N-Q 1 nqfhitpe083115.htm nqfhitpe083115.htm - Generated by SEC Publisher for SEC Filing

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 811-01608

 

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: 8/31/15

 

 

Item 1. Schedule of Investments.

 

Franklin High Income Trust        
 
Statement of Investments, August 31, 2015 (unaudited)      
 
 
Franklin High Income Fund Country Shares/Warrants   Value
Common Stocks and Other Equity Interests 0.1%        
Consumer Services 0.0%†        
a,bStation Casinos Inc., wts., 6/17/18 United States 136,789 $ 213,390
Materials 0.0%†        
aVerso Corp. United States 113,176   27,162
Transportation 0.1%        
aCEVA Holdings LLC United Kingdom 3,364   2,186,743
Total Common Stocks and Other Equity Interests (Cost $5,554,227)       2,427,295
Convertible Preferred Stocks 0.1%        
Transportation 0.1%        
aCEVA Holdings LLC, cvt. pfd., A-1 United Kingdom 134   120,600
aCEVA Holdings LLC, cvt. pfd., A-2 United Kingdom 7,283   4,733,703
Total Convertible Preferred Stocks (Cost $11,036,794)       4,854,303
    Principal Amount*    
Corporate Bonds 93.7%        
Automobiles & Components 2.0%        
Fiat Chrysler Automobiles NV, senior note, 5.25%, 4/15/23 United Kingdom 55,000,000   54,828,125
The Goodyear Tire & Rubber Co., senior note,        
8.25%, 8/15/20 United States 10,000,000   10,462,500
6.50%, 3/01/21 United States 25,200,000   26,768,700
cInternational Automotive Components Group SA, senior secured note, 144A, 9.125%,        
6/01/18 United States 15,000,000   15,421,875
        107,481,200
Banks 4.7%        
dBank of America Corp., junior sub. bond, M, 8.125% to 5/15/18, FRN thereafter,        
Perpetual United States 55,000,000   58,162,500
CIT Group Inc., senior note,        
5.25%, 3/15/18 United States 9,000,000   9,371,250
5.375%, 5/15/20 United States 21,550,000   22,573,625
5.00%, 8/15/22 United States 33,650,000   34,280,937
dCitigroup Inc., junior sub. bond, M, 6.30% to 5/15/24, FRN thereafter, Perpetual United States 47,600,000   46,231,500
dJPMorgan Chase & Co.,        
junior sub. bond, R, 6.00% to 8/01/23, FRN thereafter, Perpetual United States 40,000,000   39,700,000
junior sub. bond, V, 5.00% to 7/30/19, FRN thereafter, Perpetual United States 10,400,000   10,153,000
junior sub. note, X, 6.10% to 10/01/24, FRN thereafter, Perpetual United States 5,000,000   4,998,400
Royal Bank of Scotland Group PLC, sub. note,        
6.125%, 12/15/22 United Kingdom 15,000,000   16,218,750
5.125%, 5/28/24 United Kingdom 13,900,000   14,082,438
        255,772,400
Capital Goods 2.9%        
cAbengoa Finance SAU, senior note, 144A, 8.875%, 11/01/17 Spain 9,100,000   6,267,625
cBombardier Inc., senior bond, 144A, 7.50%, 3/15/25 Canada 63,000,000   47,722,500
cCBC Ammo LLC/CBC FinCo Inc., senior note, 144A, 7.25%, 11/15/21 Brazil 25,000,000   23,484,375
cDigitalGlobe Inc., senior note, 144A, 5.25%, 2/01/21 United States 22,000,000   21,230,000
Navistar International Corp., senior note, 8.25%, 11/01/21 United States 14,000,000   12,285,000
Terex Corp., senior note, 6.00%, 5/15/21 United States 5,000,000   5,075,000
TransDigm Inc.,        
senior sub. bond, 6.50%, 7/15/24 United States 9,500,000   9,333,750
c senior sub. bond, 144A, 6.50%, 5/15/25 United States 4,200,000   4,147,500
senior sub. note, 6.00%, 7/15/22 United States 9,400,000   9,247,250
cZachry Holdings Inc., senior note, 144A, 7.50%, 2/01/20 United States 20,000,000   20,050,000
        158,843,000
Commercial & Professional Services 0.9%        
cAnna Merger Sub Inc., senior note, 144A, 7.75%, 10/01/22 United States 20,000,000   19,862,400
          b,eGoss Graphic Systems Inc., senior sub. note, 12.25%, 11/19/05 United States 9,053,899   905
IHS Inc., senior note, 5.00%, 11/01/22 United States 10,700,000   10,860,500

 

Quarterly Statement of Investments | See Notes to Statement of Investments.

 

Franklin High Income Trust

Statement of Investments, August 31, 2015 (unaudited) (continued)

United Rentals North America Inc., senior bond, 5.75%, 11/15/24 United States 20,000,000 19,800,000
      50,523,805
Consumer Durables & Apparel 3.2%      
D.R. Horton Inc., senior note,      
3.75%, 3/01/19 United States 20,000,000 20,212,400
4.00%, 2/15/20 United States 5,000,000 5,050,000
KB Home,      
senior bond, 7.50%, 9/15/22 United States 25,000,000 25,875,000
senior note, 4.75%, 5/15/19 United States 11,000,000 10,862,500
senior note, 7.00%, 12/15/21 United States 10,000,000 10,150,000
M/I Homes Inc., senior note, 8.625%, 11/15/18 United States 5,500,000 5,699,375
cTaylor Morrison Communities Inc./Monarch Communities Inc., senior note, 144A,      
5.25%, 4/15/21 United States 10,000,000 10,100,000
5.875%, 4/15/23 United States 15,000,000 15,150,000
5.625%, 3/01/24 United States 25,000,000 24,500,000
Toll Brothers Finance Corp., senior bond, 5.625%, 1/15/24 United States 20,000,000 21,200,000
Visant Corp., senior note, 10.00%, 10/01/17 United States 28,900,000 23,698,000
      172,497,275
Consumer Services 4.2%      
c1011778 BC ULC/New Red Finance Inc.,      
secured note, second lien, 144A, 6.00%, 4/01/22 Canada 30,000,000 30,975,000
senior secured note, first lien, 144A, 4.625%, 1/15/22 Canada 19,800,000 19,948,500
c24 Hour Holdings III LLC, senior note, 144A, 8.00%, 6/01/22 United States 30,000,000 24,000,000
eCaesars Entertainment Operating Co. Inc., senior secured note, first lien,      
11.25%, 6/01/17 United States 35,000,000 29,443,750
9.00%, 2/15/20 United States 10,000,000 8,625,000
c,e Fontainebleau Las Vegas, senior secured note, first lien, 144A, 11.00%, 6/15/15 United States 20,000,000 101,000
cInternational Game Technology PLC,      
senior secured bond, 144A, 6.50%, 2/15/25 United States 26,500,000 25,191,562
senior secured note, 144A, 6.25%, 2/15/22 United States 36,600,000 35,410,500
MGM Resorts International, senior note,      
6.875%, 4/01/16 United States 10,000,000 10,300,000
6.625%, 12/15/21 United States 12,950,000 13,824,125
6.00%, 3/15/23 United States 15,000,000 15,262,500
cWynn Macau Ltd., senior note, 144A, 5.25%, 10/15/21 Macau 17,500,000 16,187,500
      229,269,437
Diversified Financials 3.4%      
AerCap Ireland Capital Ltd./AerCap Global Aviation Trust, senior note,      
4.25%, 7/01/20 Netherlands 9,250,000 9,319,375
5.00%, 10/01/21 Netherlands 20,100,000 20,778,375
4.625%, 7/01/22 Netherlands 15,900,000 16,078,875
Ally Financial Inc., senior note, 5.50%, 2/15/17 United States 10,000,000 10,352,000
E*TRADE Financial Corp., senior note,      
5.375%, 11/15/22 United States 16,600,000 17,388,500
4.625%, 9/15/23 United States 15,100,000 15,137,750
Navient Corp., senior note,      
5.50%, 1/15/19 United States 42,200,000 40,659,700
4.875%, 6/17/19 United States 4,000,000 3,750,000
5.00%, 10/26/20 United States 12,500,000 11,156,250
5.875%, 3/25/21 United States 5,000,000 4,500,000
cNeuberger Berman Group LLC/Finance Corp., senior note, 144A, 5.875%, 3/15/22 United States 10,000,000 10,562,500
cOneMain Financial Holdings Inc., senior note, 144A, 7.25%, 12/15/21 United States 25,000,000 25,937,500
      185,620,825
Energy 18.3%      
c,e Alpha Natural Resources Inc., second lien, 144A, 7.50%, 8/01/20 United States 25,000,000 2,375,000
cAmerican Energy-Permian Basin LLC/AEPB Finance Corp., senior note, 144A, 7.375%,      
11/01/21 United States 10,900,000 5,559,000
Atlas Energy Holdings Operating Co. LLC/Atlas Resource Finance Corp., senior note,      
7.75%, 1/15/21 United States 25,500,000 13,731,087
9.25%, 8/15/21 United States 17,400,000 10,179,000
BreitBurn Energy Partners LP/BreitBurn Finance Corp., senior bond, 7.875%, 4/15/22 United States 45,000,000 20,025,000
California Resources Corp.,      
senior bond, 6.00%, 11/15/24 United States 35,000,000 26,512,500

 

 

Franklin High Income Trust        
 
Statement of Investments, August 31, 2015 (unaudited) (continued)      
senior note, 5.50%, 9/15/21 United States 16,900,000   13,188,422
cCalumet Specialty Products Partners LP/Calumet Finance Co., senior note, 144A,        
7.75%, 4/15/23 United States 30,100,000   29,347,500
CGG SA, senior note,        
7.75%, 5/15/17 France 2,281,000   1,819,098
6.50%, 6/01/21 France 29,000,000   16,457,500
6.875%, 1/15/22 France 20,800,000   12,181,000
Chaparral Energy Inc., senior note,        
9.875%, 10/01/20 United States 15,000,000   7,875,000
8.25%, 9/01/21 United States 10,000,000   4,750,000
7.625%, 11/15/22 United States 6,700,000   3,048,500
CHC Helicopter SA,        
senior note, 9.375%, 6/01/21 Canada 10,000,000   4,450,000
senior secured note, first lien, 9.25%, 10/15/20 Canada 40,500,000   24,603,750
Chesapeake Energy Corp., senior note,        
6.625%, 8/15/20 United States 35,000,000   28,000,000
4.875%, 4/15/22 United States 10,000,000   7,300,000
5.75%, 3/15/23 United States 12,700,000   9,531,477
Clayton Williams Energy Inc., senior note, 7.75%, 4/01/19 United States 25,000,000   21,125,000
Compressco Partners LP/Finance Corp., senior note, 7.25%, 8/15/22 United States 12,900,000   10,642,500
CONSOL Energy Inc., senior note,        
5.875%, 4/15/22 United States 20,900,000   14,943,500
c 144A, 8.00%, 4/01/23 United States 37,400,000   28,424,000
cCrestwood Midstream Partners LP/Crestwood Midstream Finance Corp., senior note,        
144A, 6.25%, 4/01/23 United States 17,700,000   16,284,000
cDrill Rigs Holdings Inc., secured note, 144A, 6.50%, 10/01/17 United States 25,000,000   19,500,000
Energy Transfer Equity LP,        
senior bond, 5.875%, 1/15/24 United States 15,000,000   14,550,000
senior note, first lien, 7.50%, 10/15/20 United States 40,000,000   42,950,000
senior secured bond, first lien, 5.50%, 6/01/27 United States 17,900,000   16,826,000
Energy XXI Gulf Coast Inc.,        
senior note, 9.25%, 12/15/17 United States 26,000,000   7,670,000
senior note, 7.50%, 12/15/21 United States 8,200,000   1,578,500
senior note, 6.875%, 3/15/24 United States 3,400,000   688,500
c senior secured note, second lien, 144A, 11.00%, 3/15/20 United States 10,000,000   6,200,000
cEnQuest PLC, senior note, 144A, 7.00%, 4/15/22 United Kingdom 25,000,000   16,625,000
EPL Oil & Gas Inc., senior note, 8.25%, 2/15/18 United States 20,000,000   7,100,000
cFerrellgas LP/Ferrellgas Finance Corp., senior note, 144A, 6.75%, 6/15/23 United States 33,900,000   32,713,500
Goodrich Petroleum Corp.,        
c second lien, 144A, 8.00%, 3/15/18 United States 15,000 f 13,500,000
senior note, 8.875%, 3/15/19 United States 35,000,000   8,575,000
Halcon Resources Corp.,        
senior note, 9.75%, 7/15/20 United States 20,000,000   7,000,000
senior note, 8.875%, 5/15/21 United States 5,000,000   1,825,000
c senior secured note, third lien, 144A, 13.00%, 2/15/22 United States 16,250,000   12,675,000
cKinder Morgan Inc., senior secured bond, first lien, 144A, 5.625%, 11/15/23 United States 25,000,000   25,210,275
Linn Energy LLC/Finance Corp., senior note,        
6.50%, 5/15/19 United States 10,000,000   4,200,000
6.25%, 11/01/19 United States 25,000,000   9,875,000
8.625%, 4/15/20 United States 10,000,000   4,075,000
7.75%, 2/01/21 United States 12,000,000   4,770,000
6.50%, 9/15/21 United States 8,900,000   3,337,500
Martin Midstream Partners LP/Martin Midstream Finance Corp., senior note, 7.25%,        
2/15/21 United States 30,000,000   28,050,000
Memorial Production Partners LP/Memorial Production Finance Corp., senior note,        
7.625%, 5/01/21 United States 30,000,000   20,550,000
6.875%, 8/01/22 United States 14,000,000   8,855,000
Memorial Resource Development Corp., senior note, 5.875%, 7/01/22 United States 25,000,000   22,875,000
Midstates Petroleum Co. Inc./LLC, senior note, 9.25%, 6/01/21 United States 25,000,000   7,125,000
cMurray Energy Corp., secured note, second lien, 144A, 11.25%, 4/15/21 United States 24,500,000   11,637,500
Oasis Petroleum Inc., senior note, 6.875%, 3/15/22 United States 15,000,000   12,525,000
cOcean Rig UDW Inc., senior note, 144A, 7.25%, 4/01/19 United States 20,000,000   10,200,000
Offshore Group Investment Ltd.,        
senior bond, first lien, 7.125%, 4/01/23 United States 12,000,000   5,580,000
senior secured note, first lien, 7.50%, 11/01/19 United States 35,000,000   16,384,375

 

 

Franklin High Income Trust      
 
Statement of Investments, August 31, 2015 (unaudited) (continued)    
PBF Holding Co. LLC, first lien, 8.25%, 2/15/20 United States 15,000,000 15,861,750
Peabody Energy Corp.,      
c second lien, 144A, 10.00%, 3/15/22 United States 28,245,000 11,439,225
senior note, 6.50%, 9/15/20 United States 8,300,000 2,230,625
senior note, 6.25%, 11/15/21 United States 22,800,000 6,099,000
Penn Virginia Corp., senior note, 8.50%, 5/01/20 United States 25,000,000 6,625,000
QEP Resources Inc., senior note,      
5.375%, 10/01/22 United States 20,000,000 17,450,000
5.25%, 5/01/23 United States 10,000,000 8,650,000
c,e,g Quicksilver Resources Inc., secured note, second lien, 144A, FRN, 7.00%, 6/21/19 United States 15,175,000 7,132,250
Sabine Pass Liquefaction LLC,      
first lien, 5.625%, 2/01/21 United States 35,000,000 34,650,000
first lien, 5.625%, 4/15/23 United States 13,300,000 12,984,125
c senior secured note, first lien, 144A, 5.625%, 3/01/25 United States 10,000,000 9,706,250
Sanchez Energy Corp., senior note,      
7.75%, 6/15/21 United States 10,000,000 8,500,000
6.125%, 1/15/23 United States 20,000,000 15,100,000
cTriangle USA Petroleum Corp., senior note, 144A, 6.75%, 7/15/22 United States 20,000,000 11,900,000
cUltra Petroleum Corp., senior bond, 144A, 6.125%, 10/01/24 United States 40,000,000 26,600,000
Vanguard Natural Resources LLC/Finance Corp., senior note, 7.875%, 4/01/20 United States 20,000,000 14,100,000
W&T Offshore Inc., senior note, 8.50%, 6/15/19 United States 40,000,000 19,000,000
WPX Energy Inc., senior note,      
6.00%, 1/15/22 United States 35,000,000 29,925,000
8.25%, 8/01/23 United States 5,300,000 5,114,500
      1,000,646,709
Food, Beverage & Tobacco 3.3%      
Cott Beverages Inc., senior note, 6.75%, 1/01/20 United States 20,000,000 20,800,000
cDole Food Co. Inc., senior secured note, 144A, 7.25%, 5/01/19 United States 25,000,000 25,312,500
cJBS USA LLC/Finance Inc.,      
senior bond, 144A, 5.875%, 7/15/24 United States 17,100,000 17,121,375
senior note, 144A, 8.25%, 2/01/20 United States 25,000,000 26,468,750
senior note, 144A, 7.25%, 6/01/21 United States 14,900,000 15,626,375
Post Holdings Inc., senior note,      
7.375%, 2/15/22 United States 22,000,000 22,632,500
c 144A, 6.75%, 12/01/21 United States 25,600,000 25,824,000
c 144A, 6.00%, 12/15/22 United States 5,400,000 5,231,250
c 144A, 7.75%, 3/15/24 United States 5,000,000 5,175,000
cSmithfield Foods Inc., senior note, 144A,      
5.25%, 8/01/18 United States 7,300,000 7,446,000
5.875%, 8/01/21 United States 8,450,000 8,798,563
      180,436,313
Health Care Equipment & Services 6.1%      
Alere Inc.,      
senior note, 7.25%, 7/01/18 United States 25,000,000 26,218,750
senior sub. note, 6.50%, 6/15/20 United States 10,000,000 10,420,900
CHS/Community Health Systems Inc.,      
senior note, 8.00%, 11/15/19 United States 20,000,000 20,950,000
senior note, 7.125%, 7/15/20 United States 13,300,000 14,098,000
senior note, 6.875%, 2/01/22 United States 4,600,000 4,904,750
senior secured note, 5.125%, 8/01/21 United States 4,100,000 4,223,000
senior secured note, first lien, 5.125%, 8/15/18 United States 10,000,000 10,262,500
DaVita HealthCare Partners Inc.,      
senior bond, 5.125%, 7/15/24 United States 17,800,000 17,755,500
senior bond, 5.00%, 5/01/25 United States 17,400,000 17,095,500
senior note, 5.75%, 8/15/22 United States 15,000,000 16,016,250
HCA Inc.,      
senior bond, 5.375%, 2/01/25 United States 7,000,000 7,122,500
senior note, 5.875%, 5/01/23 United States 50,000,000 53,000,000
senior secured bond, first lien, 5.875%, 3/15/22 United States 20,000,000 21,800,000
senior secured bond, first lien, 5.25%, 4/15/25 United States 11,000,000 11,426,250
senior secured note, first lien, 5.00%, 3/15/24 United States 20,000,000 20,525,000
cHologic Inc., senior note, 144A, 5.25%, 7/15/22 United States 17,400,000 17,878,500
Tenet Healthcare Corp.,      
first lien, 6.00%, 10/01/20 United States 6,700,000 7,185,750

 

 

Franklin High Income Trust      
 
Statement of Investments, August 31, 2015 (unaudited) (continued)    
senior note, 5.00%, 3/01/19 United States 10,700,000 10,721,293
senior note, 5.50%, 3/01/19 United States 6,300,000 6,339,375
senior note, 8.125%, 4/01/22 United States 20,000,000 22,200,000
senior note, 6.75%, 6/15/23 United States 13,700,000 14,179,500
      334,323,318
Materials 10.6%      
ArcelorMittal, senior note,      
6.25%, 3/01/21 Luxembourg 46,800,000 46,403,136
6.125%, 6/01/25 Luxembourg 10,800,000 9,976,500
cArdagh Packaging Finance PLC/Ardagh MP Holdings USA Inc.,      
senior note, 144A, 6.25%, 1/31/19 Luxembourg 4,100,000 4,202,500
senior note, 144A, 7.00%, 11/15/20 Luxembourg 2,647,059 2,686,765
senior note, 144A, 6.00%, 6/30/21 Luxembourg 7,000,000 6,981,100
g senior secured note, 144A, FRN, 3.286%, 12/15/19 Luxembourg 22,800,000 22,344,000
cBarminco Finance Pty. Ltd., senior note, 144A, 9.00%, 6/01/18 Australia 30,800,000 24,178,000
cCemex Finance LLC, senior secured note, first lien, 144A, 6.00%, 4/01/24 Mexico 15,800,000 15,148,250
cCemex SAB de CV,      
first lien, 144A, 5.70%, 1/11/25 Mexico 30,000,000 28,031,250
senior secured bond, first lien, 144A, 6.125%, 5/05/25 Mexico 10,000,000 9,587,500
cThe Chemours Co.,      
senior bond, 144A, 7.00%, 5/15/25 United States 8,500,000 7,288,750
senior note, 144A, 6.625%, 5/15/23 United States 37,000,000 32,282,500
cEldorado Gold Corp., senior note, 144A, 6.125%, 12/15/20 Canada 45,000,000 39,150,000
cFirst Quantum Minerals Ltd., senior note, 144A,      
6.75%, 2/15/20 Canada 25,000,000 18,000,000
7.00%, 2/15/21 Canada 39,882,000 28,316,220
cFMG Resources (August 2006) Pty. Ltd., senior secured note, 144A, 9.75%, 3/01/22 Australia 59,700,000 54,774,750
Novelis Inc., senior note, 8.75%, 12/15/20 Canada 20,000,000 20,050,000
cOwens-Brockway Glass Container Inc., senior note, 144A,      
5.00%, 1/15/22 United States 14,800,000 14,633,500
5.875%, 8/15/23 United States 16,000,000 16,310,000
cPlatform Specialty Products Corp., senior note, 144A, 6.50%, 2/01/22 United States 12,700,000 12,361,291
cRain CII Carbon LLC/CII Carbon Corp., second lien, 144A, 8.25%, 1/15/21 United States 19,700,000 18,715,000
Reynolds Group Issuer Inc./LLC/SA,      
first lien, 5.75%, 10/15/20 United States 23,600,000 24,396,500
senior note, 8.50%, 5/15/18 United States 10,000,000 10,137,500
senior note, 9.00%, 4/15/19 United States 2,300,000 2,357,500
senior note, 9.875%, 8/15/19 United States 7,500,000 7,893,750
senior note, 8.25%, 2/15/21 United States 20,000,000 20,675,000
senior secured note, 7.875%, 8/15/19 United States 5,000,000 5,212,500
cSealed Air Corp., senior bond, 144A, 5.50%, 9/15/25 United States 19,300,000 19,975,500
Steel Dynamics Inc.,      
senior bond, 5.50%, 10/01/24 United States 15,000,000 14,606,250
senior note, 5.125%, 10/01/21 United States 15,000,000 14,850,000
cUnivar USA Inc., senior note, 144A, 6.75%, 7/15/23 United States 12,500,000 12,468,750
cU.S. Coatings Acquisition Inc./Flash Dutch 2 BV, senior note, 144A, 7.375%, 5/01/21 United States 12,750,000 13,658,437
Verso Paper Holdings LLC/Inc., senior secured note, first lien, 11.75%, 1/15/19 United States 5,406,000 1,283,925
      578,936,624
Media 9.5%      
CCO Holdings LLC/CCO Holdings Capital Corp.,      
senior bond, 5.25%, 9/30/22 United States 30,000,000 30,315,000
senior bond, 5.125%, 2/15/23 United States 15,000,000 15,000,000
c senior bond, 144A, 5.375%, 5/01/25 United States 15,000,000 14,606,250
senior note, 6.50%, 4/30/21 United States 5,000,000 5,235,375
Clear Channel Worldwide Holdings Inc.,      
senior note, 6.50%, 11/15/22 United States 6,500,000 6,738,875
senior note, 6.50%, 11/15/22 United States 3,500,000 3,549,875
senior sub. note, 7.625%, 3/15/20 United States 20,000,000 20,775,000
senior sub. note, 7.625%, 3/15/20 United States 1,650,000 1,697,438
CSC Holdings LLC, senior note,      
6.75%, 11/15/21 United States 15,000,000 15,768,750
5.25%, 6/01/24 United States 30,000,000 27,915,000
DISH DBS Corp.,      
senior bond, 5.00%, 3/15/23 United States 5,000,000 4,437,500

 

 

Franklin High Income Trust      
 
Statement of Investments, August 31, 2015 (unaudited) (continued)    
senior note, 7.125%, 2/01/16 United States 5,000,000 5,081,250
senior note, 5.875%, 7/15/22 United States 30,000,000 28,443,900
senior note, 5.875%, 11/15/24 United States 20,000,000 18,275,000
Gannett Co. Inc.,      
senior bond, 6.375%, 10/15/23 United States 10,000,000 10,500,000
senior note, 5.125%, 10/15/19 United States 10,000,000 10,350,000
senior note, 5.125%, 7/15/20 United States 15,000,000 15,562,500
iHeartCommunications Inc.,      
senior secured bond, first lien, 9.00%, 3/01/21 United States 40,000,000 35,350,000
senior secured note, first lien, 9.00%, 9/15/22 United States 18,300,000 16,081,125
cLive Nation Entertainment Inc., senior note, 144A,      
7.00%, 9/01/20 United States 7,100,000 7,561,500
5.375%, 6/15/22 United States 8,600,000 8,664,500
cRadio One Inc., senior sub. note, 144A, 9.25%, 2/15/20 United States 20,000,000 17,900,000
cSirius XM Radio Inc., senior bond, 144A,      
6.00%, 7/15/24 United States 34,200,000 35,311,500
5.375%, 4/15/25 United States 13,400,000 13,266,000
cUnitymedia KabelBW GmbH, senior bond, 144A, 6.125%, 1/15/25 Germany 25,000,000 25,687,500
cUnivision Communications Inc.,      
senior secured bond, first lien, 144A, 6.75%, 9/15/22 United States 15,000,000 15,918,750
senior secured note, first lien, 144A, 5.125%, 5/15/23 United States 5,000,000 4,950,000
senior secured note, first lien, 144A, 5.125%, 2/15/25 United States 17,700,000 17,213,250
cVideotron Ltd., senior bond, 144A, 5.375%, 6/15/24 Canada 14,800,000 15,096,000
cVirgin Media Secured Finance PLC,      
senior secured bond, 144A, 5.25%, 1/15/26 United Kingdom 20,000,000 19,462,500
senior secured bond, first lien, 144A, 5.50%, 1/15/25 United Kingdom 25,000,000 25,437,500
senior secured note, first lien, 144A, 5.375%, 4/15/21 United Kingdom 9,810,000 10,092,037
cVTR Finance BV, senior secured note, 144A, 6.875%, 1/15/24 Chile 15,000,000 14,812,500
      517,056,375
Pharmaceuticals, Biotechnology & Life Sciences 4.1%      
cAMAG Pharmaceuticals Inc., senior note, 144A, 7.875%, 9/01/23 United States 14,700,000 15,124,830
cConcordia Healthcare Corp., senior note, 144A, 7.00%, 4/15/23 Canada 19,600,000 20,287,960
cEndo Finance LLC/Endo Ltd./Endo Finco Inc.,      
senior bond, 144A, 6.00%, 2/01/25 United States 20,900,000 21,579,250
senior note, 144A, 6.00%, 7/15/23 United States 13,700,000 14,282,250
Grifols Worldwide Operations Ltd., senior note, 5.25%, 4/01/22 United States 16,300,000 16,605,625
cHorizon Pharma Financing Inc., senior note, 144A, 6.625%, 5/01/23 United States 9,000,000 9,326,250
cJaguar Holding Co. II/Pharmaceutical Product Development LLC, senior note, 144A,      
6.375%, 8/01/23 United States 17,300,000 17,213,500
Par Pharmaceutical Cos. Inc., senior note, 7.375%, 10/15/20 United States 20,000,000 21,310,000
cValeant Pharmaceuticals International Inc.,      
senior bond, 144A, 6.125%, 4/15/25 United States 12,500,000 12,906,250
senior note, 144A, 7.50%, 7/15/21 United States 15,400,000 16,574,250
senior note, 144A, 5.625%, 12/01/21 United States 15,000,000 15,375,000
cVPI Escrow Corp., senior note, 144A, 6.375%, 10/15/20 United States 42,600,000 44,517,000
      225,102,165
Real Estate 0.7%      
Equinix Inc., senior bond, 5.375%, 4/01/23 United States 37,000,000 37,277,500
Retailing 1.3%      
cArgos Merger Sub Inc., senior note, 144A, 7.125%, 3/15/23 United States 12,700,000 13,335,000
cDollar Tree Inc., senior note, 144A,      
5.25%, 3/01/20 United States 2,800,000 2,947,000
5.75%, 3/01/23 United States 12,500,000 13,156,250
cNetflix Inc.,      
senior bond, 144A, 5.875%, 2/15/25 United States 15,600,000 16,282,500
senior note, 144A, 5.50%, 2/15/22 United States 24,600,000 25,338,000
      71,058,750
Software & Services 2.8%      
cBMC Software Finance Inc., senior note, 144A, 8.125%, 7/15/21 United States 45,000,000 36,956,250
First Data Corp.,      
senior bond, 12.625%, 1/15/21 United States 10,000,000 11,512,500
senior note, 11.25%, 1/15/21 United States 9,676,000 10,716,170
c senior secured bond, second lien, 144A, 8.25%, 1/15/21 United States 37,000,000 39,035,000
cInfor (U.S.) Inc., senior note, 144A, 6.50%, 5/15/22 United States 40,000,000 37,600,000

 

 

Franklin High Income Trust      
 
Statement of Investments, August 31, 2015 (unaudited) (continued)    
 
Sterling International Inc., senior note, 11.00%, 10/01/19 United States 19,075,000 19,885,688
      155,705,608
Technology Hardware & Equipment 1.9%      
cAlcatel-Lucent USA Inc., senior note, 144A, 6.75%, 11/15/20 France 20,000,000 21,425,000
cBlackboard Inc., senior note, 144A, 7.75%, 11/15/19 United States 30,000,000 27,000,000
c,h CommScope Holdings Co. Inc., senior note, 144A, PIK, 6.625%, 6/01/20 United States 8,000,000 8,340,000
cCommScope Inc.,      
senior bond, 144A, 5.50%, 6/15/24 United States 7,000,000 6,825,000
senior note, 144A, 5.00%, 6/15/21 United States 15,000,000 14,943,750
cCommScope Technologies Finance LLC, senior bond, 144A, 6.00%, 6/15/25 United States 10,200,000 9,945,000
cPlantronics Inc., senior note, 144A, 5.50%, 5/31/23 United States 17,900,000 18,034,250
      106,513,000
Telecommunication Services 9.3%      
CenturyLink Inc.,      
senior bond, 6.75%, 12/01/23 United States 6,300,000 6,134,625
c senior bond, 144A, 5.625%, 4/01/25 United States 17,800,000 15,962,150
senior note, 5.80%, 3/15/22 United States 30,000,000 28,837,500
cDigicel Group Ltd., senior note, 144A, 8.25%, 9/30/20 Bermuda 18,000,000 16,762,500
cDigicel Ltd., senior note, 144A,      
6.00%, 4/15/21 Bermuda 24,400,000 22,387,000
6.75%, 3/01/23 Bermuda 8,100,000 7,466,539
Frontier Communications Corp.,      
senior bond, 7.625%, 4/15/24 United States 5,700,000 5,172,750
senior note, 8.75%, 4/15/22 United States 1,500,000 1,485,000
senior note, 7.125%, 1/15/23 United States 7,100,000 6,446,800
senior note, 7.875%, 1/15/27 United States 23,000,000 19,665,000
Intelsat Jackson Holdings SA,      
senior bond, 6.625%, 12/15/22 Luxembourg 20,000,000 17,600,000
senior bond, 5.50%, 8/01/23 Luxembourg 15,000,000 13,265,625
senior note, 7.25%, 10/15/20 Luxembourg 15,000,000 14,475,000
senior note, 7.50%, 4/01/21 Luxembourg 30,000,000 29,175,000
cMillicom International Cellular SA, senior note, 144A, 6.625%, 10/15/21 Luxembourg 30,000,000 30,600,000
  b,eRSL Communications PLC,      
senior discount note, 10.125%, 3/01/08 United Kingdom 44,500,000 —
senior note, 12.00%, 11/01/08 United Kingdom 6,250,000 —
Sprint Communications Inc., senior note,      
8.375%, 8/15/17 United States 25,000,000 26,637,750
6.00%, 11/15/22 United States 7,500,000 6,768,750
c 144A, 9.00%, 11/15/18 United States 55,000,000 61,393,750
c 144A, 7.00%, 3/01/20 United States 9,800,000 10,434,060
Sprint Corp.,      
senior bond, 7.875%, 9/15/23 United States 4,700,000 4,529,625
senior bond, 7.125%, 6/15/24 United States 10,900,000 10,137,000
senior note, 7.625%, 2/15/25 United States 27,000,000 25,261,875
T-Mobile USA Inc.,      
senior bond, 6.50%, 1/15/24 United States 7,400,000 7,622,000
senior bond, 6.375%, 3/01/25 United States 22,400,000 22,904,000
senior note, 6.542%, 4/28/20 United States 11,700,000 12,226,500
senior note, 6.633%, 4/28/21 United States 9,000,000 9,427,500
senior note, 6.125%, 1/15/22 United States 4,200,000 4,341,750
senior note, 6.731%, 4/28/22 United States 9,000,000 9,472,500
cWind Acquisition Finance SA,      
senior note, 144A, 7.375%, 4/23/21 Italy 45,000,000 46,012,500
senior secured note, first lien, 144A, 4.75%, 7/15/20 Italy 15,000,000 15,121,875
      507,726,924
Transportation 1.9%      
cFlorida East Coast Holdings Corp.,      
secured note, first lien, 144A, 6.75%, 5/01/19 United States 15,000,000 15,150,000
senior note, 144A, 9.75%, 5/01/20 United States 9,300,000 8,416,500
Hertz Corp., senior note,      
6.75%, 4/15/19 United States 26,800,000 27,470,000
5.875%, 10/15/20 United States 10,000,000 10,153,600
6.25%, 10/15/22 United States 10,000,000 10,225,000
cStena AB, senior bond, 144A, 7.00%, 2/01/24 Sweden 18,800,000 16,544,000

 

 

Franklin High Income Trust        
 
Statement of Investments, August 31, 2015 (unaudited) (continued)      
cStena International SA, secured bond, 144A, 5.75%, 3/01/24 Sweden 20,000,000   18,865,000
        106,824,100
Utilities 2.6%        
Calpine Corp.,        
senior bond, 5.75%, 1/15/25 United States 15,400,000   14,976,500
senior note, 5.375%, 1/15/23 United States 18,300,000   17,745,510
c senior secured bond, first lien, 144A, 5.875%, 1/15/24 United States 10,000,000   10,550,000
cInterGen NV, secured bond, 144A, 7.00%, 6/30/23 Netherlands 45,000,000   39,487,500
NGL Energy Partners LP/NGL Energy Finance Corp., senior note, 5.125%, 7/15/19 United States 3,600,000   3,348,000
NRG Yield Operating LLC, senior bond, 5.375%, 8/15/24 United States 20,000,000   19,350,000
cPPL Energy Supply LLC, senior bond, 144A, 6.50%, 6/01/25 United States 13,500,000   12,538,125
c,e Texas Competitive Electric Holdings Co. LLC/Texas Competitive Electric Holdings        
Finance Inc., senior secured note, first lien, 144A, 11.50%, 10/01/20 United States 50,000,000   23,125,000
        141,120,635
Total Corporate Bonds (Cost $5,799,150,019)       5,122,735,963
Senior Floating Rate Interests (Cost $30,136,270) 0.5%        
Household & Personal Products 0.5%        
gSun Products Corp., Tranche B Term Loan, 5.50%, 3/23/20 United States 30,350,265   29,325,944
    Shares    
Litigation Trusts (Cost $—) 0.0%        
a,bNewPage Corp., Litigation Trust United States 30,000,000   —
Total Investments before Short Term Investments (Cost $5,845,877,310)       5,159,343,505
Short Term Investments (Cost $188,612,138) 3.4%        
Money Market Funds 3.4%        
a,iInstitutional Fiduciary Trust Money Market Portfolio United States 188,612,138   188,612,138
Total Investments (Cost $6,034,489,448) 97.8%       5,347,955,643
Other Assets, less Liabilities 2.2%       118,209,879
Net Assets 100.0%     $ 5,466,165,522

 

† Rounds to less than 0.1% of net assets.
* The principal amount is stated in U.S. dollars unless otherwise indicated.
a Non-income producing.
b Security has been deemed illiquid because it may not be able to be sold within seven days. At August 31, 2015, the aggregate value of these securities was $214,295
representing less than 0.01% of net assets.
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, 2015, the aggregate value of these securities was $2,344,401,039, representing 42.89% of net assets.
d Perpetual security with no stated maturity date.
e Defaulted security or security for which income has been deemed uncollectible.
f Principal amount is stated in 1,000 Units.
g The coupon rate shown represents the rate at period end.
h Income may be received in additional securities and/or cash.
i Institutional Fiduciary Trust Money Market Portfolio is an affiliated open-end management investment company.

ABBREVIATIONS
Selected Portfolio

FRN - Floating Rate Note
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 an open-end management investment company, consisting of one fund, Franklin High Income Fund (Fund) and applies the specialized accounting and reporting guidance in U.S. Generally Accepted Accounting Principles.

2. FINANCIAL INSTRUMENT VALUATION

The Fund's investments in financial instruments are carried at fair value daily. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The Fund calculates the net asset value per share (NAV) at the close of the New York Stock Exchange (NYSE), generally at 4 p.m. Eastern time (NYSE close) on each day the NYSE is open for trading. Under compliance policies and procedures approved by the Trust's Board of Trustees (the Board), the Fund’s administrator has responsibility for oversight of valuation, including leading the cross-functional Valuation and Liquidity Oversight Committee (VLOC). The VLOC provides administration and oversight of the Fund's valuation policies and procedures, which are approved annually by the Board. Among other things, these procedures allow the Fund to utilize independent pricing services, quotations from securities and financial instrument dealers, and other market sources to determine fair value.

Equity securities listed on an 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. Foreign equity securities are valued as of the close of trading on the foreign stock exchange on which the security is primarily traded or as of the NYSE close, whichever is earlier. The value is then converted into its U.S. dollar equivalent at the foreign exchange rate in effect at the NYSE close on the day that the value of the security is determined. Over-the-counter (OTC) securities 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.

Debt securities generally trade in the OTC market rather than on a securities exchange. The Fund's pricing services use multiple valuation techniques to determine fair value. In instances where sufficient market activity exists, the pricing services may utilize a market-based approach through which quotes from market makers are used to determine fair value. In instances where sufficient market activity may not exist or is limited, the pricing services also utilize proprietary valuation models which may consider market characteristics such as benchmark yield curves, credit spreads, estimated default rates, anticipated market interest rate volatility, coupon rates, anticipated timing of principal repayments, underlying collateral, and other unique security features in order to estimate the relevant cash flows, which are then discounted to calculate the fair value. Securities denominated in a foreign currency are converted into their U.S. dollar equivalent at the foreign exchange rate in effect at the NYSE close on the date that the values of the foreign debt securities are determined.

Investments in open-end mutual funds are valued at the closing NAV.

The Fund has procedures to determine the fair value of financial instruments for which market prices are not reliable or readily available. Under these procedures, the VLOC convenes on a regular basis to review such financial instruments and considers a number of factors, including significant unobservable valuation inputs, when arriving at fair value. The VLOC primarily employs a market-based approach which may use related or comparable assets or liabilities, recent transactions, market multiples, book values, and other relevant information for the investment to determine the fair value of the investment. An income-based valuation approach may also be used in which the anticipated future cash flows of the investment are discounted to calculate fair value. Discounts may also be applied

 

due to the nature or duration of any restrictions on the disposition of the investments. Due to the inherent uncertainty of valuations of such investments, the fair values may differ significantly from the values that would have been used had an active market existed. The VLOC employs various methods for calibrating these valuation approaches including a regular review of key inputs and assumptions, transactional back-testing or disposition analysis, and reviews of any related market activity.

Trading in securities on foreign securities stock exchanges and OTC markets may be completed before the daily NYSE close. In addition, trading in certain foreign markets may not take place on every NYSE business day. Occasionally, events occur between the time at which trading in a foreign security is completed and the close of the NYSE that might call into question the reliability of the value of a portfolio security held by the Fund. As a result, differences may arise between the value of the Fund’s portfolio securities as determined at the foreign market close and the latest indications of value at the close of the NYSE. In order to minimize the potential for these differences, the VLOC monitors price movements following the close of trading in foreign stock markets through a series of country specific market proxies (such as baskets of American Depositary Receipts, futures contracts and exchange traded funds). These price movements are measured against established trigger thresholds for each specific market proxy to assist in determining if an event has occurred that may call into question the reliability of the values of the foreign securities 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.

When the last day of the reporting period is a non-business day, certain foreign markets may be open on those days that the NYSE is closed, which could result in differences between the value of the Fund’s portfolio securities on the last business day and the last calendar day of the reporting period. Any significant security valuation changes due to an open foreign market are adjusted and reflected by the Fund for financial reporting purposes.

3. INCOME TAXES

At August 31, 2015, the cost of investments and net unrealized appreciation (depreciation) for income tax purposes were as follows:

Cost of investments $ 6,044,054,066  
 
Unrealized appreciation $ 86,105,368  
Unrealized depreciation   (782,203,791 )
Net unrealized appreciation (depreciation) $ (696,098,423 )
 
 
 
4. FAIR VALUE MEASUREMENTS      

 

The Fund follows a fair value hierarchy that distinguishes between market data obtained from independent sources (observable inputs) and the Fund’s own market assumptions (unobservable inputs). These inputs are used in determining the value of the Fund’s financial instruments and are summarized in the following fair value hierarchy:

  • Level 1 – quoted prices in active markets for identical financial instruments
  • Level 2 – other significant observable inputs (including quoted prices for similar financial instruments, interest rates, prepayment speed, credit risk, etc.)
  • Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of financial instruments)

The input levels are not necessarily an indication of the risk or liquidity associated with financial instruments at that level.

 

For movements between the levels within the fair value hierarchy, the Fund has adopted a policy of recognizing the transfers as of the date of the underlying event which caused the movement.

A summary of inputs used as of August 31, 2015, in valuing the Fund’s assets carried at fair value, is as follows:

                             Level 1   Level 2                  Level 3   Total
Assets:                
 Investments in Securities:                
Equity Investments:a                
Consumer Services $ - $ - $ 213,390 $ 213,390
Materials   27,162   -   -   27,162
Transportation   -   7,041,046   -   7,041,046
Corporate Bonds   -   5,096,459,058   26,276,905 b 5,122,735,963
Senior Floating Rate Interests   -   29,325,944   -   29,325,944
Litigation Trusts   -   -   - b -
Short Term Investments   188,612,138   -   -   188,612,138
Total Investments in Securities $ 188,639,300 $ 5,132,826,048 $ 26,490,295 $ 5,347,955,643

 

aIncludes common and convertible preferred stocks as w ell as other equity investments.
bIncludes securities determined to have no value at August 31, 2015.

A reconciliation of assets in which Level 3 inputs are used in determining fair value is presented when there are
significant Level 3 financial instruments at the end of the period.

5. SUBSEQUENT EVENTS

The Fund has evaluated subsequent events through the issuance of the Statement of Investments and determined that no events have occurred that require disclosure.

For additional information on the Fund's 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 changes in the Registrant’s internal controls or in other factors that could materially affect the internal controls over financial reporting 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 26, 2015

 

 

 

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 26, 2015

 

 

By /s/ Gaston Gardey

      Gaston Gardey

      Chief Financial Officer and Chief Accounting Officer

Date  October 26, 2015