N-Q 1 d638748dnq.htm NUVEEN HIGH INCOME DECEMBER 2019 TARGET TERM FUND Nuveen High Income December 2019 Target Term Fund

 

 

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-23141

Nuveen High Income December 2019 Target Term Fund

(Exact name of registrant as specified in charter)

    333 West Wacker Drive, Chicago, Illinois 60606    

(Address of principal executive offices) (Zip code)

Gifford R. Zimmerman—Vice President and Secretary

    333 West Wacker Drive, Chicago, Illinois 60606    

(Name and address of agent for service)

Registrant’s telephone number, including area code:     312-917-7700    

Date of fiscal year end:       December 31      

Date of reporting period:  September 30, 2018  

Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q 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 the 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. § 3507.

 

 

 

 

 

Item 1. Schedule of Investments

 

 

JHD
Nuveen High Income December 2019 Target Term Fund
Portfolio of Investments    September 30, 2018
(Unaudited)
Principal Amount (000)   Description (1) Coupon Maturity Ratings (2) Value
    LONG-TERM INVESTMENTS – 97.7% (98.9% of Total Investments)        
    CORPORATE BONDS – 91.7% (92.8% of Total Investments)        
    Aerospace & Defense – 1.8%        
$ 4,600   Bombardier Inc., 144A 7.750% 3/15/20 B $ 4,809,875
    Airlines – 4.9%        
3,580   Air Canada 2015-1 Class C Pass Through Trust, 144A 5.000% 3/15/20 BB+ 3,602,375
3,500   American Airlines Group Inc., 144A 5.500% 10/01/19 BB- 3,548,125
2,000   American Airlines Group Inc., 144A 4.625% 3/01/20 BB- 2,005,000
4,235   Virgin Australia Holdings Ltd, 144A 8.500% 11/15/19 B- 4,298,525
13,315   Total Airlines       13,454,025
    Auto Components – 0.8%        
2,205   American Axle & Manufacturing Inc. 7.750% 11/15/19 B 2,293,200
    Automobiles – 3.1%        
5,150   Fiat Chrysler Automobiles NV 4.500% 4/15/20 BB+ 5,182,187
722   Jaguar Land Rover Automotive PLC, 144A 4.250% 11/15/19 BB+ 722,000
2,500   Jaguar Land Rover Automotive PLC, 144A 3.500% 3/15/20 BB+ 2,468,750
8,372   Total Automobiles       8,372,937
    Banks – 3.0%        
3,900   CIT Group Inc. 5.375% 5/15/20 BB+ 4,007,640
3,832   Popular Inc. 7.000% 7/01/19 BB- 3,929,716
250   Royal Bank of Scotland Group PLC 6.400% 10/21/19 BBB+ 257,407
7,982   Total Banks       8,194,763
    Chemicals – 2.9%        
4,327   CF Industries Inc. 7.125% 5/01/20 BB+ 4,575,802
2,910   INVISTA Finance LLC, 144A 4.250% 10/15/19 BBB- 2,905,490
345   Methanex Corp 3.250% 12/15/19 Baa3 343,647
7,582   Total Chemicals       7,824,939
    Commercial Services & Supplies – 1.2%        
1,500   ADT Security Corp/The 5.250% 3/15/20 BB- 1,522,500
1,750   AerCap Ireland Capital DAC / AerCap Global Aviation Trust 3.750% 5/15/19 BBB- 1,756,920
3,250   Total Commercial Services & Supplies       3,279,420
    Construction & Engineering – 0.9%        
2,500   HC2 Holdings Inc., 144A 11.000% 12/01/19 B- 2,512,500
1

JHD Nuveen High Income December 2019 Target Term Fund (continued)
  Portfolio of Investments September 30, 2018
  (Unaudited)
Principal Amount (000)   Description (1) Coupon Maturity Ratings (2) Value
    Consumer Finance – 3.3%        
$ 3,000   Ally Financial Inc. 4.125% 3/30/20 BB+ $3,011,250
3,680   Navient Corp 8.000% 3/25/20 BB 3,889,760
1,925   Springleaf Finance Corp 5.250% 12/15/19 B+ 1,952,758
8,605   Total Consumer Finance       8,853,768
    Containers & Packaging – 0.8%        
2,191   Greif Inc. 7.750% 8/01/19 BB- 2,263,303
    Diversified Financial Services – 1.6%        
4,250   Jefferies Finance LLC / JFIN Co-Issuer Corp, 144A 7.375% 4/01/20 BB- 4,319,063
    Diversified Telecommunication Services – 2.9%        
6,100   CenturyLink Inc. 5.625% 4/01/20 BB 6,206,750
1,775   Telecom Italia Capital SA 7.175% 6/18/19 BBB- 1,806,062
7,875   Total Diversified Telecommunication Services       8,012,812
    Electronic Equipment, Instruments & Components – 0.3%        
875   Sanmina Corp, 144A 4.375% 6/01/19 BBB- 877,188
    Energy Equipment & Services – 0.9%        
2,500   Resolute Energy Corp 8.500% 5/01/20 B+ 2,503,125
    Equity Real Estate Investment Trust – 4.7%        
4,340   CoreCivic Inc. 4.125% 4/01/20 Ba1 4,325,027
2,582   iStar Inc. 5.000% 7/01/19 BB 2,586,325
3,000   Realogy Group LLC / Realogy Co-Issuer Corp, 144A 4.500% 4/15/19 B1 3,007,500
3,000   Select Income REIT 3.600% 2/01/20 BBB- 2,983,853
12,922   Total Equity Real Estate Investment Trust       12,902,705
    Food Products – 2.1%        
4,000   Marfrig Holdings Europe BV, 144A 6.875% 6/24/19 BB- 4,050,000
1,660   Smithfield Foods Inc., 144A 2.700% 1/31/20 BBB 1,634,364
5,660   Total Food Products       5,684,364
    Health Care Providers & Services – 5.2%        
5,500   HCA Inc. 6.500% 2/15/20 BBB- 5,710,375
3,000   Tenet Healthcare Corp 6.750% 2/01/20 B 3,100,800
3,300   Tenet Healthcare Corp 4.750% 6/01/20 BB- 3,337,125
1,997   Universal Health Services Inc., 144A 3.750% 8/01/19 BBB- 2,006,985
13,797   Total Health Care Providers & Services       14,155,285
    Hotels, Restaurants & Leisure – 3.5%        
5,293   MGM Resorts International 5.250% 3/31/20 BB 5,402,830
4,000   Studio City Co Ltd, 144A 5.875% 11/30/19 BB- 4,030,000
9,293   Total Hotels, Restaurants & Leisure       9,432,830
2

Principal Amount (000)   Description (1) Coupon Maturity Ratings (2) Value
    Household Durables – 4.9%        
$ 1,600   KB Home 4.750% 5/15/19 BB- $1,610,000
2,144   KB Home 8.000% 3/15/20 BB- 2,267,494
132   Lennar Corp 4.500% 6/15/19 BBB- 132,825
3,750   Lennar Corp 4.500% 11/15/19 BBB- 3,778,125
187   Lennar Corp 6.625% 5/01/20 BBB- 194,499
2,925   Meritage Homes Corp 7.150% 4/15/20 BB 3,059,784
300   Toll Brothers Finance Corp 6.750% 11/01/19 BBB- 309,750
1,968   TRI Pointe Group Inc. / TRI Pointe Homes Inc. 4.375% 6/15/19 BB- 1,977,840
13,006   Total Household Durables       13,330,317
    Independent Power & Renewable Electricity Producers – 4.8%        
5,364   Atlantica Yield plc, 144A 7.000% 11/15/19 BB+ 5,471,280
2,550   DPL Inc. 6.750% 10/01/19 BBB- 2,613,750
5,000   Talen Energy Supply LLC, 144A 4.625% 7/15/19 B- 4,902,774
12,914   Total Independent Power & Renewable Electricity Producers       12,987,804
    Insurance – 0.1%        
150   CNO Financial Group Inc. 4.500% 5/30/20 BB+ 151,500
    Machinery – 1.3%        
3,500   CNH Industrial Capital LLC 3.375% 7/15/19 BBB 3,504,550
    Media – 5.7%        
2,050   Cablevision Systems Corp 8.000% 4/15/20 B- 2,160,188
3,350   Clear Channel Worldwide Holdings Inc. 7.625% 3/15/20 CCC+ 3,358,375
2,275   CSC Holdings LLC 8.625% 2/15/19 B2 2,309,125
540   DISH DBS Corp 7.875% 9/01/19 BB 559,013
3,800   DISH DBS Corp 5.125% 5/01/20 BB 3,833,250
3,176   Hughes Satellite Systems Corp 6.500% 6/15/19 BBB- 3,239,917
15,191   Total Media       15,459,868
    Metals & Mining – 3.6%        
2,500   ArcelorMittal 5.125% 6/01/20 BBB- 2,560,125
2,825   Freeport-McMoRan Inc. 3.100% 3/15/20 BB+ 2,793,219
4,250   United States Steel Corp 7.375% 4/01/20 BB- 4,446,562
9,575   Total Metals & Mining       9,799,906
    Multiline Retail – 0.4%        
1,000   JC Penney Corp Inc. 8.125% 10/01/19 B 1,001,250
    Oil, Gas & Consumable Fuels – 11.8%        
2,000   Andeavor Logistics LP / Tesoro Logistics Finance Corp 5.500% 10/15/19 BBB- 2,037,540
670   Canadian Oil Sands Ltd, 144A 7.750% 5/15/19 A- 685,454
3,750   Cenovus Energy Inc. 5.700% 10/15/19 BBB 3,838,166
4,500   DCP Midstream Operating LP, 144A 5.350% 3/15/20 BB+ 4,601,250
3

JHD Nuveen High Income December 2019 Target Term Fund (continued)
  Portfolio of Investments September 30, 2018
  (Unaudited)
Principal Amount (000)   Description (1) Coupon Maturity Ratings (2) Value
    Oil, Gas & Consumable Fuels (continued)        
$ 2,000   Ithaca Energy Inc., 144A 8.125% 7/01/19 CCC+ $1,982,500
2,500   Marathon Oil Corp 2.700% 6/01/20 BBB 2,467,473
4,245   NGL Energy Partners LP / NGL Energy Finance Corp 5.125% 7/15/19 B+ 4,266,225
3,500   Southwestern Energy Co, (3) 5.800% 1/23/20 BB 3,552,500
4,000   Targa Resources Partners LP / Targa Resources Partners Finance Corp 4.125% 11/15/19 BB- 3,985,000
1,475   Teekay Corp 8.500% 1/15/20 B+ 1,501,063
3,000   Williams Cos Inc./The 5.250% 3/15/20 BBB 3,078,640
31,640   Total Oil, Gas & Consumable Fuels       31,995,811
    Pharmaceuticals – 2.9%        
375   Allergan Funding SCS 3.000% 3/12/20 BBB 374,554
3,500   Mallinckrodt International Finance SA / Mallinckrodt CB LLC, 144A 4.875% 4/15/20 B+ 3,465,000
4,250   Teva Pharmaceutical Finance IV LLC 2.250% 3/18/20 BB 4,123,977
8,125   Total Pharmaceuticals       7,963,531
    Specialty Retail – 2.5%        
3,350   GameStop Corp, 144A 5.500% 10/01/19 Ba1 3,341,625
3,200   L Brands Inc. 7.000% 5/01/20 Ba1 3,336,000
6,550   Total Specialty Retail       6,677,625
    Technology Hardware, Storage & Peripherals – 4.4%        
1,500   Dell International LLC / EMC Corp, 144A 3.480% 6/01/19 BBB- 1,503,814
8,000   EMC Corp 2.650% 6/01/20 Ba2 7,854,173
2,500   Seagate HDD Cayman 3.750% 11/15/18 Baa3 2,499,264
12,000   Total Technology Hardware, Storage & Peripherals       11,857,251
    Thrifts & Mortgage Finance – 1.2%        
3,247   Radian Group Inc. 5.500% 6/01/19 BB+ 3,291,646
    Trading Companies & Distributors – 2.0%        
3,137   Aircastle Ltd 6.250% 12/01/19 BBB- 3,235,430
2,073   Aircastle Ltd 7.625% 4/15/20 BBB- 2,194,068
5,210   Total Trading Companies & Distributors       5,429,498
    Wireless Telecommunication Services – 2.2%        
2,500   Sprint Capital Corp 6.900% 5/01/19 B+ 2,540,625
3,205   Sprint Communications Inc., 144A 7.000% 3/01/20 BB 3,325,188
5,705   Total Wireless Telecommunication Services       5,865,813
$ 245,587   Total Corporate Bonds (cost $248,084,082)       249,062,472
    
4

Principal Amount (000)   Description (1) Coupon Maturity Ratings (2) Value
    CONVERTIBLE BONDS – 3.8% (3.9% of Total Investments)        
    Capital Markets – 1.3%        
$ 3,500   Prospect Capital Corp 4.750% 4/15/20 BBB- $ 3,526,135
    Electrical Equipment – 1.0%        
3,240   Tesla Energy Operations Inc./DE 1.625% 11/01/19 N/R 2,834,844
    Independent Power & Renewable Electricity Producers – 1.1%        
3,000   Clearway Energy Inc., 144A 3.250% 6/01/20 N/R 2,997,600
    Machinery – 0.4%        
1,000   Navistar International Corp 4.750% 4/15/19 CCC 1,013,244
$ 10,740   Total Convertible Bonds (cost $10,501,442)       10,371,823
    
Principal Amount (000)   Description (1) Coupon Maturity Ratings (2) Value
    SOVEREIGN DEBT – 2.2% (2.2% of Total Investments)        
    Argentina – 0.4%        
$ 1,000   Argentine Republic Government International Bond 6.250% 4/22/19 B+ $ 1,000,000
    Egypt – 0.9%        
2,500   Egypt Government International Bond, 144A 5.750% 4/29/20 B 2,533,350
    Sri Lanka – 0.9%        
1,000   Sri Lanka Government International Bond, 144A 6.000% 1/14/19 B+ 1,000,234
1,500   Sri Lanka Government International Bond, 144A 5.125% 4/11/19 B+ 1,494,890
2,500   Total Sri Lanka       2,495,124
$ 6,000   Total Sovereign Debt (cost $6,077,515)       6,028,474
    Total Long-Term Investments (cost $264,663,039)       265,462,769
    
Principal Amount (000)   Description (1) Coupon Maturity   Value
    SHORT-TERM INVESTMENTS – 1.0% (1.1% of Total Investments)        
    REPURCHASE AGREEMENTS – 1.0% (1.1% of Total Investments)        
$ 2,878   Repurchase Agreement with Fixed Income Clearing Corporation, dated 9/28/18, repurchase price $2,878,006, collateralized by $2,720,000 U.S. Treasury Bonds, 3.625%, due 2/15/44, value $2,939,520 1.050% 10/01/18   $ 2,877,754
    Total Short-Term Investments (cost $2,877,754)       2,877,754
    Total Investments (cost $267,540,793) – 98.7%       268,340,523
    Other Assets Less Liabilities – 1.3%       3,425,624
    Net Assets – 100%       $ 271,766,147
5

JHD Nuveen High Income December 2019 Target Term Fund (continued)
  Portfolio of Investments September 30, 2018
  (Unaudited)
Fair Value Measurements
Fair value is defined as the price that would be received upon selling an investment or transferring a liability in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. A three-tier hierarchy is used to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability. Observable inputs are based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Unobservable inputs are based on the best information available in the circumstances. The following is a summary of the three-tiered hierarchy of valuation input levels.
Level 1  –     Inputs are unadjusted and prices are determined using quoted prices in active markets for identical securities.
Level 2  –     Prices are determined using other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3  –     Prices are determined using significant unobservable inputs (including management’s assumptions in determining the fair value of investments).
The inputs or methodologies used for valuing securities are not an indication of the risks associated with investing in those securities. The following is a summary of the Fund’s fair value measurements as of the end of the reporting period:
  Level 1 Level 2 Level 3 Total
Long-Term Investments:        
Corporate Bonds $ — $249,062,472 $ — $249,062,472
Convertible Bonds  — 10,371,823  — 10,371,823
Sovereign Debt  — 6,028,474  — 6,028,474
Short-Term Investments:        
Repurchase Agreements  — 2,877,754  — 2,877,754
Total $ — $268,340,523 $ — $268,340,523
Income Tax Information
The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to timing differences in recognizing certain gains and losses on investment transactions. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts on the Statement of Assets and Liabilities presented in the annual report, based on their federal tax basis treatment; temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset value of the Fund.
The table below presents the cost and unrealized appreciation (depreciation) of the Fund's investment portfolio, as determined on a federal income tax basis, as of September 30, 2018.
Tax cost of investments $267,542,435
Gross unrealized:  
Appreciation $ 1,735,063
Depreciation (936,975)
Net unrealized appreciation (depreciation) of investments $ 798,088
6

  For Fund portfolio compliance purposes, the Fund’s industry classifications refer to any one or more of the industry sub-classifications used by one or more widely recognized market indexes or ratings group indexes, and/or as defined by Fund management. This definition may not apply for purposes of this report, which may combine industry sub-classifications into sectors for reporting ease.  
(1) All percentages shown in the Portfolio of Investments are based on net assets.  
(2) For financial reporting purposes, the ratings disclosed are the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investors Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. This treatment of split-rated securities may differ from that used for other purposes, such as for Fund investment policies. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of these national rating agencies.  
(3) Step-up coupon bond, a bond with a coupon that increases ("steps up"), usually at regular intervals, while the bond is outstanding. The rate shown is the coupon as of the end of the reporting period.  
144A Investment is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These investments may only be resold in transactions exempt from registration, which are normally those transactions with qualified institutional buyers.  
REIT Real Estate Investment Trust  
7

Item 2. Controls and Procedures.

 

  a.

The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d-15(b)).

 

  b.

There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3. Exhibits.

File as exhibits as part of this Form a separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)), exactly as set forth below: EX-99 CERT Attached hereto.

 

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant)    Nuveen High Income December 2019 Target Term Fund   
By (Signature and Title)    /s/ Gifford R. Zimmerman                                                        
   Gifford R. Zimmerman   
   Vice President and Secretary   

Date: November 29, 2018

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By (Signature and Title)    /s/ Cedric H. Antosiewicz                                                         
   Cedric H. Antosiewicz   
   Chief Administrative Officer (principal executive officer)   
Date: November 29, 2018      
By (Signature and Title)    /s/ Stephen D. Foy                                                                    
   Stephen D. Foy   
   Vice President and Controller (principal financial officer)   
Date: November 29, 2018