SEC FORM 4

SEC Form 4

FORM 4

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

1. Name and Address of Reporting Person^*

DONDERO JAMES D

(Last)

(First)

(Middle)

13455 NOEL ROAD STE 800

(Street)

DALLAS

75240

(City)

(State)

(Zip)

2. Issuer Name and Ticker or Trading Symbol
Highland Credit Strategies Fund [ HCF ]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

	Director	10% Owner
X	Officer (give title below)	Other (specify below)
	CEO and President

3. Date of Earliest Transaction (Month/Day/Year)
01/28/2008

4. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock	01/28/2008		P		181,160	A	⁽¹⁾	267,160.87⁽²⁾	I	See Footnote⁽³⁾
Common Stock	01/29/2008		P		33,500	A	$14.26	300,660.87⁽²⁾	I	See Footnote⁽³⁾

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	4. Transaction Code (Instr. 8)		5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)		6. Date Exercisable and Expiration Date (Month/Day/Year)		7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)		8. Price of Derivative Security (Instr. 5)	9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)	10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
1. Title of Derivative Security (Instr. 3)	2. Conversion or Exercise Price of Derivative Security	3. Transaction Date (Month/Day/Year)	3A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)

Explanation of Responses:

1. The following shares were purchased pursuant to a rights offering by Highland Credit Strategies Fund at a price of $12.85 per share: (i) 20,380 shares by the Highland 401(k) Plan (the "401(k) Plan"), (ii) 32,996 shares by the Highland Capital Management Retirement Plan and Trust (the "Retirement Plan"), (iii) 3,918 shares by Highland Capital Management Services, Inc. ("HCMS") and (iv) 90,366 shares by Highland Capital Management, L.P. ("HCMLP"). HCMLP purchased an additional 33,500 shares on the open market at a price of $14.38 per share.

2. As of January 28, 2008, shares were held by the following entities: (i) 50,952 shares held by the 401(k) Plan, (ii) 82,492 shares held by the Retirement Plan, (iii) 9,850.87 shares held by HCMS and (iv) 123,866 shares held by HCMLP. On January 29, 2008, HCMLP purchased an additional 33,500 shares.

3. HCMLP is the investment adviser for Highland Credit Strategies Fund. HCMLP maintains the 401(k) Plan and the Retirement Plan for the benefit of its employees. Mr. Dondero is the trustee of the 401(k) Plan and the Retirement Plan, as well as a participant in the 401(k) Plan and the Retirement Plan, and he owns interests in HCMLP and HCMS. Mr. Dondero expressly disclaims beneficial ownership of the securities reported herein, except to the extent of his pecuniary interest therein.

	/s/ James Dondero	01/30/2008
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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