-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PE1KILEvDqLX4DLRs31GAEPJfQVA/FFIuodVM6TBfMbQ/51Fz/dp7u9anvcb9sEI b5f91HXBDaKJ2yU0NYCC1w== 0000002768-09-000017.txt : 20091029 0000002768-09-000017.hdr.sgml : 20091029 20091029084210 ACCESSION NUMBER: 0000002768-09-000017 CONFORMED SUBMISSION TYPE: N-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20090831 FILED AS OF DATE: 20091029 DATE AS OF CHANGE: 20091029 EFFECTIVENESS DATE: 20091029 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRANKLIN HIGH INCOME TRUST CENTRAL INDEX KEY: 0000002768 IRS NUMBER: 941693697 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-Q SEC ACT: 1940 Act SEC FILE NUMBER: 811-01608 FILM NUMBER: 091143254 BUSINESS ADDRESS: STREET 1: ONE FRANKLIN PARKWAY CITY: SAN MATEO STATE: CA ZIP: 94403-1906 BUSINESS PHONE: 650-312-2000 MAIL ADDRESS: STREET 1: ONE FRANKLIN PARKWAY CITY: SAN MATEO STATE: CA ZIP: 94403-1906 FORMER COMPANY: FORMER CONFORMED NAME: AGE HIGH INCOME FUND INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: AGE FUND INC DATE OF NAME CHANGE: 19810128 0000002768 S000006840 FRANKLIN HIGH INCOME FUND C000018490 CLASS A AGEFX C000018491 CLASS B FHIBX C000018492 CLASS C FRAIX C000018493 ADVISOR CLASS FAHAX C000018494 CLASS R FAHRX N-Q 1 fhitnq.txt FR. HIGH INCOME TRUST N-Q PE 8/31/09 FORM N-Q QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY Investment Company Act file number 811-01608 FRANKLIN HIGH INCOME TRUST -------------------------------------------------- (Exact name of registrant as specified in charter) ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906 --------------------------------------------------- (Address of principal executive offices) (Zip code) CRAIG S. TYLE, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906 -------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 650 312-2000 ------------ Date of fiscal year end: 5/31 ---- Date of reporting period: 8/31/09 ------- ITEM 1. SCHEDULE OF INVESTMENTS. FRANKLIN HIGH INCOME TRUST Quarterly Statement of Investments August 31, 2009 - ------------------------------------------------------------------------------- Contents Franklin High Income Fund............................................... Notes to Statements of Investments...................................... (FRANKLIN TEMPLETON INVESTMENTS(R) LOGO) FRANKLIN - Templeton - Mutual Series Quarterly Statement of Investments | This page intentionally left blank. Franklin High Income Trust Franklin High Income Fund STATEMENT OF INVESTMENTS, AUGUST 31, 2009 (UNAUDITED)
PRINCIPAL COUNTRY AMOUNT(a) VALUE -------------- -------------- --------------- (b) SENIOR FLOATING RATE INTERESTS 1.8% CONSUMER SERVICES 0.2% OSI Restaurant Partners LLC (Outback), Pre-Funded Revolving Credit, 0.449% - 2.563%, 6/14/13 United States $ 600,957 $ 479,889 Term Loan B, 2.563%, 6/14/14 United States 7,081,981 5,655,260 --------------- 6,135,149 --------------- MATERIALS 0.7% Novelis Corp., U.S. Term Loan, 2.27% - 2.60%, 7/07/14 United States 20,743,742 18,959,780 --------------- MEDIA 0.3% Univision Communications Inc., Initial Term Loan, 2.511%, 9/29/14 United States 10,000,000 7,903,570 --------------- UTILITIES 0.6% Dynegy Holdings Inc., Term L/C Facility, 4.02%, 4/02/13 United States 13,861,332 13,414,305 Term Loan B, 4.02%, 4/02/13 United States 1,121,545 1,085,375 --------------- 14,499,680 --------------- TOTAL SENIOR FLOATING RATE INTERESTS (COST $48,997,989) 47,498,179 --------------- Corporate Bonds 93.1% AUTOMOBILES & COMPONENTS 2.8% Ford Motor Credit Co. LLC, senior note, 9.75%, 9/15/10 United States 20,000,000 20,198,520 9.875%, 8/10/11 United States 35,000,000 34,825,000 7.50%, 8/10/12 United States 4,000,000 3,684,932 (c) TRW Automotive Inc., senior note, 144A, 7.00%, 3/15/14 United States 5,000,000 4,375,000 7.25%, 3/15/17 United States 17,000,000 14,365,000 --------------- 77,448,452 --------------- BANKS 0.7% (d) Wells Fargo Capital XIII, pfd., 7.70%, Perpetual United States 15,000,000 13,125,000 (d) Wells Fargo Capital XV, pfd., 9.75%, Perpetual United States 5,000,000 5,100,000 --------------- 18,225,000 --------------- CAPITAL GOODS 4.2% (c) Allison Transmission Inc., senior note, 144A, 11.00%, 11/01/15 United States 25,000,000 22,625,000 Case New Holland Inc., senior note, 7.125%, 3/01/14 United States 25,000,000 24,000,000 (c) 144A, 7.75%, 9/01/13 United States 5,000,000 4,950,000 L-3 Communications Corp., senior sub. note, 6.125%, 1/15/14 United States 15,000,000 14,400,000 RBS Global & Rexnord Corp., senior note, 9.50%, 8/01/14 United States 18,000,000 16,650,000 senior sub. note, 11.75%, 8/01/16 United States 9,100,000 7,689,500 RSC Equipment Rental Inc., senior note, 9.50%, 12/01/14 United States 26,000,000 23,400,000 --------------- 113,714,500 --------------- COMMERCIAL & PROFESSIONAL SERVICES 2.7% Allied Waste North America Inc., senior note, 7.875%, 4/15/13 United States 10,000,000 10,358,080 ARAMARK Corp., senior note, 8.50%, 2/01/15 United States 25,000,000 24,375,000 (c) Clean Harbors Inc., senior secured note, 144A, 7.625%, 8/15/16 United States 6,250,000 6,296,875 (e, f) Goss Graphic Systems Inc., senior sub. note, 12.25%, 11/19/05 United States 9,053,899 905 Iron Mountain Inc., senior sub. note, 8.75%, 7/15/18 United States 8,550,000 8,753,063 JohnsonDiversey Holdings Inc., senior disc, note, 10.67%, 5/15/13 United States 25,000,000 23,500,000 (e, f) Safety Kleen Services, senior sub. note, 9.25%, 6/01/08 United States 10,000,000 50,000 --------------- 73,333,923 --------------- CONSUMER DURABLES & APPAREL 2.5% Jarden Corp., senior sub. note, 7.50%, 5/01/17 United States 26,000,000 25,155,000 Jostens IH Corp., senior sub. note, 7.625%, 10/01/12 United States 25,000,000 25,250,000 KB Home, senior note, 6.25%, 6/15/15 United States 20,000,000 18,300,000 --------------- 68,705,000 ---------------
See Notes to Statements of Investments Quarterly Statement of Investments Franklin High Income Trust Franklin High Income Fund STATEMENT OF INVESTMENTS, AUGUST 31, 2009 (UNAUDITED) (CONTINUED) CONSUMER SERVICES 7.0% Boyd Gaming Corp., senior sub. note, 6.75%, 4/15/14 United States $ 10,000,000 $ 8,762,500 (c, e) Fontainebleau Las Vegas, 144A, 10.25%, 6/15/15 United States 20,000,000 800,000 (c) Harrah's Operating Escrow, senior secured note, 144A, 11.25%, 6/01/17 United States 30,000,000 30,675,000 Host Hotels & Resorts LP, senior note, K, 7.125%, 11/01/13 United States 19,175,000 18,647,687 M, 7.00%, 8/15/12 United States 7,100,000 7,029,000 Q, 6.75%, 6/01/16 United States 5,000,000 4,675,000 MGM MIRAGE, senior note, 6.625%, 7/15/15 United States 45,000,000 32,512,500 6.875%, 4/01/16 United States 10,000,000 7,200,000 Pinnacle Entertainment Inc., (c) seniornote, 144A, 8.625%, 8/01/17 United States 16,800,000 16,632,000 senior sub. note, 8.25%, 3/15/12 United States 3,876,000 3,895,380 senior sub. note, 7.50%, 6/15/15 United States 5,900,000 5,162,500 Royal Caribbean Cruises Ltd., senior deb., 7.25%, 3/15/18 United States 17,000,000 13,345,000 senior note, 6.875%, 12/01/13 United States 10,000,000 8,700,000 senior note, 11.875%, 7/15/15 United States 3,000,000 3,150,000 Starwood Hotels & Resorts Worldwide Inc., senior note, 6.75%, 5/15/18 United States 15,000,000 13,650,000 (e) Station Casinos Inc., senior note, 6.00%, 4/01/12 United States 9,300,000 2,987,625 senior note, 7.75%, 8/15/16 United States 8,200,000 2,593,250 senior sub. note, 6.50%, 2/01/14 United States 3,400,000 136,000 senior sub. note, 6.875%, 3/01/16 United States 8,400,000 336,000 Universal City Development, senior note, 11.75%, 4/01/10 United States 10,000,000 10,000,000 --------------- 190,889,442 --------------- DIVERSIFIED FINANCIALS 4.0% Citigroup Inc., senior note, 6.375%, 8/12/14 United States 5,000,000 5,061,520 senior note, 8.125%, 7/15/39 United States 5,000,000 5,218,358 sub. note, 5.00%, 9/15/14 United States 15,000,000 13,758,060 (c) GMAC LLC, senior note, 144A, 6.875%, 9/15/11 United States 45,000,000 41,962,500 (d) JPMorgan Chase & Co., junior sub. note, 1, 7.90%, Perpetual United States 25,000,000 23,897,575 (e) Lehman Brothers Holdings Inc., senior note, 6.20%, 9/26/14 United States 17,000,000 3,060,000 7.00%, 9/27/27 United States 8,000,000 1,440,000 Merrill Lynch & Co. Inc., senior note, 6.40%, 8/28/17 United States 15,000,000 14,942,173 --------------- 109,340,186 --------------- ENERGY 14.3% (c) Arch Coal Inc., senior note, 144A, 8.75%, 8/01/16 United States 4,500,000 4,522,500 Atlas Pipeline Partners LP, senior note, 8.125%, 12/15/15 United States 14,000,000 11,550,000 8.75%, 6/15/18 United States 11,000,000 9,020,000 Berry Petroleum Co., senior note, 10.25%, 6/01/14 United States 15,500,000 16,255,625 Chesapeake Energy Corp., senior note, 9.50%, 2/15/15 United States 5,000,000 5,125,000 6.625%, 1/15/16 United States 10,000,000 9,137,500 6.25%, 1/15/18 United States 27,600,000 24,150,000 Compagnie Generale de Geophysique-Veritas, senior note, 7.50%, 5/15/15 France 15,000,000 14,325,000 (c) 144A, 9.50%, 5/15/16 France 5,600,000 5,887,672 El Paso Corp., senior note, 12.00%, 12/12/13 United States 10,000,000 11,400,000 6.875%, 6/15/14 United States 15,000,000 14,707,455 7.00%, 6/15/17 United States 5,000,000 4,724,005 (b) Enterprise Products Operating LLP, junior sub. note, FRN, 7.034%, 1/15/68 United States 25,000,000 20,530,425 Mariner Energy Inc., senior note, 7.50%, 4/15/13 United States 27,000,000 25,650,000 MarkWest Energy Partners LP, senior note, 8.75%, 4/15/18 United States 25,000,000 23,875,000 Peabody Energy Corp., senior note, 7.375%, 11/01/16 United States 6,900,000 6,934,500
Franklin High Income Trust Franklin High Income Fund STATEMENT OF INVESTMENTS, AUGUST 31, 2009 (UNAUDITED) (CONTINUED) B, 6.875%, 3/15/13 United States $ 15,000,000 $ 15,075,000 (c) Petrohawk Energy Corp., senior note, 144A, 10.50%, 8/01/14 United States 21,550,000 23,166,250 (c) Petroplus Finance Ltd., senior note, 144A, 6.75%, 5/01/14 Switzerland 22,000,000 20,130,000 Plains Exploration & Production Co., senior note, 10.00%, 3/01/16 United States 3,000,000 3,195,000 7.625%, 6/01/18 United States 27,000,000 25,650,000 Quicksilver Resources Inc., senior note, 8.25%, 8/01/15 United States 20,000,000 18,900,000 11.75%, 1/01/16 United States 2,600,000 2,769,000 9.125%, 8/15/19 United States 5,000,000 4,900,000 (c) SandRidge Energy Inc., senior note, 144A, 8.00%, 6/01/18 United States 25,000,000 22,750,000 Tesoro Corp., senior note, 6.50%, 6/01/17 United States 25,000,000 22,125,000 The Williams Cos. Inc., senior note, 7.875%, 9/01/21 United States 15,000,000 16,271,955 8.75%, 3/15/32 United States 5,000,000 5,641,890 --------------- 388,368,777 --------------- FOOD & STAPLES RETAILING 1.4% (c) Rite Aid Corp., senior secured note, 144A, 9.75%, 6/12/16 United States 14,700,000 15,618,750 SUPERVALU Inc., senior note, 8.00%, 5/01/16 United States 24,000,000 23,730,000 --------------- 39,348,750 --------------- FOOD, BEVERAGE & TOBACCO 2.4% Dean Foods Inc., senior note, 7.00%, 6/01/16 United States 10,000,000 9,400,000 (c) Dole Food Co. Inc, senior note, 144A, 13.875%, 3/15/14 United States 17,300,000 19,808,500 (c) JBS USA LLC, senior note, 144A, 11.625%, 5/01/14 United States 23,000,000 24,265,000 Tyson Foods Inc., senior note, 10.50%, 3/01/14 United States 10,000,000 11,200,000 --------------- 64,673,500 --------------- HEALTH CARE EQUIPMENT & SERVICES 7.8% DaVita Inc., senior sub. note, 7.25%, 3/15/15 United States 25,000,000 24,250,000 FMC Finance III SA, senior note, 6.875%, 7/15/17 Germany 15,000,000 14,250,000 (c) Fresenius US Finance II, senior note, 144A, 9.00%, 7/15/15 Germany 10,000,000 10,900,000 HCAInc, senior note, 6.50%, 2/15/16 United States 6,300,000 5,512,500 senior secured note, 9.125%, 11/15/14 United States 35,000,000 35,437,500 (c) senior secured note, 144A, 7.875%, 2/15/20 United States 15,000,000 14,662,500 (g) senior secured note, PIK, 9.625%, 11/15/16 United States 10,518,000 10,649,475 Tenet Healthcare Corp., senior note, 7.375%, 2/01/13 United States 9,600,000 8,880,000 (c) senior secured note, 144A, 8.875%, 7/01/19 United States 18,800,000 19,505,000 United Surgical Partners International Inc., senior sub. note, 8.875%, 5/01/17 United States 8,500,000 8,032,500 (g) PIK, 9.25%, 5/01/17 United States 12,000,000 10,680,000 (b, g) US Oncology Holdings Inc., senior note, PIK, FRN, 6.904%, 3/15/12 United States 27,978,000 23,921,190 Vanguard Health Holding Co. II LLC, senior sub. note, 9.00%, 10/01/14 United States 25,000,000 24,687,500 --------------- 211,368,165 --------------- MATERIALS 10.3% (c) Anglo American Capital PLC, senior note, 144A, 9.375%, 4/08/14 United Kingdom 15,000,000 17,116,185 ArcelorMittal, senior note, 9.85%, 6/01/19 Luxembourg 20,000,000 22,878,680 Ball Corp., senior note, 7.125%, 9/01/16 United States 3,400,000 3,417,000 7.375%, 9/01/19 United States 3,400,000 3,408,500 (c) Cellu Tissue Holdings Inc., secured note, 144A, 11.50%, 6/01/14 United States 17,000,000 17,850,000 Crown Americas Inc., senior note, 7.75%, 11/15/15 United States 24,600,000 24,477,000 Freeport-McMoRan Copper & Gold Inc., senior note, 8.25%, 4/01/15 United States 10,000,000 10,436,590 8.375%, 4/01/17 United States 15,000,000 15,659,370 Huntsman International LLC, senior sub. note, 7.875%, 11/15/14 United States 25,000,000 22,375,000 (c) lneos Group Holdings PLC, senior secured note, 144A, 8.50%, 2/15/16 United Kingdom 20,000,000 9,300,000 Ispat Inland ULC, senior secured note, 9.75%, 4/01/14 United States 5,000,000 5,216,050 (c) MacDermid Inc., senior sub. note, 144A, 9.50%, 4/15/17 United States 20,000,000 16,900,000 Nalco Co., senior sub. note, 8.875%, 11/15/13 United States 25,000,000 25,375,000
Franklin High Income Trust Franklin High Income Fund STATEMENT OF INVESTMENTS, AUGUST 31, 2009 (UNAUDITED) (CONTINUED) NewPage Corp., senior secured note, 10.00%, 5/01/12 United States $ 25,000,000 $ 13,687,500 Novelis Inc., senior note, 7.25%, 2/15/15 Canada 2,000,000 1,630,000 (C) 144A, 11.50%, 2/15/15 Canada 3,150,000 3,063,375 Owens-Brockway Glass Container Inc., senior note, 6.75%, 12/01/14 United States 5,000,000 4,887,500 Owens-Illinois Inc., senior note, 7.80%, 5/15/18 United States 20,000,000 19,800,000 Solo Cup Co., (c) senior secured note, 144A, 10.50%, 11/01/13 United States 5,100,000 5,380,500 senior sub. note, 8.50%, 2/15/14 United States 14,000,000 12,915,000 Teck Resources Ltd., senior secured note, 10.25%, 5/15/16 Canada 11,400,000 12,654,000 10.75%, 5/15/19 Canada 10,200,000 11,666,250 --------------- 280,093,500 --------------- MEDIA 10.2% (e, h) CanWest Media Inc., senior sub. note, 8.00%, 9/15/12 Canada 25,000,000 13,687,500 (e, h) CCH I Holdings LLC, senior note, 13.50%, 1/15/14 United States 15,500,000 251,875 (e, h) CCH II LLC, senior note, 10.25%, 9/15/10 United States 40,000,000 44,650,000 (e, h) CCO Holdings LLC, senior note, 8.75%, 11/15/13 United States 5,000,000 5,075,000 CSC Holdings Inc., senior deb., 7.625%, 7/15/18 United States 8,000,000 7,700,000 senior note, 6.75%, 4/15/12 United States 7,750,000 7,827,500 (c) senior note, 144A, 8.50%, 4/15/14 United States 4,000,000 4,080,000 (e, h) Dex Media Inc., senior disc, note, 9.00%, 11/15/13 United States 18,300,000 3,568,500 senior note, B, 8.00%, 11/15/13 United States 24,000,000 4,680,000 DIRECTV Holdings LLC, senior note, 8.375%, 3/15/13 United States 5,000,000 5,150,000 7.625%, 5/15/16 United States 15,000,000 15,862,500 EchoStar DBS Corp., senior note, 6.375%, 10/01/11 United States 10,000,000 10,037,500 7.75%, 5/31/15 United States 5,000,000 4,925,000 7.125%, 2/01/16 United States 20,000,000 19,300,000 (e) ldearc Inc., senior note, 8.00%, 11/15/16 United States 19,950,000 1,620,937 Lamar Media Corp., senior sub. note, 6.625%, 8/15/15 United States 17,800,000 16,020,000 B, 6.625%, 8/15/15 United States 10,000,000 8,800,000 Liberty Media Corp., senior note, 5.70%, 5/15/13 United States 25,000,000 23,875,000 LIN Television Corp., senior sub. note, 6.50%, 5/15/13 United States 20,000,000 16,300,000 Quebecor Media Inc., senior note, 7.75%, 3/15/16 Canada 27,500,000 26,056,250 (h) Radio One Inc., senior sub. note, 6.375%, 2/15/13 United States 5,000,000 1,675,000 B, 8.875%, 7/01/11 United States 10,000,000 4,425,000 (c) Univision Communications Inc., (g) senior note, 144A, PIK, 10.50%, 3/15/15 United States 5,000,000 3,225,000 senior secured note, 144A, 12.00%, 7/01/14 United States 5,000,000 5,300,000 (c) WMG Acquisition Corp., senior secured note, 144A, 9.50%, 6/15/16 United States 24,000,000 24,960,000 --------------- 279,052,562 --------------- REAL ESTATE 0.2% Forest City Enterprises Inc., senior note, 7.625%, 6/01/15 United States 9,575,000 6,056,188 --------------- RETAILING 1.7% Dollar General Corp., senior note, 10.625%, 7/15/15 United States 20,000,000 22,300,000 Michaels Stores Inc., senior note, 10.00%, 11/01/14 United States 25,000,000 24,000,000 --------------- 46,300,000 --------------- SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT 0.4% Freescale Semiconductor Inc., senior note, 8.875%, 12/15/14 United States 15,800,000 10,744,000 --------------- SOFTWARE & SERVICES 1.6% First Data Corp., senior note, 9.875%, 9/24/15 United States 15,000,000 12,900,000 SunGard Data Systems Inc., senior note, 9.125%, 8/15/13 United States 11,100,000 11,044,500
Franklin High Income Trust Franklin High Income Fund STATEMENT OF INVESTMENTS, AUGUST 31, 2009 (UNAUDITED) (CONTINUED) senior sub. note, 10.25%, 8/15/15 United States $ 20,000,000 $ 19,900,000 --------------- 43,844,500 --------------- TECHNOLOGY HARDWARE & EQUIPMENT 1.2% (e) Nortel Networks Ltd., senior note, 10.75%, 7/15/16 Canada 20,000,000 9,350,000 Sanmina-SCI Corp., (b, c) senior note, 144A, FRN, 3.379%, 6/15/14 United States 5,000,000 4,400,000 senior sub. note, 6.75%, 3/01/13 United States 10,000,000 9,200,000 senior sub. note, 8.125%, 3/01/16 United States 10,000,000 8,675,000 --------------- 31,625,000 --------------- TELECOMMUNICATION SERVICES 9.2% (c) CC Holdings GS V LLC, senior secured note, 144A, 7.75%, 5/01/17 United States 3,600,000 3,654,000 Crown Castle International Corp., senior note, 9.00%, 1/15/15 United States 15,000,000 15,675,000 (c) Digicel Group Ltd., senior note, 144A, 8.875%, 1/15/15 Jamaica 27,000,000 24,232,500 Inmarsat Finance PLC, senior note, 10.375%, 11/15/12 United Kingdom 25,000,000 26,062,500 Intelsat Bermuda Ltd., senior note, 11.25%, 6/15/16 Bermuda 8,000,000 8,380,000 Intelsat Subsidiary Holding Co. Ltd., senior note, 8.50%, 1/15/13 Bermuda 25,000,000 25,312,500 (c) 144A, 8.875%, 1/15/15 Bermuda 5,000,000 5,037,500 (e) lridium LLC, senior note, D, 10.875%, 7/15/05 Bermuda 17,000,000 127,500 MetroPCS Wireless Inc., senior note, 9.25%, 11/01/14 United States 25,000,000 24,656,250 Millicom International Cellular SA, senior note, 10.00%, 12/01/13 Luxembourg 22,000,000 22,907,500 Nextel Communications Inc., senior note, D, 7.375%, 8/01/15 United States 10,000,000 8,587,500 Qwest Communications International Inc., senior note, 7.50%, 2/15/14 United States 10,000,000 9,700,000 B, 7.50%, 2/15/14 United States 20,000,000 19,400,000 (c) Qwest Corp., senior note, 144A, 8.375%, 5/01/16 United States 10,000,000 10,150,000 (e, f) RSL Communications PLC, senior discount note, 10.125%, 3/01/08 United Kingdom 44,500,000 356,000 senior note, 12.00%, 11/01/08 United Kingdom 6,250,000 62,500 (c) SBA Telecommunications Inc., senior note, 144A, 8.25%, 8/15/19 United States 10,350,000 10,453,500 Sprint Nextel Corp., senior note, 8.375%, 8/15/17 United States 10,000,000 9,575,000 (c) Wind Acquisition Finance SA, senior note, 144A, 10.75%, 12/01/15 Italy 25,000,000 27,000,000 --------------- 251,329,750 --------------- TRANSPORTATION 0.3% (c) Ceva Group PLC, senior note, 144A, 10.00%, 9/01/14 United Kingdom 10,400,000 9,009,000 --------------- UTILITIES 8.2% The AES Corp., senior note, 8.00%, 10/15/17 United States 15,000,000 14,437,500 6/01/20 United States 5,000,000 4,700,000 Ameren Corp., senior note, 8.875%, 5/15/14 United States 24,000,000 26,156,592 Aquila Inc., senior note, 11.875%, 7/01/12 United States 15,500,000 17,603,242 CMS Energy Corp., senior note, 8.75%, 6/15/19 United States 12,200,000 13,004,663 Dynegy Holdings Inc., senior note, 8.375%, 5/01/16 United States 15,000,000 12,225,000 Edison Mission Energy, senior note, 7.00%, 5/15/17 United States 25,000,000 19,218,750 ESI Tractebel Acquisition Corp., secured note, 7.99%, 12/30/11 United States 4,170,000 4,086,758 (c) lntergen NV, senior secured note, 144A, 9.00%, 6/30/17 Netherlands 20,000,000 19,750,000 Mirant North America LLC, senior note, 7.375%, 12/31/13 United States 23,000,000 22,195,000 NRG Energy Inc., senior note, 7.25%, 2/01/14 United States 8,500,000 8,287,500 7.375%, 2/01/16 United States 20,000,000 19,175,000 7.375%, 1/15/17 United States 5,000,000 4,775,000 Texas Competitive Electric Holdings Co. LLC, senior note, A, 10.25%, 11/01/15 United States 55,000,000 36,712,500 --------------- 222,327,505 --------------- TOTAL CORPORATE BONDS (COST $2,731,305,067) 2,535,797,700 ---------------
Franklin High Income Trust Franklin High Income Fund STATEMESNT OF INVESTMENTS, AUGUST 31, 2009 (UNAUDITED) (CONTINUED)
SHARES -------------- COMMON STOCKS 0.0%(i) United States 4,853,892 $ -- AUTOMOBILES & COMPONENTS 0.0%(i) (j, k) Cambridge Industries Liquidating Trust Interest (f, j, l) Harvard Industries Inc. United States 793,966 7,940 --------------- 7,940 --------------- COMMERCIAL & PROFESSIONAL SERVICES 0.0% (j, k, l) VS Holdings Inc. United States 1,685,375 -- --------------- TOTAL COMMON STOCKS (COST $27,223,861) 7,940 --------------- PREFERRED STOCKS 0.2% BANKS 0.0%(i) (j) Freddie Mac, 8.375%, pfd., Z United States 400,000 856,000 --------------- DIVERSIFIED FINANCIALS 0.2% (c) Preferred Blocker Inc., 9.00%, pfd., 144A United States 8,059 3,749,702 --------------- TOTAL PREFERRED STOCKS (COST $12,860,945) 4,605,702 --------------- TOTAL INVESTMENTS BEFORE SHORT TERM INVESTMENTS (COST $2,820,387,862) 2,587,909,521 --------------- SHORT TERM INVESTMENTS (COST $77,155,571) 2.8% MONEY MARKET FUNDS 2.8% (m) Institutional Fiduciary Trust Money Market Portfolio, 0.00% United States 77,155,571 77,155,571 --------------- TOTAL INVESTMENTS (COST $2,897,543,433) 97.9% 2,665,065,092 OTHER ASSETS, LESS LIABILITIES 2.1% 58,122,547 --------------- NET ASSETS 100.0% $ 2,723,187,639 ===============
(a) The principal amount is stated in U.S. dollars unless otherwise indicated. (b) The coupon rate shown represents the rate at period end. (c) Security was purchased pursuant to Rule 144A under the Securities Act of 1933 and may be sold in transactions exempt from registration only to qualified institutional buyers or in a public offering registered under the Securities Act of 1933. These securities have been deemed liquid under guidelines approved by the Trust's Board of Trustees. At August 31, 2009, the aggregate value of these securities was $548,508,809, representing 20.14% of net assets. (d) Perpetual security with no stated maturity date. (e) Defaulted security or security for which income has been deemed uncollectible. (f) Security has been deemend illiquid because it may not be able to be sold within seven days. At August 31, 2009, the aggregate value of these securities was $477,345, representing 0.02% of net assets. (g) Income may be received in additional securities and/or cash. (h) See Note 6 regarding other considerations. (i) Rounds to less than 0.1% of net assets. (j) Non-income producing. (k) See Note 4 regarding restricted securities. (l) See Note 5 regarding holdings of 5% voting securities. (m) The Institutional Fiduciary Trust Money Market Portfolio is managed by the Fund's investment manager. The rate shown is the annualized seven-day yield at period end. Franklin High Income Trust Franklin High Income Fund STATEMENT OF INVESTMENTS, AUGUST 31, 2009 (UNAUDITED) (CONTINUED) SELECTED PORTFOLIO ABBREVIATIONS FRN Floating Rate Note L/C Letter of Credit PIK Payment-In-Kind FRANKLIN HIGH INCOME TRUST Notes to Statement of Investments (unaudited) 1. ORGANIZATION Franklin High Income Trust (Trust) is registered under the Investment Company Act of 1940, as amended, (1940 Act) as an open-end investment company, consisting of one fund, the Franklin High Income Fund (Fund). 2. SECURITY VALUATION Equity and other securities listed on a securities exchange or on the NASDAQ National Market System are valued at the last quoted sale price or the official closing price of the day, respectively. Over-the-counter securities and listed securities for which there is no reported sale are valued within the range of the most recent quoted bid and ask prices. Securities that trade in multiple markets or on multiple exchanges are valued according to the broadest and most representative market. Certain equity securities are valued based upon fundamental characteristics or relationships to similar securities. Investments in open-end mutual funds are valued at the closing net asset value. Corporate debt securities generally trade in the over-the-counter market rather than on a securities exchange. The Fund may utilize independent pricing services, quotations from bond dealers, and information with respect to bond and note transactions, to assist in determining a current market value for each security. The Fund's pricing services may use valuation models or matrix pricing which considers information with respect to comparable bond and note transactions, quotations from bond dealers, or by reference to other securities that are considered comparable in such characteristics as rating, interest rate and maturity date, option adjusted spread models, prepayment projections, interest rate spreads and yield curves, to determine current value. The Fund has procedures to determine the fair value of individual securities and other assets for which market prices are not readily available or which may not be reliably priced. Methods for valuing these securities may include: fundamental analysis based upon the underlying investment book value, anticipated future cash flows, market changes in comparable or similar securities, matrix pricing, discounts from market prices of similar securities, or discounts applied due to the nature and duration of restrictions on the disposition of the securities. Due to the inherent uncertainty of valuations of such securities, the fair values may differ significantly from the values that would have been used had a ready market for such investments existed. Occasionally, events occur between the time at which trading in a security is completed and the close of the NYSE that might call into question the availability (including the reliability) of the value of a portfolio security held by the Fund. If such an event occurs, the securities may be valued using fair value procedures, which may include the use of independent pricing services. All security valuation procedures are approved by the Fund's Board of Trustees. 3. INCOME TAXES At August 31, 2009, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows: Cost of investments $2,902,144,611 ============== Unrealized appreciation $ 118,725,037 Unrealized depreciation (355,804,556) -------------- Net unrealized appreciation (depreciation) $ (237,079,519) ==============
4. RESTRICTED SECURITIES At August 31, 2009, the Fund held investments in restricted securities, excluding 144A securities deemed to be liquid, valued in accordance with procedures approved by the Trust's Board of Trustees as reflecting fair value, as follows:
Acquisition Shares Issuer Dates Cost Value - --------- ------ ----------- ---------- ----- 4,853,892 Cambridge Industries Liquidating Trust Interest 1/09/02 $ -- $-- 1,685,375 VS Holdings Inc. 12/06/01 1,685,375 -- --- Total Restricted Securities (0.00% of Net Assets) $-- ===
5. HOLDINGS OF 5% VOTING SECURITIES OF PORTFOLIO COMPANIES Investments in "affiliated companies" for the Fund for the three months ended August 31, 2009, were as shown below.
Number of Number of Shares Shares Realized Held at Held at Value at Capital Beginning Gross Gross End of End of Investment Gain Name of Issuer of Period Additions Reductions of Period of Period Income (Loss) - -------------- --------- --------- ---------- --------- --------- ---------- -------- Non-Controlled Affiliates Harvard Industries Inc. 793,966 -- -- 793,966 $7,940 $-- $-- VS Holdings Inc. 1,685,375 -- -- 1,685,375 -- -- -- ------ --- --- Total Affiliated Securities (0.00%a of Net Assets) $7,940 $-- $-- ====== === ===
(a) Rounds to less than 0.01 % of net assets. 6. OTHER CONSIDERATIONS From time to time, officers, directors or employees of the Fund's Investment Manager may have discussions or enter into agreements with issuers, underwriters or creditors' committees which, pursuant to the Fund's policies and requirements of applicable securities laws, could prevent the Fund from trading in the securities of such company for limited or extended periods of time. 7. FAIR VALUE MEASUREMENTS Financial Accounting Standards Board (FASB) Statement No. 157, "Fair Value Measurement" (SFAS 157) establishes a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Trust's own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund's investments and are summarized in the following fair value hierarchy: - Level 1 - quoted prices in active markets for identical securities - Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speed, credit risk, etc.) - Level 3 - significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments) The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities. The following is a summary of the inputs used as of August 31, 2009, in valuing the Fund's assets carried at fair value:
Level 1 Level 2 Level 3 Total ----------- -------------- -------- -------------- Assets: Investments in Securities: Equity Investments:(a) Automobiles & Components $ -- $ -- $ 7,940(b) $ 7,940 Commericial & Professional Services -- -- --(b) -- Diversified Financials -- 3,749,702 -- 3,749,702 Other equity investments(c) 856,000 -- -- 856,000 Senior Floating Rate Interests -- 47,498,179 -- 47,498,179 Corporate Bonds -- 2,535,328,295 469,405 2,535,797,700 Short Term Investments 77,155,571 -- -- 77,155,571 ----------- -------------- -------- -------------- Total Investments in Securities $78,011,571 $2,586,576,176 $477,345 $2,665,065,092 ----------- -------------- -------- --------------
(a) Includes common and preferred stock as well as other equity investments. (b) lncludes securities determined to have no value at August 31, 2009. (c) For detailed industry descriptions, see the accompanying Statement of Investments. At August 31, 2009, the reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value, is as follows:
Net Change in Unrealized Appreciation Net Change (Depreciation) in Unrealized Net Transfer on Assets Beginning Net Realized Appreciation Purchases In (Out) of Ending Held at Balance Gain (Loss) (Depreciation) (Sales) Level 3 Balance Period End --------- ------------ -------------- --------- ----------- -------- -------------- Assets Equity Securities Automobiles & Components $ 7,940(a) $ -- $ -- $ -- $-- $ 7,940(b) $-- Commericial & Professional Services --(a) -- -- -- -- --(b) -- Corporate Bonds 473,205 (20,799,744) 21,308,944 (513,000) -- 469,405 -- --------- ------------ ----------- --------- --- -------- --- Total $ 481,145 $(20,799,744) $21,308,944 $(513,000) $-- $477,345 $-- --------- ------------ ----------- --------- --- -------- ---
(a) Includes securities determined to have no value at May 31, 2009. (b) lncludes securities determined to have no value at August 31, 2009. 8. SUBSEQUENT EVENTS The Fund has evaluated subsequent events through October 23, 2009, the issuance date of the financial statements and determined that no events have occurred that require disclosure. For information on the Fund's policy regarding other significant accounting policies, please refer to the Fund's most recent semiannual or annual shareholder report. ITEM 2. CONTROLS AND PROCEDURES. (a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Registrant's filings under the Securities Exchange Act of 1934 and the Investment Company Act of 1940 is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission. Such information is accumulated and communicated to the Registrant's management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Registrant's management, including the principal executive officer and the principal financial officer, recognizes that any set of controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Within 90 days prior to the filing date of this Quarterly Schedule of Portfolio Holdings on Form N-Q, the Registrant had carried out an evaluation, under the supervision and with the participation of the Registrant's management, including the Registrant's principal executive officer and the Registrant's principal financial officer, of the effectiveness of the design and operation of the Registrant's disclosure controls and procedures. Based on such evaluation, the Registrant's principal executive officer and principal financial officer concluded that the Registrant's disclosure controls and procedures are effective. (b) CHANGES IN INTERNAL CONTROLS. There have been no significant changes in the Registrant's internal controls or in other factors that could significantly affect the internal controls subsequent to the date of their evaluation in connection with the preparation of this Quarterly Schedule of Portfolio Holdings on Form N-Q. ITEM 3. EXHIBITS. (a) Certification pursuant to Section 30a-2 under the Investment Company Act of 1940 of Laura F. Fergerson, Chief Executive Officer - Finance and Administration, and Gaston Gardey, Chief Financial Officer and Chief Accounting Officer. 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. FRANKLIN HIGH INCOME TRUST By /s/LAURA F. FERGERSON -------------------------------- Laura F. Fergerson Chief Executive Officer - Finance and Administration Date October 28, 2009 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/LAURA F. FERGERSON -------------------------------- Laura F. Fergerson Chief Executive Officer - Finance and Administration Date October 28, 2009 By /s/GASTON GARDEY -------------------------------- Gaston Gardey Chief Financial Officer and Chief Accounting Officer Date October 28, 2009 EX-99.CERT 2 fhit302cert.txt SECTION 302 CERTIFICATION Exhibit 3(a) I, Laura F. Fergerson, certify that: 1. I have reviewed this report on Form N-Q of FRANKLIN HIGH INCOME TRUST; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. 10/28/2009 /s/LAURA F. FERGERSON Laura F. Fergerson Chief Executive Officer - Finance and Administration Exhibit 3(a) I, Gaston Gardey, certify that: 1. I have reviewed this report on Form N-Q of FRANKLIN HIGH INCOME TRUST; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the schedules of investments included in this report fairly present in all material respects the investments of the registrant as of the end of the fiscal quarter for which the report is filed; 4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report, based on such evaluation; and (d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer(s) and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. 10/28/2009 /s/GASTON GARDEY Gaston Gardey Chief Financial Officer and Chief Accounting Officer -----END PRIVACY-ENHANCED MESSAGE-----