Not required in a semi-annual filing. |
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Item 4 - |
| Principal Accountant Fees and Services - Not required in semi-annual filing. |
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Item 5 - |
| Audit Committee of Listed Registrant - Not required in semi-annual filing. |
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Item 6 - |
| Schedule of Investments - Included as part of the report to shareholders filed under Item 1 of this Form. |
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Item 7 - |
| Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies - Not required in semi-annual filing. |
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Item 8 - |
| Portfolio Managers of Closed-End Management Investment Companies - Not required in semi-annual filing. |
Item 9 - |
| Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers - Not applicable. |
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Item 10 - |
| Submission of Matters to a Vote of Security Holders - Not applicable. |
ITEM 11. CONTROLS AND PROCEDURES.
(a) The Fund’s principal executive officer and principal financial officer concluded that the Fund disclosure controls and procedures (as defined in Rule 30a-3(c) under the 1940 Act) provide reasonable assurances that information required to be disclosed by the Fund on Form N-CSR is recorded, processed, summarized and reported within the required time periods and that information required to be disclosed by the Fund in the reports that it files or submits on Form N-CSR is accumulated and communicated to the Fund’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure, based on their evaluation of the disclosure controls and procedures as of a date within 90 days of the filing date of this report.
(b) There was no change in the Fund’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the Fund’s second fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) |
| Not Applicable. |
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(a)(2) |
| The certifications required by Rule 30a-2(a) under the 1940 Act. |
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(a)(3) |
| Not Applicable. |
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(b) |
| The certifications required by Rule 30a-2(b) under the 1940 Act. |
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.
| The New America High Income Fund, Inc. | |
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| By: | /s/ Ellen E. Terry |
| Name: | Ellen E. Terry |
| Title: | President |
| Date: | August 30, 2019 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: | /s/ Ellen E. Terry |
| Name: | Ellen E. Terry |
| Title: | President and Treasurer |
| Date: | August 30, 2019 |