N-Q 1 a06-15104_2nq.htm QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS

 

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

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
MANAGEMENT INVESTMENT COMPANY

 

Investment Company Act file number

811-02932

 

 

Morgan Stanley High Yield Securities Inc.

(Exact name of registrant as specified in charter)

 

1221 Avenue of the Americas, New York, New York

 

10020

(Address of principal executive offices)

 

(Zip code)

 

Ronald E. Robison

1221 Avenue of the Americas, New York, New York 10020

(Name and address of agent for service)

 

Registrant's telephone number, including area code:

212-762-4000

 

 

Date of fiscal year end:

August 31, 2006

 

 

 

 

Date of reporting period:

May 31, 2006

 

 


 

Item 1. Schedule of Investments.

 

The Fund’s schedule of investments as of the close of the reporting period prepared pursuant to Rule 12-12 of Regulation S-X is as follows:

 


 

Morgan Stanley High Yield Securities Inc.

Portfolio of Investments May 31, 2006 (unaudited)

 

PRINCIPAL

 

 

 

 

 

 

 

 

 

AMOUNT IN

 

 

 

COUPON

 

MATURITY

 

 

 

THOUSANDS

 

 

 

RATE

 

DATE

 

VALUE

 

 

 

CORPORATE BONDS (93.5%)

 

 

 

 

 

 

 

 

 

Advertising/Marketing Services (0.3%)

 

 

 

 

 

 

 

$

825

 

Advanstar Communications, Inc.

 

10.75

%

08/15/10

 

$

895,125

 

 

 

 

 

 

 

 

 

 

 

 

 

Aerospace & Defense (1.2%)

 

 

 

 

 

 

 

3,765

 

K&F Acquisition Inc.

 

7.75

 

11/15/14

 

3,840,300

 

 

 

 

 

 

 

 

 

 

 

 

 

Aluminum (1.0%)

 

 

 

 

 

 

 

3,310

 

Novelis, Inc. - 144A* (Canada)

 

8.00

**

02/15/15

 

3,177,600

 

 

 

 

 

 

 

 

 

 

 

 

 

Apparel/Footwear (1.7%)

 

 

 

 

 

 

 

3,625

 

Levi Strauss & Co.

 

9.74

**

04/01/12

 

3,765,469

 

1,525

 

Oxford Industries, Inc.

 

8.875

 

06/01/11

 

1,570,750

 

 

 

 

 

 

 

 

 

5,336,219

 

 

 

Apparel/Footwear Retail (0.5%)

 

 

 

 

 

 

 

1,620

 

Brown Shoe Co., Inc.

 

8.75

 

05/01/12

 

1,701,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Auto Parts: O.E.M. (1.5%)

 

 

 

 

 

 

 

945

 

ArvinMeritor, Inc.

 

8.75

 

03/01/12

 

954,450

 

3,275

 

TRW Automotive, Inc.

 

9.375

 

02/15/13

 

3,545,188

 

 

 

 

 

 

 

 

 

4,499,638

 

 

 

Broadcasting (0.8%)

 

 

 

 

 

 

 

1,630

 

LIN Television Corp.

 

6.50

 

05/15/13

 

1,519,975

 

950

 

LIN Television Corp. (Series B)

 

6.50

 

05/15/13

 

885,875

 

 

 

 

 

 

 

 

 

2,405,850

 

 

 

Building Products (2.0%)

 

 

 

 

 

 

 

865

 

Interface Inc.

 

7.30

 

04/01/08

 

886,625

 

2,750

 

Interface Inc.

 

9.50

 

02/01/14

 

2,866,875

 

2,450

 

Nortek Inc.

 

8.50

 

09/01/14

 

2,474,500

 

 

 

 

 

 

 

 

 

6,228,000

 

 

 

Cable/Satellite TV (4.0%)

 

 

 

 

 

 

 

3,165

 

Cablevision Systems Corp. (Series B)

 

9.62

**

04/01/09

 

3,378,637

 

893

 

CCH I LLC

 

11.00

 

10/01/15

 

772,445

 

1,940

 

EchoStar DBS Corp.

 

6.375

 

10/01/11

 

1,867,250

 

285

 

Intelsat Bermuda Ltd. (Bermuda)

 

8.25

**

01/15/13

 

287,494

 

2,555

 

Intelsat Bermuda Ltd. (Bermuda)

 

8.625

**

01/15/15

 

2,599,712

 

1,910

 

Intelsat Bermuda Ltd. (Bermuda)

 

9.614

**

01/15/12

 

1,945,812

 

1,645

 

Renaissance Media Group LLC

 

10.00

**

04/15/08

 

1,649,113

 

 

 

 

 

 

 

 

 

12,500,463

 

 

 

Casino/Gaming (4.0%)

 

 

 

 

 

 

 

27,175

 

Aladdin Gaming Holdings/Capital Corp. LLC (Series B) (b) (f)

 

.00

**

03/01/10

 

0

 

3,185

 

Isle of Capri Casinos

 

7.00

 

03/01/14

 

3,105,375

 

2,000

 

Las Vegas Sands Corp.

 

6.375

 

02/15/15

 

1,890,000

 

4,470

 

MGM Mirage Inc.

 

6.00

 

10/01/09

 

4,430,888

 

27,634

 

Resort At Summerlin LP/Ras Co.
(Series B) (a) (b) (f)

 

13.00

 

12/15/07

 

0

 

2,980

 

Station Casinos, Inc.

 

6.00

 

04/01/12

 

2,868,250

 

265

 

Station Casinos, Inc.

 

6.875

 

03/01/16

 

257,381

 

 

 

 

 

 

 

 

 

12,551,894

 

 

 

Chemicals: Major Diversified (0.5%)

 

 

 

 

 

 

 

1,445

 

Westlake Chemical Corp.

 

6.625

 

01/15/16

 

1,398,038

 

 

 

 

 

 

 

 

 

 

 

 

 

Chemicals: Specialty (5.1%)

 

 

 

 

 

 

 

2,775

 

Equistar Chemical Funding

 

10.125

 

09/01/08

 

2,969,250

 

1,845

 

Innophos, Inc.

 

8.875

**

08/15/14

 

1,886,512

 

1,662

 

Innophos, Inc.

 

13.17

**†

02/15/15

 

1,674,076

 

915

 

Koppers Industry Inc.

 

9.875

 

10/15/13

 

1,011,075

 

2,190

 

Millennium America, Inc.

 

9.25

 

06/15/08

 

2,280,338

 

1,320

 

Nalco Co.

 

7.75

 

11/15/11

 

1,329,900

 

1,920

 

Nalco Co.

 

8.875

 

11/15/13

 

1,984,800

 

2,616

 

Rockwood Specialties, Inc.

 

10.625

 

05/15/11

 

2,838,360

 

 

 

 

 

 

 

 

 

15,974,311

 

 

 

Coal (1.3%)

 

 

 

 

 

 

 

860

 

Foundation PA Coal Co.

 

7.25

 

08/01/14

 

868,600

 

3,225

 

Massey Energy Co. - 144A*

 

6.875

 

12/15/13

 

3,112,125

 

 

 

 

 

 

 

 

 

3,980,725

 

 

1


 

 

 

Commercial Printing/Forms (0.6%)

 

 

 

 

 

 

 

2,090

 

Quebecor World Capital Corp. 144A* (Canada)

 

8.75

 

03/15/16

 

1,980,678

 

 

 

 

 

 

 

 

 

 

 

 

 

Containers/Packaging (3.5%)

 

 

 

 

 

 

 

2,020

 

Graham Packaging Company Inc.

 

8.50

 

10/15/12

 

2,050,300

 

1,500

 

Graham Packaging Company Inc.

 

9.875

 

10/15/14

 

1,537,500

 

2,625

 

Graphic Packaging International Corp.

 

9.50

 

08/15/13

 

2,651,250

 

850

 

Owens-Brockway Glass Containers Corp.

 

8.75

 

11/15/12

 

903,125

 

1,765

 

Owens-Illinois, Inc.

 

7.35

 

05/15/08

 

1,769,413

 

1,825

 

Owens-Illinois, Inc.

 

7.50

 

05/15/10

 

1,825,000

 

 

 

 

 

 

 

 

 

10,736,588

 

 

 

Data Processing Services (0.7%)

 

 

 

 

 

 

 

1,965

 

Sungard Data Systems Inc. - 144A*

 

9.125

 

08/15/13

 

2,070,619

 

171

 

Sungard Data Systems Inc. - 144A*

 

9.431

**

08/15/13

 

180,833

 

 

 

 

 

 

 

 

 

2,251,452

 

 

 

Drugstore Chains (1.0%)

 

 

 

 

 

 

 

1,535

 

Jean Coutu Group PJC Inc. (Canada)

 

7.625

 

08/01/12

 

1,500,463

 

1,495

 

Rite Aid Corp.

 

8.125

 

05/01/10

 

1,513,688

 

 

 

 

 

 

 

 

 

3,014,151

 

 

 

Electric Utilities (6.8%)

 

 

 

 

 

 

 

415

 

AES Corp. (The)

 

7.75

 

03/01/14

 

427,450

 

347

 

AES Corp. (The)

 

8.875

 

02/15/11

 

370,856

 

497

 

AES Corp. (The)

 

9.375

 

09/15/10

 

540,487

 

1,100

 

AES Corp. (The) - 144A*

 

9.00

 

05/15/15

 

1,196,250

 

2,420

 

CMS Energy Corp.

 

7.50

 

01/15/09

 

2,462,350

 

910

 

IPALCO Enterprises, Inc.

 

8.375

**

11/14/08

 

950,950

 

965

 

IPALCO Enterprises, Inc.

 

8.625

**

11/14/11

 

1,039,787

 

2,925

 

Monongahela Power Co.

 

5.00

 

10/01/06

 

2,918,407

 

2,935

 

MSW Energy Holdings/Finance

 

7.375

 

09/01/10

 

2,964,350

 

695

 

MSW Energy Holdings/Finance

 

8.50

 

09/01/10

 

724,538

 

1,940

 

Nevada Power Co.

 

8.25

 

06/01/11

 

2,104,165

 

1,889

 

Nevada Power Co.

 

9.00

 

08/15/13

 

2,074,152

 

3,320

 

PSEG Energy Holdings Inc.

 

8.625

 

02/15/08

 

3,436,200

 

 

 

 

 

 

 

 

 

21,209,942

 

 

 

Electrical Products (1.2%)

 

 

 

 

 

 

 

3,499

 

Ormat Funding Corp.

 

8.25

 

12/30/20

 

3,621,522

 

 

 

 

 

 

 

 

 

 

 

 

 

Environmental Services (1.3%)

 

 

 

 

 

 

 

840

 

Allied Waste North America, Inc.

 

6.375

 

04/15/11

 

813,750

 

1,515

 

Allied Waste North America, Inc.

 

6.50

 

11/15/10

 

1,488,487

 

1,546

 

Allied Waste North America, Inc.

 

9.25

 

09/01/12

 

1,656,152

 

 

 

 

 

 

 

 

 

3,958,389

 

 

 

Finance/Rental/Leasing (1.2%)

 

 

 

 

 

 

 

2,080

 

Ford Motor Credit Corp.

 

5.625

 

10/01/08

 

1,908,105

 

1,810

 

Residential Capital Corp.

 

6.375

 

06/30/10

 

1,788,285

 

 

 

 

 

 

 

 

 

3,696,390

 

 

 

Financial Conglomerates (1.6%)

 

 

 

 

 

 

 

2,345

 

General Motors Acceptance Corp.

 

4.375

 

12/10/07

 

2,221,815

 

2,780

 

General Motors Acceptance Corp.

 

6.875

 

09/15/11

 

2,614,404

 

 

 

 

 

 

 

 

 

4,836,219

 

 

 

Food Retail (1.5%)

 

 

 

 

 

 

 

1,205

 

Albertson’s, Inc.

 

7.25

 

05/01/13

 

1,176,086

 

480

 

Albertson’s, Inc.

 

7.50

 

02/15/11

 

481,703

 

1,297

 

CA FM Lease Trust - 144A*

 

8.50

 

07/15/17

 

1,386,164

 

1,400

 

Delhaize America, Inc.

 

8.125

 

04/15/11

 

1,497,602

 

 

 

 

 

 

 

 

 

4,541,555

 

 

 

Food: Meat/Fish/Dairy (3.8%)

 

 

 

 

 

 

 

1,845

 

Michael Foods Inc. (Series B)

 

8.00

 

11/15/13

 

1,849,613

 

3,300

 

Pilgrim’s Pride Corp.

 

9.25

 

11/15/13

 

3,349,500

 

2,525

 

Pilgrim’s Pride Corp.

 

9.625

 

09/15/11

 

2,657,563

 

4,045

 

Smithfield Foods Inc.

 

7.00

 

08/01/11

 

3,984,325

 

 

 

 

 

 

 

 

 

11,841,001

 

 

 

Forest Products (1.4%)

 

 

 

 

 

 

 

1,865

 

Covalence Specialty Material - 144A*

 

10.25

 

03/01/16

 

1,892,975

 

2,395

 

Crown Americas Inc. - 144A*

 

7.625

 

11/15/13

 

2,418,950

 

 

 

 

 

 

 

 

 

4,311,925

 

 

 

Gas Distributors (0.2%)

 

 

 

 

 

 

 

675

 

Northwest Pipeline Corp.

 

8.125

 

03/01/10

 

712,125

 

 

2


 

 

 

Home Building (0.6%)

 

 

 

 

 

 

 

865

 

Tech Olympic USA, Inc.

 

9.00

 

07/01/10

 

875,813

 

865

 

Tech Olympic USA, Inc.

 

10.375

 

07/01/12

 

882,300

 

 

 

 

 

 

 

 

 

1,758,113

 

 

 

Home Furnishings (0.5%)

 

 

 

 

 

 

 

1,420

 

Tempur-Pedic Inc.

 

10.25

 

08/15/10

 

1,512,300

 

 

 

 

 

 

 

 

 

 

 

 

 

Hospital/Nursing Management (2.5%)

 

 

 

 

 

 

 

2,500

 

Community Health System Inc.

 

6.50

 

12/15/12

 

2,409,375

 

1,740

 

HCA, Inc.

 

6.30

 

10/01/12

 

1,670,372

 

80

 

HCA, Inc.

 

8.75

 

09/01/10

 

85,951

 

2,285

 

Medcath Holdings Corp.

 

9.875

 

07/15/12

 

2,336,413

 

740

 

Tenet Healthcare Corp.

 

7.375

 

02/01/13

 

688,200

 

430

 

Tenet Healthcare Corp.

 

9.875

 

07/01/14

 

439,675

 

 

 

 

 

 

 

 

 

7,629,986

 

 

 

Hotels/Resorts/Cruiselines (0.3%)

 

 

 

 

 

 

 

980

 

Starwood Hotels & Resorts Worldwide, Inc.

 

7.875

**

05/01/12

 

1,041,250

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial Machinery (0.3%)

 

 

 

 

 

 

 

810

 

Goodman Global Holding Company, Inc. (Series B)

 

7.491

**

06/15/12

 

822,150

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial Specialties (2.0%)

 

 

 

 

 

 

 

3,710

 

Johnsondiversy, Inc.

 

9.625

 

05/15/12

 

3,765,650

 

2,255

 

UCAR Finance, Inc.

 

10.25

 

02/15/12

 

2,412,850

 

 

 

 

 

 

 

 

 

6,178,500

 

 

 

Media Conglomerates (1.0%)

 

 

 

 

 

 

 

3,061

 

Canwest Media Inc. (Canada)

 

8.00

 

09/15/12

 

3,098,763

 

 

 

 

 

 

 

 

 

 

 

 

 

Medical Specialties (0.6%)

 

 

 

 

 

 

 

1,800

 

Fisher Scientific International, Inc.

 

6.125

 

07/01/15

 

1,759,500

 

 

 

 

 

 

 

 

 

 

 

 

 

Medical/Nursing Services (1.7%)

 

 

 

 

 

 

 

1,370

 

DaVita Inc.

 

6.625

 

03/15/13

 

1,323,762

 

3,700

 

Fresenius Medical Care Capital Trust

 

7.875

 

06/15/11

 

3,857,250

 

 

 

 

 

 

 

 

 

5,181,012

 

 

 

Metal Fabrications (1.2%)

 

 

 

 

 

 

 

1,555

 

General Cable Corp.

 

9.50

 

11/15/10

 

1,685,231

 

2,240

 

Hexcell Corp.

 

6.75

 

02/01/15

 

2,172,800

 

 

 

 

 

 

 

 

 

3,858,031

 

 

 

Miscellaneous Commercial Services (1.2%)

 

 

 

 

 

 

 

920

 

Iron Mountain Inc.

 

7.75

 

01/15/15

 

922,300

 

2,590

 

Iron Mountain Inc.

 

8.625

 

04/01/13

 

2,674,175

 

 

 

 

 

 

 

 

 

3,596,475

 

 

 

Miscellaneous Manufacturing (0.3%)

 

 

 

 

 

 

 

1,005

 

Propex Fabrics Inc.

 

10.00

 

12/01/12

 

949,725

 

 

 

 

 

 

 

 

 

 

 

 

 

Motor Vehicles (1.8%)

 

 

 

 

 

 

 

2,330

 

Ford Motor Co.

 

7.45

 

07/16/31

 

1,700,900

 

860

 

General Motors Corp.

 

7.125

 

07/15/13

 

677,250

 

4,130

 

General Motors Corp.

 

8.375

 

07/15/33

 

3,154,287

 

 

 

 

 

 

 

 

 

5,532,437

 

 

 

Movies/Entertainment (0.6%)

 

 

 

 

 

 

 

1,650

 

AMC Entertainment Inc.

 

9.42

**

08/15/10

 

1,711,875

 

 

 

 

 

 

 

 

 

 

 

 

 

Oil & Gas Pipelines (3.6%)

 

 

 

 

 

 

 

1,520

 

Colorado Interstate Gas Co. - 144A*

 

6.80

 

11/15/15

 

1,507,275

 

2,625

 

El Paso Production Holdings

 

7.75

 

06/01/13

 

2,690,625

 

2,335

 

Pacific Energy Partners/Finance

 

7.125

 

06/15/14

 

2,340,838

 

1,330

 

Southern Natural Gas

 

8.875

 

03/15/10

 

1,414,575

 

3,100

 

Williams Companies, Inc. (The)

 

7.875

 

09/01/21

 

3,231,750

 

 

 

 

 

 

 

 

 

11,185,063

 

 

 

Oil & Gas Production (4.1%)

 

 

 

 

 

 

 

2,625

 

Chaparral Energy Inc. - 144A*

 

8.50

 

12/01/15

 

2,670,937

 

400

 

Chesapeake Energy Corp.

 

6.375

 

06/15/15

 

379,000

 

2,865

 

Chesapeake Energy Corp.

 

7.50

 

09/15/13

 

2,943,787

 

1,700

 

Hilcorp Energy/Finance - 144A*

 

7.75

 

11/01/15

 

1,683,000

 

1,671

 

Hilcorp Energy/Finance - 144A*

 

10.50

 

09/01/10

 

1,825,567

 

1,295

 

Magnum Hunter Resources, Inc.

 

9.60

 

03/15/12

 

1,377,556

 

1,950

 

Pogo Producing Co.

 

6.875

 

10/01/17

 

1,852,500

 

 

 

 

 

 

 

 

 

12,732,347

 

 

 

Oil Refining/Marketing (0.9%)

 

 

 

 

 

 

 

2,775

 

Husky Oil Ltd.

 

8.90

**

08/15/28

 

2,944,683

 

 

3


 

 

 

Oilfield Services/Equipment (1.4%)

 

 

 

 

 

 

 

965

 

Compagnie Generale de Geophysique S.A. (France)

 

7.50

 

05/15/15

 

974,650

 

580

 

Hanover Compressor Co.

 

8.625

 

12/15/10

 

600,300

 

530

 

Hanover Compressor Co.

 

9.00

 

06/01/14

 

565,775

 

591

 

Hanover Equipment Trust 2001 A (Series A)

 

8.50

**

09/01/08

 

604,297

 

1,655

 

Hanover Equipment Trust 2001 B (Series B)

 

8.75

**

09/01/11

 

1,729,475

 

 

 

 

 

 

 

 

 

4,474,497

 

 

 

Other Metals/Minerals (0.0%)

 

 

 

 

 

 

 

3,750

 

Murrin Holdings Property Ltd.
(Australia) (b) (f)

 

.00

 

08/31/07

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Transportation (1.2%)

 

 

 

 

 

 

 

3,700

 

CHC Helicopter Corp. (Canada)

 

7.375

 

05/01/14

 

3,644,500

 

 

 

 

 

 

 

 

 

 

 

 

 

Pharmaceuticals: Major (1.3%)

 

 

 

 

 

 

 

1,730

 

VWR International Inc.

 

6.875

 

04/15/12

 

1,704,050

 

2,335

 

Warner Chilcott Corp

 

8.75

 

02/01/15

 

2,340,838

 

 

 

 

 

 

 

 

 

4,044,888

 

 

 

Publishing: Books/Magazines (2.1%)

 

 

 

 

 

 

 

1,255

 

Dex Media East/Finance

 

12.125

 

11/15/12

 

1,421,287

 

1,536

 

Dex Media West/Finance

 

9.875

 

08/15/13

 

1,681,920

 

1,670

 

Houghton Mifflin Co.

 

8.25

 

02/01/11

 

1,720,100

 

1,665

 

Houghton Mifflin Co.

 

9.875

 

02/01/13

 

1,764,900

 

 

 

 

 

 

 

 

 

6,588,207

 

 

 

Pulp & Paper (0.5%)

 

 

 

 

 

 

 

1,070

 

Abitibi-Consolidated Inc. (Canada)

 

6.00

 

06/20/13

 

909,500

 

525

 

Glatfelter P.H. -144A *

 

7.125

 

05/01/16

 

525,000

 

 

 

 

 

 

 

 

 

1,434,500

 

 

 

Real Estate Investment Trusts (0.7%)

 

 

 

 

 

 

 

2,200

 

Host Marriott LP

 

6.375

 

03/15/15

 

2,106,500

 

 

 

 

 

 

 

 

 

 

 

 

 

Services to the Health Industry (0.5%)

 

 

 

 

 

 

 

1,720

 

Omnicare Inc.

 

6.75

 

12/15/13

 

1,677,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Specialty Stores (2.6%)

 

 

 

 

 

 

 

2,435

 

Linens’ n Things, Inc. - 144A*

 

10.702

**

01/15/14

 

2,361,950

 

2,425

 

Petro Stopping Centers LP/Petro Financial Corp.

 

9.00

 

02/15/12

 

2,449,250

 

3,250

 

Sonic Automotive, Inc.

 

8.625

 

08/15/13

 

3,298,750

 

 

 

 

 

 

 

 

 

8,109,950

 

 

 

Specialty Telecommunications (3.5%)

 

 

 

 

 

 

 

1,920

 

American Tower Corp.

 

7.125

 

10/15/12

 

1,972,800

 

1,920

 

American Tower Corp.

 

7.50

 

05/01/12

 

1,968,000

 

432

 

Panamsat Corp.

 

9.00

 

08/15/14

 

450,360

 

4,340

 

Panamsat Holding Corp.

 

10.375

**††

11/01/14

 

3,179,050

 

3,005

 

Qwest Communications International

 

8.67

**

02/15/09

 

3,072,613

 

28,549

 

Rhythms Netconnections, Inc. (a) (b) (f)

 

12.75

 

04/15/09

 

0

 

4,309

 

Rhythms Netconnections, Inc. (a) (b) (f)

 

14.00

 

02/15/10

 

0

 

13,439

 

Rhythms Netconnections, Inc.
(Series B) (a) (b) (f)

 

13.50

 

05/15/08

 

0

 

370

 

U.S. West Communications Corp.

 

5.625

 

11/15/08

 

365,375

 

 

 

 

 

 

 

 

 

11,008,198

 

 

 

Steel (1.3%)

 

 

 

 

 

 

 

3,595

 

Amsted Industries Inc. - 144A*

 

10.25

 

10/15/11

 

3,900,575

 

 

 

 

 

 

 

 

 

 

 

 

 

Telecommunications (2.0%)

 

 

 

 

 

 

 

2,044

 

Axtel SA (Mexico)

 

11.00

 

12/15/13

 

2,289,280

 

6,416

 

Exodus Communications, Inc. (a) (b) (f)

 

11.625

 

07/15/10

 

0

 

640

 

Nordic Tel Co Holdings -144A* (Denmark)

 

8.875

 

05/01/16

 

664,000

 

315

 

NTL Cable Plc (United Kingdom)

 

8.75

 

04/15/14

 

318,150

 

EUR

530

 

TDC AS (Denmark)

 

6.50

 

04/19/12

 

703,103

 

$

2,175

 

Wind Acquisition Finance SA - 144A* (Luxembourg)

 

10.75

 

12/01/15

 

2,354,438

 

 

 

 

 

 

 

 

 

6,328,971

 

 

 

Tobacco (0.9%)

 

 

 

 

 

 

 

2,830

 

RJ Raynolds Tobacco Holdings

 

6.50

 

07/15/10

 

2,794,625

 

 

 

 

 

 

 

 

 

 

 

 

 

Trucks/Construction/Farm Machinery (1.0%)

 

 

 

 

 

 

 

2,939

 

Manitowoc Inc. (The)

 

10.50

 

08/01/12

 

3,218,205

 

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale Distributors (1.1%)

 

 

 

 

 

 

 

920

 

Buhrmann US, Inc.

 

7.875

 

03/01/15

 

924,600

 

1,845

 

Buhrmann US, Inc.

 

8.25

 

07/01/14

 

1,877,287

 

765

 

Nebraska Book Company, Inc.

 

8.625

 

03/15/12

 

707,625

 

 

 

 

 

 

 

 

 

3,509,512

 

 

4


 

 

 

Wireless Telecommunications (1.5%)

 

 

 

 

 

 

 

1,775

 

Rural Cellular Corp.

 

9.41

**

03/15/10

 

1,819,375

 

2,505

 

Ubiquitel Operating Co.

 

9.875

 

03/01/11

 

2,749,238

 

 

 

 

 

 

 

 

 

4,568,613

 

 

 

TOTAL CORPORATE BONDS

 

 

 

 

 

 

 

 

 

(Cost $369,138,760)

 

 

 

 

 

290,102,051

 

 

 

 

 

 

 

 

 

 

 

 

 

CONVERTIBLE BOND (0.6%)

 

 

 

 

 

 

 

 

 

Telecommunication Equipment

 

 

 

 

 

 

 

1,840

 

Nortel Networks Corp. (Canada)
(Cost $1,750,300)

 

4.25

 

09/01/08

 

1,750,300

 

 

 

 

 

 

 

 

 

 

 

 

 

FOREIGN GOVERNMENT OBLIGATION (0.5%)

 

 

 

 

 

 

 

MXN

15,775

 

Mexican Fixed Rate Bonds (Cost $1,563,486)

 

10.00

 

12/05/24

 

1,460,900

 

 

NUMBER OF

 

 

 

 

 

SHARES

 

 

 

 

 

 

 

COMMON STOCKS (d) (1.4%)

 

 

 

 

 

Casino/Gaming (0.0%)

 

 

 

212,312

 

Fitzgeralds Gaming Corp. + (f)

 

0

 

 

 

 

 

 

 

 

 

Electric Utilities (0.0%)

 

 

 

197

 

PNM Resources Inc.

 

4,978

 

1

 

SW Acquisition LP (0.03% Ownership interest acquired 09/25/05) (f) (g)

 

0

 

 

 

 

 

4,978

 

 

 

Food: Specialty/Candy (f) (0.0%)

 

 

 

2,447

 

SFAC New Holdings Inc. (c)

 

0

 

13,317

 

SFAC New Holdings Inc. ++ (c)

 

0

 

1,069,725

 

Specialty Foods Acquisition Corp. - 144A*

 

0

 

 

 

 

 

0

 

 

 

Medical/Nursing Services (0.0%)

 

 

 

1,754,896

 

Raintree Healthcare Corp. (c) (f)

 

0

 

 

 

 

 

 

 

 

 

Restaurants (1.4%)

 

 

 

64,807

 

American Restaurant Group Holdings, Inc. - 144A* (f)

 

0

 

111,558

 

American Restaurant Group Holdings, Inc. (c) (f)

 

0

 

13,107

 

American Restaurant Group Holdings, Inc. (c) (f)

 

59,899

 

787,160

 

Catalina Restaurant Group (c) (f)

 

4,219,178

 

 

 

 

 

4,279,077

 

 

 

Specialty Telecommunications (0.0%)

 

 

 

34,159

 

Birch Telecom Inc. +++ (c) (f)

 

341

 

1,448,200

 

PFB Telecom NV (Series B) (c) (f)

 

0

 

7,949

 

XO Holdings, Inc.

 

41,573

 

 

 

 

 

41,914

 

 

 

Telecommunications (0.0%)

 

 

 

49,597

 

Viatel Holdings Bermuda Ltd. ADR (Bermuda) (c)

 

3,472

 

 

 

 

 

 

 

 

 

Textiles (0.0%)

 

 

 

2,389,334

 

U.S. Leather, Inc. (c) (f)

 

0

 

 

 

 

 

 

 

 

 

Wireless Telecommunications (0.0%)

 

 

 

5,199

 

USA Mobility, Inc. (c)

 

105,488

 

315,021

 

Vast Solutions, Inc. (Class B1) (c) (f)

 

0

 

315,021

 

Vast Solutions, Inc. (Class B2) (c) (f)

 

0

 

315,021

 

Vast Solutions, Inc. (Class B3) (c) (f)

 

0

 

 

 

 

 

105,488

 

 

 

TOTAL COMMON STOCKS

 

 

 

 

 

(Cost $246,873,169)

 

4,434,929

 

 

 

 

 

 

 

 

 

NON-CONVERTIBLE PREFERRED STOCK (0.6%)

 

 

 

 

 

Restaurants (0.6%)

 

 

 

1,792

 

Catalina Restaurant Group (Units) ‡ (f) (Cost $1,772,032)

 

1,792,382

 

 

5


 

NUMBER OF

 

 

 

EXPIRATION

 

 

 

WARRANTS

 

 

 

DATE

 

 

 

 

 

WARRANTS (d) (0.1%)

 

 

 

 

 

 

 

Casino/Gaming (0.0%)

 

 

 

 

 

319,500

 

Aladdin Gaming Enterprises, Inc. - 144A* (f)

 

03/01/10

 

0

 

23,000

 

Resort At Summerlin LP - 144A* (f)

 

12/15/07

 

0

 

 

 

 

 

 

 

0

 

 

 

Restaurants (0.1%)

 

 

 

 

 

4,500

 

American Restaurant Group Holdings, Inc. - 144A*

 

08/15/08

 

0

 

334,250

 

Catalina Restaurant Group (c) (f)

 

07/10/12

 

454,580

 

 

 

 

 

 

 

454,580

 

 

 

Specialty Telecommunications (0.0%)

 

 

 

 

 

15,897

 

XO Holdings, Inc. (Series A)

 

01/16/10

 

15,420

 

11,925

 

XO Holdings, Inc. (Series B)

 

01/16/10

 

7,751

 

11,925

 

XO Holdings, Inc. (Series C)

 

01/16/10

 

4,532

 

 

 

 

 

 

 

27,703

 

 

 

 

 

 

 

 

 

 

 

TOTAL WARRANTS

 

 

 

 

 

 

 

(Cost $13,646)

 

 

 

482,283

 

 

PRINCIPAL

 

 

 

 

 

 

 

 

 

AMOUNT IN

 

 

 

COUPON

 

MATURITY

 

 

 

THOUSANDS

 

 

 

RATE

 

DATE

 

 

 

 

 

SHORT-TERM INVESTMENT (1.6%)

 

 

 

 

 

 

 

 

 

REPURCHASE AGREEMENT

 

 

 

 

 

 

 

$

5,024

 

Joint repurchase agreement account (dated 05/31/06; proceeds $5,024,701) (e)

 

 

 

 

 

 

 

 

 

(Cost $5,024,000)

 

5.02

%

06/01/06

 

 

5,024,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL INVESTMENTS

 

 

 

 

 

 

 

 

 

 

(Cost $626,135,393) (h)

 

 

 

98.3

%

 

305,046,845

 

 

 

OTHER ASSETS IN EXCESS OF LIABILITIES

 

 

 

1.7

 

 

5,355,065

 

 

 

NET ASSETS

 

 

 

100.0

%

 

$

310,401,910

 

 

ADR

 

American Depository Receipt

*

 

Resale is restricted to qualified institutional investors.

**

 

Floating rate security. Rate shown is the rate in effect at May 31, 2006.

+

 

Resale is restricted, acquired (12/22/98) at a cost basis of $957,527.

++

 

Resale is restricted, acquired (06/10/99) at a cost basis of $133.

+++

 

Resale is restricted, acquired (between 06/18/98 and 05/11/99) at a cost basic of $17,257,340.

†

 

Payment-in-kind security.

††

 

Currently a zero coupon bond and is scheduled to pay interest at the rate shown at a future specified date.

‡

 

Consists of one or more class of securities traded together as a unit; corporate bonds or preferred stocks with attached warrants.

(a)

 

Issuer in bankruptcy.

(b)

 

Non-income producing security; bond in default.

(c)

 

Acquired through exchange offer.

(d)

 

Non-income producing securities.

(e)

 

Collateralized by federal agency and U.S. Treasury obligations.

(f)

 

Securities with total market value equal to $6,526,380 have been valued at their fair value as determined in good faith under procedures established by and under the general supervision of the Fund’s Directors.

(g)

 

Resale is restricted. No transaction activity during the year.

(h)

 

The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $7,695,556 and the aggregate gross unrealized depreciation is $328,784,104, resulting in net unrealized depreciation of $321,088,548.

 

6


 

Forward Foreign Currency Contracts Open at May 31, 2006:

 

 

 

 

 

IN EXCHANGE

 

DELIVERY

 

UNREALIZED

 

CONTRACTS TO DELIVER

 

FOR

 

DATE

 

DEPRECIATION

 

 

 

 

 

 

 

 

 

 

 

EUR

 

543,000

 

$

684,397

 

6/27/2006

 

$

(12,625

)

 

Currency Abbreviations

EUR

 

Euro.

MXN

 

Mexican New Pesco

 

7


 

Item 2. Controls and Procedures.

 

(a) The Fund’s principal executive officer and principal financial officer have concluded that the Fund’s disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-Q was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, based upon such officers’ evaluation of these controls and procedures as of a date within 90 days of the filing date of the report.

 

(b) There were no changes in the Fund’s internal control over financial reporting that occurred during the registrant’s fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Fund’s internal control over financial reporting.

 

Item 3. Exhibits.

 

(a) A separate certification for each principal executive officer and principal financial officer of the registrant are 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.

 

Morgan Stanley High Yield Securities Inc.

 

/s/ Ronald E. Robison

 

Ronald E. Robison

Principal Executive Officer

July 20, 2006

 

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

 

/s/ Ronald E. Robison

 

Ronald E. Robison

Principal Executive Officer

July 20, 2006

 

/s/ Francis Smith

 

Francis Smith

Principal Financial Officer

July 20, 2006