N-Q 1 a07-18202_2nq.htm N-Q

 

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)

 

522 Fifth Avenue, New York, New York

 

10036

(Address of principal executive offices)

 

(Zip code)

 

Ronald E. Robison

522 Fifth Avenue, New York, New York 10036

(Name and address of agent for service)

 

Registrant's telephone number, including area code:

212-762-4000

 

 

Date of fiscal year end:

August 31, 2007

 

 

 

 

Date of reporting period:

May 31, 2007

 

 

 


 

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, 2007 (unaudited)

 

PRINCIPAL

 

 

 

 

 

 

 

 

 

AMOUNT IN

 

 

 

COUPON

 

MATURITY

 

 

 

THOUSANDS

 

 

 

RATE

 

DATE

 

VALUE

 

 

 

CORPORATE BONDS (95.6%)

 

 

 

 

 

 

 

 

 

Advertising/Marketing Services (1.7%)

 

 

 

 

 

 

 

$

1,420

 

Idearc Inc. - 144A*

 

8.00

%

11/15/16

 

$

1,478,575

 

1,025

 

Interpublic Group of Companies, Inc. (The)

 

6.25

 

11/15/14

 

967,344

 

1,680

 

Valassis Communications Inc. - 144A* (a)

 

8.25

 

03/01/15

 

1,673,700

 

 

 

 

 

 

 

 

 

4,119,619

 

 

 

Aerospace & Defense (1.3%)

 

 

 

 

 

 

 

2,995

 

K&F Acquisition Inc.

 

7.75

 

11/15/14

 

3,204,650

 

 

 

 

 

 

 

 

 

 

 

 

 

Aluminum (0.9%)

 

 

 

 

 

 

 

2,085

 

Novelis, Inc. - 144A*(Canada)

 

7.25

**

02/15/15

 

2,210,100

 

 

 

 

 

 

 

 

 

 

 

 

 

Apparel/Footwear (0.7%)

 

 

 

 

 

 

 

1,525

 

Oxford Industries, Inc.

 

8.875

 

06/01/11

 

1,593,625

 

 

 

 

 

 

 

 

 

 

 

 

 

Apparel/Footwear Retail (0.7%)

 

 

 

 

 

 

 

1,620

 

Brown Shoe Co., Inc.

 

8.75

 

05/01/12

 

1,725,300

 

 

 

 

 

 

 

 

 

 

 

 

 

Auto Parts: O.E.M. (0.8%)

 

 

 

 

 

 

 

1,915

 

ArvinMeritor, Inc. (a)

 

8.75

 

03/01/12

 

2,008,356

 

 

 

 

 

 

 

 

 

 

 

 

 

Beverages: Alcoholic (0.1%)

 

 

 

 

 

 

 

265

 

Constellation Brands Inc. - 144A*

 

7.25

 

05/15/17

 

267,981

 

 

 

 

 

 

 

 

 

 

 

 

 

Broadcasting (1.2%)

 

 

 

 

 

 

 

1,630

 

LIN Television Corp. (a)

 

6.50

 

05/15/13

 

1,654,450

 

1,135

 

Umbrella Acquistion - 144A* (a)

 

9.75

 

03/15/15

 

1,180,400

 

 

 

 

 

 

 

 

 

2,834,850

 

 

 

Building Products (1.5%)

 

 

 

 

 

 

 

1,525

 

Interface Inc.

 

9.50

 

02/01/14

 

1,669,875

 

1,950

 

Nortek Inc.

 

8.50

 

09/01/14

 

1,945,125

 

 

 

 

 

 

 

 

 

3,615,000

 

 

 

Cable/Satellite TV (3.6%)

 

 

 

 

 

 

 

2,365

 

Cablevision Systems Corp. (Series B)

 

9.82

**

04/01/09

 

2,515,769

 

893

 

CCH I LLC/CCH I Cap Co.

 

11.00

 

10/01/15

 

975,602

 

1,890

 

EchoStar DBS Corp.

 

6.375

 

10/01/11

 

1,901,812

 

800

 

Intelsat Bermuda Ltd. (Bermuda)

 

8.872

**

01/15/15

 

822,000

 

285

 

Intelsat Sub Holdings Co. Ltd. (Bermuda)

 

8.25

**

01/15/13

 

297,469

 

1,555

 

Intelsat Sub Holdings Co. Ltd. (Bermuda)

 

8.625

**

01/15/15

 

1,673,569

 

315

 

NTL Cable PLC (United Kingdom) (a)

 

8.75

 

04/15/14

 

334,687

 

165

 

NTL Cable PLC (United Kingdom)

 

9.125

 

08/15/16

 

180,263

 

 

 

 

 

 

 

 

 

8,701,171

 

 

 

Casino/Gaming (5.1%)

 

 

 

 

 

 

 

27,175

 

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

 

13.50

**

03/01/10

 

0

 

2,235

 

Isle of Capri Casinos

 

7.00

 

03/01/14

 

2,223,825

 

2,000

 

Las Vegas Sands Corp. (a)

 

6.375

 

02/15/15

 

1,965,000

 

4,470

 

MGM Mirage Inc.

 

6.00

 

10/01/09

 

4,470,000

 

27,634

 

Resort At Summerlin LP/Ras Co. (Series B) (b) (c) (h)

 

13.00

†

12/15/07

 

0

 

2,980

 

Station Casinos, Inc.

 

6.00

 

04/01/12

 

2,905,500

 

265

 

Station Casinos, Inc.

 

6.875

 

03/01/16

 

245,788

 

495

 

Station Casinos, Inc.

 

7.75

 

08/15/16

 

513,563

 

 

 

 

 

 

 

 

 

12,323,676

 

 

 

Chemicals: Agricultural (0.6%)

 

 

 

 

 

 

 

1,335

 

Terra Capital Inc. (Series B)

 

7.00

 

02/01/17

 

1,345,012

 

 

 

 

 

 

 

 

 

 

 

 

 

Chemicals: Major Diversified (0.6%)

 

 

 

 

 

 

 

1,445

 

Westlake Chemical Corp.

 

6.625

 

01/15/16

 

1,430,550

 

 


 

 

 

Chemicals: Specialty (3.3%)

 

 

 

 

 

 

 

2,775

 

Equistar Chemicals/Funding Corp.

 

10.125

 

09/01/08

 

2,934,563

 

710

 

Innophos Holdings Inc - 144A*

 

9.50

**

04/15/12

 

727,750

 

1,070

 

Innophos, Inc.

 

8.875

**

08/15/14

 

1,134,200

 

1,045

 

Koppers Holdings, Inc.

 

9.875

††

11/15/14

 

919,600

 

915

 

Koppers Inc.

 

9.875

 

10/15/13

 

999,637

 

1,190

 

Millennium America, Inc.

 

9.25

 

06/15/08

 

1,234,625

 

 

 

 

 

 

 

 

 

7,950,375

 

 

 

Coal (1.6%)

 

 

 

 

 

 

 

860

 

Foundation PA Coal Co.

 

7.25

 

08/01/14

 

875,050

 

3,225

 

Massey Energy Co.

 

6.875

 

12/15/13

 

3,108,094

 

 

 

 

 

 

 

 

 

3,983,144

 

 

 

Containers/Packaging (4.4%)

 

 

 

 

 

 

 

2,550

 

BPC Holding Corp.

 

8.875

 

09/15/14

 

2,626,500

 

940

 

Graham Packaging Company

 

8.50

 

10/15/12

 

963,500

 

1,315

 

Graham Packaging Company (a)

 

9.875

 

10/15/14

 

1,361,025

 

2,000

 

Graphic Packaging International Corp.

 

9.50

 

08/15/13

 

2,137,500

 

850

 

Owens-Brockway Glass Containers Inc.

 

8.75

 

11/15/12

 

898,875

 

1,765

 

Owens-Illinois, Inc.

 

7.35

 

05/15/08

 

1,789,269

 

950

 

Owens-Illinois, Inc.

 

7.50

 

05/15/10

 

982,063

 

 

 

 

 

 

 

 

 

10,758,732

 

 

 

Data Processing Services (0.9%)

 

 

 

 

 

 

 

1,965

 

Sungard Data Systems Inc.

 

9.125

 

08/15/13

 

2,097,638

 

 

 

 

 

 

 

 

 

 

 

 

 

Electric Utilities (4.5%)

 

 

 

 

 

 

 

415

 

AES Corp. (The)

 

7.75

 

03/01/14

 

439,381

 

347

 

AES Corp. (The)

 

8.875

 

02/15/11

 

375,628

 

497

 

AES Corp. (The) (a)

 

9.375

 

09/15/10

 

546,700

 

1,100

 

AES Corp. (The) - 144A*

 

9.00

 

05/15/15

 

1,177,000

 

2,420

 

CMS Energy Corp. (a)

 

7.50

 

01/15/09

 

2,494,967

 

910

 

IPALCO Enterprises, Inc.

 

8.375

 

11/14/08

 

944,125

 

965

 

IPALCO Enterprises, Inc.

 

8.625

 

11/14/11

 

1,054,262

 

530

 

Nevada Power Co. (Series A)

 

8.25

 

06/01/11

 

577,339

 

1,889

 

Nevada Power Co.

 

9.00

 

08/15/13

 

2,038,951

 

1,322

 

PSEG Energy Holdings Inc.

 

8.625

 

02/15/08

 

1,352,062

 

 

 

 

 

 

 

 

 

11,000,415

 

 

 

Electrical Products (1.4%)

 

 

 

 

 

 

 

700

 

Balder Electric Co.

 

8.625

 

02/15/17

 

756,000

 

2,561

 

Ormat Funding Corp.

 

8.25

 

12/30/20

 

2,625,109

 

 

 

 

 

 

 

 

 

3,381,109

 

 

 

Environmental Services (1.0%)

 

 

 

 

 

 

 

840

 

Allied Waste North America, Inc.

 

6.375

 

04/15/11

 

848,400

 

1,546

 

Allied Waste North America, Inc. (Series B)

 

9.25

 

09/01/12

 

1,634,895

 

 

 

 

 

 

 

 

 

2,483,295

 

 

 

Finance/Rental/Leasing (3.4%)

 

 

 

 

 

 

 

340

 

Capmark Financial Group - 144A*

 

5.875

 

05/10/12

 

337,953

 

140

 

Capmark Financial Group - 144A* (a)

 

6.30

 

05/10/17

 

139,369

 

1,905

 

Ford Motor Credit Co.

 

7.25

 

10/25/11

 

1,876,065

 

1,780

 

Ford Motor Credit Corp.

 

5.80

 

01/12/09

 

1,753,823

 

1,500

 

Ford Motor Credit

 

7.00

 

10/01/13

 

1,437,286

 

1,810

 

Residential Capital Corp.

 

6.375

 

06/30/10

 

1,807,817

 

770

 

Residential Capital LLC

 

6.50

 

04/17/13

 

761,956

 

 

 

 

 

 

 

 

 

8,114,269

 

 

 

Financial Conglomerates (2.1%)

 

 

 

 

 

 

 

2,345

 

General Motors Acceptance Corp.

 

4.375

 

12/10/07

 

2,326,592

 

2,780

 

General Motors Acceptance Corp.

 

6.875

 

09/15/11

 

2,803,533

 

 

 

 

 

 

 

 

 

5,130,125

 

 

 

Food Retail (1.9%)

 

 

 

 

 

 

 

1,165

 

CA FM Lease Trust - 144A*

 

8.50

 

07/15/17

 

1,241,531

 

1,400

 

Delhaize America, Inc.

 

8.125

 

04/15/11

 

1,538,627

 

705

 

Delhaize America, Inc.

 

9.00

 

04/15/31

 

876,111

 

925

 

Supervalue Inc.

 

7.50

 

05/15/12

 

977,748

 

 

 

 

 

 

 

 

 

4,634,017

 

 


 

 

 

Food: Meat/Fish/Dairy (4.0%)

 

 

 

 

 

 

 

1,310

 

Michael Foods Inc.

 

8.00

 

11/15/13

 

1,349,300

 

2,300

 

Pilgrim’s Pride Corp.

 

7.625

 

05/01/15

 

2,374,750

 

3,105

 

Pilgrim’s Pride Corp.

 

9.625

 

09/15/11

 

3,244,725

 

2,545

 

Smithfield Foods Inc.

 

7.00

 

08/01/11

 

2,595,900

 

 

 

 

 

 

 

 

 

9,564,675

 

 

 

Forest Products (1.2%)

 

 

 

 

 

 

 

1,170

 

Covalence Specialty Material - 144A*

 

10.25

 

03/01/16

 

1,205,100

 

1,520

 

Crown Americas, Inc.

 

7.625

 

11/15/13

 

1,584,600

 

 

 

 

 

 

 

 

 

2,789,700

 

 

 

Gas Distributors (0.4%)

 

 

 

 

 

 

 

915

 

DYNEGY Holdings Inc. - 144A*

 

7.75

 

06/01/19

 

910,425

 

 

 

 

 

 

 

 

 

 

 

 

 

Home Furnishings (0.7%)

 

 

 

 

 

 

 

1,565

 

Jarden Corp.

 

7.50

 

05/01/17

 

1,604,125

 

 

 

 

 

 

 

 

 

 

 

 

 

Hospital/Nursing Management (4.0%)

 

 

 

 

 

 

 

2,775

 

Community Health System Inc.

 

6.50

 

12/15/12

 

2,889,469

 

1,200

 

HCA, Inc.

 

5.75

 

03/15/14

 

1,057,500

 

1,240

 

HCA, Inc

 

6.25

 

02/15/13

 

1,157,850

 

2,305

 

HCA, Inc. (a)

 

6.50

 

02/15/16

 

2,039,925

 

80

 

HCA, Inc.

 

8.75

 

09/01/10

 

85,200

 

930

 

Sun Healthcare Group Inc. - 144A*

 

9.125

 

04/15/15

 

981,150

 

740

 

Tenet Healthcare Corp.

 

7.375

 

02/01/13

 

701,150

 

615

 

Tenet Healthcare Corp. (a)

 

9.875

 

07/01/14

 

633,450

 

 

 

 

 

 

 

 

 

9,545,694

 

 

 

Industrial Machinery (0.2%)

 

 

 

 

 

 

 

587

 

Goodman Global Holding Company, Inc. (Series B)

 

8.36

 

06/15/12

 

595,071

 

 

 

 

 

 

 

 

 

 

 

 

 

Industrial Specialties (1.6%)

 

 

 

 

 

 

 

2,510

 

Johnsondiversy, Inc.

 

9.625

 

05/15/12

 

2,635,500

 

1,265

 

UCAR Finance, Inc.

 

10.25

 

02/15/12

 

1,340,900

 

 

 

 

 

 

 

 

 

3,976,400

 

 

 

Integrated Oil (0.2%)

 

 

 

 

 

 

 

390

 

Cimarex Energy Co. (a)

 

7.125

 

05/01/17

 

396,825

 

 

 

 

 

 

 

 

 

 

 

 

 

Media Conglomerates (1.0%)

 

 

 

 

 

 

 

2,386

 

Canwest Media Inc. (Canada)

 

8.00

 

09/15/12

 

2,474,964

 

 

 

 

 

 

 

 

 

 

 

 

 

Medical Specialties (1.1%)

 

 

 

 

 

 

 

2,370

 

Fisher Scientific International, Inc.

 

6.125

 

07/01/15

 

2,361,662

 

290

 

Invacare Corp. - 144A*

 

9.75

 

02/15/15

 

297,250

 

 

 

 

 

 

 

 

 

2,658,912

 

 

 

Medical/Nursing Services (2.2%)

 

 

 

 

 

 

 

1,370

 

DaVita Inc.

 

6.625

 

03/15/13

 

1,383,700

 

3,700

 

Fresenius Medical Care Capital Trust

 

7.875

 

06/15/11

 

3,926,625

 

 

 

 

 

 

 

 

 

5,310,325

 

 

 

Metal Fabrications (0.9%)

 

 

 

 

 

 

 

2,240

 

Hexcell Corp. (a)

 

6.75

 

02/01/15

 

2,262,400

 

 

 

 

 

 

 

 

 

 

 

 

 

Miscellaneous Commercial Services (1.2%)

 

 

 

 

 

 

 

200

 

Iron Mountain Inc.

 

7.75

 

01/15/15

 

207,000

 

2,590

 

Iron Mountain Inc.

 

8.625

 

04/01/13

 

2,674,175

 

 

 

 

 

 

 

 

 

2,881,175

 

 

 

Miscellaneous Manufacturing (0.6%)

 

 

 

 

 

 

 

1,470

 

Propex Fabrics Inc.

 

10.00

 

12/01/12

 

1,367,100

 

 

 

 

 

 

 

 

 

 

 

 

 

Motor Vehicles (0.7%)

 

 

 

 

 

 

 

860

 

General Motors Corp. (a)

 

7.125

 

07/15/13

 

808,400

 

995

 

General Motors Corp. (a)

 

8.375

 

07/15/33

 

930,325

 

 

 

 

 

 

 

 

 

1,738,725

 

 

 

Oil & Gas Pipelines (4.1%)

 

 

 

 

 

 

 

1,520

 

Colorado Interstate Gas Co.

 

6.80

 

11/15/15

 

1,597,753

 

2,625

 

El Paso Production Holdings

 

7.75

 

06/01/13

 

2,786,348

 

2,335

 

Pacific Energy Partners/Finance

 

7.125

 

06/15/14

 

2,438,931

 

2,800

 

Williams Companies, Inc. (The)

 

7.875

 

09/01/21

 

3,150,000

 

 

 

 

 

 

 

 

 

9,973,032

 

 


 

 

 

Oil & Gas Production (6.5%)

 

 

 

 

 

 

 

305

 

Chaparral Energy Inc. - 144A*

 

8.875

 

02/01/17

 

311,100

 

2,135

 

Chaparral Energy, Inc.

 

8.50

 

12/01/15

 

2,151,012

 

2,400

 

Chesapeake Energy Corp.

 

7.50

 

09/15/13

 

2,514,000

 

465

 

Chesepeaks Energy Corp.

 

7.625

 

07/15/13

 

495,806

 

2,810

 

Hilcorp Energy/Finance - 144A* (a)

 

7.75

 

11/01/15

 

2,838,100

 

2,775

 

Husky Oil Ltd. (Canada)

 

8.90

**

08/15/28

 

2,880,467

 

1,140

 

Opti Canada Inc. - 144A* (Canada)

 

8.25

 

12/15/14

 

1,216,950

 

1,950

 

Pogo Producing Co.

 

6.875

 

10/01/17

 

1,984,125

 

1,175

 

Sandridge Energy

 

8.625

 

04/01/15

 

1,219,063

 

 

 

 

 

 

 

 

 

15,610,623

 

 

 

Oilfield Services/Equipment (1.9%)

 

 

 

 

 

 

 

965

 

CIE Gener de Geophysique S.A. (France)

 

7.50

 

05/15/15

 

1,014,456

 

580

 

Hanover Compressor Co.

 

8.625

 

12/15/10

 

607,550

 

530

 

Hanover Compressor Co.

 

9.00

 

06/01/14

 

573,725

 

591

 

Hanover Equipment Trust 2001 A (Series A)

 

8.50

**

09/01/08

 

595,432

 

1,655

 

Hanover Equipment Trust 2001 B (Series B)

 

8.75

**

09/01/11

 

1,717,063

 

 

 

 

 

 

 

 

 

4,508,226

 

 

 

Other Transportation (1.2%)

 

 

 

 

 

 

 

3,000

 

CHC Helicopter Corp. (Canada)

 

7.375

 

05/01/14

 

2,962,500

 

 

 

 

 

 

 

 

 

 

 

 

 

Pharmaceuticals: Major (1.4%)

 

 

 

 

 

 

 

1,730

 

VWR International Inc.

 

6.875

 

04/15/12

 

1,807,850

 

1,505

 

Warner Chilcott Corp.

 

8.75

**

02/01/15

 

1,604,706

 

 

 

 

 

 

 

 

 

3,412,556

 

 

 

Publishing: Books/Magazines (1.7%)

 

 

 

 

 

 

 

1,255

 

Dex Media East/Finance

 

12.125

 

11/15/12

 

1,364,812

 

1,536

 

Dex Media West/Finance (Series B)

 

9.875

 

08/15/13

 

1,676,160

 

960

 

PGS Solutions Inc. - 144A*

 

9.625

 

02/15/15

 

984,114

 

 

 

 

 

 

 

 

 

4,025,086

 

 

 

Pulp & Paper (0.9%)

 

 

 

 

 

 

 

1,560

 

Georgia Pacific Corp. - 144A*

 

7.125

 

01/15/17

 

1,563,900

 

525

 

Glatfelter P.H. - 144A*

 

7.125

 

05/01/16

 

538,125

 

 

 

 

 

 

 

 

 

2,102,025

 

 

 

Real Estate Development (0.2%)

 

 

 

 

 

 

 

610

 

Realogy Corp. -144A*

 

10.50

 

04/15/14

 

613,813

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate Investment Trusts (0.9%)

 

 

 

 

 

 

 

2,200

 

Host Marriott LP

 

6.375

 

03/15/15

 

2,202,750

 

 

 

 

 

 

 

 

 

 

 

 

 

Restaurants (0.5%)

 

 

 

 

 

 

 

320

 

Aramark Corp. - 144A*

 

8.50

 

02/01/15

 

338,000

 

105

 

Aramark Corp. - 144A* (a)

 

8.86

**

02/01/15

 

108,806

 

750

 

Aramark Services Inc.

 

5.00

 

06/01/12

 

682,500

 

 

 

 

 

 

 

 

 

1,129,306

 

 

 

Semiconductors (0.7%)

 

 

 

 

 

 

 

1,685

 

Freescale Semiconductor - 144A*

 

8.875

 

12/15/14

 

1,695,531

 

 

 

 

 

 

 

 

 

 

 

 

 

Services to the Health Industry (1.3%)

 

 

 

 

 

 

 

1,285

 

National Mentor Holdings Inc. - 144A*

 

11.25

 

07/01/14

 

1,426,350

 

1,720

 

Omnicare Inc.

 

6.75

 

12/15/13

 

1,702,800

 

125

 

Omnicare Inc.

 

6.875

 

12/15/15

 

123,750

 

 

 

 

 

 

 

 

 

3,252,900

 

 

 

Specialty Stores (2.9%)

 

 

 

 

 

 

 

670

 

Asbury Automotive Group - 144A*

 

7.625

 

03/15/17

 

673,350

 

2,425

 

Petro Stopping Centers LP/Petro Financial Corp. (a)

 

9.00

 

02/15/12

 

2,585,656

 

2,300

 

Sonic Automotive, Inc.

 

8.625

 

08/15/13

 

2,423,625

 

1,285

 

United Auto Group, Inc.

 

7.75

 

12/15/16

 

1,304,275

 

 

 

 

 

 

 

 

 

6,986,906

 

 

 

Specialty Telecommunications (2.1%)

 

 

 

 

 

 

 

670

 

American Tower Corp.

 

7.125

 

10/15/12

 

699,312

 

1,920

 

American Tower Corp.

 

7.50

 

05/01/12

 

2,011,200

 

432

 

Panamsat Corp.

 

9.00

 

08/15/14

 

468,720

 

1,900

 

Qwest Communications International

 

8.86

**

02/15/09

 

1,933,250

 

 

 

 

 

 

 

 

 

5,112,482

 

 


 

 

 

Telecommunications (1.7%)

 

 

 

 

 

 

 

2,044

 

Axtel SA (Mexico)

 

11.00

 

12/15/13

 

2,289,280

 

6,416

 

Exodus Communications, Inc. (c) (h)

 

11.625

 

07/15/10

 

0

 

640

 

Nordic Tel Company - 144A* (Denmark)

 

8.875

 

05/01/16

 

696,800

 

28,549

 

Rhythms Netconnections, Inc. (b) (c) (h)

 

12.75

 

04/15/09

 

0

 

13,439

 

Rhythms Netconnections, Inc. (Series B) (b) (c) (h)

 

.00

 

05/15/08

 

0

 

4,309

 

Rhythms Netconnections, Inc. (Series B) (b) (c) (h)

 

14.00

 

02/15/10

 

0

 

EUR

530

 

TDC AS (Denmark)

 

6.50

 

04/19/12

 

736,593

 

$

370

 

U.S. West Communications Corp. (a)

 

5.625

 

11/15/08

 

371,850

 

 

 

 

 

 

 

 

 

4,094,523

 

 

 

Tobacco (0.3%)

 

 

 

 

 

 

 

635

 

RJ Reynolds Tobacco Holdings (a)

 

6.50

 

07/15/10

 

652,005

 

 

 

 

 

 

 

 

 

 

 

 

 

Trucks/Construction/Farm Machinery (0.6%)

 

 

 

 

 

 

 

1,439

 

Manitowoc Inc. (The)

 

10.50

 

08/01/12

 

1,528,937

 

 

 

 

 

 

 

 

 

 

 

 

 

Water Utilities (1.4%)

 

 

 

 

 

 

 

1,320

 

Nalco Co.

 

7.75

 

11/15/11

 

1,372,800

 

1,920

 

Nalco Co. (a)

 

8.875

 

11/15/13

 

2,068,800

 

 

 

 

 

 

 

 

 

3,441,600

 

 

 

Wireless Telecommunications (1.1%)

 

 

 

 

 

 

 

2,175

 

Wind Acquisition Finance SA - 144A*

 

10.75

 

12/01/15

 

2,555,625

 

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale Distributors (0.9%)

 

 

 

 

 

 

 

1,930

 

RBS Global & Rexnold Corp. - 144A* (a)

 

9.50

 

08/01/14

 

2,084,400

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Corporate Bonds

 

 

 

 

 

 

 

 

 

 (Cost $306,080,565)

 

 

 

 

 

230,934,351

 

 

 

 

 

 

 

 

 

 

 

 

 

Convertible Bond (0.7%)

 

 

 

 

 

 

 

 

 

Telecommunication Equipment

 

 

 

 

 

 

 

1,840

 

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

 

4.25

 

09/01/08

 

1,803,200

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Government Obligation (0.5%)

 

 

 

 

 

 

 

MXN

10,995

 

Mexican Fixed Rate Bonds (Series M20) (Mexico)
(Cost $1,119,411)

 

9.50

 

12/18/14

 

1,138,081

 

 

NUMBER OF

 

 

 

 

 

 

 

 

 

SHARES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Stocks (0.1%)

 

 

 

 

 

 

 

 

 

Casino/Gaming (0.0%)

 

 

 

 

 

 

 

212,312

 

Fitzgeralds Gaming Corp. + (e) (h)

 

 

 

 

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

Electric Utilities (0.0%)

 

 

 

 

 

 

 

197

 

PNM Resources Inc.

 

 

 

 

 

5,813

 

1

 

SW Acquisition LP (0.03% Ownership interest acquired 09/25/05) (e) (h) (i)

 

 

 

 

 

0

 

 

 

 

 

 

 

 

 

5,813

 

 

 

Food: Specialty/Candy (d) (e) (h) (0.0%)

 

 

 

 

 

 

 

2,447

 

SFAC New Holdings Inc.

 

 

 

 

 

0

 

13,317

 

SFAC New Holdings Inc. ++

 

 

 

 

 

0

 

 

 

 

 

 

 

 

 

0

 

 

 

Restaurants (e) (h) (0.0%)

 

 

 

 

 

 

 

64,807

 

American Restaurant Group Holdings, Inc. - 144A*

 

 

 

 

 

0

 

111,558

 

American Restaurant Group Holdings, Inc. (d)

 

 

 

 

 

0

 

13,107

 

American Restaurant Group Holdings, Inc. (d)

 

 

 

 

 

0

 

10,126

 

American Restaurant Group Holdings, Inc. (Class A) (d)

 

 

 

 

 

81,008

 

787,160

 

Catalina Restaurant Group (escrow) (d)

 

 

 

 

 

7,872

 

 

 

 

 

 

 

 

 

88,880

 

 


 

 

 

Specialty Telecommunications (d) (e) (0.0%)

 

 

 

 

 

342

 

34,159

 

Birch Telecom Inc. +++ (h)

 

 

 

 

 

0

 

1,448,200

 

PFB Telecom NV (Series B) (h)

 

 

 

 

 

40,422

 

8,510

 

XO Holdings, Inc.

 

 

 

 

 

40,764

 

 

 

 

 

 

 

 

 

 

 

 

 

Telecommunications (0.0%)

 

 

 

 

 

 

 

49,597

 

Viatel Holdings Bermuda Ltd. (ADR) (Bermuda) (d) (e)

 

 

 

 

 

5

 

 

 

 

 

 

 

 

 

 

 

 

 

Textiles (0.0%)

 

 

 

 

 

 

 

2,389,334

 

U.S. Leather, Inc. (d) (e) (h)

 

 

 

 

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

Wireless Telecommunications (d) (0.1%)

 

 

 

 

 

 

 

5,199

 

USA Mobility, Inc. (a)

 

 

 

 

 

119,629

 

315,021

 

Vast Solutions, Inc. (Class B1) (e) (h)

 

 

 

 

 

0

 

315,021

 

Vast Solutions, Inc. (Class B2) (e) (h)

 

 

 

 

 

0

 

315,021

 

Vast Solutions, Inc. (Class B3) (e) (h)

 

 

 

 

 

0

 

 

 

 

 

 

 

 

 

119,629

 

 

 

Total Common Stocks
(Cost $217,219,197)

 

 

 

 

 

255,091

 

 

NUMBER OF

 

 

 

 

 

EXPIRATION

 

 

 

WARRANTS

 

 

 

 

 

DATE

 

 

 

 

 

Warrants (0.0%)

 

 

 

 

 

 

 

 

 

Casino/Gaming (h) (0.0%)

 

 

 

 

 

 

 

319,500

 

Aladdin Gaming Enterprises, Inc. - 144A*

 

 

 

03/01/10

 

0

 

23,000

 

Resort At Summerlin LP - 144A*

 

 

 

12/15/07

 

0

 

 

 

 

 

 

 

 

 

0

 

 

 

Restaurants (0.0%)

 

 

 

 

 

 

 

4,500

 

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

 

 

 

08/15/08

 

0

 

 

 

 

 

 

 

 

 

 

 

 

 

Specialty Telecommunications (d) (0.0%)

 

 

 

 

 

 

 

17,020

 

XO Holdings, Inc. (Series A)

 

 

 

01/16/10

 

12,765

 

12,768

 

XO Holdings, Inc. (Series B)

 

 

 

01/16/10

 

6,384

 

12,768

 

XO Holdings, Inc. (Series C)

 

 

 

01/16/10

 

2,809

 

 

 

 

 

 

 

 

 

21,958

 

 

 

Total Warrants
(Cost $15,485)

 

 

 

 

 

21,958

 

 

PRINCIPAL

 

 

 

 

 

 

 

 

 

AMOUNT IN

 

 

 

COUPON

 

MATURITY

 

 

 

THOUSANDS

 

 

 

RATE

 

DATE

 

 

 

 

 

Short-Term Investments (11.6%)

 

 

 

 

 

 

 

 

 

Repurchase Agreements (0.5%)

 

 

 

 

 

 

 

$

924

 

The Bank of New York (dated 05/31/07; proceeds $924,277) (g)
(Cost $924,144)

 

5.188

%

06/01/07

 

924,144

 

228

 

Joint repurchase agreement account (dated 05/31/07; proceeds $228,034) (f)
(Cost $228,000)

 

5.29

 

06/01/07

 

228,000

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Repurchase Agreements
(Cost $1,152,144)

 

 

 

 

 

1,152,144

 

 

 

 

 

 

 

 

 

 

 

 

 

Security Purchased From Securities Lending Collateral (11.1%)

 

 

 

 

 

 

 

26,808

 

The Bank of New York Institutional Cash Reserve Fund
(Cost $26,807,952)

 

 

 

 

 

26,807,952

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Short-Term Investments
(Cost $27,960,096)

 

 

 

 

 

27,960,096

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Investments
(Cost $554,145,054) (j)

 

 

 

108.5

%

262,112,777

 

 

 

Liabilities in Excess of Other Assets

 

 

 

(8.5

)

(20,561,975

)

 

 

Net Assets

 

 

 

100.0

%

$

241,550,802

 

 


 

ADR

 

American Depositary Receipt.

*

 

Resale is restricted to qualified institutional investors.

**

 

Floating rate security. Rate shown is the rate in effect at May 31, 2007.

+

 

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 basis 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.

(a)

 

As of May 31, 2007 all or a portion of this security with a total value of $25,857,542 was on loan and secured by collateral of $26,807,952 which was received as cash and subsequently invested in The Bank of New York Institutional Cash Reserve Fund as reported in the portfolio of investments.

(b)

 

Issuer in bankruptcy.

(c)

 

Non-income producing security; bond in default.

(d)

 

Acquired through exchange offer.

(e)

 

Non-income producing securities.

(f)

 

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

(g)

 

Collateralized by Federal National Mortgage Assoc. 5.50% due 08/01/36 valued at $942,627.

(h)

 

Securities with total market value equal to $89,222 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.

(i)

 

Resale is restricted. No transaction activity during the year.

(j)

 

The aggregate cost for federal income tax purposes approximates the aggregate cost for book purposes. The aggregate gross unrealized appreciation is $7,330,483 and the aggregate gross unrealized depreciation is $299,362,760, resulting in net unrealized depreciation of $292,032,277.

 

Forward Foreign Currency Contract Open at May 31, 2007:

 

 

 

IN EXCHANGE

 

DELIVERY

 

UNREALIZED

 

CONTRACT TO DELIVER

 

FOR

 

DATE

 

APPRECIATION

 

 

 

 

 

 

 

 

 

EUR

543,000

 

$

740,733

 

7/31/2007

 

$

8,583

 

 

Currency Abbreviations

 

 

 

 

 

 

 

 

 

EUR

Euro.

 

 

 

 

 

 

 

MXN

Mexican New Peso.

 

 

 

 

 

 

 

 


 

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 19, 2007

 

 

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 19, 2007

 

/s/ Francis Smith

 

Francis Smith

Principal Financial Officer

July 19, 2007