0000919574-16-013368.txt : 20160725 0000919574-16-013368.hdr.sgml : 20160725 20160520171850 ACCESSION NUMBER: 0000919574-16-013368 CONFORMED SUBMISSION TYPE: N-14 PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 20160520 DATE AS OF CHANGE: 20160628 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AB BOND FUND, INC. CENTRAL INDEX KEY: 0000003794 IRS NUMBER: 132754393 FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: N-14 SEC ACT: 1933 Act SEC FILE NUMBER: 333-211514 FILM NUMBER: 161667246 BUSINESS ADDRESS: STREET 1: ALLIANCEBERNSTEIN LP STREET 2: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 BUSINESS PHONE: 2129691000 MAIL ADDRESS: STREET 1: ALLIANCEBERNSTEIN LP STREET 2: 1345 AVENUE OF THE AMERICAS CITY: NEW YORK STATE: NY ZIP: 10105 FORMER COMPANY: FORMER CONFORMED NAME: ALLIANCEBERNSTEIN BOND FUND INC DATE OF NAME CHANGE: 20030319 FORMER COMPANY: FORMER CONFORMED NAME: ALLIANCE BOND FUND INC DATE OF NAME CHANGE: 19920703 CENTRAL INDEX KEY: 0000003794 S000045256 AB High Yield Portfolio C000140942 Class Z HIYZX CENTRAL INDEX KEY: 0001308576 S000010373 AB High-Yield Portfolio C000028688 AB High-Yield Portfolio N-14 1 d7128737_n-14.txt As filed with the Securities and Exchange Commission on May 20, 2016 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------------- FORM N-14 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment No. ___ Post-Effective Amendment No. ___ ----------------------------- AB BOND FUND, INC. (Exact Name of Registrant as Specified in Charter) 1345 Avenue of the Americas, New York, New York 10105 (Address of Principal Executive Office) (Zip Code) Registrant's Telephone Number, including Area Code: (800) 221-5672 ----------------------------- EMILIE D. WRAPP AllianceBernstein L.P. 1345 Avenue of the Americas New York, New York 10105 (Name and address of agent for service) Copies of communications to: Paul M. Miller Seward & Kissel LLP 901 K Street, NW Suite 800 Washington, DC 20001 Approximate Date of Proposed Public Offering: As soon as practicable after this Registration Statement becomes effective. It is proposed that this filing will become effective on June 20, 2016 pursuant to Rule 488. Title of Securities Being Registered: Class Z shares of beneficial interest, par value $.001 per share, of the following series of the Registrant: AB High Yield Portfolio. No filing fee is required because an indefinite number of shares has previously been registered pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended. THE AB POOLING PORTFOLIOS 1345 Avenue of the Americas New York, New York 10105 Toll Free (800) 324-5060 June [__], 2016 Dear Shareholder: The Board of Trustees (the "Trustees") of The AB Pooling Portfolios (the "Trust"), a Massachusetts business trust and an open-end management investment company, is asking the shareholders of AB High-Yield Portfolio, a series of the Trust (the "Portfolio"), to approve an Agreement and Plan of Acquisition and Liquidation (the "Plan") providing for the acquisition of the assets and assumption of the liabilities of the Portfolio by AB High Yield Portfolio (the "Acquiring Portfolio"), a series of AB Bond Fund, Inc. (the "Company"), a Maryland corporation and an open-end management investment company. The Trustees are soliciting your written consent for the Portfolio to enter into the Plan and to effectuate the acquisition. A form that requests your consent is enclosed with the attached Information Statement/Prospectus. The proposed acquisition is described in more detail in the attached Information Statement/Prospectus. You should review the Information Statement/Prospectus carefully and retain it for future reference. After reviewing the Information Statement/Prospectus and the Plan, please complete and return the consent form. If the shareholders of the Portfolio approve the Plan providing for the acquisition by the Acquiring Portfolio, the acquisition is expected to be completed in July 2016. The Adviser and Trustees believe the reorganization will benefit shareholders of both Portfolios by consolidating management and result in efficiencies for the Portfolios. The acquisition is expected to be tax-free to the shareholders of the Portfolio for federal income tax purposes. The Portfolio and the Acquiring Portfolio have substantially similar investment objectives. The Acquiring Portfolio's investment objective is to seek to maximize total return consistent with prudent investment management, and the Portfolio's investment objective is to seek to achieve high total return by maximizing current income and, to the extent consistent with that objective, capital appreciation. Like the Portfolio, the Acquiring Portfolio normally invests at least 80% of its net assets in high-yield debt securities. Each of the Portfolio and the Acquiring Portfolio invests in debt securities with a range of maturities from short- to long-term and may invest in fixed-income securities of foreign issuers (though the Acquiring Portfolio's prospectus provides that it will most often invest in securities of U.S. issuers). Each of the Portfolio and the Acquiring Portfolio may also use derivatives and effectively leverage its assets by creating aggregate market exposure in excess of its net assets. Disclosure differences between the objectives and strategies for the Acquiring Portfolio and Portfolio have not resulted, and are not expected to result, in differences in the actual management of the Portfolios. The day-to-day management of, and investment decisions for, the Portfolio are made by Gershon M. Distenfeld, Douglas J. Peebles and Ashish C. Shah. The day-to-day management of, and investment decisions for, the Acquiring Portfolio are made by Mr. Distenfeld, Mr. Shah. Sherif M. Hamid and Ivan Rudolph-Shabinsky. If the Plan is approved, Mr. Peebles will join the portfolio management team of the Acquiring Portfolio. The Acquiring Portfolio's gross expenses are significantly higher than the Portfolio's expenses. The Portfolio currently pays no investment advisory or transfer agency fees, because the Portfolio is offered exclusively to mutual funds advised by, and certain other institutional clients of, the Adviser and such fees are effectively paid at the level of the funds investing in the Portfolio, while the Acquiring Portfolio pays such fees as a fund that is offered and sold to the public. The Adviser has agreed to waive fees and/or reimburse expenses borne by the AB Fund that is currently invested in the Portfolio in an amount equal to that Fund's share of the advisory fees in the Acquiring Portfolio until December 31, 2017. If the Plan is approved by the Portfolio's shareholders, each shareholder will receive Class Z shares of the Acquiring Portfolio. These shares of the Acquiring Portfolio will have an aggregate net asset value ("NAV") equal to the aggregate NAV of the shareholder's holding in the Portfolio. The Portfolio would then cease operations and terminate. Shareholders of the Portfolio will not be assessed any sales charges or other individual shareholder fees in connection with the acquisition. The Trustees have given careful consideration to the proposed Plan and the acquisition and have concluded that the acquisition is in the best interests of the Portfolio. The Trustees unanimously recommend that you approve the proposed Plan providing for the acquisition of the Portfolio by the Acquiring Portfolio by providing your written consent. Sincerely, Robert M. Keith President INFORMATION STATEMENT/PROSPECTUS June [__], 2016 FOR THE ACQUISITION OF AB High-Yield Portfolio a series of The AB Pooling Portfolios 1345 Avenue of the Americas New York, New York 10105 BY AB High Yield Portfolio a series of AB Bond Fund, Inc. 1345 Avenue of the Americas New York, New York l0105 (800) 324-5060 This Combined Information Statement and Prospectus (the "Information Statement/Prospectus") relates to the solicitation of shareholder approval of the acquisition of the assets and assumption of the liabilities (the "Acquisition") of the AB High-Yield Portfolio (the "Portfolio"), a series of The AB Pooling Portfolios, a Massachusetts business trust (the "Trust"), by AB High Yield Portfolio (the "Acquiring Portfolio"), a series of AB Bond Fund, Inc., a Maryland corporation (the "Company"), pursuant to an Agreement and Plan of Acquisition and Liquidation (the "Plan"). Each of the Trust and the Company is an open-end management investment company registered with the Securities and Exchange Commission (the "SEC"). This Information Statement/Prospectus sets forth the basic information you should know before approving the Plan (the "Proposal") by returning the enclosed written consent. You should read it and keep it for future reference. If the Proposal is approved, the Acquisition will be accomplished through the transfer of all of the assets of the Portfolio to the Acquiring Portfolio in exchange for Class Z shares of the Acquiring Portfolio, which will be distributed to shareholders of the Portfolio, and the assumption by the Acquiring Portfolio of the Portfolio's liabilities. The shares of the Acquiring Portfolio that a Portfolio shareholder receives will have a total net asset value ("NAV") equal to the NAV of shares held by the shareholder in the Portfolio as of the time that the shares of the Portfolio and Acquiring Portfolio (each, a "Portfolio" and together, the "Portfolios") are valued for determining NAV for the Acquisition (4:00 p.m. Eastern time, on the day before the date of the closing of the Acquisition (the "Closing Date"), or such other date and time as may be agreed upon by the parties to the Plan (the "Valuation Time")). Because Portfolio shareholders will receive Acquiring Portfolio shares, this Prospectus/Information Statement also serves as a prospectus for the offering of Class Z shares of the Acquiring Portfolio in connection with the Acquisition. The Portfolio expects that this Information Statement/Prospectus will be distributed on or about June [__], 2016. Additional information relating to the Portfolios and this Information Statement/Prospectus is set forth in the Statement of Additional Information to this Information Statement/Prospectus dated June [__], 2016 (the "Acquisition SAI"), which is incorporated herein by reference. Additional information about the Portfolios has been filed with the Securities and Exchange Commission (the "SEC") and is available upon request and without charge by writing to the applicable Portfolio or by calling (800) 324-5060. -------------------------------------------------------------------------------- THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED OR DISAPPROVED THESE SECURITIES NOR HAS IT PASSED ON THE ACCURACY OR ADEQUACY OF THIS INFORMATION STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. -------------------------------------------------------------------------------- TABLE OF CONTENTS Page PROPOSAL: APPROVAL OF AN AGREEMENT AND PLAN OF ACQUISITION AND LIQUIDATION............................................................4 SUMMARY......................................................................4 COMPARISON OF INVESTMENT ADVISORY FEES.................................5 COMPARISON OF EXPENSES.................................................5 COMPARISON OF INVESTMENT OBJECTIVES AND PRINCIPAL INVESTMENT STRATEGIES.......................................................7 FEDERAL INCOME TAX CONSEQUENCES........................................9 COMPARISON OF PORTFOLIO SHARES.........................................9 COMPARISON OF PURCHASE AND REDEMPTION PROCEDURES.......................9 SERVICE PROVIDERS.....................................................10 COMPARISON OF BUSINESS STRUCTURES.....................................10 PRINCIPAL RISKS.............................................................10 INFORMATION ABOUT THE ACQUISITION...........................................11 INTRODUCTION..........................................................11 DESCRIPTION OF THE PLAN...............................................12 REASONS FOR THE ACQUISITION...........................................12 DESCRIPTION OF THE SECURITIES TO BE ISSUED............................14 DIVIDENDS AND OTHER DISTRIBUTIONS.....................................14 SHARE CERTIFICATES....................................................14 FEDERAL INCOME TAX CONSEQUENCES.......................................14 CAPITALIZATION INFORMATION............................................15 INFORMATION ABOUT THE PORTFOLIOS............................................15 MANAGEMENT OF THE PORTFOLIOS..........................................16 ADVISORY AGREEMENTS AND FEES..........................................20 ACQUIRING PORTFOLIO DISTRIBUTION ARRANGEMENTS.........................21 ADMINISTRATIVE AND TRANSFER AGENCY ARRANGEMENTS.......................22 VOTING INFORMATION..........................................................22 LEGAL MATTERS...............................................................22 FINANCIAL HIGHLIGHTS........................................................22 INFORMATION FILED WITH THE SEC..............................................23 Appendix A: FORM OF AGREEMENT AND PLAN OF ACQUISITION AND LIQUIDATION......A-1 Appendix B: PORTFOLIO PERFORMANCE..........................................B-1 Appendix C: COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES...............C-1 Appendix D: CERTAIN INFORMATION APPLICABLE TO SHARES OF THE ACQUIRING PORTFOLIO .....................................................D-1 Appendix E: COMPARISON OF BUSINESS STRUCTURE AND ORGANIZATION .............E-1 Appendix F: CAPITALIZATION ................................................F-1 Appendix G: SHARE OWNERSHIP INFORMATION....................................G-1 PROPOSAL APPROVAL OF AN AGREEMENT AND PLAN OF ACQUISITION AND LIQUIDATION The Board of Trustees (the "Board" or the "Trustees") of the Trust approved the Plan at a meeting of the Board held on May 3-5, 2016. Subject to the approval of the shareholders of the Portfolio, the Plan provides for: o the transfer of all of the assets of the Portfolio to the Acquiring Portfolio in exchange for Class Z shares of the Acquiring Portfolio and the assumption by the Acquiring Portfolio of all of the liabilities of the Portfolio; o the distribution of Class Z shares of the Acquiring Portfolio to the shareholders of the Portfolio; and o the liquidation and termination of the Portfolio. Each shareholder of the Portfolio will become the owner of the number of full and fractional Class Z shares of the Acquiring Portfolio having an NAV equal to the aggregate NAV of the shareholder's Portfolio shares as of the Valuation Time. It is expected that shareholders of the Portfolio will recognize no gain or loss for federal income tax purposes in connection with the Acquisition. If the Proposal is approved by the shareholders of the Portfolio, the Acquisition is expected to occur in July 2016. The shareholders of the Portfolio must approve the Proposal in order for the Acquisition to occur. Approval of the Proposal requires the affirmative vote of the holders of a majority of the Portfolio's outstanding voting securities as defined in the 1940 Act, which means (a) 67% or more of the shares of the Portfolio represented at a meeting at which more than 50% of the outstanding shares are present in person or by proxy or (b) more than 50% of the outstanding shares of the Portfolio, whichever is less. The Acquisition does not require approval of the shareholders of the Acquiring Portfolio. Based on their consideration of, among other factors, the benefits expected to be received by shareholders of the Portfolio in becoming shareholders of the Acquiring Portfolio, the Trustees of the Trust concluded that the Acquisition is in the best interests of the Portfolio. In reaching this conclusion, the Trustees considered: the similarity between the investment policies and strategies of the Acquiring Portfolio and the Portfolio, and related risks; marketing benefits and the potential for growth of assets that could result from the Acquisition; the different advisory fee arrangements of the Acquiring Portfolio and the Portfolio and the Adviser's agreement to waive certain advisory fees/reimburse certain expenses of the Acquiring Portfolio and the AB Fund invested in the Portfolio; that the Adviser serves as investment adviser to both the Portfolio and the Acquiring Portfolio; that the portfolio managers of the Portfolio will be part of the portfolio management team of the Acquiring Portfolio. The Trustees unanimously recommend that shareholders of the Portfolio vote "FOR" the Plan. For a more complete discussion of the factors considered by the Trustees in approving the Acquisition, see "Information about the Acquisition - Reasons for the Acquisition." SUMMARY The following summary highlights differences between the Portfolios. This summary is not complete and does not contain all of the information that you should consider before voting on the Plan. This Summary is qualified in its entirety by reference to the additional information contained elsewhere in this Information Statement/Prospectus and the Plan, a form of which is attached to this Information Statement/Prospectus as Appendix A. Shareholders of the Portfolio should read this entire Information Statement/Prospectus carefully. For additional information about the Acquiring Portfolio, please read the prospectus of the Acquiring Portfolio. This Information Statement/Prospectus is being distributed to shareholders of the Portfolio on or about June [__], 2016. The Portfolio is a series of the Trust, an open-end management investment company that is organized as a Massachusetts business trust. The Acquiring Portfolio is a series of the Company, an open-end management investment company that is organized as a Maryland corporation. The investment objective of the Portfolio is to seek primarily to achieve high total return by maximizing current income and, to the extent consistent with that objective, capital appreciation. The investment objective of the Acquiring Portfolio is to seek to maximize total return consistent with prudent investment management. The Portfolio is a diversified investment company, and the Acquiring Portfolio is a non-diversified investment company. The Portfolio will be the accounting survivor in the Acquisition, which means, among other things, that the performance record of the Portfolio will become the performance record of the Acquiring Portfolio upon closing of the Acquisition. Performance information of the Portfolio is included in Appendix B. Comparison of Investment Advisory Fees Because the Portfolio is offered exclusively to mutual funds advised by, and certain other institutional clients of the Adviser, the Portfolio does not pay an advisory fee, with such fees effectively being paid at the level of the funds investing in the Portfolio. In contrast to the Portfolio, the Acquiring Portfolio is offered and sold to the public. The Acquiring Portfolio pays the Adviser a fee at an annualized rate of 0.60% of the first $2.5 billion of the Acquiring Portfolio's average daily net assets; 0.55% of the excess of $2.5 billion up to $5 billion; and 0.50% of the excess over $5 billion, which fee will accrue daily and be paid monthly. The Adviser has contractually agreed to waive its advisory fees and/or to bear expenses of the Acquiring Portfolio through January 31, 2018 to the extent necessary to prevent total Portfolio operating expenses (excluding acquired fund fees and expenses other than the advisory fees of any AB Mutual Funds in which the Acquiring Portfolio may invest, interest expense, taxes, extraordinary expenses, and brokerage commissions and other transaction costs), on an annualized basis from exceeding 0.80% of the average daily net assets for Class Z shares (the "Acquiring Portfolio Limitation"). Any fees waived and expenses borne by the Adviser prior to July 15, 2015 under the Acquiring Portfolio Limitation may be reimbursed by the Acquiring Portfolio until the end of the third fiscal year after the fiscal period in which the fee was waived or the expense was borne, provided that no reimbursement payment will be made that would cause the Acquiring Portfolio's total annual fund operating expenses to exceed the Acquiring Portfolio Limitation. In connection with the Acquisition, the Adviser has agreed to waive fees and/or reimburse the expenses payable to the Adviser by the AB Fund acquiring Class Z shares of the Acquiring Portfolio in the Acquisition (the "Investing AB Fund") in an amount equal to its share of the advisory fees of the Acquiring Portfolio until December 31, 2017 (the "Investing AB Fund Limitation"). The Portfolio and the Acquiring Portfolio reimburse the Adviser for the costs of providing administrative and accounting services to the Portfolios. Comparison of Expenses The Acquiring Portfolio currently has higher gross expenses than the Portfolio due primarily to differences in assets and structure of the Portfolios. For example, the Acquiring Portfolio pays transfer agency fees, while the Portfolio does not pay a transfer agency fee. The Acquiring Portfolio's gross expenses for Class Z shares were 3.86% for its fiscal year ended October 31, 2015 as compared to expenses of the Portfolio of 0.17% for the Portfolio's semi-annual period ended February 29, 2016 and 0.66% as of May 20, 2016. As noted above, pursuant to the Investing AB Fund Limitation, the Adviser has agreed to waive fees and/or reimburse the expenses payable by holders of Class Z shares received by the Portfolio's shareholders in an amount equal to their share of the advisory fees of the Acquiring Portfolio until December 31, 2017. As a result of the Investing AB Fund Limitation and Acquiring Portfolio Limitation, the net operating expenses for Class Z shares of the Acquiring Portfolio that would effectively be borne by the Investing AB Fund after the Acquisition are expected to be approximately 0.46% lower than the expenses of the Portfolio borne by the Investing AB Fund as of May 20, 2016 in connection with its investing in the Portfolio. Without these limitations, the cost to the Investing AB Fund of investing in the Acquiring Portfolio would be considerably higher than the cost of its investing in the Portfolio More detailed information about the Portfolios' fees is included in the tables below. Fee Table The purpose of the tables below is to assist an investor in understanding the various costs and expenses that a shareholder bears directly and indirectly from an investment in the Portfolios. The tables allow you to compare any sales charges and expenses of the Portfolio and (pro forma) estimates for the Acquiring Portfolio in its first year following the Acquisition. Under the Plan, shares of beneficial interest in the Portfolio will be exchanged for Class Z shares of the Acquiring Portfolio. The tables also include Annual Portfolio Operating Expenses and Expense Examples on a pro forma combined basis. The fees and expenses of the Portfolio shown below are based on the fees and expenses of the Portfolio incurred during its semi-annual fiscal period ended February 29, 2016. The fees and expenses of the Acquiring Portfolio shown below are based on the fees and expenses of the Acquiring Portfolio incurred during its fiscal year ended October 31, 2015. Pro forma fees and expenses are based on the estimated fees and expenses of the Acquiring Portfolio for its first fiscal period ending after the Acquisition. Pro forma numbers reflect the reduction in Portfolio assets that occurred between February 29, 2016 and the date of this Information Statement/Prospectus. Pro forma numbers are estimated in good faith and are hypothetical. Shareholder Fees (fees paid directly from your investment) Acquiring Portfolio Portfolio - Class Z Shares ------------------------------------------------------------------- Maximum Sales Charge (Load) Imposed on Purchases None None ------------------------------------------------------------------- Maximum Deferred Sales Charge (Load) None None ------------------------------------------------------------------- Annual Portfolio Operating Expenses (expenses that you pay each year as a percentage of the value of your investment) Acquiring Acquiring Portfolio Portfolio - - Class Z Portfolio Class Z (pro forma) -------------------------------------------------------------------------------- Management Fees 0% 0.60%* 0.60%* Distribution and/or Service (12b-1) Fees 0% None None Other Expenses: Transfer Agent 0% .02% .02% Other Expenses(a) .17% 3.24% .69% ---- ------ -------- Total Other Expenses .17% 3.26% .71% ---- ------ -------- Total Annual Portfolio Operating Expenses Before Waiver, If Applicable .17% 3.86% 1.31% ==== ====== ======== Fee Waiver and/or Expense Reimbursement N/A (3.06)%(b) (.51)%(b) ---- ------- -------- Total Annual Portfolio Operating Expenses After Fee Waiver and/or Expense Reimbursement, If Applicable .17% .80% .80% ==== ======= ======== -------------------------------------------------------------------------------- * The advisory fee of the Acquiring Portfolio is equal to an annualized rate of 0.60% of the first $2.5 billion of the Acquiring Portfolio's average daily net assets; 0.55% of the excess of $2.5 billion up to $5 billion; and 0.50% of the excess over $5 billion. (a) Other expenses do not include the projected costs and expenses of the Acquisition to be borne by the Portfolio. The basis point impact of such costs and expenses is projected to be approximately .06% based on current Portfolio assets. (b) The Adviser has contractually agreed to waive its investment advisory fees and/or to bear expenses of the Acquiring Portfolio through January 31, 2018 to the extent necessary to prevent total operating expenses (excluding acquired fund fees and expenses other than the advisory fees of any AB mutual funds in which the Acquiring Portfolio may invest, interest expense, taxes, extraordinary expenses, and brokerage commissions and other transaction costs), on an annual basis, from exceeding 0.80% of the average daily net assets for Class Z shares. Examples The following examples are intended to help you compare the costs of investing in each of the Portfolio and the Acquiring Portfolio. The examples assume that you invest $10,000 in each of the Portfolio and the Acquiring Portfolio after the Acquisition for the time periods indicated and then redeem all of your shares at the end of those periods. The examples also assume that your investment has a 5% return each year, that all distributions are reinvested, that each Portfolio's operating expenses remain the same and that the fee waiver, if applicable, is in effect for the time period indicated in the fee table. Although your actual costs may be higher or lower, based on these assumptions your costs would be: 1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- Portfolio $17 $ 55 $ 96 $ 217 Acquiring Portfolio - Class Z (pro forma) $82 $365 $669 $1,534 Portfolio Turnover Each Portfolio pays transaction costs, such as commissions, when it buys and sells securities (or "turns over" its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Portfolio shares are held in a taxable account. These costs, which are not reflected in annual Portfolio operating expenses or in the examples, affect the Portfolio's performance. During its most recent fiscal year ended August 31, 2015, the Portfolio's portfolio turnover rate was 51% of the average value of its portfolio. During its most recent fiscal year ended October 31, 2015, the Acquiring Portfolio's portfolio turnover rate was 56% of the average value of its portfolio. Comparison of Investment Objectives and Principal Investment Strategies The Portfolio and the Acquiring Portfolio have substantially similar investment objectives and strategies. Disclosure differences between the objectives and strategies for the Acquiring Portfolio and Portfolio have not resulted, and are not expected to result, in differences in the actual management of the Portfolios. While the Acquiring Portfolio's investment objective to seek to maximize total return consistent with prudent investment management reflects the Adviser's current practice to use concise investment objectives, the Portfolio's investment objective has not resulted in differences in the actual management of the Portfolio's portfolio. Like the Portfolio, the Acquiring Portfolio will normally invest at least 80% of its net assets in high-yield debt securities. Each of the Portfolio and the Acquiring Portfolio invests in debt securities with a range of maturities from short- to long-term and may invest in fixed-income securities of foreign issuers (though the Acquiring Portfolio will most often invest in securities of U.S. issuers). Each of the Portfolio and the Acquiring Portfolio may also use derivatives and effectively leverage its assets by creating aggregate market exposure in excess of its net assets. The following table shows the investment objective and principal investment strategies of each Portfolio: The AB Pooling Portfolios--AB AB Bond Fund, Inc.--AB High Yield High-Yield Portfolio Portfolio (Portfolio) (Acquiring Portfolio) -------------------------------------------------------------------------------- Investment The investment objective of the The investment objective of the Objective Portfolio is to seek primarily Acquiring Portfolio is to seek to to achieve high total return by maximize total return consistent maximizing current income and, with prudent investment to the extent consistent with management. that objective, capital appreciation. -------------------------------------------------------------------------------- Principal The Portfolio invests, under At least 80% of the Acquiring Investment normal circumstances, at least Portfolio's net assets will under Strategies 80% of its net assets in normal circumstances be invested high-yield debt securities. in fixed-income securities rated The Portfolio invests in a Ba1 or lower by Moody's Investors diversified mix of high yield, Service ("Moody's") or BB+ or below investment grade debt lower by Standard & Poor's Ratings securities, known as "junk Services ("S&P") or Fitch Ratings bonds." These securities involve ("Fitch") (commonly known as "junk greater volatility of price and bonds"), unrated securities risk of principal and income considered by the Adviser to be of than higher quality debt comparable quality, and related securities. The Portfolio is derivatives. The Acquiring managed to maximize current Portfolio may invest in income by taking advantage of fixed-income securities with a market developments, yield range of maturities from short- to disparities, and variations in long-term. The Acquiring Portfolio the creditworthiness of issuers. may also invest in equity The Portfolio uses various securities. strategies in attempting to achieve its objective. The In selecting securities for Portfolio may invest in debt purchase or sale by the Acquiring securities with a range of Portfolio, the Adviser attempts to maturities from short- to take advantage of inefficiencies long-term. that it believes exist in the global debt markets. These The Portfolio may invest in U.S. inefficiencies arise from investor Dollar-denominated and non-U.S. behavior, market complexity, and Dollar-denominated foreign the investment limitations to fixed-income securities. The which investors are subject. The Portfolio also may invest in Adviser combines quantitative mortgage-related and other analysis with fundamental credit asset-backed securities, loan and economic research in seeking participations, to exploit these inefficiencies. inflation-indexed securities, structured securities and The Acquiring Portfolio will most preferred stocks. The Portfolio often invest in securities of U.S. may use leverage for investment issuers, but may also purchase purposes by entering into fixed-income securities of foreign transactions such as reverse issuers, including securities repurchase agreements and dollar denominated in foreign currencies. rolls. Fluctuations in currency exchange rates can have a dramatic impact The Portfolio may invest in on the returns of fixed-income variable, floating, and inverse securities denominated in foreign floating-rate investments. The currencies. The Adviser may or may Portfolio may also invest in not hedge any foreign currency zero-coupon and interest-only or exposure through the use of principal-only securities. The currency-related derivatives. Portfolio may enter into derivatives transactions, such The Acquiring Portfolio expects to as options, futures contracts, use derivatives, such as options, forwards, and swaps. futures, forwards and swaps, to a significant extent. Derivatives may provide a more efficient and economical exposure to market segments than direct investments, and may also be more efficient way to alter the Acquiring Portfolio's exposure. The Acquiring Portfolio may, for example, use credit default and interest rate swaps to gain exposure to the fixed-income markets or particular fixed-income securities and, as noted above, may use currency derivatives. The Adviser may use derivatives to effectively leverage the Acquiring Portfolio by creating aggregate market exposure substantially in excess of the Acquiring Portfolio's net assets. Additional information about the Portfolios' investment objectives, strategies and policies is contained in Appendix C. Fundamental and Non-Fundamental Policies. Fundamental policies are policies that, under the Investment Company Act of 1940, as amended (the "1940 Act"), may not be changed without a shareholder vote. Please refer to Appendix C for additional information about the fundamental and non-fundamental policies of the Portfolio and the Acquiring Portfolio. Federal Income Tax Consequences The Portfolios expect that the Acquisition will constitute a "reorganization" within the meaning of Section 368 of the Internal Revenue Code of 1986, as amended (the "Code"), with substantially the following results: No gain or loss will be recognized by the Portfolio or its shareholders or the Acquiring Portfolio or its shareholders as a result of the Acquisition. The aggregate tax basis of the shares of the Acquiring Portfolio received by a shareholder of the Portfolio (including any fractional shares to which the shareholder may be entitled) will be the same as the aggregate tax basis of the shareholder's shares of the Portfolio. The holding period of the shares of the Acquiring Portfolio received by a shareholder of the Portfolio (including any fractional share to which the shareholder may be entitled) will include the holding period of the shares of the Portfolio held by the shareholder, provided that such shares are held as capital assets by the shareholder of the Portfolio at the time of the Acquisition. The holding period and tax basis of each asset of the Portfolio in the hands of the Acquiring Portfolio as a result of the Acquisition will generally be the same as the holding period and tax basis of each such asset in the hands of the Portfolio prior to the Acquisition. It is a condition to the closing of the Acquisition that both the Portfolio and Acquiring Portfolio receive an opinion of Seward & Kissel LLP confirming these consequences, as further discussed below under "Information About the Acquisition--Federal Income Tax Consequences." An opinion of counsel is not binding on the Internal Revenue Service. Additional tax considerations are discussed below under "Information About the Acquisition--Federal Income Tax Consequences." Comparison of Portfolio Shares The Portfolio offers one class of shares. In contrast, the Acquiring Portfolio offers multiple share classes, which, in addition to Class Z shares, include Class A, Class C, Advisor Class, Class R, Class K and Class I shares (such other classes collectively, the "Share Classes"). Information regarding the Share Classes, including the expenses of the Share Classes, is available in the Acquiring Portfolio's prospectus. Comparison of Purchase and Redemption Procedures As a result of the Acquisition, holders of Portfolio shares will receive Class Z shares of the Acquiring Portfolio. Because the Portfolio is offered exclusively to mutual funds advised by, and certain other institutional clients of the Adviser, and the Acquiring Portfolio is offered and sold to the public, the distribution and purchase procedures of the Portfolio and the Class Z shares of the Acquiring Portfolio are different. The Portfolio's shares are offered at net asset value ("NAV") without a sales charge or other fee. The Acquiring Portfolio's Class Z shares are offered at NAV, without a sales charge, to 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit-sharing and money purchase pension plans, defined benefit plans, and non-qualified deferred compensation plans where plan level or omnibus accounts are held on the books of the Acquired Portfolio. Class Z shares are also available to certain AllianceBernstein-sponsored group retirement plans and to certain institutional clients of the Adviser who invest at least $2,000,000 in the Acquiring Portfolio. Class Z shares generally are not available to retail non-retirement accounts, traditional and Roth IRAs, Coverdell Education Savings Accounts, SEPs, SAR-SEPs, SIMPLE IRAs and individual 403(b) plans. The Class Z shares of the Acquiring Portfolio may be exchanged for shares of the same class of other AB Mutual Funds provided that the other fund offers the same class of shares. More information on distribution, purchase and redemption procedures of the Acquiring Portfolio is provided in Appendix D. Service Providers The Portfolios are serviced by many of the same service providers, with one exception. The Adviser is the investment adviser to each Portfolio, AllianceBernstein Investment Services, Inc. ("ABIS") is the transfer agent for each Portfolio, AllianceBernstein Investments, Inc. is the distributor for each Portfolio and Ernst & Young LLP is the independent registered public accounting firm for each Portfolio. Because it will be most efficient for the custodian of the accounting survivor to serve as custodian of the Acquiring Fund following the Acquisition, State Street Bank and Trust Company ("State Street"), which is the custodian, foreign custody manager and accounting agent for the Portfolio, will serve in that capacity for the Acquiring Portfolio after the Acquisition in lieu of the Acquiring Portfolio's current custodian, foreign custody manager and accounting agent, which is Brown Brothers Harriman ("BBH"). Comparison of Business Structures As described above, the Portfolio is a series of the Trust, which is an open-end management investment company organized as a Massachusetts business trust governed by its Agreement and Declaration of Trust ("Declaration"), Bylaws and Massachusetts law. The Acquiring Portfolio is a series of the Company, an open-end management investment company organized as a Maryland corporation, which is governed by its Charter, Bylaws and Maryland law. For more information on the comparison of the business structures of the Portfolios, see Appendix E. PRINCIPAL RISKS The principal risks of the Acquiring Portfolio are similar to those of the Portfolio. These similar risks include market risk, interest rate risk, credit risk, below investment grade securities risk, inflation risk, derivatives risk, leverage risk, foreign (Non-U.S.) risk, currency risk, liquidity risk and management risk. The principal risks of investing in the Portfolio and the Acquiring Portfolio are described below. Each of the Portfolio and the Acquiring Portfolio could become subject to additional risks because the types of investments made by each Portfolio can change over time. Principal Risks of both the Portfolio and Acquiring Portfolio Market Risk. Market risk is the risk that the value of the Portfolio's investments will fluctuate as the bond or stock market fluctuates. The value of its investments may decline, sometimes rapidly and unpredictably, simply because or economic changes or other events that affect large portions of the market. Interest Rate Risk. Interest rate risk is the risk that changes in interest rates will affect the value of investments in fixed-income securities. When interest rates rise, the value of existing investments in fixed-income securities tends to fall and this decrease in value may not be offset by higher income from new investments. The Portfolio may be subject to heightened interest rate risk due to rising rates as the current period of historically low interest rates ends. Interest rate risk is generally greater for fixed-income securities with longer maturities or durations. Credit Risk. Credit risk is the risk that the issuer or the guarantor of a fixed-income security, or the counterparty to a derivatives or other contract, may be unable or unwilling to make timely payments of interest or principal, or to otherwise honor its obligations. The issuer or guarantor may default, causing a loss of the full principal amount of a security and accrued interest. The degree of risk for a particular security may be reflected in its credit rating. There is the possibility that the credit rating of a fixed-income security may be downgraded after purchase, which may adversely affect the value of the security. Below Investment Grade Risk. Investments in fixed-income securities with lower ratings (commonly known as "junk bonds") are subject to a higher probability that an issuer will default or fail to meet its payment obligations. These securities may be subject to greater price volatility, due to such factors as specific corporate developments, negative perceptions of the junk bond market generally and less secondary market liquidity. Inflation Risk. This is the risk that the value of assets or income from investments will be less in the future as inflation decreases the value of money. As inflation increases, the value of the Portfolio's assets can decline as can the value of the Portfolio's distributions. This risk is significantly greater for fixed-income securities with longer maturities. Derivatives Risk. Derivatives may be illiquid, difficult to price, and leveraged so that small changes may produce disproportionate losses for the Portfolio, and may be subject to counterparty risk to a greater degree than more traditional investments. Leverage Risk. To the extent the Portfolio uses leveraging techniques, its NAV may be more volatile because leverage tends to exaggerate the effect of changes in interest rates and any increase or decrease in the value of the Portfolio's investments. Foreign (Non-U.S.) Risk. Foreign risk is the risk that investments in securities of non-U.S. issuers may involve more risk than those of U.S. issuers. These securities may fluctuate more widely in price and may be less liquid due to adverse market, economic, political, regulatory or other factors. Currency Risk. Currency risk is the risk that fluctuations in currency exchange rates may negatively affect the value of the Portfolio's investments or reduce its returns. Liquidity Risk. Liquidity risk occurs when certain investments become difficult to purchase or sell. Difficulty in selling less liquid securities may result in sales at disadvantageous prices affecting the value of your investment in the Portfolio. Causes of liquidity risk may include low trading volumes, large positions and heavy redemptions of Portfolio shares. Over recent years liquidity risk has also increased because the capacity of dealers in the secondary market for fixed-income securities to make markets in these securities has decreased, even as the overall bond market has grown significantly, due to, among other things, structural changes, additional regulatory requirements and capital and risk restraints that have led to reduced inventories. Liquidity risk may be higher in a rising interest rate environment, when the value and liquidity of fixed-income securities generally decline. Management Risk. The Portfolio is subject to management risk because it is an actively-managed investment fund. The Adviser will apply its investment techniques and risk analyses in making investment decisions, but there is no guarantee that its techniques will produce the intended results. Additional Principal Risks of the Acquiring Portfolio Duration Risk. Duration is a measure that relates the expected price volatility of a fixed-income security to changes in interest rates. The duration of a fixed-income security may be shorter than or equal to full maturity of a fixed-income security. Fixed-income securities with longer durations have more risk and will decrease in price as interest rates rise. For example, a fixed-income security with a duration of three years will decrease in value by approximately 3% if interest rates increase by 1%. Emerging Market Risk. Investments in emerging market countries may have more risk because the markets are less developed and less liquid, and because these investments may be subject to increased economic, political, regulatory or other uncertainties. Diversification Risk. The Acquiring Portfolio may have more risk because it is "non-diversified", meaning that it can invest more of its assets in a smaller number of issuers. Accordingly, changes in the value of a single security may have a more significant effect, either negative or positive, on the Acquiring Portfolio's NAV. INFORMATION ABOUT THE ACQUISITION Introduction This Information Statement/Prospectus is provided to you to solicit your approval of the Proposal. This Information Statement/Prospectus is being distributed to shareholders of the Portfolio on or about June [__], 2016. Description of the Plan As provided in the Plan, the Portfolio will transfer all of its assets to the Acquiring Portfolio, and in exchange, the Acquiring Portfolio will assume all the liabilities of the Portfolio and deliver to the Portfolio a number of Class Z shares of the Acquiring Portfolio having an aggregate NAV equal to the value of the assets of the Portfolio, less the value of the liabilities of the Portfolio assumed by the Acquiring Portfolio. The assets and liabilities of the Portfolio will be valued as of the Valuation Time, as defined in the Plan. The Class Z shares of the Acquiring Portfolio will be delivered to the Portfolio on the next full business day following the Valuation Time (the "Exchange Date"). Immediately following the delivery of the Class Z shares to the Portfolio on the Exchange Date, the Portfolio will distribute pro rata to its shareholders of record as of the Valuation Time the Class Z shares received from the Acquiring Portfolio. The Class Z shares of the Acquiring Portfolio that a Portfolio shareholder receives will have a total NAV equal to the NAV of shares held by the shareholder in the Portfolio as of the Exchange Date. The distribution of Class Z shares to Portfolio shareholders will be accomplished by the establishment of accounts on the share records of the Acquiring Portfolio in the name of such Portfolio shareholders, each account representing the respective number of Class Z shares due the respective shareholder. Certificates for Class Z shares will not be issued. Following the distribution of Class Z shares of the Acquiring Portfolio in full liquidation of the Portfolio, the Portfolio will wind up its affairs, cease operations and terminate as soon as is reasonably practicable after the Acquisition. If the shareholders do not approve the Plan, the Acquisition will not occur. The Adviser will continue as investment adviser to the Portfolio and the current service providers will continue to provide services to the Portfolio. The Trustees of the Portfolio will consider options for the Portfolio. The Portfolios will bear 50% of the costs and expenses of the Acquisition (primarily legal expenses), allocated to each Portfolio based on their respective net assets, with the other 50% being borne by the Adviser. In addition, it is expected that the Adviser will bear the costs and expenses of the Acquisition allocable to the Acquiring Portfolio pursuant to the Acquiring Portfolio Limitation. The total costs and expenses of the Acquisition are estimated to be approximately $110,000. Completion of the Acquisition is subject to certain conditions set forth in the Plan, including approval of the Acquisition by shareholders of the Portfolio. Assuming satisfaction of the conditions in the Plan, the Acquisition will be completed on the Closing Date, which is expected to be in July 2016. However, any shareholder of the Portfolio may redeem his or her shares prior to the Acquisition. The cost of a "stub audit" that will be incurred due to a change in the fiscal year end of the Acquiring Portfolio is also expected to be borne by the Adviser pursuant to the Acquiring Portfolio Limitation. The Plan may be amended in any mutually agreed manner, except that no amendment may be made subsequent to shareholder approval of the Acquisition that materially alters the obligations of either party. The parties to the Plan may terminate the Plan by mutual consent and either party has the right to terminate the Plan under certain circumstances. Among other circumstances, either party may at any time terminate the Plan unilaterally upon a determination by the party's Directors or Trustees that proceeding with the Plan is not in the best interests of the relevant Portfolio or its shareholders. A form of the Plan is attached as Appendix A. Reasons for the Acquisition At the Annual Meeting of the Board of Trustees of the Trust held on May 3-5, 2016, the Adviser recommended that the Board of Trustees approve and recommend to the Portfolio's shareholders for their approval the proposed Plan and Acquisition. The Trustees considered the factors discussed below from the point of view of the interests of the Portfolio and its shareholders. After careful consideration, the Board of Trustees (including all Trustees who are not "interested persons" of the Trust, the Adviser or its affiliates) determined that the Acquisition would be in the best interests of the Portfolio's shareholders and that the interests of existing shareholders of the Portfolio would not be diluted as a result of the Acquisition. The Trustees have unanimously approved the Plan and Acquisition and recommended that the shareholders of the Portfolio vote in favor of the Acquisition by approving the Plan. The Adviser presented the following reasons relative to the Acquisition: o the Portfolio is an open-end fund originally created in May 2005 offered exclusively to mutual funds advised by, and certain other institutional clients of, the Adviser. Until recently, the shareholders of the Portfolio were several AB Funds and institutional accounts of the Adviser, which for various business reasons have, except for the Investing AB Fund, redeemed their shares of the Portfolio. Therefore, at present, the Investing AB Fund is the sole shareholder of the Portfolio, rendering the continued operation of the Portfolio inefficient. The Acquiring Portfolio, established in July 2014, has a substantially similar investment objective and policies, making it an appropriate choice for the acquisition of the Portfolio. At the meeting, the Trustees (with the advice and assistance of independent counsel) also considered, among other things: o the current asset levels of the Portfolio and the combined pro forma asset levels of the Acquiring Portfolio; o the historical performance results of the Portfolios, and the fact that the Portfolio will be the accounting survivor of the Acquisition, and the factors leading to that conclusion, including that the Portfolio will be the source of the substantial majority of the Acquiring Portfolio's assets following the Acquisition, has a longer performance record and that the Adviser believes that use of the Portfolio's performance results could be beneficial in marketing the Acquiring Portfolio, which will ultimately benefit shareholders through increased assets and lower fees; o the substantially similar investment objectives and principal investment strategies of the Portolios; o the use of the Barclays U.S. Corporate High Yield 2% Issuer Capped Index as a benchmark for both Portfolios; o the portfolio managers of the Portfolio will be part of the portfolio management team of the Acquiring Portfolio following the Acquisition; and o the differences between the investors of the Portfolio and the Acquiring Portfolio and the corresponding differences in expense ratios of the Portfolios; the impact of changes in the net assets of the Portfolio from redemptions and the corresponding net expense ratio of the Portfolio, giving effect to such redemptions; and the net expense ratio of the Acquiring Portfolio, giving effect to the Acquisition, and the Adviser's agreement to waive its fees and reimburse certain expenses of the Acquiring Portfolio through January 31, 2018. The Trustees also considered, among other things: o the form of the Plan and the terms and conditions of the Acquisition; o whether the Acquisition would result in the dilution of shareholders' interests; o the number of shareholder accounts and average account sizes of the Portfolios; o changes in service providers that would result from the Acquisition; o the benefits of the Acquisition to persons other than the Portfolio and its shareholders, in particular, the Adviser, which will benefit from the elimination of monitoring and administering the Portfolio, which has one shareholder, that is duplicative of its counterpart, the Acquiring Portfolio; o the fact that the Acquiring Portfolio will assume all the liabilities of the Portfolio; o the expected federal income tax consequences of the Acquisition; o whether the Acquisition would be preferable to acquisition by potential acquirors other than the Acquiring Portfolio, including funds that are not sponsored by the Adviser; and o 50% of the costs of the Acquisition will be borne by the Portfolios and 50% of the costs of the Acquisition will be borne by the Adviser. Also, at the May 3-5, 2016 Annual Meeting of the Board of Directors, the Directors of the Company (comprised of the same persons as the Board of the Trust) approved the proposed Plan in respect of the Acquiring Portfolio and determined that interests of shareholders of the Acquiring Portfolio would not be diluted. No vote of shareholders of the Acquiring Portfolio is required in connection with the Acquisition. Description of the Securities to be Issued Class Z shares of the Acquiring Portfolio will be issued to the Portfolio's shareholders in accordance with the Plan, as described above. Class Z shares are not subject to sales charges or 12b-1 distribution fees. Class Z shareholders will be entitled to exchange their Class Z shares of the Acquiring Portfolio for Class Z shares of another Portfolio in the AB mutual fund group without sales or service charges. Under the Plan, the Acquiring Portfolio will issue shares of its Class Z shares for distribution to the Portfolio shareholders. Each Class Z share of the Acquiring Portfolio represents an equal proportionate interest with the other Class Z shares of the Acquiring Portfolio. Each share has equal earnings, assets and voting privileges and is entitled to dividends and other distributions out of the income earned and gain realized on the assets belonging to the Acquiring Portfolio as authorized by the Company's Board of Directors. Holders of Class Z shares of the Acquiring Portfolio have one vote per full share and fractional votes for fractional shares held. Shares of the Acquiring Portfolio issued to the shareholders of the Portfolio pursuant to the Acquisition will be duly authorized, validly issued, fully paid and nonassessable when issued, will be transferable without restriction and will have no preemptive or conversion rights. Shares will be sold and redeemed based upon their NAV per share next determined after receipt of the purchase or redemption request. Dividends and Other Distributions On or before the Valuation Time, as defined in the Plan, the Portfolio will, if necessary, declare and pay as a distribution substantially all of its undistributed net investment income, net short-term capital gain and net long-term capital gain as applicable to maintain its treatment as a regulated investment company under the Code. Share Certificates The Acquiring Portfolio does not issue certificates representing Acquiring Portfolio shares. Ownership of the Acquiring Portfolio's Class Z shares will be shown on the books of the Acquiring Portfolio's transfer agent. Federal Income Tax Consequences Subject to certain stated assumptions contained therein, the Portfolio and the Acquiring Portfolio will receive an opinion of Seward & Kissel LLP substantially to the effect that, for United States federal income tax purposes: (i) the Acquisition will constitute a "reorganization" within the meaning of Section 368(a) of the Code, and each of the Portfolio and the Acquiring Portfolio will be a "party to a reorganization" within the meaning of Section 368(b) of the Code; (ii) no gain or loss will be recognized by the Portfolio on the transfer of all of the Portfolio's assets to the Acquiring Portfolio solely in exchange for Acquiring Portfolio shares and the assumption by the Acquiring Portfolio of the liabilities of the Portfolio, or upon the distribution of the Acquiring Portfolio shares to the shareholders of the Portfolio, except for (A) gain or loss that may be recognized on the transfer of "section 1256 contracts" as defined in Section 1256(b) of the Code, (B) gain that may be recognized on the transfer of stock in a "passive foreign investment company" as defined in Section 1297(a) of the Code, and (C) any other gain or loss that may be required to be recognized upon the transfer of an asset regardless of whether such transfer would otherwise be a non-recognition transaction under the Code; (iii) the tax basis in the hands of the Acquiring Portfolio of each asset of the Portfolio will be the same as the tax basis of such asset in the hands of the Portfolio immediately prior to the transfer thereof, increased by the amount of gain (or decreased by the amount of loss), if any, recognized by the Portfolio on the transfer; (iv) the holding period of each asset of the Portfolio in the hands of the Acquiring Portfolio, other than assets with respect to which gain or loss is required to be recognized, will include in each instance the period during which such asset was held by the Portfolio (except where investment activities of the Acquiring Portfolio have the effect of reducing or eliminating the holding period with respect to an asset); (v) no gain or loss will be recognized by the Acquiring Portfolio upon its receipt of the assets of the Portfolio solely in exchange for Acquiring Portfolio shares and the assumption of the liabilities of the Portfolio; (vi) no gain or loss will be recognized by the Portfolio shareholders upon the exchange of their Portfolio shares for Acquiring Portfolio shares as part of the Acquisition; (vii) the aggregate tax basis of the Acquiring Portfolio shares that each Portfolio shareholder receives in the Acquisition will be the same as the aggregate tax basis of the Portfolio shares exchanged therefor; and (viii) each Portfolio shareholder's holding period for the Acquiring Portfolio shares received in the Acquisition will include the period for which such shareholder held the Portfolio shares exchanged therefor, provided that the Portfolio shareholder held such Portfolio shares as capital assets on the date of the exchange. This opinion of counsel will not be binding on the Internal Revenue Service or a court and there is no assurance that the Internal Revenue Service or a court will not take a view contrary to those expressed in the opinion. Shareholders of the Portfolio are encouraged to consult their tax advisers regarding the effect, if any, of the Acquisition in light of their individual circumstances. Because the foregoing only relates to the federal income tax consequences of the Acquisition, those shareholders also should consult their tax advisers as to foreign, state and local tax consequences, if any, of the Acquisition. Capitalization Information For information on the existing capitalization of the Portfolio and pro forma capitalization of the Acquiring Portfolio, see Appendix F. INFORMATION ABOUT THE PORTFOLIOS The Portfolio, a "diversified" investment company registered under the 1940 Act, is a series of the Trust, which is organized as a Massachusetts business trust. The Acquiring Portfolio, a "non-diversified" investment company registered under the 1940 Act, is a series of the Company, which is organized as a Maryland corporation. Management of the Portfolios The Board of each of the Trust and the Company is comprised of the same individuals. In overseeing the management of the business and affairs of each Portfolio, each Board approves all significant agreements between the Trust (or the Company, as applicable) and persons or companies furnishing services to it, including the Trust's agreements with the Adviser and the Trust's other service providers, including the administrator, custodian and transfer agent. The day-to-day operations of each of the Trust and the Company are delegated to the officers of the Trust and the Company, as applicable, subject to each Portfolio's investment objective and policies and the general supervision by the Board. Subsequent to the consummation of the Acquisition, the Directors and officers of the Acquiring Portfolio will continue to serve as the Directors and officers of the combined Portfolio. The following table presents information about the Board. Other Public Portfolios Company Name, Address,* Principal in AB Fund Directorships Age and Occupation(s) Complex Currently (Year First During Past Five Overseen by Held by Elected**) Years or Longer Director Director --------------- ---------------- ----------- ------------- INDEPENDENT DIRECTORS Marshall C. Turner, Private Investor 110 Xilinx, Inc. Jr.,# since prior to 2011. (programmable Chairman of the Former Chairman and logic Board CEO of Dupont semi-conductors) 74 Photomasks, Inc. since 2007 (2005 - Portfolio) (components of (2014 - Acquiring semi-conductor Portfolio) manufacturing). He has extensive operating leadership and venture capital investing experience, including five interim or full-time CEO roles, and prior service as general partner of institutional venture capital partnerships. He also has extensive non-profit board leadership experience, and currently serves on the boards of two education and science-related non-profit organizations. He has served as a director of one AB Fund since 1992, and director or trustee of multiple AB Funds since 2005. He has been Chairman of the AB Funds since January 2014, and the Chairman of the Independent Directors Committees of such AB Funds since February 2014. John H. Dobkin,# Independent 110 None 74 Consultant since (2005 - Portfolio) prior to 2011. (2014 - Acquiring Formerly, President Portfolio) of Save Venice, Inc. (preservation organization) from 2001-2002; Senior Advisor from June 1999-June 2000 and President of Historic Hudson Valley (historic preservation) from December 1989-May 1999. Previously, Director of the National Academy of Design. He has served as a director or trustee of various AB Funds since 1992 and as Chairman of the Audit Committees of a number of such AB Funds from 2001-2008. Michael J. Downey,# Private Investor 110 Asia Pacific 72 since prior to 2011. Fund, Inc. (2005 - Portfolio) Formerly, managing (registered (2014 - Acquiring partner of Lexington investment Portfolio) Capital, LLC company) (investment advisory since firm) from December prior to 1997 until December 2011 2003. He also served as Director of Prospect Acquisition Corp. (financial services) from 2007 until 2009. From 1987 until 1993, Chairman and CEO of Prudential Mutual Fund Management, director of the Prudential mutual funds, and member of the Executive Committee of Prudential Securities Inc. He has served as a director or trustee of the AB Funds since 2005 and is a director and Chairman of one other registered investment company. William H. Foulk, Investment Adviser 110 None Jr.# and an Independent 83 Consultant since (2005 - Portfolio) prior to 2011. (2014 - Acquiring Previously, he was Portfolio) Senior Manager of Barrett Associates, Inc., a registered investment adviser. He was formerly Deputy Comptroller and Chief Investment Officer of the State of New York and, prior thereto, Chief Investment Officer of the New York Bank for Savings. He has served as a director or trustee of various AB Funds since 1983 and was Chairman of the Independent Directors Committees of the AB Funds from 2003 until early February 2014. He served as Chairman of such AB Funds from 2003 through December 2013. He is also active in a number of mutual fund related organizations and committees. D. James Guzy,# Chairman of the Board 110 None 79 of SRC Computers, (2005 - Portfolio) Inc. (2014 - Acquiring (semi-conductors), Portfolio) with which he has been associated since prior to 2011. He served as Chairman of the Board of PLX Technology (semi-conductors) since prior to 2011 until November 2013. He was a Director of Cirrus Logic Corporation (semi-conductors) from 1984 until July 2011. He was a director of Intel Corporation (semi-conductors) from 1969 until 2008, and served as Chairman of the Finance Committee of such company for several years until May 2008. He has served as a director or trustee of one or more of the AB Funds since 1982. Nancy P. Jacklin,# Professorial Lecturer 110 None 67 at the Johns Hopkins (2006 - Portfolio) School of Advanced (2014 - Acquiring International Studies Portfolio) (2008-2015). U.S. Executive Director of the International Monetary Fund (which is responsible for ensuring the stability of the international monetary system), (December 2002-May 2006); Partner, Clifford Chance (1992-2002); Sector Counsel, International Banking and Finance, and Associate General Counsel, Citicorp (1985-1992); Assistant General Counsel (International), Federal Reserve Board of Governors (1982-1985); and Attorney Advisor, U.S. Department of the Treasury (1973-1982). Member of the Bar of the District of Columbia and of New York; and member of the Council on Foreign Relations. She has served as a director or trustee of the AB Funds since 2006 and has been Chairman of the Governance and Nominating Committees of the AB Funds since August 2014. Garry L. Moody,# Independent 110 None 63 Consultant. Formerly, (2008 - Portfolio) Partner, Deloitte & (2014 - Acquiring Touche LLP, Portfolio) (1995-2008) where he held a number of senior positions, including Vice Chairman, and U.S. and Global Investment Management Practice Managing Partner; President, Fidelity Accounting and Custody Services Company (1993-1995); and Partner, Ernst & Young LLP (1975-1993), where he served as the National Director of Mutual Fund Tax Services and Managing Partner of its Chicago Office Tax department. He is a member of the Trustee Advisory Board of BoardIQ, a biweekly publication focused on issues and news affecting directors of mutual funds. He has served as a director or trustee, and as Chairman of the Audit Committees of the AB Funds since 2008. Earl D. Weiner,# Of Counsel, and 110 None 76 Partner prior to (2007 - Portfolio) January 2007, of the (2014 - Acquiring law firm Sullivan & Portfolio) Cromwell LLP and is a former member of the ABA Federal Regulation of Securities Committee Task Force to draft editions of the Fund Director's Guidebook. He also serves as a director or trustee of various non-profit organizations and has served as Chairman or Vice Chairman of a number of them. He has served as a director or trustee of the AB Funds since 2007 and served as Chairman of the Governance and Nominating Committees of the AB Funds from 2007 until August 2014. INTERESTED DIRECTOR Robert M. Keith, + Senior Vice President 110 None 55 of the Adviser++ and 1345 Avenue of the the head of Americas AllianceBernstein New York, NY 10105 Investments, Inc. (2010 - Portfolio) ("ABI")++ since July (2014 - Acquiring 2008; Director of ABI Portfolio) and President of the AB Mutual Funds. Previously, he served as Executive Managing Director of ABI from December 2006 to June 2008. Prior to joining ABI in 2006, Executive Managing Director of Bernstein Global Wealth Management, and prior thereto, Senior Managing Director and Global Head of Client Service and Sales of the Adviser's institutional investment management business since 2004. Prior thereto, he was Managing Director and Head of North American Client Service and Sales in the Adviser's institutional investment management business with which he had been associated since prior to 2004. * The address for each of the Independent Trustees/Directors is c/o AllianceBernstein L.P., Attention: Philip L. Kirstein, 1345 Avenue of the Americas, New York, NY 10105. ** There is no stated term of office for the Trustees/Directors. # Member of the Audit Committee, the Governance and Nominating Committee, and the Independent Directors Committee. + Mr. Keith is an "interested person," as defined in Section 2(a)(19) of the Investment Company Act of 1940 (the "1940 Act"), of the Portfolio due to his position as a Senior Vice President of the Adviser. ++ The Adviser and ABI are affiliates of the Portfolio. In addition to the public company directorships currently held by the Directors set forth in the table above, Mr. Turner was a director of SunEdison, Inc. (solar materials and power plants) since prior to 2011 until July 2014, Mr. Downey was a director of the Merger Fund (a registered investment company) since prior to 2011 until 2013, Mr. Guzy was a director of Cirrus Logic Corporation (semi-conductors) from prior to 2011 until July 2011 and served as Chairman of the Board of PLX Technology (semi-conductors) since prior to 2011 until November 2013, and Mr. Moody was a director of Greenbacker Renewable Energy Company LLC (renewable energy and energy efficiency projects) from August 2013 until January 2014. The management of, and investment decisions for, the Portfolio are made by Gershon M. Distenfeld, Douglas J. Peebles and Ashish C. Shah. The management of, and investment decisions for, the Acquiring Portfolio are made by Mr. Distenfeld, Mr. Shah, Sherif M. Hamid and Ivan Rudolph-Shabinsky. If the Plan is approved, Mr. Peebles will join the portfolio management team of the Acquiring Portfolio. Each of Mr. Distenfeld, Mr. Peebles, Mr. Shah and Mr. Rudolph-Shabinsky is a Senior Vice President of the Adviser, and has been associated with the Adviser since prior to 2011. Mr. Hamid is a Vice President of the Adviser, and has been associated with the Adviser since 2013. Prior to joining the Adviser, Mr. Hamid was at Barclays Capital where he was head of European Credit Strategy from 2011 to 2013, and a U.S. investment-grade credit strategist and U.S. high-yield analyst from prior to 2011 until 2011. Each Portfolio's SAI provides additional information about each portfolio manager's compensation, other accounts managed by each portfolio manager, and each portfolio manager's ownership of securities in the Portfolio. Advisory Agreements and Fees Each Portfolio's investment adviser is the Adviser, which is located at 1345 Avenue of the Americas, New York, New York 10105. The Adviser is a leading international investment adviser supervising client accounts with assets as of March 31, 2016 totaling approximately $479 billion (of which more than $97 billion represented assets of registered investment companies sponsored by the Adviser). As of March 31, 2016, the Adviser managed retirement assets for many of the largest public and private employee benefit plans (including 18 of the nation's FORTUNE 100 companies), for public employee retirement Portfolios in 25 states and the District of Columbia, for investment companies, and for foundations, endowments, banks and insurance companies worldwide. The 32 registered investment companies managed by the Adviser, comprising approximately 132 separate investment portfolios, had as of March 31, 2016 approximately 2.7 million shareholder accounts. The Adviser provides investment advisory services to each Portfolio under an advisory agreement (each an "Advisory Agreement"). Under its Advisory Agreement, the Portfolio does not pay an advisory fee, with such fees effectively being paid at the level of the funds investing in the Portfolio. Under the terms of its Advisory Agreement, the Acquiring Portfolio will pays the Adviser a fee at an annualized rate of 0.60% of the first $2.5 billion of the Acquiring Portfolio's average daily net assets; 0.55% of the excess of $2.5 billion up to $5 billion; and 0.50% of the excess over $5 billion, which fee will accrue daily and be paid monthly. Under each Portfolio's Advisory Agreement, the Adviser has agreed to provide certain clerical, accounting and administrative services to the Portfolio and is entitled to receive reimbursement from the Portfolio of the costs of providing those services. Each Advisory Agreement continues in effect from year to year if such continuance is specifically approved, at least annually, by a majority vote of the Trustees/Directors of the Portfolio who neither are interested persons of the Portfolio nor have any direct or indirect financial interest in the Advisory Agreement, cast in person at a meeting called for the purpose of voting on such approval. A discussion regarding the basis for the Trustees' approval of the Portfolio's Advisory Agreement is available in the Portfolio's semi-annual report to shareholders for the period ended February 29, 2016. A discussion regarding the basis for the Directors' approval of the Acquiring Portfolio's Advisory Agreement is available in the Portfolio's annual report to shareholders for the period ended October 31, 2014. In addition, the Adviser has entered into the Acquiring Portfolio Limitation, an expense limitation agreement with the Company, on behalf of the Acquiring Portfolio. Pursuant to the Acquiring Portfolio Limitation, the Adviser will waive its investment advisory fee and/or bear the expenses of the Acquiring Portfolio through January 31, 2018 to the extent necessary to prevent total Portfolio operating expenses on an annualized basis from exceeding 0.80% of the average daily net assets for Class Z shares. Any fees waived and expenses borne by the Adviser prior to July 15, 2015 under the Acquiring Portfolio Limitation may be reimbursed by the Acquiring Portfolio until the end of the third fiscal year after the fiscal period in which the fee was waived or the expense was borne, provided that no reimbursement payment will be made that would cause the Acquiring Portfolio's total annual fund operating expenses to exceed the expense limitations. Pursuant to the Investing AB Fund Limitation, the Adviser will also waive fees and/or reimburse the expenses payable to the Adviser by the Investing AB Fund in an amount equal to its share of the advisory fees of the Acquiring Portfolio until December 31, 2017. As a result of these undertakings, the net operating expenses for Class Z shares of the Acquiring Portfolio that will effectively be borne by the Investing AB Fund after the Acquisition are expected to be approximately 0.46% lower than the expenses of the Portfolio borne by the Investing AB Fund as of May 20, 2016 in connection with its investing in the Portfolio. Without these undertakings, the cost to the Investing AB Fund of investing in the Acquiring Portfolio would be considerably higher than the cost of its investing in the Portfolio. The total operating expenses to which the Acquiring Portfolio Limitation applies do not include fees and expenses of other investment companies in which the Acquiring Portfolio may invest (other than the advisory fees of any AB mutual funds in which the Acquiring Portfolio may invest), interest expense, taxes, extraordinary expenses, and brokerage commissions and other transaction costs ("excluded expenses"). The estimated difference between the net operating expenses of the Acquiring Portfolio and the Portfolio to the Investing AB Fund could be less than 0.46% if such excluded expenses are higher than anticipated. Termination of the Acquiring Portfolio Limitation may, depending on the assets of the Acquiring Portfolio at termination, result in a substantial increase in the expense ratio of the Class Z shares of the Acquiring Portfolio. Acquiring Portfolio Distribution Arrangements ABI, a wholly-owned subsidiary of the Adviser, serves as the distributor (principal underwriter) of the Acquiring Portfolio's shares. Under a Distribution Services Agreement between ABI and the Company (the "Distribution Services Agreement"), the Acquiring Portfolio may pay distribution and service fees to ABI at an annual rate of up to 0.25%, 1.00%, 0.50% and 0.25% of the Portfolio's average daily net assets attributable to its Class A, Class C, Class R and Class K shares, respectively. The Distribution Services Agreement is intended to defray expenses associated with the distribution of such share classes in accordance with a plan of distribution that is included in the Distribution Services Agreement and that has been duly adopted and approved in accordance with Rule 12b-1 adopted by the SEC under the 1940 Act. The Distribution Services Agreement provides that the Distributor will use such payments in their entirety for distribution assistance and promotional activities. Because these fees are paid out of the Acquiring Portfolio's assets on an ongoing basis, over time these fees will increase the cost of an investment in these share classes and may cost more than paying other types of sales charges. No distribution and/or service fees are paid with respect to Class Z shares, which Portfolio shareholders will receive in the Acquisition. Administrative and Transfer Agency Arrangements As noted above, under each Portfolio's Advisory Agreement, the Portfolio reimburses the Adviser for providing certain administrative services to the Portfolio. State Street and BBH also provide certain administrative services to the Portfolio and the Acquiring Portfolio, respectively. ABIS, an indirect wholly-owned subsidiary of the Adviser, acts as transfer agent for the Portfolios. Under a Transfer Agency Agreement between ABIS and the Company, each Portfolio compensates ABIS for providing personnel and facilities to perform transfer agency services for the Portfolio. VOTING INFORMATION The Trustees have fixed the close of business on June 20, 2016 (the "Record Date") as the date for the determination of shareholders entitled to vote on the Proposal. Shareholders of record of the Portfolio at the close of business on the Record Date are entitled to vote, even if they later sold such shares. As of June 20, 2016, the Portfolio had [_________] shares issued and outstanding. Appendix G to this Information Statement/Prospectus identifies holders of more than five percent (5%) of the Portfolio's shares, and contains information about any holdings of the shares of the Portfolio by the executive officers and Trustees of the Portfolio. Shareholders may vote by returning the enclosed written consent. Approval of the Proposal requires the affirmative vote of the holders of majority of the Portfolio's outstanding voting securities as defined in the 1940 Act, which means (a) 67% or more of the shares of the Portfolio represented at a meeting at which more than 50% of the outstanding shares are present in person or by proxy or (b) more than 50% of the outstanding shares of the Portfolio, whichever is less. LEGAL MATTERS The validity of shares offered hereby will be passed upon for the Acquiring Portfolio by Seward & Kissel LLP. FINANCIAL HIGHLIGHTS The fiscal year-end of the Portfolio is August 31. The fiscal year-end of the Acquiring Portfolio is October 31. The financial highlights of the Portfolio for the five years ended August 31, 2015 are contained in the Portfolio's most recent annual report to shareholders of the Portfolio dated August 31, 2015, and are incorporated herein by reference. The financial highlights of the Portfolio for the five years ended August 31, 2015 and the six-month period ended February 29, 2016 are contained in the Portfolio's most recent semi-annual report to shareholders of the Portfolio dated February 29, 2016, and are incorporated herein by reference. The financial highlights of the Acquiring Portfolio for the year ended October 31, 2015 and the period ended October 31, 2014 are contained in the Portfolio's most recent annual report to shareholders of the Acquiring Portfolio dated October 31, 2015, and are incorporated herein by reference. INFORMATION FILED WITH THE SEC Each Portfolio is subject to the information requirements of the Securities Exchange Act of 1934, as amended, and the 1940 Act and in accordance therewith, file reports and other information, including proxy materials and charter documents, with the SEC. Reports, proxy statements, registration statements and other information filed by each Portfolio may be inspected without charge and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, DC 20549. You may also view or obtain these documents from the SEC: By phone: 1-202-551-8090 (for information on the operations of the Public Reference Room only) By electronic mail: publicinfo@sec.gov (duplicating fee required) On the Internet: www.sec.gov Information relating to the Portfolio and the Acquiring Portfolio can be found in the following documents, which are incorporated herein by reference: o The Acquisition SAI dated as of June [__], 2016 that has been filed with the SEC in connection with the Information Statement/Prospectus (File No. [________]); o The prospectus and SAI of the Portfolio dated December 31, 2015, which were filed with the SEC on December 31, 2015, each as supplemented through the date hereof (File No. 811-21673); o The prospectus and SAI of the Acquiring Portfolio dated January 29, 2016, which were filed with the SEC on January 29, 2016, each as amended and supplemented through the date hereof (File No. 811-02383); o The annual report to shareholders of the Portfolio dated August 31, 2015, which contains audited financial statements and the related independent registered public accounting firm's report for the Portfolio for its fiscal year ended August 31, 2015 (File No. 811-21673); o The semi-annual report to shareholders of the Portfolio dated February 29, 2016, which contains unaudited financial statements for the Portfolio for its fiscal year ended February 29, 2016 (File No. 811-21673); and o The annual report to shareholders of the Acquiring Portfolio dated October 31, 2015, which contains audited financial statements and the related independent registered public accounting firm's report for the Acquiring Portfolio for its fiscal year ended October 31, 2015 (File No. 811-02383). Copies of the annual reports to shareholders of the Portfolio and Acquiring Portfolio are available, along with the Information Statement/Prospectus and Acquisition SAI, upon request, without charge, by writing to the address or calling the telephone number listed below. By mail: c/o AllianceBernstein Investor Services, Inc. P.O. Box 786003 San Antonio, TX 78278-6003 By phone: (800) 324-5060 THE TRUSTEES RECOMMEND THAT YOU VOTE FOR THE PROPOSAL. Appendix A FORM OF AGREEMENT AND PLAN OF ACQUISITION AND LIQUIDATION RELATING TO THE ACQUISITION OF THE ASSETS AND LIABILITIES OF THE AB HIGH-YIELD PORTFOLIO OF THE AB POOLING PORTFOLIOS As of May [__], 2016 This Agreement and Plan of Acquisition and Liquidation (the "Plan") is made as of this [__] day of May, 2016, by and among AB Bond Fund, Inc. (the "Company"), a Maryland corporation, on behalf of its series, AB High Yield Portfolio (the "Acquiring Portfolio"); The AB Pooling Portfolios (the "Trust"), a Massachusetts business trust, on behalf of its series, AB High-Yield Portfolio (the "Portfolio"); and, solely for purposes of Section 24, AllianceBernstein L.P., the investment adviser to the Acquiring Portfolio and the Portfolio (the "Adviser"). WHEREAS, the Portfolio and the Acquiring Portfolio are each series of entities registered as open-end management investment companies with the Securities and Exchange Commission (the "SEC") under the Investment Company Act of 1940, as amended (the "1940 Act"); WHEREAS, the parties desire that the Portfolio transfer all of its assets to the Acquiring Portfolio in exchange for Class Z shares of the Acquiring Portfolio of equal net asset value ("Acquisition Shares") and that the Acquiring Portfolio assume the liabilities of the Portfolio and distribute the Acquisition Shares to shareholders of the Portfolio (the "Acquisition"); and that the Portfolio thereafter liquidate and terminate; and WHEREAS, the parties intend that the Acquisition qualify as a "reorganization" within the meaning of Section 368(a) of the United States Internal Revenue Code of 1986, as amended (the "Code"), and any successor provisions, and that with respect to the Acquisition, the Acquiring Portfolio and the Portfolio will each be a "party to a reorganization" within the meaning of Section 368(b) of the Code; Now, therefore, the Company, on behalf of the Acquiring Portfolio, and the Trust, on behalf of the Portfolio, agree as follows: 1. Definitions ----------- In addition to the terms elsewhere defined herein, each of the following terms shall have the meaning indicated for that term as follows: 1934 Act................ Securities Exchange Act of 1934, as amended. 1933 Act................ Securities Act of 1933, as amended. Assets.................. All assets of any kind and all interests, rights, privileges and powers of or attributable to the Portfolio or its shares, as appropriate, whether or not determinable at the appropriate Effective Time and wherever located, including, without limitation, all cash, cash equivalents, securities, commodities, futures interests, claims (whether absolute or contingent, known or unknown, accrued or unaccrued or conditional or unmatured), contract rights and receivables (including dividend and interest receivables) owned by the Portfolio or attributable to its shares and any deferred or prepaid expense shown as an asset on the Portfolio's books. Closing Date............ Shall be on such date following the date that shareholders of the Portfolio approve the Plan as the parties may agree. Declaration............. The Trust's Agreement and Declaration of Trust. Effective Time.......... 10:00 a.m. Eastern time on the Closing Date, or such other time as the parties may agree to in writing. Financial Statements.... The audited financial statements of the relevant Portfolio for its most recently completed fiscal year. Portfolio............... The Acquiring Portfolio and/or the Portfolio, as the case may be. Liabilities............. All liabilities, expenses and obligations of any kind whatsoever of the Portfolio, whether known or unknown, accrued or unaccrued, absolute or contingent or conditional or unmatured, except that expenses of the Acquisition contemplated hereby to be paid by the Portfolio pursuant to Section 24 of the Plan and which shall not be assumed or paid by the Acquiring Portfolio shall not fall within the definition of Liabilities for purposes of this Plan. N-14 Registration The Registration Statement of the Company (with Statement............... respect to the Acquiring Portfolio) on Form N-14 under the 1940 Act that will register the Acquisition Shares to be issued in the Acquisition and will include the proxy materials necessary for the shareholders of the Portfolio to approve the Acquisition. Valuation Time.......... The close of regular session trading on the New York Stock Exchange ("NYSE") on the day before the Closing Date or such other time as may be mutually agreed upon, when for purposes of the Plan, the Acquiring Portfolio determines its net asset value per Acquisition Share and the Portfolio determines the net value of the Assets. NAV..................... A Portfolio's net asset value per share, which is calculated by valuing and totaling its assets and then subtracting its liabilities and then dividing the balance by the number of shares that are outstanding. 2. Regulatory Filings ------------------ The Company, on behalf of the Acquiring Portfolio, shall promptly prepare and file the N-14 Registration Statement with the SEC, and the Company and the Trust, on behalf of each Portfolio, also shall make any other required or appropriate filings with respect to the actions contemplated hereby. 3. Shareholder Action ------------------ As soon as practicable after the effective date of the N-14 Registration Statement, the Portfolio shall request that the shareholders of the Portfolio consider and vote upon the Plan and such other matters as the Board of Trustees may determine by written consent. Such approval by the shareholders of the Portfolio shall, to the extent necessary to permit the consummation of the transactions contemplated herein without violating any investment objective, policy or restriction of the Portfolio, be deemed to constitute approval by the shareholders of a temporary amendment of any investment objective, policy or restriction that would otherwise be inconsistent with or violated upon the consummation of such transactions solely for the purpose of consummating such transactions. 4. Transfer of the Portfolio's Assets ---------------------------------- The Acquiring Portfolio and the Portfolio shall take the following steps with respect to the Acquisition, as applicable: (a) On or prior to the Closing Date, the Portfolio shall pay or provide for the payment of all of the Liabilities, expenses, costs and charges of or attributable to the Portfolio that are known to the Portfolio and that are due and payable prior to or as of the Closing Date. (b) On or prior to the Valuation Date, except to the extent prohibited by Rule 19b-1 under the 1940 Act, the Portfolio will declare to Portfolio shareholders of record a dividend or dividends which, together with all previous such dividends, shall have the effect of distributing (a) all the excess of (i) Portfolio's investment income excludable from gross income under Section 103(a) of the Code over (ii) Portfolio's deductions disallowed under Sections 265 and 171(a)(2) of the Code, (b) all of Portfolio's investment company taxable income (as defined in Code Section 852), (computed in each case without regard to any deduction for dividends paid), and (c) all of Portfolio's net realized capital gain (as defined in Code Section 1222), if any (after reduction for any capital loss carryover), in each case for both the taxable year ending on December 31, 2015, and for the short taxable year beginning on January 1, 2016, and ending on the Closing Date. Such dividends will be declared and paid to ensure continued qualification of the Portfolio as a "regulated investment company" for tax purposes and to eliminate Portfolio-level tax. (c) At the Effective Time, the Portfolio shall assign, transfer, deliver and convey the Assets to the Acquiring Portfolio, subject to the Liabilities. The Acquiring Portfolio shall then accept the Assets and assume the Liabilities such that at and after the Effective Time (i) the Assets at and after the Effective Time shall become and be assets of the Acquiring Portfolio, and (ii) the Liabilities at the Effective Time shall attach to the Acquiring Portfolio, and shall be enforceable against the Acquiring Portfolio to the same extent as if initially incurred by the Acquiring Portfolio. (d) Within a reasonable time prior to the Closing Date, the Portfolio shall provide, if requested, a list of the Assets to the Acquiring Portfolio. The Portfolio may sell any asset on such list prior to the Effective Time. After the Portfolio provides such list, the Portfolio will not acquire any additional securities or permit to exist any encumbrances, rights, restrictions or claims not reflected on such list, without the approval of the Acquiring Portfolio. Within a reasonable time after receipt of the list and prior to the Closing Date, the Acquiring Portfolio will advise the Portfolio in writing of any investments shown on the list that the Acquiring Portfolio has determined to be inconsistent with its investment objective, policies and restrictions. The Portfolio will dispose of any such securities prior to the Closing Date to the extent practicable and consistent with applicable legal requirements, including the Portfolio's investment objectives, policies and restrictions. In addition, if the Acquiring Portfolio determines that, as a result of the Acquisition, the Acquiring Portfolio would own an aggregate amount of an investment that would exceed a percentage limitation applicable to the Acquiring Portfolio, the Acquiring Portfolio will advise the Portfolio in writing of any such limitation and the Portfolio shall dispose of a sufficient amount of such investment as may be necessary to avoid the limitation as of the Effective Time, to the extent practicable and consistent with applicable legal requirements, including the Portfolio's investment objectives, policies and restrictions. (e) The Portfolio shall assign, transfer, deliver and convey the Assets to the Acquiring Portfolio at the Effective Time on the following basis: (1) The value of the Assets less the Liabilities of the Portfolio, determined as of the Valuation Time, shall be divided by the then NAV of one Acquisition Share, and, in exchange for the transfer of the Assets by the Portfolio to the Acquiring Portfolio, the Acquiring Portfolio shall assume the Liabilities and simultaneously issue and deliver to the Portfolio the number of Acquisition Shares, rounded to the fourth decimal place or such other decimal place as the parties may agree to in writing; (2) The NAV of each Acquisition Share to be delivered to the Portfolio shall be the NAV determined as of the Valuation Time in accordance with the Company's then applicable valuation procedures, and the NAV of the Assets to be conveyed to the Acquiring Portfolio shall be determined as of the Valuation Time in accordance with the then applicable valuation procedures of the Trust and the value of the assets to be conveyed; (3) The number of Acquisition Shares (including fractional shares, if any) to be delivered to the Portfolio shall be determined by dividing the aggregate net assets of the Portfolio by the NAV per share of the Acquiring Portfolio (determined in accordance with Section 4(e)(2) of this Plan); and (4) The portfolio securities of the Portfolio shall be made available by the Acquiring Portfolio to State Street Bank and Trust Company, as custodian for the Portfolio and the Acquiring Portfolio after the Closing Date(the "Custodian"), for examination no later than five business days preceding the Valuation Time. On the Closing Date, such portfolio securities and all the Portfolio's cash shall be delivered by the Portfolio to the Custodian for the account of the Acquiring Portfolio, such portfolio securities to be duly endorsed in proper form for transfer in such manner and condition as to constitute good delivery thereof in accordance with the custom of brokers or, in the case of portfolio securities held in the U.S. Treasury Department's book-entry system or by The Depository Trust Company, Participants Trust Company or other third party depositories, by transfer to the account of the Custodian in accordance with Rule 17f-4, Rule 17f-5 or Rule 17f-7, as the case may be, under the 1940 Act and accompanied by all necessary federal and state stock transfer stamps or a check for the appropriate purchase price thereof. The cash delivered shall be in the form of currency or certified or official bank checks, payable to the order of the Custodian or shall be wired to an account pursuant to instructions provided by the Acquiring Portfolio. (f) Promptly after the Closing Date, the Portfolio will deliver to the Acquiring Portfolio a Statement of Assets and Liabilities of the Portfolio as of the Closing Date. 5. Liquidation and Termination of the Portfolio, Registration of Acquisition Shares and Access to Records -------------------------------------------------------------------------- The Portfolio and the Acquiring Portfolio also shall take the following steps, as applicable: (a) At or as soon as reasonably practical after the Effective Time, the Portfolio shall completely liquidate and terminate by transferring to its shareholders of record the Acquisition Shares it receives pursuant this Plan. The Acquiring Portfolio shall establish accounts on its share records and note on such accounts the names of the former Portfolio shareholders and the amount of Acquisition Shares that former Portfolio shareholders are due based on their respective holdings of shares of the Portfolio as of the close of business on the Closing Date. The Acquiring Portfolio shall not issue certificates representing Acquisition Shares in connection with such exchange. All issued and outstanding shares in connection with such exchange will be simultaneously cancelled on the books of the Portfolio. Ownership of Acquisition Shares will be shown on the books of the Acquiring Portfolio's transfer agent. Following distribution by the Portfolio to its shareholders of all Acquisition Shares delivered to the Portfolio, the Portfolio shall wind up its affairs and shall take all steps as are necessary and proper to terminate its existence as soon as is reasonably possible after the Effective Time. (b) At and after the Closing Date, the Portfolio shall provide the Acquiring Portfolio and its transfer agent with immediate access to: (i) all records containing the names, addresses and taxpayer identification numbers of all of the Portfolio's shareholders and the number and percentage ownership of the outstanding shares of the Portfolio owned by shareholders as of the Effective Time, and (ii) all original documentation (including all applicable Internal Revenue Service forms, certificates, certifications and correspondence) relating to the Portfolio shareholders' taxpayer identification numbers and their liability for or exemption from back-up withholding. The Portfolio shall preserve and maintain, or shall direct its service providers to preserve and maintain, records with respect to the Portfolio as required by Section 31 of, and Rules 31a-1 and 31a-2 under, the 1940 Act. 6. Certain Representations and Warranties of the Portfolio ------------------------------------------------------- The Trust, on behalf of itself or the Portfolio, as applicable, represents and warrants to the Acquiring Portfolio as follows: (a) The Portfolio is a duly established series of the Trust, which is a Massachusetts business trust duly organized and validly existing and in good standing under the laws of the Commonwealth of Massachusetts. The Trust is registered with the SEC as an open-end management investment company under the 1940 Act and the registration of the Portfolio shares under the 1933 Act will be in full force and effect as of the Effective Time. (b) The Trust, on behalf of the Portfolio, has the power and all necessary federal, state and local qualifications and authorizations to own all of the Assets, to carry on its business, to enter into this Plan and to consummate the transactions contemplated herein. (c) The Board of Trustees of the Trust has duly authorized the execution and delivery of this Plan and the transactions contemplated herein with respect to the Portfolio. Duly authorized officers of the Trust, on behalf of the Portfolio, have executed and delivered the Plan. The Plan represents a valid and binding contract of the Trust, on behalf of the Portfolio, enforceable against the Portfolio in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization, arrangement, moratorium, and other similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. The execution and delivery of this Plan by the Trust does not, and, subject to the approval of shareholders referred to in Section 3 hereof, the consummation of the transactions contemplated by this Plan will not, violate federal securities laws or Massachusetts law, or the Trust's Declaration or Bylaws or any material agreement to which the Portfolio is subject. Except for the approval of the Portfolio's shareholders and the Board of Trustees of the Trust, the Trust does not need to take any other action to authorize its officers to effectuate this Plan and the transactions contemplated herein on behalf of the Portfolio. (d) The Portfolio is a separate series of the Trust that is treated as a separate corporation from each other series of the Trust under Section 851(g) of the Code. The Portfolio has qualified as a regulated investment company under Part I of Subchapter M of Subtitle A, Chapter 1, of the Code, and has been eligible for taxation under Section 852(b) of the Code, in respect of each taxable year since the commencement of its operations and intends to continue to qualify as a regulated investment company for its taxable year that includes the Closing Date. (e) The information pertaining to the Portfolio included within the N-14 Registration Statement when filed with the SEC, when Part A of the N-14 Registration Statement is distributed to shareholders, and at the Effective Time, insofar as it relates to the Portfolio, shall (i) comply in all material respects with the applicable provisions of the 1933 Act and the 1940 Act, and the rules and regulations thereunder and applicable state securities laws, and (ii) not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. (f) The Trust has duly authorized and validly issued all issued and outstanding shares of the Portfolio, and all such shares are fully paid and nonassessable and were offered for sale and sold in conformity with the registration requirements of all applicable federal and state securities laws. There are no outstanding options, warrants or other rights to subscribe for or purchase any of the shares of the Portfolio, and there are no securities convertible into shares of the Portfolio. (g) The Trust shall operate its business in the ordinary course between the date hereof and the Effective Time. Such ordinary course of business will include the declaration and payment of customary dividends and distributions and any other dividends and distributions referred to in Section 4(b) hereof. (h) At the Effective Time, the Portfolio will have good and marketable title to the Assets and full right, power and authority to assign, transfer, deliver and convey the Assets. (i) The Financial Statements of the Portfolio, a copy of which has been previously delivered to the Acquiring Portfolio, fairly present the financial position of the Portfolio as of the Portfolio's most recent fiscal year-end and the results of the Portfolio's operations and changes in the Portfolio's net assets for the periods indicated. (j) To the knowledge of the Portfolio, the Portfolio has no liabilities, whether or not determined or determinable, other than the liabilities disclosed or provided for in its Financial Statements or liabilities incurred in the ordinary course of business subsequent to the date of the most recent Financial Statement referencing liabilities and reflected in its NAV. (k) To the knowledge of the Portfolio, except as has been disclosed in writing to the Acquiring Portfolio, no claims, actions, suits, investigations or proceedings of any type are pending or threatened against the Portfolio or any of its properties or assets or any person whom the Portfolio may be obligated to indemnify in connection with such litigation, proceeding or investigation. Subject to the foregoing, there are no facts that the Portfolio has reason to believe are likely to form the basis for the institution of any such claim, action, suit, investigation or proceeding against the Portfolio. The Portfolio is not a party to nor subject to the provisions of any order, decree or judgment of any court or governmental body that adversely affects, or is reasonably likely to adversely affect, its financial condition, results of operations, or the Assets or its ability to consummate the transactions contemplated by the Plan. (l) Except for agreements entered into or granted in the ordinary course of its business, in each case under which no material default exists, and this Plan, the Portfolio is not a party to or subject to any material contract or other commitments, which if terminated, may result in material liability to the Portfolio or under which (whether or not terminated) any material payment for periods subsequent to the Closing Date will be due from the Portfolio. (m) The Trust has filed or will file its federal income tax returns, copies of which have been previously made available or will be made available to the Acquiring Portfolio, for all taxable years ending on or before the Closing Date, and has paid or will pay all taxes shown as due on such returns. All of the Portfolio's tax liabilities will have been adequately provided for on its books. No such return is currently under audit and no unpaid assessment has been asserted with respect to such returns. To the best of the Trust's knowledge, it will not have any tax deficiency or liability asserted against it or question with respect thereto raised, and it will not be under audit by the Internal Revenue Service or by any state or local tax authority for taxes in excess of those already paid. The Trust will timely file its federal income tax return for each subsequent taxable year including its current taxable year. (n) Since the date of the Financial Statements of the Portfolio, except for the information that has been disclosed to the Boards of the Trust and the Company and that has been reflected in the Information Statement/Prospectus concerning the net assets of the Portfolio, there has been no material adverse change in the Portfolio's financial condition, results of operations, business, or Assets. For this purpose, negative investment performance shall not be considered a material adverse change. (o) The Portfolio's investment operations from inception to the date hereof have been in compliance in all material respects with the investment policies and investment restrictions set forth in its prospectus or prospectuses and statement or statements of additional information as in effect from time to time, except as previously disclosed in writing to the Acquiring Portfolio. (p) The Acquisition Shares to be issued to the Portfolio pursuant to paragraph 4(e)(1) will not be acquired for the purpose of making any distribution thereof other than to the Portfolio shareholders as provided in paragraph 4(e)(1). (q) The Trust, or its agent(s), (i) holds or has obtained a valid Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Withholding (or other appropriate series of Form W-8, as the case may be) or Form W-9, Request for Taxpayer Identification Number and Certification, for each Portfolio shareholder of record, which Form W-8 or Form W-9 can be associated with reportable payments made by the Portfolio to such shareholder, and/or (ii) has otherwise timely instituted any required backup withholding procedures with respect to such shareholder as provided by Section 3406 of the Code and the regulations thereunder. 7. Certain Representations and Warranties of the Acquiring Portfolio ----------------------------------------------------------------- The Company, on behalf of itself or the Acquiring Portfolio, as applicable, represents and warrants to the Portfolio as follows: (a) The Acquiring Portfolio is a duly established series of the Company, which is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Maryland. The Company is registered with the SEC as an open-end management investment company under the 1940 Act and the registration of the Acquiring Portfolio shares under the 1933 Act will be in full force and effect as of the Effective Time. (b) The Company, on behalf of the Acquiring Portfolio, has the power and all necessary federal, state and local qualifications and authorizations to own all of its assets, to carry on its business, to enter into this Plan and to consummate the transactions contemplated herein. (c) The Board of Directors of the Company has duly authorized execution and delivery of this Plan and the transactions contemplated herein on behalf of the Company, on behalf of the Acquiring Portfolio. Duly authorized officers of the Acquiring Portfolio have executed and delivered the Plan. The Plan represents a valid and binding contract of the Company, on behalf of the Acquiring Portfolio, enforceable against the Acquiring Portfolio in accordance with its terms, subject as to enforcement to bankruptcy, insolvency, reorganization, arrangement, moratorium and other similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. The execution and delivery of this Plan by the Company does not, and the consummation of the transactions contemplated by this Plan will not, violate the federal securities laws or Maryland law or the Company's Charter or Bylaws or any material agreement to which the Acquiring Portfolio is subject. Except for the approval of the Board of Directors of the Company, the Company does not need to take any other action to authorize its officers to effectuate the Plan and the transactions contemplated herein on behalf of the Acquiring Portfolio. (d) The Acquiring Portfolio is a separate series of the Company that is treated as a separate corporation from each other series of the Company under Section 851(g) of the Code. The Acquiring Portfolio has qualified as a regulated investment company under Part I of Subchapter M of Subtitle A, Chapter 1, of the Code and is eligible for taxation under Section 852(b) of the Code for the taxable year that will include the Closing Date and expects to so qualify for each subsequent taxable year. (e) The N-14 Registration Statement, when filed with the SEC, when Part A of the N-14 Registration Statement is distributed to shareholders of the Portfolio and at the Effective Time, insofar as it relates to the Acquiring Portfolio, shall (i) comply in all material respects with the applicable provisions of the 1933 Act and the 1940 Act, and the rules and regulations thereunder and applicable state securities laws and (ii) not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading. (f) The Company has duly authorized and validly issued all issued and outstanding shares of the Acquiring Portfolio, and all such shares are fully paid and non assessable and were offered for sale and sold in conformity with the registration requirements of all applicable federal and state securities laws. The Acquiring Portfolio has duly authorized the Acquisition Shares referred to in Section 4(e) hereof to be issued and delivered to the Portfolio as of the Effective Time. When issued and delivered, such Acquisition Shares shall be validly issued, fully paid and non assessable, and no shareholder of the Acquiring Portfolio shall have any preemptive right of subscription or purchase in respect of any such share. There are no outstanding options, warrants or other rights to subscribe for or purchase any Acquisition Shares, nor are there any securities convertible into Acquisition Shares. (g) To the knowledge of the Acquiring Portfolio, except as has been disclosed in writing to the Portfolio, no claims, actions, suits, investigations or proceedings of any type are pending or threatened against the Acquiring Portfolio or any of its properties or assets or any person whom the Acquiring Portfolio may be obligated to indemnify in connection with such litigation, proceeding or investigation. Subject to the foregoing, there are no facts that the Acquiring Portfolio currently has reason to believe are likely to form the basis for the institution of any such claim, action, suit, investigation or proceeding against the Acquiring Portfolio. The Acquiring Portfolio is not a party to or subject to the provisions of any order, decree or judgment of any court or governmental body that adversely affects, or is reasonably likely to adversely affect its financial condition, results of operations, its assets or its ability to consummate the transactions contemplated by this Plan. (h) Except for agreements entered into or granted in the ordinary course of its business, in each case under which no material default exists, the Acquiring Portfolio is not a party to or subject to any material contract, debt instrument, employee benefit plan, lease, franchise, license or permit of any kind or nature whatsoever. (i) The Acquiring Portfolio will use all reasonable efforts to obtain the approvals and authorizations required by the 1933 Act, the 1940 Act and such state securities laws as it may deem appropriate in order to continue its operations after the Closing Date. 8. Conditions to the Obligations of the Acquiring Portfolio and the Portfolio -------------------------------------------------------------------------- The obligations of the Acquiring Portfolio and the Portfolio with respect to the Acquisition shall be subject to the following conditions precedent: (a) The shareholders of the Portfolio shall have approved the Acquisition in the manner required by the Declaration of the Trust, its Bylaws and applicable law. If shareholders of the Portfolio fail to approve this Plan providing for the Acquisition as required, that failure shall release the Portfolios of their obligations under this Plan. (b) The Acquiring Portfolio and the Portfolio shall have delivered to the other party a certificate dated as of the Closing Date and executed in its name by its Secretary or an Assistant Secretary, in a form reasonably satisfactory to the receiving party, stating that the representations and warranties of the Acquiring Portfolio or the Portfolio, as applicable, in this Plan that apply to the Acquisition are true and correct in all material respects at and as of the Valuation Time. (c) The Acquiring Portfolio and the Portfolio shall have performed and complied in all material respects with each of its representations and warranties required by this Plan to be performed or complied with by it prior to or at the Valuation Time and the Effective Time. (d) There shall have been no material adverse change in the financial condition, results of operations, business, properties or assets of the Portfolio since the date of its most recent financial statement. Negative investment performance shall not be considered a material adverse change. (e) The Acquiring Portfolio and the Portfolio shall have received an opinion of Seward & Kissel LLP reasonably satisfactory to each of them, substantially to the effect that for federal income tax purposes: (1) the Acquisition will constitute a "reorganization" within the meaning of Section 368(a) of the Code and that each of the Acquiring Portfolio and the Portfolio will be "a party to a reorganization" within the meaning of Section 368(b) of the Code; (2) no gain or loss will be recognized by the Portfolio on the transfer of all of the Portfolio's Assets to the Acquiring Portfolio solely in exchange for the Acquisition Shares and the assumption by the Acquiring Portfolio of the Liabilities, or upon the distribution of the Acquisition Shares to shareholders of the Portfolio; (3) the tax basis in the hands of the Acquiring Portfolio of each Asset of the Portfolio will be the same as the tax basis of such Asset in the hands of the Portfolio immediately prior to the transfer thereof, increased by the amount of gain (or decreased by the amount of loss), if any, recognized by the Portfolio on the transfer; (4) the holding period of each Asset of the Portfolio in the hands of the Acquiring Portfolio, other than Assets with respect to which gain or loss is required to be recognized, will include in each instance the period during which such Asset was held by the Portfolio (except where investment activities of the Acquiring Portfolio have the effect of reducing or eliminating the holding period with respect to an Asset); (5) no gain or loss will be recognized by the Acquiring Portfolio upon its receipt of the Assets of the Portfolio solely in exchange for Acquisition Shares and the assumption of the Liabilities; (6) no gain or loss will be recognized by the shareholders of the Portfolio upon the exchange of their Portfolio shares for Acquisition Shares as part of the Acquisition; (7) the aggregate tax basis of the Acquisition Shares that each shareholder of the Portfolio receives in the Acquisition will be the same as the aggregate tax basis of the Portfolio shares exchanged therefor; and (8) each Portfolio shareholder's holding period for the Acquisition Shares received in the Acquisition will include the period for which such shareholder held the Portfolio shares exchanged therefor, provided that the shareholder held such Portfolio shares as capital assets on the date of the exchange. The opinion will be based on certain factual certifications made by officers of the Portfolios and will also be based on customary assumptions and subject to certain qualifications. The opinion is not a guarantee that the tax consequences of the Acquisition will be as described above. Notwithstanding this subparagraph (e), Seward & Kissel LLP will express no view with respect to the effect of the Acquisition on any transferred asset as to which any unrealized gain or loss is required to be recognized at the end of a taxable year (or on the termination or transfer thereof) under federal income tax principles. Each Portfolio shall agree to make and provide to Seward & Kissel LLP additional factual representations with respect to the Portfolios that are reasonably necessary to enable Seward & Kissel LLP to deliver the tax opinion. Notwithstanding anything in this Plan to the contrary, neither Portfolio may waive in any material respect the conditions set forth under this subparagraph (e). (f) The N-14 Registration Statement shall have become effective under the 1933 Act as to the Acquisition Shares, and the SEC shall not have instituted and, to the knowledge of the Acquiring Portfolio, is not contemplating instituting any stop order suspending the effectiveness of the N-14 Registration Statement. (g) No action, suit or other proceeding shall be threatened or pending before any court or governmental agency in which it is sought to restrain or prohibit, or obtain damages or other relief in connection with, the Acquisition. (h) The SEC shall not have issued any unfavorable advisory report under Section 25(b) of the 1940 Act nor instituted any proceeding seeking to enjoin consummation of the Acquisition under Section 25(c) of the 1940 Act. (i) Neither party shall have terminated this Plan with respect to the Acquisition pursuant to Section 13 of this Plan. 9. Conditions to the Obligations of the Portfolio ---------------------------------------------- The obligations of the Portfolio with respect to the Acquisition shall be subject to the following conditions precedent: (a) The Portfolio shall have received an opinion of Seward & Kissel LLP, counsel to the Company and the Acquiring Portfolio, in form and substance reasonably satisfactory to the Portfolio and dated as of the Closing Date, substantially to the effect that: (1) The Acquiring Portfolio is a series of a corporation, and the corporation is duly incorporated and existing under and by virtue of the laws of the state of Maryland, is in good standing with the State Department of Assessments and Taxation of Maryland ("SDAT"), and is an open-end management investment company registered under the 1940 Act; (2) This Plan has been duly authorized, executed and delivered by the Company, on behalf of the Acquiring Portfolio, and, assuming the N-14 Registration Statement referred to in Section 2 of this Plan does not contain any material misstatements or omissions, and assuming due authorization, execution and delivery of this Plan by the Portfolio, represents a legal, valid and binding contract, enforceable in accordance with its terms, subject to the effect of bankruptcy, insolvency, moratorium, fraudulent conveyance and transfer and similar laws relating to or affecting creditors' rights generally and court decisions with respect thereto, and further subject to the application of equitable principles in any proceeding, whether at law or in equity or with respect to the enforcement of provisions of the Plan and the effect of judicial decisions which have held that certain provisions are unenforceable when their enforcement would violate an implied covenant of good faith and fair dealing or would be commercially unreasonable or when default under the Plan is not material; (3) The Acquisition Shares to be delivered as provided for by this Plan are duly authorized and upon delivery will be validly issued, fully paid and non assessable by the Acquiring Portfolio; (4) The execution and delivery of this Plan by the Company, on behalf of the Acquiring Portfolio, did not, and the consummation of the Acquisition will not, violate the Charter of the Company, its Bylaws or, to the knowledge of such counsel, any agreement of the Company, with respect to the Acquiring Portfolio, and no approval of the Plan by the shareholders of the Acquiring Portfolio is required under the Company's Charter, Bylaws or applicable law; and (5) To the knowledge of such counsel, no consent, approval, authorization or order of any federal or state court or administrative or regulatory agency is required for the Company to enter into this Plan on behalf of the Acquiring Portfolio or carry out its terms, except those that have been obtained under the 1933 Act, the 1934 Act, the 1940 Act and the rules and regulations under those Acts, if any, or that may be required under state securities laws or subsequent to the Effective Time or when the failure to obtain the consent, approval, authorization or order would not have a material adverse effect on the operation of the Company or the Acquiring Portfolio, as applicable. In rendering such opinion, Seward & Kissel LLP may (i) rely on the opinion of Venable LLP as to matters of Maryland law to the extent set forth in such opinion, (ii) make assumptions regarding the authenticity, genuineness and/or conformity of documents and copies thereof without independent verification thereof, (iii) limit such opinion to applicable federal and state law, (iv) define the word "knowledge" and related terms to mean the knowledge of attorneys then with such firm who have devoted substantive attention to matters directly related to this Plan and (v) rely on certificates of officers or directors of the Company as to factual matters. (b) The Portfolio shall have received a letter from the Adviser with respect to insurance matters in form and substance satisfactory to the Portfolio. 10. Conditions to the Obligations of the Company or the Acquiring Portfolio ----------------------------------------------------------------------- The obligations of the Company or the Acquiring Portfolio, as applicable, with respect to the Acquisition shall be subject to the following conditions precedent: (a) The Company, on behalf of the Acquiring Portfolio, shall have received an opinion of Seward & Kissel LLP, counsel to the Portfolio, in form and substance reasonably satisfactory to the Company and dated as of the Closing Date, substantially to the effect that: (1) The Portfolio is a duly established series of the Trust, which is a Massachusetts business trust duly organized and validly existing and in good standing under the laws of the Commonwealth of Massachusetts and is an open-end management investment company registered under the 1940 Act; (2) This Plan has been duly authorized, executed and delivered by the Portfolio and, assuming the N-14 Registration Statement referred to in Section 2 of this Plan does not contain any material misstatements or omissions, and assuming due authorization, execution and delivery of this Plan by the Company, on behalf of the Acquiring Portfolio, represents a legal, valid and binding contract, enforceable in accordance with its terms, subject to the effect of bankruptcy, insolvency, moratorium, fraudulent conveyance and transfer and similar laws relating to or affecting creditors' rights generally and court decisions with respect thereto, and further subject to the application of equitable principles in any proceeding, whether at law or in equity or with respect to the enforcement of provisions of the Plan and the effect of judicial decisions which have held that certain provisions are unenforceable when their enforcement would violate an implied covenant of good faith and fair dealing or would be commercially unreasonable or when default under the Plan is not material; (3) The execution and delivery of this Plan did not, and the consummation of the Acquisition will not, violate the Declaration of the Trust, its Bylaws or any agreement of the Portfolio known to such counsel, after reasonable inquiry, and no approval of the Plan by the shareholders of the Acquiring Portfolio is required under the Company's Charter, Bylaws or applicable law; and (4) To the knowledge of such counsel, no consent, approval, authorization or order of any federal or state court or administrative or regulatory agency is required for the Portfolio to enter into the Plan or carry out its terms, except those that have been obtained under the 1933 Act, the 1934 Act, the 1940 Act and the rules and regulations under those Acts, if any, or that may be required under state securities laws or subsequent to the Effective Time or when the failure to obtain the consent, approval, authorization or order would not have a material adverse effect on the operation of the Portfolio. In rendering such opinion, Seward & Kissel LLP may (i) rely on the opinion of Dechert LLP as to matters of Massachusetts law, (ii) make assumptions regarding the authenticity, genuineness and/or conformity of documents and copies thereof without independent verification thereof, (iii) limit such opinion to applicable federal and state law, (iv) define the word "knowledge" and related terms to mean the knowledge of attorneys then with such firm who have devoted substantive attention to matters directly related to this Plan and (v) rely on certificates of officers or directors of the Portfolio as to factual matters. (b) The Company, on behalf of the Acquiring Portfolio, shall have received a letter from the Adviser agreeing to indemnify the Acquiring Portfolio in respect of certain liabilities of the Portfolio in form and substance satisfactory to the Company. 11. Closing ------- (a) The Closing shall be held at the offices of the Portfolios, 1345 Avenue of the Americas, New York, New York 10105, or at such other time or place as the parties may agree. (b) In the event that at the Valuation Time (a) the NYSE shall be closed to trading or trading thereon shall be restricted, or (b) trading or the reporting of trading on the NYSE or elsewhere shall be disrupted so that accurate appraisal of the value of the net assets of the Portfolio or the Acquiring Portfolio is impracticable, the Closing Date shall be postponed until the first business day after the day when trading shall have been fully resumed and reporting shall have been restored; provided that if trading shall not be fully resumed and reporting restored within three business days of the Valuation Time, this Plan may be terminated by either the Portfolio or the Acquiring Portfolio upon the giving of written notice to the other party. (c) The Acquiring Portfolio will provide to the Portfolio evidence satisfactory to the Portfolio that Acquisition Shares issuable pursuant to the Acquisition have been credited to the Portfolio's account on the books of the Acquiring Portfolio. After the Closing Date, the Acquiring Portfolio will provide to the Portfolio evidence satisfactory to the Portfolio that such Acquisition Shares have been credited to open accounts in the names of the Portfolio shareholders. (d) At the Closing, each party shall deliver to the other such bills of sale, instruments of assumption of liabilities, checks, assignments, stock certificates, receipts or other documents as such other party or its counsel may reasonably request in connection with the transfer of assets, assumption of liabilities and liquidation contemplated by the Plan. 12. Survival of Representations and Warranties ------------------------------------------ (a) Except for Sections 6, 7, 14, 18, 19, 21, 22, 23 and 24, no representations, warranties or covenants in or pursuant to this Plan (including certificates of officers) shall survive the completion of the transactions contemplated herein. (b) Each party agrees to treat confidentially and as proprietary information of the other party all records and other information, including any information relating to portfolio holdings, of its Portfolio and not to use such records and information for any purpose other than the performance of its duties under the Plan; provided, however, that after prior notification of and written approval by party (which approval shall not be withheld if the other party would be exposed to civil or criminal contempt proceedings for failure to comply when requested to divulge such information by duly constituted authorities having proper jurisdiction, and which approval shall not be withheld unreasonably in any other circumstance), the other party may disclose such records and/or information as so approved. 13. Termination of Plan ------------------- A majority of the Directors/Trustees of either the Company or the Trust may terminate this Plan with respect to the Acquiring Portfolio or the Portfolio, respectively, at any time before the applicable Effective Time if: (i) the conditions precedent set forth in Sections 8, 9 or 10 as appropriate, are not satisfied; or (ii) either the Board of Directors/Trustees of the Company or the Trust determines that the consummation of the Acquisition is not in the best interests of the Portfolio or its shareholders and gives notice of such termination to the other party. 14. Governing Law ------------- This Plan and the transactions contemplated hereby shall be governed, construed and enforced in accordance with the laws of the State of New York, except to the extent preempted by federal law, without regard to conflicts of law principles. 15. Brokerage Fees -------------- Each party represents and warrants that there are no brokers or finders entitled to receive any payments in connection with the transactions provided for in the Plan. 16. Amendments ---------- The Company, on behalf of the Acquiring Portfolio, and the Trust, on behalf of the Portfolio, may, by agreement in writing authorized by its respective Board of Directors/Trustees, amend this Plan at any time before or after the shareholders of the Portfolio approve this Plan providing for the Acquisition. However, after shareholders of the Portfolio approve the Acquisition, the parties may not amend this Plan in a manner that materially alters the obligations of the other party. This Section 16 shall not preclude the parties from changing the Closing Date or the Effective Time by mutual agreement. 17. Waivers ------- At any time prior to the Closing Date, either party may by written instrument signed by it (i) waive the effect of any inaccuracies in the representations and warranties made to it contained herein and (ii) waive compliance with any of the agreements, covenants or conditions made for its benefit contained herein. Any waiver shall apply only to the particular inaccuracy or requirement for compliance waived, and not any other or future inaccuracy or lack of compliance. 18. Indemnification of Trustees ---------------------------- The Acquiring Portfolio agrees that all rights to indemnification and all limitations of liability existing in favor of the Trust's current and former Trustees and officers, acting in their capacities as such, under the Trust's Declaration and Bylaws as in effect as of the date of this Plan shall survive the Acquisition as obligations of the Company or the Acquiring Portfolio, as applicable, and shall continue in full force and effect, without any amendment thereto, and shall constitute rights which may be asserted against the Acquiring Portfolio, its successors or assigns. 19. Cooperation and Further Assurances ---------------------------------- Each party will cooperate with the other in fulfilling its obligations under this Plan and will provide such information and documentation as is reasonably requested by the other in carrying out the Plan's terms. Each party will provide such further assurances concerning the performance of its obligations hereunder and execute all documents for or in connection with the consummation of the Acquisition as, with respect to such assurances or documents, the other shall deem necessary or appropriate. 20. Updating of N-14 Registration Statement --------------------------------------- If at any time prior to the Effective Time, a party becomes aware of any untrue statement of a material fact or omission to state a material fact required to be stated therein or necessary to make the statements made in the N-14 Registration Statement not misleading, the party discovering the item shall notify the other party and the parties shall cooperate in promptly preparing, filing and clearing with the SEC and, if appropriate, distributing to shareholders appropriate disclosure with respect to such item. 21. Limitation on Liabilities ------------------------- The obligations of the Trust, the Portfolio, the Company and the Acquiring Portfolio shall not bind any of the directors/trustees, shareholders, nominees, officers, employees or agents of the Portfolio or the Company personally, but shall bind only the Trust, the Portfolio, the Company or the Acquiring Portfolio, as appropriate. The execution and delivery of this Plan by an officer of either party shall not be deemed to have been made by the officer individually or to impose any liability on the officer personally, but shall bind only the Trust or the Company, as appropriate. No other series of the Company shall be liable for the obligations of the Acquiring Portfolio. No other series of the Trust shall be liable for the obligations of the Portfolio. 22. Termination of the Portfolio ---------------------------- If the parties complete the Acquisition, the Portfolio shall terminate its registration under the 1940 Act, the 1933 Act, and the 1934 Act and liquidate and terminate. 23. Notices ------- Any notice, report, statement, certificate or demand required or permitted by any provision of the Plan shall be in writing and shall be given in person or by telecopy, certified mail or overnight express courier to: For the Portfolio: The AB Pooling Portfolios - AB High-Yield Portfolio 1345 Avenue of the Americas New York, New York 10105 Attention: Secretary For the Acquiring Portfolio: AB Bond Fund, Inc. - AB High Yield Portfolio 1345 Avenue of the Americas New York, New York 10105 Attention: Secretary 24. Expenses -------- The Adviser has agreed to bear 50% of the expenses relating to the Acquisition. The total remaining expenses relating to the Acquisition shall be paid proportionately by the Portfolio and the Acquiring Portfolio, allocated to each Portfolio based on its respective net assets as of the Valuation Time. Notwithstanding the foregoing, expenses relating to the Acquisition will in any event be paid by the party directly incurring such expenses if and to the extent that the payment by another person of such expenses would result in a Portfolio's failure to qualify for tax treatment as a "regulated investment company" within the meaning of Section 851 of the Code or would prevent the Acquisition from qualifying as a "reorganization" within the meaning of Section 368(a) of the Code. 25. General ------- This Plan supersedes all prior agreements between the parties with respect to the subject matter hereof and may be amended only by a writing signed by both parties. The headings contained in this Plan are for reference only and shall not affect in any way the meaning or interpretation of this Plan. Whenever the context so requires, the use in the Plan of the singular will be deemed to include the plural and vice versa. Nothing in this Plan, expressed or implied, confers upon any other person any rights or remedies under or by reason of this Plan. Neither party may assign or transfer any right or obligation under this Plan without the written consent of the other party. In Witness Whereof, the parties hereto have executed this Plan as of the day and year first above written. The AB Pooling Portfolios, on behalf of its series, AB High-Yield Portfolio Attest: ______________________________ By: _______________________________ Name: ______________________ Name: ______________________ Title: ______________________ Title: ______________________ AB Bond Fund, Inc., on behalf of its series, AB High Yield Portfolio Attest: ______________________________ By: _______________________________ Name: ______________________ Name: ______________________ Title: ______________________ Title: ______________________ Accepted and agreed with respect to Section 24 only: AllianceBernstein L.P. By: ------------------------------- Name: ------------------------------- Title: ------------------------------- Appendix B PORTFOLIO PERFORMANCE Set forth below is the performance information for the Portfolio and Class Z shares of the Acquiring Portfolio. The performance information provided below indicates some of the risks of investing in each Portfolio by showing changes in the Portfolio's performance from year to year and by comparing the performance of the Portfolio with the performance of a broad-based securities market index. Updated performance information for the Acquiring Portfolio is available on the Acquiring Portfolio's website at www.ABglobal.com. Performance information represents only past performance, before and after taxes, and does not necessarily indicate future results. The Portfolio and the Acquiring Portfolio may not perform at the same level in the future. Portfolio --------- The gross expenses of the Class Z shares of the Acquiring Portfolio are significantly higher than the Portfolio's expenses. The Portfolio currently pays no investment advisory or transfer agency fees. The performance information shown below for the Portfolio may not be representative of the performance the Acquiring Portfolio would have achieved under its expense levels. Through March 31, 2016, the year-to-date unannualized return for the Portfolio's shares was 2.96%. [THE FOLLOWING TABLE WAS DEPICTED AS A BAR CHART IN THE PRINTED MATERIAL.] 9.89 2.09 -25.42 60.18 16.48 3.14 18.27 9.12 3.99 -5.14 -------------------------------------------------------------------------- 06 07 08 09 10 11 12 13 14 15 Calendar Year End (%) Best Quarter was up 22.40%, 2nd quarter, 2009; and Worst Quarter was down -14.87%, 4th quarter, 2008. Average Annual Total Returns (for periods ended December 31, 2015) -------------------------------------------------------------------------------- Since Inception One Year Five Years Ten Years (5/20/2005) -------------------------------------------------------------------------------- Portfolio -5.14% 5.60% 7.44% 7.41% -------------------------------------------------------------------------------- Barclays U.S. Corporate High Yield 2% Issuer Capped Index (reflects no deduction for fees, expenses, or taxes) -4.43% 5.03% 6.95% 7.09% -------------------------------------------------------------------------------- Acquiring Portfolio ------------------- The annual returns in the bar chart are for the Acquiring Portfolio's Class Z shares. Through March 31, 2016, the year-to-date unannualized return for the Acquiring Portfolio's Class Z shares was 3.32%. [THE FOLLOWING TABLE WAS DEPICTED AS A BAR CHART IN THE PRINTED MATERIAL.] n/a n/a n/a n/a n/a n/a n/a n/a n/a -4.98 -------------------------------------------------------------------------- 06 07 08 09 10 11 12 13 14 15 Calendar Year End (%) Best Quarter was up 2.17%, 1st quarter, 2015; and Worst Quarter was down -5.10%, 3rd quarter, 2015. Average Annual Total Returns (for periods ended December 31, 2015) ------------------------------------------------------------------------- Since Inception One Year (7/15/2014) ------------------------------------------------------------------------- Acquiring Portfolio - Class Z -4.73% -4.32% ------------------------------------------------------------------------- Barclays U.S. Corporate High Yield 2% Issuer Capped Index (reflects no deduction for fees, expenses, or taxes) -4.43% -4.82% ------------------------------------------------------------------------- Appendix C COMPARISON OF INVESTMENT OBJECTIVES AND POLICIES The Portfolio and the Acquiring Portfolio have substantially similar investment objectives. For purposes of this comparison, each of the Portfolio and the Acquiring Portfolio may be referred to as a "Portfolio." The following chart compares the investment objective and principal investment policies of each Portfolio. The second chart contained in this Appendix compares the fundamental and non-fundamental investment policies of each Portfolio. Fundamental investment policies are policies that may not be changed without a shareholder vote. The AB Pooling Portfolios--AB AB Bond Fund, Inc.--AB High High-Yield Portfolio Yield Portfolio (Portfolio) (Acquiring Portfolio) -------------------------------------------------------------------------------- Investment The Portfolio's investment The Acquiring Portfolio's Objective objective is to seek primarily to investment objective is to achieve high total return by seek to maximize total return maximizing current income and, to consistent with prudent the extent consistent with that investment management. objective, capital appreciation. This is not a fundamental policy. Same. Status The Portfolio is diversified. This The Acquiring Portfolio is is a fundamental policy. non-diversified. Investment Policies -------------------------------------------------------------------------------- 80% Policy - The Portfolio normally invests at Same. In addition, high yield High-Yield least 80% of its net assets in debt securities are defined Debt high-yield debt securities. The in the principal strategies Securities Portfolio invests in a diversified as fixed-income securities mix of high yield, below rated Ba1 or lower by Moody's investment grade debt securities, Investors Service ("Moody's") known as "junk bonds." The or BB+ or lower by Standard & Portfolio may invest in debt Poor's Ratings Services securities with a range of ("S&P") or Fitch Ratings maturities from short- to (commonly known as "junk long-term. bonds"), unrated securities considered by the Adviser to be of comparable quality, and related derivatives. U.S. and The Portfolio may invest in U.S. Same. The Acquiring Portfolio Foreign Dollar-denominated and non-U.S. will most often invest in Fixed-Income Dollar-denominated foreign securities of U.S. issuers. Securities fixed-income securities. The Adviser may or may not hedge any foreign currency exposure through the use of currency-related derivatives. Equity The Portfolio may invest in these The Acquiring Portfolio may Securities instruments but not as a principal invest in equity securities. strategy. Other The Portfolio may invest in The Acquiring Portfolio may Securities mortgage-related and other invest in these instruments asset-backed securities, loan but not as a principal participations, inflation-indexed strategy. securities, structured securities and preferred stocks. Leverage The Portfolio may use leverage for The Adviser may use investment purposes by entering derivatives to effectively into transactions such as reverse leverage the Acquiring repurchase agreements and dollar Portfolio by creating rolls. aggregate market exposure substantially in excess of the Acquiring Portfolio's net assets. Derivative The Portfolio may enter into Same. The Acquiring Portfolio Transactions derivatives transactions, such as expects to use derivatives to options, futures contracts, a significant extent. forwards, and swaps. Other The Portfolio may invest in The Acquiring Portfolio may Investment variable, floating, and inverse invest in these instruments Techniques floating-rate investments. but not as a principal The Portfolio may also strategy. invest in zero-coupon and interest-only or principal-only securities. Fundamental Policies -------------------------------------------------------------------------------- Concentration The Portfolio may not concentrate Same. its investments in an industry, as concentration may be defined under the 1940 Act or the rules and regulations thereunder (as such statute, rules or regulations may be amended from time to time) or by guidance regarding, interpretations of, or exemptive orders under, the 1940 Act or the rules or regulations thereunder published by appropriate regulatory authorities. Make Loans The Portfolio may not make loans Same. except through: (i) the purchase of debt obligations in accordance with its investment objective and policies; (ii) the lending of portfolio securities; (iii) the use of repurchase agreements; or (iv) the making of loans to affiliated funds as permitted under the 1940 Act, the rules and regulations thereunder (as such statutes, rules or regulations may be amended from time to time), or by guidance regarding, and interpretations of, or exemptive orders under, the 1940 Act. Issue Senior The Portfolio may not issue any Same. Securities senior security (as that term is defined in the 1940 Act) or borrow money, except to the extent permitted by the 1940 Act or the rules and regulations thereunder (as such statute, rules or regulations may be amended from time to time) or by guidance regarding, or interpretations of, or exemptive orders under, the 1940 Act or the rules or regulations thereunder published by appropriate regulatory authorities. For purposes of this restriction, margin and collateral arrangements, including, for example, with respect to permitted borrowings, options, futures contracts, options on futures contracts and other derivatives such as swaps, are not deemed to involve the issuance of a senior security. Commodities The Portfolio may purchase and sell Same. commodities to the extent allowed by applicable law. Real Estate The Portfolio may not purchase or Same. sell real estate except that it may dispose of real estate acquired as a result of the ownership of securities or other instruments. This restriction does not prohibit the Portfolio from investing in securities or other instruments backed by real estate or in securities of companies engaged in the real estate business. Underwritings The Portfolio may not act as an Same. underwriter of securities, except that the Portfolio may acquire restricted securities under circumstances in which, if such securities were sold, the Portfolio might be deemed to be an underwriter for purposes of the Securities Act. Non-Fundamental Policies -------------------------------------------------------------------------------- Securities The Portfolio may not purchase Same. on Margin securities on margin, except (i) as otherwise provided under rules adopted by the SEC under the 1940 Act or by guidance regarding the 1940 Act, or interpretations thereof, and (ii) that the Portfolio may obtain such short-term credits as are necessary for the clearance of portfolio transactions, and the Portfolio may make margin payments in connection with futures contracts, options, forward contracts, swaps, caps, floors, collars and other financial instruments Appendix D CERTAIN INFORMATION APPLICABLE TO SHARES OF THE ACQUIRING PORTFOLIO Portfolio shareholders will receive Class Z shares of the Acquiring Portfolio through the Acquisition, as described in this Information Statement/Prospectus. Each shareholder of the Portfolio will become the owner of the number of full and fractional Class Z shares of the Acquiring Portfolio having a NAV equal to the aggregate NAV of the shareholder's Portfolio shares as of the Valuation Time (as such term is defined in the Information Statement/Prospectus). Only Class Z shares will be issued to Portfolio shareholders in connection with the Acquisition. The Acquiring Portfolio also offers Class A, Class C, Advisor Class, Class R, Class K and Class I shares (together with Class Z shares, the "Share Classes"). Investors may purchase shares of the Share Classes on any business day (i.e., any day that the NYSE is open for trading). The purchase of shares of the Share Classes is priced at the next-determined NAV after an order is received in proper form. Shareholders may "redeem" shares of any class of the Acquiring Portfolio (i.e., sell their shares to the Portfolio) on any day the NYSE is open, either directly or through a financial intermediary. The sale price will be the next-determined NAV, less any applicable contingent deferred sales charge (if any), after the Portfolio receives the redemption request in proper form. Each share class represents an investment in the same portfolio of securities, but the classes may have different sales charges and bear different ongoing distribution expenses. Additional information regarding the Share Classes, including more detailed information about the purchase and redemption procedures for the Share Classes, is available in the Acquiring Portfolio's prospectus. HOW TO BUY SHARES OF THE ACQUIRING PORTFOLIO Class Z Shares As noted above, Portfolio shareholders will receive Class Z shares of the Acquiring Portfolio through the Acquisition. Each shareholder of the Portfolio will become the owner of the number of full and fractional Class Z shares of the Acquiring Portfolio having an NAV equal to the aggregate NAV of the shareholder's Portfolio shares as of the Valuation Time, as such term is defined in the Information Statement/Prospectus. Class Z shares will not be subject to an initial sales charge or 12b-1 distribution fees. Class Z shareholders will be entitled to exchange their Class Z shares of the Acquiring Portfolio for Class Z shares of another fund in the AB mutual fund group without sales or service charges. Purchase Information for Share Classes A shareholder's broker or financial advisor must receive a purchase request by the Portfolio Closing Time, which is the close of regular trading on any day the NYSE is open (ordinarily, 4:00 p.m., Eastern time, but sometimes earlier, as in the case of scheduled half-day trading or unscheduled suspensions of trading) and submit it to the Acquiring Portfolio by a pre-arranged time for the shareholder to receive the next-determined NAV. Acquiring Portfolio shareholders who have completed the appropriate section of the Mutual Fund Application may purchase additional shares by telephone with payment by electronic funds transfer in amounts not exceeding $500,000. AllianceBernstein Investor Services, Inc., or ABIS, must receive and confirm telephone requests before the Portfolio Closing Time to receive that day's public offering price. A shareholder may call 800-221-5672 to arrange a transfer from the shareholder's bank account. Payment may be made by wire transfer or check. All checks should be made payable to the Acquiring Portfolio. Payment must be made in U.S. Dollars. All purchase orders will be confirmed in writing. Required Information The Acquiring Portfolio is required by law to obtain, verify and record certain personal information from investors or persons on an investor's behalf in order to establish an account. Required information includes name, date of birth, permanent residential address and taxpayer identification number (for most investors, the investor's social security number). The Acquiring Portfolio may also ask to see other identifying documents. If an investor does not provide the information, the Acquiring Portfolio will not be able to open an account for such investor. If the Acquiring Portfolio is unable to verify an investor's identity, or that of another person(s) authorized to act on the investor's behalf, or if the Acquiring Portfolio believes it has identified potentially criminal activity, the Acquiring Portfolio reserves the right to take any action it deems appropriate or as required by law, which may include closing the investor's account. If an investor is not a U.S. citizen or resident alien, the account must be affiliated with a Financial Industry Regulatory Authority, or FINRA, member firm. The Acquiring Portfolio is required to withhold 28% of taxable dividends, capital gains distributions, and redemptions paid to any shareholder who has not provided the Acquiring Portfolio with his or her correct taxpayer identification number. To avoid this, an investor must provide the investor's correct taxpayer identification number on the Mutual Fund Application. General IRA custodians, plan sponsors, plan fiduciaries, plan recordkeepers, and other financial intermediaries may establish their own eligibility requirements as to the purchase, sale or exchange of Acquiring Portfolio shares, including minimum and maximum investment requirements. The Acquiring Portfolio is not responsible for, and has no control over, the decisions of any plan sponsor, fiduciary or other financial intermediary to impose such differing requirements. ABI may refuse any order to purchase shares. The Acquiring Portfolio reserves the right to suspend the sale of its shares to the public in response to conditions in the securities markets or for other reasons. SHARE CLASS EXPENSES Information about the expenses applicable to the Share Classes is available in the Acquiring Portfolio's prospectus. A transaction, service, administrative or other similar fee may be charged by a shareholder's broker-dealer, agent or other financial intermediary, with respect to the purchase, sale or exchange of Class Z shares made through the shareholder's financial advisor. Financial intermediaries, a fee-based program, or, for group retirement plans, a plan sponsor or plan fiduciary, also may impose requirements on the purchase, sale or exchange of shares that are different from, or in addition to, those described in the Acquiring Portfolio's Prospectus and Statement of Additional Information, including requirements as to the minimum initial and subsequent investment amounts. The Acquiring Portfolio is not responsible for, and has no control over, the decision of any financial intermediary, plan sponsor or fiduciary to impose such differing requirements. OTHER PROGRAMS Dividend Reinvestment Program Unless a shareholder specifically has elected to receive dividends or distributions in cash, the shareholder will automatically be reinvested in the same class of additional shares of the Acquiring Portfolio. If a shareholder elects to receive distributions in cash, the shareholder will only receive a check if the amount of the distribution is equal to or exceeds $25.00. Distributions of less than $25.00 will automatically be reinvested in shares of the Acquiring Portfolio. To receive distributions of less than $25.00 in cash, a shareholder must have bank instructions associated to the shareholder's account so that distributions can be delivered to the shareholder electronically via Electronic Funds Transfer using the Automated Clearing House or "ACH". In addition, the Acquiring Portfolio may reinvest a shareholder's distribution check (and future checks) in additional shares of the Acquiring Portfolio if the shareholder's check (i) is returned as undeliverable or (ii) remains uncashed for nine months. Dividend Direction Plan A shareholder who already maintains accounts in more than one AB mutual fund may direct the automatic investment of income dividends and/or capital gains by one fund, in any amount, without the payment of any sales charges, in shares of any eligible class of one or more other AB mutual fund(s) in which the shareholder maintains an account. Automatic Investment Program The Automatic Investment Program allows investors to purchase shares of the Acquiring Portfolio through pre-authorized transfers of funds from the investor's bank account. Under the Automatic Investment Program, an investor may (i) make an initial purchase of at least $2,500 and invest at least $50 monthly or (ii) make an initial purchase of less than $2,500 and commit to a monthly investment of $200 or more until the investor's account balance is $2,500 or more. Please see the Acquiring Portfolio's Statement of Additional Information for more details. HOW TO EXCHANGE SHARES Shareholders of the Portfolio, including shareholders who received Class Z shares of the Acquiring Portfolio through the Acquisition, will have exchange privileges with other AB mutual funds. Shareholders may generally exchange their shares for shares of the same class of another fund in the AB mutual fund group. Exchanges of each class of Acquiring Portfolio shares are made at the next-determined NAV after an order is received in proper form. All exchanges are subject to the minimum investment restrictions set forth in the prospectus for the AB mutual fund whose shares are being acquired. Shareholders may request an exchange either directly or through a financial intermediary or, in the case of retirement plan participants, by following the procedures specified by the plan sponsor or plan recordkeeper. In order to receive a day's NAV, ABIS must receive and confirm a telephone exchange request by the Portfolio Closing Time on that day. The Acquiring Portfolio may modify, restrict or terminate the exchange privilege on 60 days' written notice. HOW TO SELL OR REDEEM SHARES OF THE ACQUIRING PORTFOLIO Shareholders of the Acquiring Portfolio, including shareholders who received Class Z shares through the Acquisition, may "redeem" their shares (i.e., sell shares to the Acquiring Portfolio) on any day the NYSE is open, either directly or through a financial intermediary or, in the case of retirement plan participants, by following the procedures specified by the plan sponsor or plan recordkeeper. The sale price will be the next-determined NAV after the Acquiring Portfolio receives the redemption request in proper form. Normally, redemption proceeds are sent to shareholders within seven days. If shares were recently purchased by check or electronic funds transfer, the redemption payment may be delayed until the Acquiring Portfolio is reasonably satisfied that the check or electronic funds transfer has been collected (which may take up to 10 days). Any shareholder who is in doubt about what procedures or documents are required by a fee-based program or employee benefit plan to sell shares should contact the financial advisor. Selling Shares Through a Financial Intermediary or Retirement Plan A shareholder's financial intermediary or plan recordkeeper must receive a sales request by the Portfolio Closing Time and submit it to the Acquiring Portfolio by a pre-arranged time for the shareholder to receive that day's NAV. A shareholder's financial intermediary, plan sponsor or plan recordkeeper is responsible for submitting all necessary documentation to the Acquiring Portfolio and may charge a fee for this service. Selling Shares Directly to the Acquiring Portfolio By Mail: o Send a signed letter of instruction or stock power to: AllianceBernstein Investor Services, Inc. P.O. Box 786003 San Antonio, TX 78278-6003 o For certified or overnight deliveries, send to: AllianceBernstein Investor Services, Inc. 8000 IH 10 W, 4th floor San Antonio, TX 78230 o For shareholder protection, a bank, a member firm of a national stock exchange or another eligible guarantor institution must guarantee signatures. Stock power forms are available from a shareholder's financial intermediary, ABIS and many commercial banks. Additional documentation is required for the sale of shares by corporations, intermediaries, fiduciaries and surviving joint owners. If a shareholder has any questions about these procedures, contact ABIS. By Telephone: o A shareholder may redeem the shareholder's shares by telephone request. A shareholder may call ABIS at 800-221-5672 with instructions on how the shareholder wishes to receive the sale proceeds. o ABIS must receive and confirm a telephone redemption request by the Portfolio Closing Time for a shareholder to receive that day's NAV. o For the protection of shareholders, ABIS will request personal or other information from shareholders to verify their identity and will generally record the calls. Neither the Acquiring Portfolio nor the Adviser, ABIS, ABI or other Acquiring Portfolio agent will be liable for any loss, injury, damage or expense as a result of acting upon telephone instructions purporting to be on behalf of a shareholder that ABIS reasonably believes to be genuine. o If a shareholder has selected electronic funds transfer in the shareholder's Mutual Fund Application, the redemption proceeds will be sent directly to the shareholder's bank. Otherwise, the proceeds will be mailed to the shareholder. o Redemption requests by electronic funds transfer or check may not exceed $100,000 per fund account per day. o Telephone redemption is not available for shares held in nominee or "street name" accounts, retirement plan accounts, or shares held by a shareholder who has changed his or her address of record within the previous 30 calendar days. FREQUENT PURCHASES AND REDEMPTIONS OF PORTFOLIO SHARES ------------------------------------------------------ The Acquiring Portfolio's Board has adopted policies and procedures designed to detect and deter frequent purchases and redemptions of Acquiring Portfolio shares or excessive or short-term trading that may disadvantage long-term Portfolio shareholders. These policies are described below. There is no guarantee that the Acquiring Portfolio will be able to detect excessive or short-term trading or to identify shareholders engaged in such practices, particularly with respect to transactions in omnibus accounts. Shareholders should be aware that application of these policies may have adverse consequences, as described below, and avoid frequent trading in Acquiring Portfolio shares through purchases, sales and exchanges of shares. The Acquiring Portfolio reserves the right to restrict, reject or cancel, without any prior notice, any purchase or exchange order for any reason, including any purchase or exchange order accepted by any shareholder's financial intermediary. Risks Associated With Excessive or Short-Term Trading Generally. While the Acquiring Portfolio will try to prevent market timing by utilizing the procedures described below, these procedures may not be successful in identifying or stopping excessive or short-term trading in all circumstances. By realizing profits through short-term trading, shareholders that engage in rapid purchases and sales or exchanges of the Acquiring Portfolio's shares dilute the value of shares held by long-term shareholders. Volatility resulting from excessive purchases and sales or exchanges of Acquiring Portfolio shares, especially involving large dollar amounts, may disrupt efficient portfolio management and cause the Acquiring Portfolio to sell shares at inopportune times to raise cash to accommodate redemptions relating to short-term trading activity. In particular, the Acquiring Portfolio may have difficulty implementing its long-term investment strategies if it is forced to maintain a higher level of its assets in cash to accommodate significant short-term trading activity. In addition, the Acquiring Portfolio may incur increased administrative and other expenses due to excessive or short-term trading, including increased brokerage costs and realization of taxable capital gains. Portfolios that may invest significantly in securities of foreign issuers may be particularly susceptible to short-term trading strategies. This is because securities of foreign issuers are typically traded on markets that close well before the time a Portfolio calculates its NAV at 4:00 p.m., Eastern time, which gives rise to the possibility that developments may have occurred in the interim that would affect the value of these securities. The time zone differences among international stock markets can allow a shareholder engaging in a short-term trading strategy to exploit differences in Acquiring Portfolio share prices that are based on closing prices of securities of foreign issuers established some time before a Portfolio calculates its own share price (referred to as "time zone arbitrage"). The Acquiring Portfolio has procedures, referred to as fair value pricing, designed to adjust closing market prices of securities of foreign issuers to reflect what is believed to be the fair value of those securities at the time the Acquiring Portfolio calculates its NAV. While there is no assurance, the Acquiring Portfolio expects that the use of fair value pricing, in addition to the short-term trading policies discussed below, will significantly reduce a shareholder's ability to engage in time zone arbitrage to the detriment of other Acquiring Portfolio shareholders. A shareholder engaging in a short-term trading strategy may also target the Acquiring Portfolio irrespective of its investments in securities of foreign issuers. Any Portfolio that invests in securities that are, among other things, thinly traded, traded infrequently or relatively illiquid has the risk that the current market price for the securities may not accurately reflect current market values. A shareholder may seek to engage in short-term trading to take advantage of these pricing differences (referred to as "price arbitrage"). The Acquiring Portfolio may be adversely affected by price arbitrage. Policy Regarding Short-Term Trading. Purchases and exchanges of shares of the Acquiring Portfolio should be made for investment purposes only. The Acquiring Portfolio seeks to prevent patterns of excessive purchases and sales of Acquiring Portfolio shares to the extent they are detected by the procedures described below, subject to the Acquiring Portfolio's ability to monitor purchase, sale and exchange activity. The Acquiring Portfolio reserves the right to modify this policy, including any surveillance or account blocking procedures established from time to time to effectuate this policy, at any time without notice. o Transaction Surveillance Procedures. The Acquiring Portfolio, through its agents, ABI and ABIS, maintains surveillance procedures to detect excessive or short-term trading in Portfolio shares. This surveillance process involves several factors, which include scrutinizing transactions in Acquiring Portfolio shares that exceed certain monetary thresholds or numerical limits within a specified period of time. Generally, more than two exchanges of Acquiring Portfolio shares during any 60-day period or purchases of shares followed by a sale within 60 days will be identified by these surveillance procedures. For purposes of these transaction surveillance procedures, the Acquiring Portfolio may consider trading activity in multiple accounts under common ownership, control or influence. Trading activity identified by either, or a combination, of these factors, or as a result of any other information available at the time, will be evaluated to determine whether such activity might constitute excessive or short-term trading. With respect to managed or discretionary accounts for which the account owner gives his/her broker, investment adviser or other third-party authority to buy and sell Acquiring Portfolio shares, the Acquiring Portfolio may consider trades initiated by the account owner, such as trades initiated in connection with bona fide cash management purposes, separately in their analysis. These surveillance procedures may be modified from time to time, as necessary or appropriate to improve the detection of excessive or short-term trading or to address specific circumstances. o Account Blocking Procedures. If the Acquiring Portfolio determines, in its sole discretion, that a particular transaction or pattern of transactions identified by the transaction surveillance procedures described above is excessive or short-term trading in nature, the Acquiring Portfolio will take remedial action that may include issuing a warning, revoking certain account-related privileges (such as the ability to place purchase, sale and exchange orders over the internet or by phone) or prohibiting or "blocking" future purchase or exchange activity. However, sales of Acquiring Portfolio shares back to the Acquiring Portfolio or redemptions will continue to be permitted in accordance with the terms of the Acquiring Portfolio's current Prospectus. As a result, unless the shareholder redeems his or her shares, which may have consequences if the shares have declined in value or adverse tax consequences may result, the shareholder may be "locked" into an unsuitable investment. A blocked account will generally remain blocked for 90 days. Subsequent detections of excessive or short-term trading may result in an indefinite account block or an account block until the account holder or the associated broker, dealer or other financial intermediary provides evidence or assurance acceptable to the Acquiring Portfolio that the account holder did not or will not in the future engage in excessive or short-term trading. o Applications of Surveillance Procedures and Restrictions to Omnibus Accounts. Omnibus account arrangements are common forms of holding shares of the Acquiring Portfolio, particularly among certain brokers, dealers and other financial intermediaries, including sponsors of retirement plans. The Acquiring Portfolio applies its surveillance procedures to these omnibus account arrangements. As required by SEC rules, the Acquiring Portfolio has entered into agreements with all of its financial intermediaries that require the financial intermediaries to provide the Acquiring Portfolio, upon the request of the Acquiring Portfolio or its agents, with individual account level information about their transactions. If the Acquiring Portfolio detects excessive trading through its monitoring of omnibus accounts, including trading at the individual account level, the financial intermediaries will also execute instructions from the Acquiring Portfolio to take actions to curtail the activity, which may include applying blocks to accounts to prohibit future purchases and exchanges of Acquiring Portfolio shares. For certain retirement plan accounts, the Acquiring Portfolio may request that the retirement plan or other intermediary revoke the relevant participant's privilege to effect transactions in Acquiring Portfolio shares via the internet or telephone, in which case the relevant participant must submit future transaction orders via the U.S. Postal Service (i.e., regular mail). DIVIDENDS, DISTRIBUTIONS AND TAXES Income dividends and capital gains distributions, if any, declared by the Acquiring Portfolio on its outstanding shares will be paid in cash if elected by the shareholder or in additional shares of the same class of shares of the Acquiring Portfolio. If paid in additional shares, the shares will have an aggregate NAV as of the close of business on the declaration date of the dividend or distribution equal to the cash amount of the dividend or distribution. A shareholder may make an election to receive dividends and distributions in cash or in shares at the time the shareholder purchases shares. A shareholder's election can be changed at any time prior to a record date for a dividend. There is no sales or other charge in connection with the reinvestment of dividends or capital gains distributions. Cash dividends may be paid by check, or, at a shareholder's election, electronically via the ACH network. If a shareholder receives an income dividend or capital gains distribution in cash the shareholder may, within 120 days following the date of its payment, reinvest the dividend or distribution in additional shares of the Acquiring Portfolio without charge by returning to the Adviser, with appropriate instructions, the check representing the dividend or distribution. Thereafter, unless the shareholder otherwise specifies, the shareholder will be deemed to have elected to reinvest all subsequent dividends and distributions in shares of the Acquiring Portfolio. While it is the intention of the Acquiring Portfolio to distribute to its shareholders substantially all of each fiscal year's net income and net realized capital gains, if any, the amount and timing of any dividend or distribution will depend on the realization by the Acquiring Portfolio of income and capital gains from investments. There is no fixed dividend rate and there can be no assurance that the Acquiring Portfolio will pay any dividends or realize any capital gains. The final determination of the amount of the Acquiring Portfolio's return of capital distributions for the period will be made after the end of each calendar year. A shareholder will normally have to pay federal income tax, and any state or local income taxes, on the distributions the shareholder receives from the Acquiring Portfolio, whether the shareholder takes the distributions in cash or reinvests them in additional shares. Distributions of net capital gains from the sale of investments that the Acquiring Portfolio owned for more than one year and that are properly designated as capital gains distributions are taxable as long-term capital gains. Distributions of dividends to the Acquiring Portfolio's non-corporate shareholders may be treated as "qualified dividend income", which is taxed at the same preferential tax rates applicable to long-term capital gains, if, in general, such distributions are derived from, and designated by the Acquiring Portfolio as, "qualified dividend income" and provided that holding period and other requirements are met by both the shareholder and the Acquiring Portfolio. "Qualified dividend income" generally is income derived from dividends from U.S. corporations and "qualified foreign corporations". Other distributions by the Acquiring Portfolio are generally taxable to a shareholder as ordinary income. Dividends declared in October, November, or December and paid in January of the following year are taxable as if they had been paid the previous December. The Acquiring Portfolio will notify a shareholder as to how much of the Acquiring Portfolio's distributions, if any, qualify for these reduced tax rates. Investment income received by the Acquiring Portfolio from sources within foreign countries may be subject to foreign income taxes withheld at the source. To the extent that the Acquiring Portfolio is liable for foreign income taxes withheld at the source, the Acquiring Portfolio intends, if possible, to operate so as to meet the requirements of the Code to "pass through" to the Acquiring Portfolio's shareholders credits for foreign income taxes paid (or to permit shareholders to claim a deduction for such foreign taxes), but there can be no assurance that the Acquiring Portfolio will be able to do so. Furthermore, a shareholder's ability to claim a foreign tax credit or deduction for foreign taxes paid by the Acquiring Portfolio may be subject to certain limitations imposed by the Code, as a result of which a shareholder may not be permitted to claim a credit or deduction for all or a portion of the amount of such taxes. Under certain circumstances, if the Acquiring Portfolio realizes losses (e.g., from fluctuations in currency exchange rates) after paying a dividend, all or a portion of the dividend may subsequently be characterized as a return of capital. Returns of capital are generally nontaxable, but will reduce a shareholder's basis in shares of the Acquiring Portfolio. If that basis is reduced to zero (which could happen if the shareholder does not reinvest distributions and returns of capital are significant), any further returns of capital will be taxable as capital gain. If a shareholder buy shares just before the Acquiring Portfolio deducts a distribution from its NAV, the shareholder will pay the full price for the shares and then receive a portion of the price back as a taxable distribution. The sale or exchange of Acquiring Portfolio shares is a taxable transaction for federal income tax purposes. Each year shortly after December 31, the Acquiring Portfolio will send shareholders tax information stating the amount and type of all its distributions for the year. A shareholder is encouraged to consult the shareholder's tax adviser about the federal, state, and local tax consequences in the shareholder's particular circumstances, as well as about any possible foreign tax consequences. Non-U.S. Shareholders If a shareholder is a nonresident alien individual or a foreign corporation for federal income tax purposes, please see the Acquiring Portfolio's Statement of Additional Information for information on how the shareholder will be taxed as a result of holding shares in the Acquiring Portfolio. Appendix E COMPARISON OF BUSINESS STRUCTURE AND ORGANIZATION The following information provides only a summary of the key features of the organizational structure and governing documents of the Portfolio and the Acquiring Portfolio. The Acquiring Portfolio is a series of the Company, an open-end management investment company organized as a Maryland corporation. The Charter and Bylaw provisions and state law that govern the Company apply to the Acquiring Portfolio. The Portfolio is a series of the Trust, an open-end management investment company organized as a Massachusetts business trust. It is governed by the Trust's Declaration and Bylaw provisions and state law. Certain differences in the respective Charter/Declaration and Bylaw provisions and state law of the Acquiring Portfolio and the Portfolio are noted below. Shareholder Meetings Each Portfolio has procedures available to its respective shareholders for calling shareholders' meetings and for the removal of Trustees/Directors. Under Maryland law, unless a charter provides otherwise (which the Company's does not), a director may be removed, either with or without cause, at a meeting duly called and at which a quorum is present by the affirmative vote of the holders of a majority of the votes entitled to be cast for the election of directors. Under the Bylaws of the Company, a special meeting of shareholders may be called by the secretary upon the written request of shareholders entitled to cast not less than a majority of all the votes entitled to be cast at such meeting. Under the Bylaws of the Trust, the Trust must promptly call a meeting of shareholders for the purpose of voting upon the removal of any Trustee when requested to do so by the record holders of not less than 10% of the outstanding shares. Additionally, under the Bylaws of the Trust, whenever ten or more shareholders of record who have been such for at least six months preceding the date of the request, and who hold in the aggregate shares having a NAV of at least one percent of the Trust's outstanding shares, apply to the Trustees in writing, stating that they wish to communicate with other shareholders with a view to obtaining signatures to request a meeting of shareholders for the removal of Trustees, and include a form of communication and request which they wish to transmit to shareholders, the Trustees must either (a) provide such applicants access to a list of names and addresses of the Trust's shareholders of record, or (b) inform such applicants as to the approximate number of shareholders of record, and the approximate cost of transmitting to them the proposed communication and form of request. If the latter course is chosen, the Trustees, upon the written request of applicants, accompanied by the material to be transmitted and the reasonable expenses of such transmittal, must transmit such material to shareholders, unless the Trustees transmit to applicants and file with the SEC, together with the material proposed to be transmitted, a written statement signed by at least a majority of the Trustees to the effect that in their opinion either such material contains untrue statements of fact or omits to state facts necessary to make the statements therein not misleading, or would be in violation of applicable law, and specifying the basis of such opinion. If, among other things, the SEC does not sustain the objections of the Trustees, the Trustees must transmit copies of the material to all shareholders. For the Company, and with respect to the Acquiring Portfolio, the presence in person or by proxy of shareholders entitled to cast one-third of all the votes entitled to be cast at any meeting of shareholders on any matter shall constitute a quorum. For the Trust, and with respect to the Portfolio, the presence in person or by proxy of stockholders entitled to cast 30% of the votes entitled to be cast shall constitute a quorum. When a quorum is present at any meeting of the Company or the Trust, the affirmative vote of a majority of the votes (or with respect to the election of Directors/Trustees, a plurality of votes) cast or, with respect to any matter requiring a class vote, the affirmative vote of a majority of the votes cast of each class entitled to vote as a class on the matter, shall decide any question brought before such meeting, except as otherwise required by law. Shares of the Portfolios The Trust's Declaration authorizes the issuance of an unlimited number of shares of beneficial interest, which may be divided into separate and distinct series or classes. The Company's Charter authorizes a set number of shares of common stock. The Directors of the Company may classify any unissued shares of common stock in one or more series or classes of stock. The Company's Charter provides that no shareholder is entitled to any preemptive rights except as the Board may establish. Shareholders of the Trust are also not entitled to preemptive rights. Shareholders of the Trust and Company are entitled to one vote per share. All voting rights for the election of Trustees are non-cumulative, which means that the holders of a plurality of the shares of common stock of the Trust can elect 100% of the Trustees then nominated for election if they choose to do so and, in such event, the holders of the remaining shares will not be able to elect any Trustees. The Trust and the Company are not required to, and do not, hold annual meetings of shareholders and have no current intention to hold such meetings, except as required by the 1940 Act. Under the 1940 Act, the Trust and the Company are required to hold a shareholder meeting if, among other reasons, the number of Trustees/Directors elected by shareholders is less than a majority of the total number of Trustees/Directors, or if the a Portfolio seeks to change its fundamental investment policies. Dividends and Distributions For each Portfolio, dividends may be authorized by the Board and declared by the Portfolio at any time, and the amount and number of capital gains distributions paid to shareholders during each fiscal year are determined by the Board. Each such payment shall be accompanied by a statement as to the source of such payment, to the extent required by law. With respect to the Company, each share class is entitled to such dividends or distributions, in cash, property or additional shares of stock or the same or another series of the Company, or class, as may be authorized from time to time by the Board. With respect to the Trust, each share class is entitled to such dividends or distributions, in cash or otherwise (but only from assets belonging to the Portfolio) an amount approximately equal to the net income attributable to the assets belonging to the Portfolio and such additional amounts as the Trustees may authorize. A shareholder of each Portfolio may make an election to receive dividends and distributions in cash or in shares at the time of purchase of shares. The shareholder's election can be changed at any time prior to a record date for a dividend. There is no sales or other charge in connection with the reinvestment of dividends or capital gains distributions. Indemnification and Liability of Directors and Officers The Charter and Bylaws of the Company provide for the indemnification of officers and Directors, as applicable, to the fullest extent permitted by Maryland law. This indemnification does not protect any indemnified person against any liability to the Company or the Trust, respectively, or any shareholder thereof to which such person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the satisfaction of such person's office. Maryland law permits a Maryland corporation to include in its charter a provision limiting the liability of its Directors and officers to the corporation and its shareholders for money damages except for liability resulting from (a) actual receipt of an improper benefit or profit in money, property or services or (b) active and deliberate dishonesty established by a final judgment as being material to the cause of action. The Charter of the Company contains such a provision that eliminates Directors' and officers' liability to the maximum extent permitted by Maryland law. This exculpation does not protect any such person against any liability to the Company or any shareholder thereof to which such person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the satisfaction of such person's office. The Declaration and Bylaws of the Trust provide for the indemnification of officers and Trustees against all liabilities and expenses, including but not limited to amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and counsel fees reasonably incurred by any officer or Trustee in connection with the defense or disposition of any action, suit or other proceeding, whether civil or criminal, before any court or administrative or legislative body, in which such person may be or may have been involved as a party or otherwise or with which such person may be or may have been threatened, while in office or thereafter, by reason of any alleged act or omission as a Trustee or officer or by reason of his or her being or having been such a Trustee or officer, except with respect to any matter as to which such person shall have been finally adjudicated in any such action, suit or other proceeding not to have acted in good faith in the reasonable belief that such person's action was in the best interest of the Trust. Indemnification by the Trust does not protect any indemnified person against any liability to the Trust or any shareholder thereof to which such person would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the satisfaction of such person's office. The Declaration and Bylaws of the Trust provide contain a provision that eliminates Trustees' and officers' liability, except to the extent that a Trustee or officer would otherwise be liable by reason of willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of the office of Trustee or officer. Appendix F CAPITALIZATION The following table shows on an unaudited basis the capitalization of each of the Portfolios as of October 31, 2015, and on a pro forma combined basis, giving effect to the acquisition of the assets and liabilities of the Portfolio by the Acquiring Portfolio at net asset value as of October 31, 2015: Acquiring Combined Portfolio Portfolio Pro Forma (Class Z) Portfolio (Class Z) Adjustments (pro forma)(1) ---------------------------------------------------------------- Total Net Assets $308,452,242 $9,242 $42,905(2) $308,418,579 Shares Outstanding 31,633,263 1,000 -- 33,378,634(3) NAV Per Share $9.75 $9.24 -- $9.24 ------------------ (1) Assumes the Acquisition was consummated on October 31, 2015 and is for information purposes only. No assurance can be given as to how many shares of the Acquiring Portfolio will be received by shareholders of the Portfolio on the date the Acquisition takes place, and the foregoing should not be relied upon to reflect the number of shares of the Acquiring Portfolio that will actually be received on or after such date. (2) Estimated expenses of the Acquisition allocable to the Portfolio. It is expected that the Adviser will bear the expenses of the Acquisition allocable to the Acquiring Portfolio pursuant to the Acquiring Portfolio Limitation. (3) In connection with the Acquisition, shares of the Acquiring Portfolio will be issued to the shareholders of the Portfolio. The number of shares assumed to be issued is equal to the net asset value of the Portfolio divided by the net asset value per share of the Acquiring Portfolio as of October 31, 2015. Appendix G SHARE OWNERSHIP INFORMATION Shares Outstanding As of June 20, 2016, each Portfolio had the following number of shares of common stock outstanding. Number of Outstanding Shares of Common Fund Class Stock -------------------------------------------------------------------------------- Portfolio Common Stock [__________] Acquiring Portfolio A [__________] C [__________] Advisor [__________] R [__________] K [__________] I [__________] Z [__________] Ownership of Shares As of June 20, 2016, the Trustees/Directors and officers of each Portfolio as a group beneficially owned less than 1% of the outstanding shares of common stock of that Portfolio. To the knowledge of each Portfolio, the following persons owned, either of record or beneficially, 5% or more of the outstanding shares of the Portfolio. As of June 20, 2016, AB Balanced Wealth Strategy, a series of the AB Portfolios, may be deemed to "control" the Acquiring Portfolio. As of June 20, 2016, no shareholders may be deemed to "control" the Acquiring Portfolio. "Control" for this purpose is the ownership of more than 25% of the Portfolio's voting securities. Number of Outstanding Percentage of Fund and Name and Address Shares of Class Outstanding Shares Class of Shareholder Owned of Class Owned -------- ---------------- --------------- ------------------- Portfolio Common Stock [________] [__________] [_____]% Acquiring Portfolio Class A [________] [__________] [_____]% Class C [________] [__________] [_____]% Advisor Class [________] [__________] [_____]% Class R [________] [__________] [_____]% Class K [________] [__________] [_____]% Class I [________] [__________] [_____]% Class Z [________] [__________] [_____]% The following table shows the percentage of combined Portfolio's shares to be owned by the above listed shareholders, if the Acquisition had been consummated as of June 20, 2016. Percentage of Outstanding Shares Fund and Name and Address of Combined Fund Class of Shareholder Class Owned -------- ----------------- ------------------- Acquiring Portfolio Class A [________] [_____]% Class C [________] [_____]% Advisor Class [________] [_____]% Class R [________] [_____]% Class K [________] [_____]% Class I [________] [_____]% Class Z [________] [_____]% THE AB POOLING PORTFOLIOS 1345 Avenue of the Americas New York, New York 10105 Toll Free (800) 324-5060 CONSENT THIS CONSENT IS SOLICITED ON BEHALF OF THE BOARD OF TRUSTEES The undersigned hereby (i) acknowledges receipt of the Information Statement/Prospectus dated June [__], 2016 for the solicitation of consents from the shareholders of AB High-Yield Portfolio (the "Portfolio"), a series of the AB Pooling Portfolios, a Massachusetts business trust, and (ii) provides this consent for those shares of the Portfolio held of record by the undersigned on June [__], 2016, in the manner designated herein. THE BOARD OF TRUSTEES RECOMMENDS THAT THE SHAREHOLDERS PROVIDE THEIR CONSENT FOR THE PROPOSAL. PLEASE REVIEW CAREFULLY THE INFORMATION STATEMENT/PROSPECTUS DELIVERED WITH THIS CONSENT. 1. To approve an Agreement and Plan of Acquisition and Liquidation providing for the acquisition of the assets and assumption of the liabilities of the Portfolio by AB High Yield Portfolio, a series of AB Bond Fund, Inc., a Maryland corporation. FOR AGAINST ABSTAIN [_] [_] [_] Account Name: ---------------------------- Account Number: -------------------------- Dated: ---------------------------- ---------------------------------- Signature Title: ---------------------------- NOTE: PLEASE DATE THIS CONSENT AND SIGN YOUR NAME(S) EXACTLY AS SET FORTH HEREON. CORPORATE PROXIES SHOULD BE SIGNED IN FULL CORPORATE OR PARTNERSHIP NAME BY AN AUTHORIZED OFFICER. PLEASE DATE AND SIGN THIS CONSENT AND RETURN IT PROMPTLY BY MAIL TO AllianceBernstein L.P., 1345 Avenue of the Americas, New York, New York 10105. ----------------------------------------------------- STATEMENT OF ADDITIONAL INFORMATION June [__], 2016 For the Acquisition of: AB HIGH-YIELD PORTFOLIO a series of the AB Pooling Portfolios 1345 Avenue of the Americas New York, New York 10105 BY AB HIGH YIELD PORTFOLIO a series of AB Bond Fund, Inc. 1345 Avenue of the Americas New York, New York l0105 (800) 324-5060 ----------------------------------------------------- This Statement of Additional Information is not a prospectus and should be read in conjunction with the Information Statement/Prospectus dated June [__], 2016 relating to the solicitation of shareholder approval of the acquisition of the assets and assumption of the liabilities (the "Acquisition") of the AB High-Yield Portfolio (the "Portfolio"), a series of the AB Pooling Portfolios, a Massachusetts business trust (the "Trust"), by AB High Yield Portfolio (the "Acquiring Portfolio"), a series of AB Bond Fund, Inc., a Maryland corporation (the "Company"), pursuant to an Agreement and Plan of Acquisition and Liquidation (the "Plan"). Subject to the approval of the shareholders of the Portfolio, the Plan provides for: o the transfer of all of the assets of the Portfolio to the Acquiring Portfolio in exchange for Class Z shares of the Acquiring Portfolio and the assumption by the Acquiring Portfolio of all of the liabilities of the Portfolio; o the distribution of Class Z shares of the Acquiring Portfolio to the shareholders of the Portfolio; and o the liquidation and termination of the Portfolio. Shareholders of the Portfolio at the time of the Acquisition will become Class Z shareholders of the Acquiring Portfolio. If the Plan is approved by the Portfolio's shareholders, the Acquisition is expected to occur in July 2016. The Information Statement/Prospectus and this Statement of Additional Information are available upon request, without charge, by writing to the applicable address or calling the telephone numbers listed below. By mail: c/o AllianceBernstein Investor Services, Inc. P.O. Box 786003 San Antonio, TX 78278-6003 By phone: (800) 320-5060 All of this additional information is also available in documents filed with the Securities and Exchange Commission (the "SEC"). You may view or obtain these documents from the SEC: In person: at the SEC's Public Reference Room in Washington, DC By phone: 1-202-551-8090 (for information on the operations of the Public Reference Room only) By mail: Public Reference Branch, Office of Consumer Affairs and Information Services, Securities and Exchange Commission, Washington, DC 20549 (copies may be obtained at prescribed rates) On the Internet: www.sec.gov TABLE OF CONTENTS ADDITIONAL INFORMATION ABOUT THE PORTFOLIOS................................... 3 FINANCIAL INFORMATION......................................................... 3 ADDITIONAL INFORMATION ABOUT THE PORTFOLIOS This Statement of Additional Information, which supplements and is related to the Information Statement/Prospectus, is accompanied by and incorporates by reference the Statement of Additional Information of the Acquiring Portfolio dated January 29, 2016 (Filed on January 29, 2016; File No. 2-48227), as supplemented or amended to the date hereof. FINANCIAL INFORMATION This Statement of Additional Information is accompanied by and incorporates by reference the documents referenced below, which contain historical financial information regarding the Acquired Fund and the Acquiring Fund. o The annual report to shareholders of the Portfolio dated August 31, 2015, which contains audited financial statements and the related independent registered public accounting firm's report for the Portfolio for its fiscal year ended August 31, 2015 (File No. 811-21673); o The semi-annual report to shareholders of the Portfolio dated February 29, 2016, which contains unaudited financial statements for the Portfolio for its semi-annual period ended February 29, 2016 (File No. 811-21673); and o The annual report to shareholders of the Acquiring Portfolio dated October 31, 2015, which contains audited financial statements and the related independent registered public accounting firm's report for the Acquiring Portfolio for its fiscal year ended October 31, 2015 (File No. 811-02383). The following represents the pro forma financial information. The pro forma Financial Statements give effect to the Acquisition of the assets and liabilities of the Acquired Fund by the Acquiring Fund in exchange for shares of the Acquiring Fund pursuant to the Agreement and Plan of Acquisition and Liquidation. Pro Forma Financial Statements ------------------------------ The most recent audited financial statements of the Acquiring Fund for the fiscal year ended October 31, 2015 and the Acquired Fund for the fiscal year ended August 31, 2015, have been audited by Ernst & Young LLP, an independent registered public accounting firm. Ernst & Young LLP's reports, along with the Funds' audited financial statements, are included in each respective Fund's Annual Report to Shareholders for the fiscal year ended August 31, 2015 and October 31, 2015, as applicable, each of which accompanies this SAI and is incorporated herein by reference. In addition, a copy of the Acquiring Fund's Annual Report for the fiscal year ended October 31, 2015 accompanies the Proxy Statement and Prospectus. Shown below are Financial Statements for the Acquired Fund and Acquiring Fund and Pro Forma Financial Statements for the Combined Fund as of October 31, 2015, as though the Reorganization occurred as of that date. These financial statements set forth the unaudited pro forma condensed Statement of Assets and Liabilities as of October 31, 2015, the unaudited pro forma condensed Statement of Operations for the twelve-month period ended October 31, 2015 and the unaudited pro forma condensed Portfolio of Investments as of October 31, 2015. These statements have been derived from the books and records utilized in calculating the daily NAVs for each Fund. The pro forma statements of investments, assets and liabilities and operations should be read in conjunction with the historical financial statements of the Funds included or incorporated by reference in the Statement of Additional Information of which the pro forma combined financial statements form a part. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, if any, at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. Following the Reorganization, AB Pooling High-Yield Portfolio will be the accounting survivor. AB High Yield Portfolio has elected to be taxed as a "regulated investment company" under the Internal Revenue Code. After the Reorganization, AB High Yield Portfolio intends to continue to qualify as a regulated investment company, if such qualification is in the best interests of its shareholders, by complying with the provisions available to certain investment companies, as defined in applicable sections of the Internal Revenue Code, and to make distributions of taxable income sufficient to relieve it from all, or substantially all, Federal income taxes, if it is in the best interests of its shareholders. Pro Forma Combined Condensed Statements of Assets and Liabilities As of October 31, 2015 (Unaudited)
AB Pooling AB Bond Portfolios - Fund, Inc. - AB High- AB High Yield Yield Pro-forma Portfolio Portfolio Adjustments Combined --------- --------- ----------- -------- Assets Investments in securities, at value Unaffiliated issuers (cost $327,810,814 and $18,621,809, respectively) $ 310,036,950 $ 17,487,110 $ - $ 327,524,060 Affiliated issuers (cost $2,365,667 and $1,992,398, respectively) 2,365,667 1,992,398 - 4,358,065 Cash 2,896,975 - - 2,896,975 Cash collateral due from broker 1,606,003 - - 1,606,003 Foreign currencies, at value (cost $105,954 and $194, respectively) 105,731 198 - 105,929 Dividends and interest receivable 5,351,911 294,915 - 5,646,826 Cash collateral due from broker - 263,306 - 263,306 Receivable from Adviser - 114,967 - 114,967 Receivable for capital stock sold - 70,123 - 70,123 Receivable for investment securities sold and foreign currency transactions 1,053,329 53,852 - 1,107,181 Unrealized appreciation on credit default swaps 964,030 12,345 - 976,375 Upfront premium paid on credit default swaps 378,583 50,359 - 428,942 Unrealized appreciation on total return swaps 221,229 18,414 - 239,643 Unrealized appreciation of forward currency exchange contracts 77,888 3,374 - 81,262 Receivable for variation margin on exchange-traded derivatives 14,601 2,922 - 17,523 Receivable for shares of beneficial interest sold 757 - - 757 ----------------------------------------------------------------------------------- Total assets 325,073,654 20,364,283 - 345,437,937 ----------------------------------------------------------------------------------- Liabilities Options written, at value (premiums received $158,817 and $8,803, respectively) 100,190 5,356 - 105,546 Swaptions written, at value (premiums received $9,279 and $594, respectively) 4,311 276 - 4,587 Payable reverse repurchase agreements 9,126,316 - - 9,126,316 Payable for investment securities purchased and foreign currency transactions 4,900,339 321,050 - 5,221,389 Unrealized depreciation on credit default swaps 1,162,238 18,430 - 1,180,668 Upfront premium received on credit default swaps 974,602 23,911 - 998,513 Payable for shares of beneficial interest redeemed 476,309 - - 476,309 Unrealized depreciation of forward currency exchange contracts 169,903 7,401 - 177,304 Audit and tax fee payable - 112,329 - 112,329 Dividends payable - 65,242 - 65,242 Payable for variation margin on exchange-traded derivatives 84,764 - - 84,764 Payable for newly entered credit default swaps - 12,856 - 12,856 Administrative fee payable 12,615 - - 12,615 Unrealized depreciation on total return swaps 8,379 494 - 8,873 Transfer Agent fee payable - 1,504 - 1,504 Offering expenses payable - 975 - 975 Distribution fee payable - 646 - 646 Payable for capital stock redeemed - 386 - 386 Accrued expenses and other liabilities 79,289 110,055 42,905 232,249(a) ----------------------------------------------------------------------------------- Total liabilities 17,099,255 680,911 42,905 17,823,071 ----------------------------------------------------------------------------------- Net Assets $ 307,974,399 $ 19,683,372 $ (42,905) $ 327,614,866 ----------------------------------------------------------------------------------- Composition of Net Assets Capital stock, at par $ - $ 2,130 $ - $ 2,130 Additional paid-in capital 337,887,419 21,109,059 - 358,996,478 Undistributed net investment income 5,397,991 122,320 (42,905) 5,477,406(a) Accumulated net realized loss on investment and foreign currency transactions (16,526,788) (466,855) - (16,993,643) Net unrealized depreciation on investments and foreign currency denominated assets and liabilities (18,784,223) (1,083,282) - (19,867,505) ----------------------------------------------------------------------------------- Net Assets $ 307,974,399 $ 19,683,372 $ (42,905) $ 327,614,866 ----------------------------------------------------------------------------------- Shares of beneficial interest outstanding - unlimited shares authorized, without par value 31,584,488 - - - ----------------------------------------------------------------------------------- Net Asset Value $ 9.75 $ - $ - $ - ----------------------------------------------------------------------------------- Class A ------- Net Assets $ - $ 2,741,974 $ - $ 2,741,974 Shares Outstanding - 296,847 - 296,847 Net Asset Value $ - $ 9.24* $ - $ 9.24* Class C ------- Net Assets $ - $ 119,137 $ - $ 119,137 Shares Outstanding - 12,895 - 12,895 Net Asset Value $ - $ 9.24 $ - $ 9.24 Class Advisor ------------- Net Assets $ - $ 250,840 $ - $ 250,840 Shares Outstanding - 27,145 - 27,145 Net Asset Value $ - $ 9.24 $ - $ 9.24 Class R ------- Net Assets $ - $ 9,242 $ - $ 9,242 Shares Outstanding - 1,000 - 1,000 Net Asset Value $ - $ 9.24 $ - $ 9.24 Class K ------- Net Assets $ - $ 9,242 $ - $ 9,242 Shares Outstanding - 1,000 - 1,000 Net Asset Value $ - $ 9.24 $ - $ 9.24 Class I ------- Net Assets $ - $ 16,543,695 $ - $ 16,543,695 Shares Outstanding - 1,790,331 - 1,790,331 Net Asset Value $ - $ 9.24 $ - $ 9.24 Class Z ------- Net Assets $ - $ 9,242 $ 307,931,494 $ 307,940,736 Shares Outstanding - 1,000 33,325,919 33,326,919 Net Asset Value $ - $ 9.24 $ - $ 9.24
(a) Includes adjustment for estimated Acquisition costs of $42,905. * The maximum offering price per share for Class A shares was $9.65 which reflects a sales charge of 4.25%. Pro Forma Combining Condensed Statement of Operations For The Twelve Month Period Ended October 31, 2015 (Unaudited)
AB Pooling AB Bond Portfolios - Fund, Inc. - AB High- AB High Yield Yield Pro-forma Portfolio Portfolio Adjustments* Combined --------- --------- ------------ -------- Investment Income Interest $ 21,587,488 $ 905,606 $ - $ 22,493,094 Dividends Unaffiliated issuers 836,576 28,383 - 864,959 Affiliated issuers 7,267 1,484 - 8,751 Other income 36,215 250 - 36,465 ------------------------------------------------------------------------- Total income 22,467,546 935,723 - 23,403,269 ------------------------------------------------------------------------- Expenses Advisory fee - 108,212 1,757,477 1,865,689(a) Distribution fee - Class A - 1,225 - 1,225 Distribution fee - Class C - 1,026 - 1,026 Distribution fee - Class R - 48 - 48 Distribution fee - Class K - 24 - 24 Transfer Agency - Class A - 6,988 - 6,988 Transfer Agency - Class C - 3,459 - 3,459 Transfer Agency - Class Advisor Class 5,266 Transfer Agency - Class R - 6 - 6 Transfer Agency - Class K - 5 - 5 Transfer Agency - Class I - 3,453 - 3,453 Transfer Agency - Class Z - 2 61,586 61,588(b) Custodian 223,344 90,802 (117,014) 197,132(c) Audit and tax 135,455 117,822 (135,455) 117,822(d) Amortization of offering expenses 101,109 Legal 33,106 41,306 (33,106) 41,306(e) Administrative 35,364 52,405 (35,364) 52,405(f) Trustees' fees 19,886 18,764 (19,886) 18,764(g) Printing 6,308 16,361 (3,153) 19,516(h) Registration fees 1,157 91,362 (1,157) 91,362(i) Miscellaneous 7,036 59,185 (7,036) 59,185(j) ------------------------------------------------------------------------- Total expenses 461,656 718,830 1,466,892 2,647,378 Less: expenses waived and reimbursed by the Adviser - (572,066) 488,896 (123,170)(k) ------------------------------------------------------------------------- Net expenses 461,656 146,764 1,915,788 2,524,208 ------------------------------------------------------------------------- Net investment income 22,005,890 788,959 (1,915,788) 20,879,061 ------------------------------------------------------------------------- Realized and Unrealized Gain (Loss) on Investment and Foreign Currency Transactions Net realized gain (loss) on: Investment transactions (4,153,902) (471,531) - (4,625,433) Futures (73,630) 39,734 - (33,896) Options written 838,298 45,351 - 883,649 Swaptions written 522,357 35,475 - 557,832 Swaps (83,169) (52,656) - (135,825) Foreign currency transactions 1,187,649 61,832 - 1,249,481 Net change in unrealized appreciation/depreciation of: Investments (25,824,895) (840,759) - (26,665,654) Futures 3,563 (6,443) - (2,880) Options written 115,387 4,239 - 119,626 Swaptions written (30,695) (1,678) - (32,373) Swaps (536,574) 44,527 - (492,047) Foreign currency denominated assets and liabilities (507,946) (15,489) - (523,435) ------------------------------------------------------------------------- Net loss on investment and foreign currency transactions (28,543,557) (1,157,398) - (29,700,955) ------------------------------------------------------------------------- Net Decrease in Net Assets from Operations $ (6,537,667) $ (368,439) $ (1,915,788) $ (8,821,894) -------------------------------------------------------------------------
(a) Advisory fee based on annual rate of .60% of the first $2.5 billion, .55% of the next $2.5 billion and .50% in excess of $5 billion, of the Portfolio's average daily net assets. The adjustment reflects an increase in advisory fees as a result of the Reorganization. (b) The adjustment reflects an increase in transfer agency fees as a result of the Reorganization. (c) The adjustment reflects a decrease in custody fees as a result of the Reorganization. (d) The adjustment reflects the elimination of the Pooling High-Yield Portfolio's audit and tax fees as a result of the Reorganization. (e) The adjustment reflects the elimination of the Pooling High-Yield Portfolio's legal fees as a result of the Reorganization. (f) The adjustment reflects the elimination of the Pooling High-Yield Portfolio's administrative fees as a result of the Reorganization. (g) The adjustment reflects the elimination of the Pooling High-Yield Portfolio's trustees' fees as a result of the Reorganization. (h) The adjustment reflects a decrease in printing fees as a result of the Reorganization. (i) The adjustment reflects the elimination of the Pooling High-Yield Portfolio's registration fees as a result of the Reorganization. (j) The adjustment reflects the elimination of the Pooling High-Yield Portfolio's miscellaneous fees as a result of the Reorganization. (k) The adjustment reflects a decrease in reimbursement as a result of the Reorganization. * Does not reflect the estimated Reorganization costs of $42,905, which will be assumed by Pooling-High Yield prior to the Reorganization. Portfolio Investments as of October 31, 2015 (unaudited)
AB Pooling AB Pro-Forma AB Pooling Pro-Forma Portfolio High- High Yield Combined Portfolio High- AB High Combined Yield Portfolio Portfolio Portfolio Yield Portfolio Yield Portfolio Portfolio ------------------------------------------------------------------------------------------------------------------------------------ Amount Amount Amount Principal Principal Principal (000) (000) (000) U.S. Value U.S. Value U.S. Value ------------------------------------------------------------------------------------------------------------------------------------ CORPORATES - NON-INVESTMENT GRADE - 77.0% Industrial - 63.1% Basic - 3.4% AK Steel Corp. 7.625%, 5/15/20-10/01/21 U.S.$ 445 65 510 231,400 31,675 263,075 Aleris International,Inc. 7.625%, 2/15/18 221 13 234 206,635 12,155 218,790 7.875%, 11/01/20 193 9 202 181,420 8,460 189,880 ArcelorMittal 5.125%, 6/01/20 180 10 190 172,969 9,609 182,578 6.125%, 6/01/18-6/01/25 1,427 100 1,527 1,416,956(a) 96,461 1,513,417 6.25%, 3/01/21 249 10 259 235,149 9,444 244,593 7.00%, 2/25/22 - 15 15 - 14,213 14,213 7.75%, 10/15/39 448 42 490 381,920 35,805 417,725 Ashland, Inc. 3.875%, 4/15/18 - 19 19 - 19,641 19,641 Axalta Coating Systems US Holdings, Inc./Axalta Coating Systems Dutch Holding B 7.375%, 5/01/21 (b) 275 - 275 290,813 - 290,813 Chemours Co. (The) 7.00%, 5/15/25 (b) 80 4 84 59,600 2,980 62,580 Cliffs Natural Resources, Inc. 7.75%, 3/31/20(b) 268 12 280 108,540 4,860 113,400 8.25%, 3/31/20(b) 323 17 340 289,085 15,215 304,300 Commercial Metals Co. 6.50%, 7/15/17 336 25 361 348,600 25,937 374,537 Consolidated Energy Finance SA 6.75%, 10/15/19 (b) 890 - 890 885,550 - 885,550 Emeco Pty Ltd. 9.875%, 3/15/19 (b) 481 - 481 270,563 - 270,563 FMG Resources (August 2006) Pty Ltd. 6.875%, 4/01/22(b) 240 25 265 171,600 17,875 189,475 9.75%, 3/01/22(b) 131 14 145 130,345(a) 13,930 144,275 Huntsman International LLC 4.875%, 11/15/20 10 10 9,407 9,407 5.125%, 11/15/22 (b) 167 - 167 155,310 - 155,310 INEOS Group Holdings SA 6.125%, 8/15/18 (b) 345 - 345 347,587 - 347,587 Jefferson Smurfit Corp./US 8.25%, 10/01/49 (c)(d) 630 - 630 315 - 315 JMC Steel Group, Inc. 8.25%, 3/15/18 (b) 201 10 211 136,680(a) 6,800 143,480 Joseph T. Ryerson & Son, Inc. 9.00%, 10/15/17 387 18 405 337,658 15,705 353,363 Lundin Mining Corp. 7.875%, 11/01/22 (b) 236 13 249 236,543 13,030 249,573 Magnetation LLC/Mag Finance Corp. 11.00%, 5/15/18 (e)(f) 645 35 680 141,900 7,700 149,600 Momentive Performance Materials, Inc. 3.88%, 10/24/21 461 40 501 368,800 32,000 400,800 8.875%, 10/15/20(d)(g)(h) 461 40 501 0 0 0 Novelis, Inc. 8.375%, 12/15/17 116 10 126 116,870 10,075 126,945 8.75%, 12/15/20 509 30 539 510,272 30,075 540,347 Peabody Energy Corp. 6.00%, 11/15/18 1,192 62 1,254 208,600 10,850 219,450 10.00%, 3/15/22 (b) 280 30 310 75,600 8,100 83,700 Smurfit Kappa Acquisitions 4.875%, 9/15/18 (b) 400 - 400 420,000 - 420,000 Smurfit Kappa Treasury Funding Ltd. 7.50%, 11/20/25 - 40 40 - 48,800 48,800 Smurfit-Stone Container Enterprises, Inc. 8.00%, 3/15/17 (c)(d) 650 - 650 325 - 325 Steel Dynamics, Inc. 5.125%, 10/01/21 - 15 15 - 14,888 14,888 6.125%, 8/15/19 645 35 680 667,575 36,225 703,800 Teck Resources Ltd. 4.50%, 1/15/21 353 18 371 240,040 12,240 252,280 5.40%, 2/01/43 90 5 95 48,150 2,675 50,825 6.25%, 7/15/41 54 8 62 30,510 4,520 35,030 Thompson Creek Metals Co., Inc. 7.375%, 6/01/18 341 8 349 143,220 3,360 146,580 9.75%, 12/01/17 456 25 481 430,920 23,625 454,545 Univar USA, Inc. 6.75%, 7/15/23 (b) 320 14 334 316,800 13,860 330,660 WR Grace & Co.-Conn 5.125%, 10/01/21 (b) 211 12 223 219,440 12,480 231,920 ---------------------------------------------------- 10,534,260 634,675 11,168,935 ---------------------------------------------------- Capital Goods - 5.1% Abengoa Finance SAU 7.75%, 2/01/20 (b) 240 - 240 100,800 - 100,800 Accudyne Industries Borrower/ Accudyne Industries LLC 7.75%, 12/15/20 (b) 328 - 328 284,540 - 284,540 Apex Tool Group LLC 7.00%, 2/01/21 (b) 368 20 388 296,240 16,100 312,340 Ardagh Finance Holdings SA 8.625%, 6/15/19 (b)(i) 414 - 414 433,419 - 433,419 Ardagh Packaging Finance PLC 9.25%, 10/15/20 (b) EUR 145 - 145 167,382 - 167,382 Ardagh Packaging Finance PLC /Ardagh Holdings USA, Inc. 6.00%, 6/30/21 (b) U.S.$ 570 200 770 558,600 196,000 754,600 Berry Plastics Corp. 5.125%, 7/15/23 299 7 306 296,010 6,930 302,940 5.50%, 5/15/22 - 20 20 - 20,600 20,600 6.00%, 10/15/22(b) 144 4 148 150,480 4,180 154,660 Beverage Packaging Holdings Luxembourg II SA/Beverage Packaging Holdings II Issuer 6.00%, 6/15/17 (b) 171 10 181 171,855 10,050 181,905 Bombardier, Inc. 6.00%, 10/15/22(b) 1,135 35 1,170 873,950 26,950 900,900 6.125%, 1/15/23(b) 734 74 808 568,850 57,350 626,200 7.45%, 5/01/34(b) 564 - 564 391,980 - 391,980 7.50%, 3/15/25(b) 136 27 163 105,740 20,992 126,732 Building Materials Corp. of America 6.00%, 10/15/25 (b) 322 19 341 342,930 20,235 363,165 Clean Harbors, Inc. 5.25%, 8/01/20 - 18 18 - 18,720 18,720 CNH Industrial Capital LLC 3.625%, 4/15/18 795 60 855 796,987(a) 60,150 857,137 EnerSys 5.00%, 4/30/23 (b) 210 10 220 213,150 10,150 223,300 EnPro Industries, Inc. 5.875%, 9/15/22 266 16 282 267,995 16,120 284,115 Gardner Denver, Inc. 6.875%, 8/15/21 (b) 213 28 241 184,245 24,220 208,465 HD Supply, Inc. 7.50%, 7/15/20 - 39 39 - 41,535 41,535 11.50%, 7/15/20 - 15 15 - 16,969 16,969 KLX, Inc. 5.875%, 12/01/22 (b) 238 40 278 242,909 40,825 283,734 Manitowoc Co., Inc. (The) 5.875%, 10/15/22 37 3 40 38,203 3,098 41,301 8.50%, 11/01/20 252 30 282 262,400 31,238 293,638 Masco Corp. 7.125%, 3/15/20 - 30 30 - 34,875 34,875 Milacron LLC/Mcron Finance Corp. 7.75%, 2/15/21 (b) 308 - 308 315,700 - 315,700 Owens-Brockway Glass Container, Inc. 5.875%, 8/15/23 (b) 55 3 58 58,369 3,184 61,553 Owens-Illinois, Inc. 7.80%, 5/15/18 290 25 315 322,445 27,797 350,242 Pactiv LLC 7.95%, 12/15/25 597 31 628 577,597 29,992 607,589 Reynolds Group Issuer, Inc./ Reynolds Group Issuer LLC/ Reynolds Group Issuer Lu 8.25%, 2/15/21 1,309 100 1,409 1,359,724 103,875 1,463,599 9.00%, 4/15/19 1,110 100 1,210 1,134,975 102,250 1,237,225 9.875%, 8/15/19 400 - 400 421,000 - 421,000 Sealed Air Corp. 5.25%, 4/01/23 (b) - 13 13 - 13,585 13,585 6.875%, 7/15/33 (b) 1,181 75 1,256 1,204,620 76,500 1,281,120 SIG Combibloc Holdings SCA 7.75%, 2/15/23 (b) EUR 147 - 147 170,620 - 170,620 SPX FLOW, Inc. 6.875%, 9/01/17 U.S.$ 300 75 375 318,000 79,500 397,500 Summit Materials LLC/Summit Materials Finance Corp. 10.50%, 1/31/20 127 8 135 134,620 8,480 143,100 TransDigm, Inc. 6.00%, 7/15/22 530 30 560 535,300 30,300 565,600 6.50%, 7/15/24 481 20 501 489,417 20,350 509,767 United Rentals North America, Inc. 5.50%, 7/15/25 758 64 822 756,105 63,840 819,945 5.75%, 11/15/24 850 39 889 862,750 39,585 902,335 ---------------------------------------------------- 15,409,907 1,276,525 16,686,432 ---------------------------------------------------- Communications - Media - 10.1% Altice Financing SA 6.625%, 2/15/23 (b) 1,114 - 1,114 1,116,785 - 1,116,785 Altice US Finance II Corp. 7.75%, 7/15/25 (b) 408 - 408 392,700 - 392,700 Arqiva Broadcast Finance PLC 9.50%, 3/31/20 (b) GBP 555 - 555 929,382 - 929,382 CCO Holdings LLC/CCO Holdings Capital Corp. 5.125%, 2/15/23 U.S.$ 785 60 845 786,962 60,150 847,112 5.375%, 5/01/25(b) 640 42 682 633,600(a) 41,580 675,180 5.75%, 1/15/24 - 8 8 - 8,120 8,120 5.875%, 5/01/27(b) 334 44 378 334,000 44,000 378,000 Cequel Communications Holdings I LLC/Cequel Capital Corp. 5.125%, 12/15/21 (b) 855 74 929 821,433 71,095 892,528 Clear Channel Worldwide Holdings, Inc. 6.50%, 11/15/22 525 35 560 540,750 36,487 577,237 7.625%, 3/15/20 100 6 106 101,500 6,225 107,725 Series B 6.50%, 11/15/22 675 - 675 703,688 - 703,688 CSC Holdings LLC 5.25%, 6/01/24 362 140 502 318,375 123,129 441,504 7.625%, 7/15/18 559 24 583 593,239 25,470 618,709 8.625%, 2/15/19 - 35 35 - 37,187 37,187 DISH DBS Corp. 5.00%, 3/15/23 550 - 550 508,750 - 508,750 5.125%, 5/01/20 - 30 30 - 29,888 29,888 5.875%, 11/15/24 1,893 60 1,953 1,810,654 57,390 1,868,044 6.75%, 6/01/21 - 105 105 - 108,412 108,412 Hughes Satellite Systems Corp. 7.625%, 6/15/21 965 50 1,015 1,051,850 54,500 1,106,350 iHeartCommunications, Inc. 6.875%, 6/15/18 1,231 70 1,301 1,058,660 60,200 1,118,860 9.00%, 12/15/19-9/15/22 1,180 60 1,240 988,082 50,200 1,038,282 10.00%, 1/15/18 475 - 475 251,750 - 251,750 Intelsat Jackson Holdings SA 5.50%, 8/01/23 1,934 95 2,029 1,594,341 78,316 1,672,657 LGE HoldCo VI BV 7.125%, 5/15/24 (b) EUR 510 - 510 609,108 - 609,108 Mediacom Broadband LLC/ Mediacom Broadband Corp. 6.375%, 4/01/23 U.S.$ 350 30 380 337,750 28,950 366,700 Neptune Finco Corp. 6.625%, 10/15/25(b) 620 - 620 654,875 - 654,875 10.125%, 1/15/23(b) 933 - 933 981,982 - 981,982 10.875%, 10/15/25(b) 700 - 700 747,250 - 747,250 Nexstar Broadcasting, Inc. 6.875%, 11/15/20 - 17 17 - 17,574 17,574 Nielsen Co. Luxembourg SARL (The) 5.50%, 10/01/21 (b) - 29 29 - 30,051 30,051 Nielsen Finance LLC/Nielsen Finance Co. 5.00%, 4/15/22 (b) 705 35 740 716,456 35,569 752,025 Outfront Media Capital LLC/ Outfront Media Capital Corp. 5.625%, 2/15/24 (b) - 10 10 - 10,406 10,406 Radio One, Inc. 7.375%, 4/15/22(b) 400 20 420 374,000 18,700 392,700 9.25%, 2/15/20(b) 511 26 537 421,575 21,450 443,025 RR Donnelley & Sons Co. 7.25%, 5/15/18 - 30 30 - 32,138 32,138 8.25%, 3/15/19 390 20 410 436,800 22,400 459,200 Sinclair Television Group, Inc. 5.375%, 4/01/21 - 20 20 - 20,050 20,050 5.625%, 8/01/24(b) 1,165 50 1,215 1,141,700 49,000 1,190,700 6.125%, 10/01/22 539 26 565 553,823 26,715 580,538 Sirius XM Radio, Inc. 5.375%, 4/15/25(b) 657 18 675 672,637 18,428 691,065 6.00%, 7/15/24(b) 595 47 642 628,201 49,623 677,824 Starz LLC/Starz Finance Corp. 5.00%, 9/15/19 315 55 370 322,127 56,244 378,371 TEGNA, Inc. 4.875%, 9/15/21(b) 455 35 490 450,450 34,650 485,100 5.125%, 7/15/20 170 5 175 177,225 5,213 182,438 5.50%, 9/15/24(b) 114 7 121 115,710 7,105 122,815 6.375%, 10/15/23 93 7 100 100,440 7,560 108,000 Time, Inc. 5.75%, 4/15/22 (b) 959 50 1,009 959,000 50,000 1,009,000 Townsquare Media, Inc. 6.50%, 4/01/23 (b) 346 19 365 332,160 18,240 350,400 Unitymedia GmbH 6.125%, 1/15/25 (b) 497 - 497 508,804 - 508,804 Unitymedia Hessen GmbH & Co. KG/Unitymedia NRW GmbH 5.00%, 1/15/25(b) 273 - 273 271,635 - 271,635 5.50%, 1/15/23(b) 580 - 580 596,124 - 596,124 Univision Communications, Inc. 5.125%, 5/15/23-2/15/25(b) 1,914 98 2,012 1,881,622 96,697 1,978,319 6.75%, 9/15/22(b) - 22 22 - 23,238 23,238 UPCB Finance IV Ltd. 5.375%, 1/15/25 (b) 685 - 685 685,856 - 685,856 Videotron Ltd. 5.00%, 7/15/22 500 55 555 521,875 57,406 579,281 Virgin Media Finance PLC 4.875%, 2/15/22 208 - 208 189,800 - 189,800 5.75%, 1/15/25(b) 200 - 200 196,500 - 196,500 6.00%, 10/15/24(b) 982 - 982 989,365 - 989,365 Wave Holdco LLC/Wave Holdco Corp. 8.25% (8.25% Cash or 9.00% PIK), 7/15/19 (b)(i) 152 - 152 152,000 - 152,000 Ziggo Bond Finance BV 5.875%, 1/15/25 (b) 262 - 262 249,555 - 249,555 ---------------------------------------------------- 31,512,906 1,629,756 33,142,662 ---------------------------------------------------- Communications - Telecommunications - 8.2% Altice Luxembourg SA 7.25%, 5/15/22(b) EUR 520 - 520 554,664 - 554,664 7.625%, 2/15/25(b) U.S.$ 220 - 220 201,850 - 201,850 7.75%, 5/15/22(b) 332 - 332 319,550 - 319,550 CenturyLink, Inc. Series T 5.80%, 3/15/22 265 10 275 257,713 9,725 267,438 Series U 7.65%, 3/15/42 - 55 55 - 47,025 47,025 Series W 6.75%, 12/01/23 335 27 362 332,454 26,795 359,249 Columbus International, Inc. 7.375%, 3/30/21 (b) 829 - 829 862,160 - 862,160 CommScope Technologies Finance LLC 6.00%, 6/15/25 (b) 162 23 185 164,430 23,345 187,775 CommScope, Inc. 5.50%, 6/15/24 (b) 293 14 307 290,070 13,860 303,930 Communications Sales & Leasing, Inc./CSL Capital LLC 6.00%, 4/15/23(b) 388 40 428 376,360 38,800 415,160 8.25%, 10/15/23 656 31 687 606,472 28,659 635,131 Frontier Communications Corp. 6.25%, 9/15/21 655 34 689 584,915 30,362 615,277 7.125%, 3/15/19-1/15/23 812 43 855 767,480 40,822 808,302 7.625%, 4/15/24 579 35 614 518,205 31,325 549,530 7.875%, 1/15/27 127 10 137 107,950 8,500 116,450 8.125%, 10/01/18 15 15 15,825 15,825 9.00%, 8/15/31 360 10 370 325,620 9,045 334,665 10.50%, 9/15/22(b) 92 7 99 95,450 7,263 102,713 11.00%, 9/15/25(b) 1,176 79 1,255 1,232,589 82,801 1,315,390 Level 3 Financing, Inc. 5.375%, 1/15/24(b) 262 24 286 265,275 24,300 289,575 7.00%, 6/01/20 800 40 840 848,000 42,400 890,400 Numericable-SFR SA 6.00%, 5/15/22(b) 883 - 883 885,207 - 885,207 6.25%, 5/15/24(b) 783 - 783 783,000 - 783,000 Sable International Finance Ltd. 6.875%, 8/01/22 (b) 344 - 344 350,020 - 350,020 SBA Communications Corp. 5.625%, 10/01/19 - 20 20 - 20,900 20,900 Sprint Capital Corp. 6.875%, 11/15/28 95 5 100 78,850 4,150 83,000 8.75%, 3/15/32 1,310 45 1,355 1,179,000 40,500 1,219,500 Sprint Communications, Inc. 6.00%, 11/15/22 425 40 465 363,158 34,180 397,338 9.00%, 11/15/18(b) 945 85 1,030 1,038,905 93,446 1,132,351 Sprint Corp. 7.125%, 6/15/24 360 10 370 316,125 8,781 324,906 7.25%, 9/15/21 520 30 550 477,750 27,562 505,312 7.625%, 2/15/25 1,502 122 1,624 1,333,025 108,275 1,441,300 7.875%, 9/15/23 1,583 85 1,668 1,464,275 78,625 1,542,900 T-Mobile USA, Inc. 6.25%, 4/01/21 900 50 950 929,160 51,620 980,780 6.375%, 3/01/25 1,300 85 1,385 1,303,250 85,212 1,388,462 6.50%, 1/15/24 715 - 715 725,725 - 725,725 6.542%, 4/28/20 - 102 102 - 104,550 104,550 Telecom Italia Capital SA 6.375%, 11/15/33 1,050 110 1,160 1,015,098 106,344 1,121,442 7.20%, 7/18/36 330 8 338 339,900 8,240 348,140 7.721%, 6/04/38 360 - 360 383,400 - 383,400 WaveDivision Escrow LLC/ WaveDivision Escrow Corp. 8.125%, 9/01/20 (b) - 10 10 - 9,725 9,725 Wind Acquisition Finance SA 4.75%, 7/15/20(b) 380 - 380 386,650 - 386,650 6.50%, 4/30/20(b) 510 - 510 538,050 - 538,050 7.375%, 4/23/21(b) 1,383 - 1,383 1,393,372 - 1,393,372 Windstream Services LLC 6.375%, 8/01/23 460 21 481 364,550 16,643 381,193 7.50%, 4/01/23 340 30 370 283,900 25,050 308,950 Zayo Group LLC/Zayo Capital, Inc. 6.00%, 4/01/23(b) 779 42 821 794,191 42,819 837,010 6.375%, 5/15/25(b) 118 15 133 119,475 15,188 134,663 ---------------------------------------------------- 25,557,243 1,362,662 26,919,905 ---------------------------------------------------- Consumer Cyclical - Automotive - 2.1% Affinia Group, Inc. 7.75%, 5/01/21 579 30 609 600,713 31,125 631,838 Banque PSA Finance SA 4.375%, 4/04/16 (b) - 30 30 - 30,320 30,320 Commercial Vehicle Group, Inc. 7.875%, 4/15/19 401 50 451 407,015 50,750 457,765 Dana Holding Corp. 5.375%, 9/15/21 - 29 29 - 29,580 29,580 Exide Technologies Series AI 7.00%, 4/30/25(c)(d)(i)(j) 978 - 978 749,482 - 749,482 11.00%, 4/30/20(g) (i) 1,326 - 1,326 1,080,961 - 1,080,961 Gates Global LLC/Gates Global Co. 6.00%, 7/15/22 (b) 700 58 758 561,750 46,545 608,295 LKQ Corp. 4.75%, 5/15/23 1,084 55 1,139 1,065,030 54,038 1,119,068 Schaeffler Holding Finance BV 6.875%, 8/15/18 (b) (i) EUR 544 - 544 620,643 - 620,643 Titan International, Inc. 6.875%, 10/01/20 U.S.$ 360 20 380 304,200 16,900 321,100 ZF North America Capital, Inc. 4.00%, 4/29/20(b) 332 - 332 335,320 - 335,320 4.75%, 4/29/25(b) 781 - 781 766,356 - 766,356 ---------------------------------------------------- 6,491,470 259,258 6,750,728 ---------------------------------------------------- Consumer Cyclical - Entertainment - 0.4% AMC Entertainment, Inc. 5.75%, 6/15/25 324 17 341 326,430 17,127 343,557 Carlson Travel Holdings, Inc. 7.50% (7.50% Cash or 8.25% PIK), 8/15/19 (b) (i) 304 - 304 305,520 - 305,520 Regal Entertainment Group 5.75%, 3/15/22-6/15/23 645 35 680 657,513 35,650 693,163 Royal Caribbean Cruises Ltd. 7.25%, 3/15/18 - 15 15 - 16,425 16,425 ---------------------------------------------------- 1,289,463 69,202 1,358,665 ---------------------------------------------------- Consumer Cyclical - Other - 3.5% Beazer Homes USA, Inc. 5.75%, 6/15/19 350 20 370 336,875 19,250 356,125 Boyd Gaming Corp. 9.00%, 7/01/20 870 50 920 937,425 53,875 991,300 Caesars Entertainment Operating Co., Inc. 9.00%, 2/15/20(e) 145 5 150 116,725 4,025 120,750 10.00%, 12/15/18(e) 825 - 825 243,375 - 243,375 Caesars Entertainment Resort Properties LLC/Caesars Entertainment Resort Prope 8.00%, 10/01/20 350 20 370 347,375 19,850 367,225 Caesars Growth Properties Holdings LLC/Caesars Growth Properties Finance, Inc. 9.375%, 5/01/22 380 20 400 314,450 16,550 331,000 CalAtlantic Group, Inc. 5.875%, 11/15/24 100 - 100 105,000 - 105,000 6.625%, 5/01/20 335 20 355 371,012 22,150 393,162 8.375%, 5/15/18 300 15 315 345,000 17,250 362,250 DR Horton, Inc. 4.00%, 2/15/20 500 - 500 515,000 - 515,000 6.50%, 4/15/16 - 60 60 - 61,050 61,050 Eldorado Resorts, Inc. 7.00%, 8/01/23 (b) 229 16 245 231,863 16,200 248,063 GLP Capital LP / GLP Financing II, Inc. 5.375%, 11/01/23 - 25 25 - 25,241 25,241 International Game Technology PLC 6.25%, 2/15/22(b) 558 - 558 544,050 - 544,050 6.50%, 2/15/25(b) 450 - 450 423,000 - 423,000 7.50%, 6/15/19 - 80 80 - 85,800 85,800 Isle of Capri Casinos, Inc. 5.875%, 3/15/21 - 9 9 - 9,473 9,473 K. Hovnanian Enterprises, Inc. 5.00%, 11/01/21 448 28 476 313,600 19,600 333,200 KB Home 4.75%, 5/15/19 290 15 305 285,185 14,751 299,936 7.00%, 12/15/21 - 10 10 - 10,125 10,125 8.00%, 3/15/20 - 20 20 - 21,750 21,750 Lennar Corp. Series B 6.50%, 4/15/16 - 50 50 - 50,875 50,875 M/I Homes, Inc. 8.625%, 11/15/18 790 40 830 806,787 40,850 847,637 MDC Holdings, Inc. 5.50%, 1/15/24 54 8 62 55,080 8,160 63,240 6.00%, 1/15/43 306 7 313 247,860 8,910 256,770 Meritage Homes Corp. 6.00%, 6/01/25 636 63 699 651,900 64,575 716,475 7.00%, 4/01/22 45 4 49 49,275 4,380 53,655 NAI Entertainment Holdings/NAI Entertainment Holdings Finance Corp. 5.00%, 8/01/18 (b) - 25 25 - 25,812 25,812 PulteGroup, Inc. 6.00%, 2/15/35 555 30 585 550,837 29,775 580,612 6.375%, 5/15/33 86 10 96 88,666 10,310 98,976 7.875%, 6/15/32 31 4 35 35,883 4,630 40,513 Scientific Games International, Inc. 7.00%, 1/01/22 (b) 306 18 324 307,530 18,090 325,620 Shea Homes LP/Shea Homes Funding Corp. 5.875%, 4/01/23(b) 81 4 85 84,746 4,185 88,931 6.125%, 4/01/25(b) 624 42 666 653,640 43,995 697,635 Studio City Finance Ltd. 8.50%, 12/01/20 (b) 325 - 325 325,813 - 325,813 Taylor Morrison Communities, Inc./Monarch Communities, Inc. 5.625%, 3/01/24(b) 525 50 575 517,125 49,250 566,375 5.875%, 4/15/23(b) 253 14 267 255,530 14,140 269,670 Toll Brothers Finance Corp. 4.00%, 12/31/18 157 10 167 163,280 10,400 173,680 Wynn Las Vegas LLC/Wynn Las Vegas Capital Corp. 5.375%, 3/15/22 36 5 41 35,640 4,950 40,590 5.50%, 3/01/25(b) 228 13 241 213,989 12,201 226,190 Wynn Macau Ltd. 5.25%, 10/15/21 (b) 200 - 200 183,000(a) - 183,000 ---------------------------------------------------- 10,656,516 822,428 11,478,944 ---------------------------------------------------- Consumer Cyclical - Restaurants - 0.4% 1011778 BC ULC/New Red Finance, Inc. 4.625%, 1/15/22(b) - 16 16 - 16,240 16,240 6.00%, 4/01/22 (b) 414 22 436 433,147 23,017 456,164 Pizzaexpress Financing 1 PLC 8.625%, 8/01/22 (b) GBP 103 - 103 167,367 - 167,367 Pizzaexpress Financing 2 PLC 6.625%, 8/01/21 (b) 107 - 107 171,522 - 171,522 Stonegate Pub Co. Financing PLC 5.75%, 4/15/19 (b) 330 - 330 511,439 - 511,439 ---------------------------------------------------- 1,283,475 39,257 1,322,732 ---------------------------------------------------- Consumer Cyclical - Retailers - 2.6% American Tire Distributors, Inc. 10.25%, 3/01/22 (b) U.S.$ 695 50 745 701,950 50,500 752,450 Argos Merger Sub, Inc. 7.125%, 3/15/23 (b) 830 65 895 873,575 68,412 941,987 Asbury Automotive Group, Inc. 6.00%, 12/15/24 (b) - 13 13 - 13,748 13,748 Brighthouse Group PLC 7.875%, 5/15/18 (b) GBP 330 - 330 476,585 - 476,585 Cash America International, Inc. 5.75%, 5/15/18 U.S.$ 544 67 611 548,080 67,502 615,582 CST Brands, Inc. 5.00%, 5/01/23 - 28 28 - 28,280 28,280 Dollar Tree, Inc. 5.75%, 3/01/23 (b) 734 48 782 773,452 50,580 824,032 Group 1 Automotive, Inc. 5.00%, 6/01/22 410 30 440 414,100 30,300 444,400 L Brands, Inc. 6.875%, 11/01/35(b) 370 30 400 384,338 31,163 415,501 8.50%, 6/15/19 820 50 870 967,600 59,000 1,026,600 Levi Strauss & Co. 5.00%, 5/01/25 613 19 632 620,663 19,238 639,901 6.875%, 5/01/22 15 15 16,444 16,444 Neiman Marcus Group Ltd. LLC 8.75% (8.75% Cash or 9.50% PIK), 10/15/21 (b)(i) 347 23 370 360,429 23,890 384,319 Party City Holdings, Inc. 6.125%, 8/15/23 (b) 302 17 319 311,060 17,510 328,570 Rite Aid Corp. 6.125%, 4/01/23 (b) 1,276 77 1,353 1,374,890 82,967 1,457,857 Serta Simmons Bedding LLC 8.125%, 10/01/20 (b) - 15 15 - 15,844 15,844 Sonic Automotive, Inc. 5.00%, 5/15/23 - 45 45 - 43,762 43,762 Wolverine World Wide, Inc. 6.125%, 10/15/20 - 10 10 - 10,500 10,500 ---------------------------------------------------- 7,806,722 629,640 8,436,362 ---------------------------------------------------- Consumer Non-Cyclical - 11.9% Air Medical Merger Sub Corp. 6.375%, 5/15/23 (b) 570 30 600 518,700 27,300 546,000 Alere, Inc. 6.375%, 7/01/23 (b) 76 7 83 79,040 7,280 86,320 AMAG Pharmaceuticals, Inc. 7.875%, 9/01/23 (b) 162 8 170 151,065 7,460 158,525 Amsurg Corp. 5.625%, 7/15/22 408 20 428 400,860 19,650 420,510 BI-LO LLC/BI-LO Finance Corp. 8.625% (8.625% Cash or 9.375% PIK), 9/15/18(b) (i) 729 39 768 667,035 35,685 702,720 9.25%, 2/15/19(b) 330 20 350 339,075 20,550 359,625 Boparan Finance PLC 5.25%, 7/15/19(b) GBP 121 - 121 178,140 - 178,140 5.50%, 7/15/21(b) 225 - 225 315,642 - 315,642 Capsugel SA 7.00% (7.00% Cash or 7.75% PIK), 5/15/19 (b)(i) U.S.$ 725 36 761 730,438 36,270 766,708 Care UK Health & Social Care PLC 5.579%, 7/15/19 (b)(k) GBP 233 - 233 330,637 - 330,637 Cerberus Nightingale 1 SARL 8.25%, 2/01/20(b) EUR 520 - 520 580,395 - 580,395 CHS/Community Health Systems, Inc. 6.875%, 2/01/22 U.S.$ 2,168 129 2,297 2,184,260(a) 129,967 2,314,227 Concordia Healthcare Corp. 7.00%, 4/15/23(b) 60 2 62 52,200 1,740 53,940 9.50%, 10/21/22(b) 204 13 217 199,920 12,740 212,660 Constellation Brands, Inc. 3.75%, 5/01/21 840 - 840 858,900 - 858,900 4.25%, 5/01/23 - 20 20 - 20,475 20,475 7.25%, 5/15/17 - 40 40 - 43,300 43,300 DaVita HealthCare Partners, Inc. 5.00%, 5/01/25 698 48 746 692,903 47,650 740,553 Endo Finance LLC 5.75%, 1/15/22 (b) 225 120 345 219,938 117,300 337,238 Endo Finance LLC/Endo Finco, Inc. 7.75%, 1/15/22 (b) 93 - 93 96,488 - 96,488 Endo Ltd./Endo Finance LLC/Endo Finco, Inc. 6.00%, 7/15/23(b) 647 - 647 647,000(a) - 647,000 6.00%, 2/01/25(b) 803 - 803 796,977 - 796,977 Envision Healthcare Corp. 5.125%, 7/01/22 (b) 553 42 595 536,410 40,740 577,150 Ephios Bondco PLC 6.25%, 7/01/22 (b) EUR 264 - 264 303,372 - 303,372 First Quality Finance Co., Inc. 4.625%, 5/15/21 (b) U.S.$ 1,535 30 1,565 1,423,712 27,825 1,451,537 Galaxy Bidco Ltd. 6.375%, 11/15/20(b) GBP 215 - 215 343,044 - 343,044 Grifols Worldwide Operations Ltd. 5.25%, 4/01/22 U.S.$ 270 - 270 279,450 - 279,450 HCA, Inc. 4.25%, 10/15/19 2,317 153 2,470 2,386,394 157,582 2,543,976 5.375%, 2/01/25 467 49 516 479,259 50,286 529,545 6.50%, 2/15/20 1,545 80 1,625 1,728,469 89,500 1,817,969 Hill-Rom Holdings, Inc. 5.75%, 9/01/23 (b) 75 6 81 76,500 6,120 82,620 Holding Medi-Partenaires SAS 7.00%, 5/15/20 (b) EUR 735 - 735 862,541 - 862,541 Horizon Pharma Financing, Inc. 6.625%, 5/01/23 (b) U.S.$ 714 - 714 617,610 - 617,610 HRG Group, Inc. 7.875%, 7/15/19(b) 254 13 267 269,558 13,780 283,338 7.875%, 7/15/19 508 48 556 539,115 50,940 590,055 Immucor, Inc. 11.125%, 8/15/19 300 20 320 307,500 20,500 328,000 Jaguar Holding Co. II/ Pharmaceutical Product Development LLC 6.375%, 8/01/23 (b) 233 13 246 233,291 13,016 246,307 Kindred Healthcare, Inc. 8.00%, 1/15/20 350 55 405 364,000 57,062 421,062 Kinetic Concepts, Inc./KCI USA, Inc. 10.50%, 11/01/18 1,015 50 1,065 1,071,738 52,795 1,124,533 Mallinckrodt International Finance SA 3.50%, 4/15/18 262 11 273 253,813 10,656 264,469 Mallinckrodt International Finance SA/Mallinckrodt CB LLC 4.875%, 4/15/20(b) - 10 10 - 9,588 9,588 5.50%, 4/15/25(b) 354 18 372 322,030 16,374 338,404 5.625%, 10/15/23(b) 330 23 353 311,438 21,706 333,144 5.75%, 8/01/22(b) 339 18 357 322,260 17,111 339,371 MPH Acquisition Holdings LLC 6.625%, 4/01/22 (b) 185 10 195 188,700 10,200 198,900 Post Holdings, Inc. 7.375%, 2/15/22 752 60 812 792,307 63,216 855,523 7.75%, 3/15/24(b) 267 18 285 284,355 19,170 303,525 8.00%, 7/15/25(b) 244 29 273 264,740 31,465 296,205 PRA Holdings, Inc. 9.50%, 10/01/23 (b) 540 30 570 608,850 33,825 642,675 Priory Group No 3 PLC 7.00%, 2/15/18(b) GBP 282 - 282 447,050 - 447,050 Quintiles Transnational Corp. 4.875%, 5/15/23 (b) U.S.$ 337 18 355 346,476 18,506 364,982 R&R Ice Cream PLC 5.50%, 5/15/20 (b) GBP 358 - 358 566,380 - 566,380 RSI Home Products, Inc. 6.50%, 3/15/23 (b) U.S.$ 916 34 950 945,770 35,105 980,875 Smithfield Foods, Inc. 5.25%, 8/01/18 (b) 660 25 685 669,900 25,375 695,275 5.875%, 8/01/21(b) - 30 30 - 31,500 31,500 6.625%, 8/15/22 - 20 20 - 21,400 21,400 Spectrum Brands, Inc. 5.75%, 7/15/25(b) 276 15 291 294,285 15,994 310,279 6.125%, 12/15/24(b) 122 7 129 131,455 7,543 138,998 6.375%, 11/15/20 - 30 30 - 32,025 32,025 6.625%, 11/15/22 - 20 20 - 21,850 21,850 Sterigenics-Nordion Holdings LLC 6.50%, 5/15/23 (b) 75 5 80 75,469 5,031 80,500 Sun Products Corp. (The) 7.75%, 3/15/21 (b) 548 26 574 513,750 30,938 544,688 Tenet Healthcare Corp. 4.50%, 4/01/21 - 25 25 - 25,000 25,000 5.50%, 3/01/19 450 450 443,250 - 443,250 6.75%, 6/15/23 - 14 14 - 13,895 13,895 6.875%, 11/15/31 1,343 72 1,415 1,208,700 64,800 1,273,500 8.00%, 8/01/20 1,040 60 1,100 1,076,400 62,100 1,138,500 8.125%, 4/01/22 446 23 469 471,645 24,323 495,968 Valeant Pharmaceuticals International, Inc. 5.50%, 3/01/23(b) 697 30 727 585,480 25,200 610,680 5.875%, 5/15/23(b) 1,189 57 1,246 1,004,705 48,165 1,052,870 6.125%, 4/15/25(b) 2,812 202 3,014 2,365,595 170,690 2,536,285 6.75%, 8/15/18(b) 390 25 415 376,389 24,128 400,517 Voyage Care Bondco PLC 6.50%, 8/01/18 (b) GBP 100 - 100 157,243 - 157,243 ---------------------------------------------------- 36,890,011 2,044,392 38,934,403 ---------------------------------------------------- Energy - 8.4% American Energy-Permian Basin LLC/AEPB Finance Corp. 7.125%, 11/01/20 (b) U.S.$ 235 10 245 126,313 5,375 131,688 Antero Resources Corp. 5.125%, 12/01/22 830 55 885 744,925 49,362 794,287 5.375%, 11/01/21 205 10 215 188,600 9,200 197,800 5.625%, 6/01/23(b) 218 10 228 200,560 9,200 209,760 Approach Resources, Inc. 7.00%, 6/15/21 190 10 200 106,400 5,600 112,000 Baytex Energy Corp. 5.625%, 6/01/24 (b) 360 20 380 297,000 16,500 313,500 Berry Petroleum Co. LLC 6.375%, 9/15/22 624 34 658 224,640 12,240 236,880 Bonanza Creek Energy, Inc. 5.75%, 2/01/23 34 3 37 22,780 2,010 24,790 6.75%, 4/15/21 103 3 106 74,160 2,160 76,320 BreitBurn Energy Partners LP/BreitBurn Finance Corp. 7.875%, 4/15/22 447 19 466 167,625 7,125 174,750 California Resources Corp. 5.00%, 1/15/20 401 19 420 291,727 13,823 305,550 5.50%, 9/15/21 286 - 286 196,625 - 196,625 6.00%, 11/15/24 114 24 138 77,520 16,320 93,840 Carrizo Oil & Gas, Inc. 7.50%, 9/15/20 48 25 73 47,880 24,937 72,817 Chaparral Energy, Inc. 7.625%, 11/15/22 393 21 414 129,690 6,930 136,620 CHC Helicopter SA 9.25%, 10/15/20 611 41 652 348,327 23,085 371,412 Chesapeake Energy Corp. 2.50%, 5/15/37(j) 376 19 395 321,480 16,245 337,725 3.571%, 4/15/19(k) 247 15 262 159,315 9,675 168,990 4.875%, 4/15/22 249 20 269 154,380 12,400 166,780 6.875%, 11/15/20 877 35 912 594,167 23,712 617,879 7.25%, 12/15/18 53 6 59 42,665 4,830 47,495 Cobalt International Energy, Inc. 2.625%, 12/01/19 (j) 430 24 454 309,600 17,280 326,880 Concho Resources, Inc. 5.50%, 4/01/23 550 30 580 552,750 30,150 582,900 Crestwood Midstream Partners LP/Crestwood Midstream Finance Corp. 6.25%, 4/01/23 (b) 290 16 306 246,500 13,600 260,100 DCP Midstream Operating LP 3.875%, 3/15/23 253 13 266 214,256 11,009 225,265 5.60%, 4/01/44 285 16 301 221,239 12,420 233,659 Denbury Resources, Inc. 4.625%, 7/15/23 1,330 77 1,407 887,775 51,397 939,172 5.50%, 5/01/22 212 18 230 148,400 12,600 161,000 Diamondback Energy, Inc. 7.625%, 10/01/21 - 8 8 - 8,520 8,520 Energy Transfer Equity LP 5.875%, 1/15/24 406 41 447 393,323 39,720 433,043 7.50%, 10/15/20 - 16 16 - 17,203 17,203 Energy XXI Gulf Coast, Inc. 6.875%, 3/15/24 660 35 695 128,700 6,825 135,525 7.75%, 6/15/19 135 10 145 27,675 2,050 29,725 11.00%, 3/15/20(b) 244 13 257 128,100 6,825 134,925 EP Energy LLC/Everest Acquisition Finance, Inc. 7.75%, 9/01/22 265 20 285 204,050 15,400 219,450 9.375%, 5/01/20 312 7 319 271,440 6,090 277,530 EXCO Resources, Inc. 7.50%, 9/15/18 115 5 120 31,625 1,375 33,000 8.50%, 4/15/22 125 7 132 28,750 1,610 30,360 Global Partners LP/GLP Finance Corp. 6.25%, 7/15/22 950 50 1,000 874,000 46,000 920,000 7.00%, 6/15/23 125 7 132 117,500 6,580 124,080 Gulfport Energy Corp. 6.625%, 5/01/23 345 18 363 315,675 16,470 332,145 Halcon Resources Corp. 8.875%, 5/15/21 277 17 294 92,968 5,706 98,674 9.75%, 7/15/20 138 8 146 46,920 2,720 49,640 Hornbeck Offshore Services, Inc. 5.875%, 4/01/20 543 30 573 442,545 24,150 466,695 Jones Energy Holdings LLC/ Jones Energy Finance Corp. 6.75%, 4/01/22 399 19 418 320,197 15,247 335,444 Jupiter Resources, Inc. 8.50%, 10/01/22 (b) 542 24 566 281,840 12,480 294,320 Laredo Petroleum, Inc. 7.375%, 5/01/22 89 19 108 87,888 18,762 106,650 Legacy Reserves LP/Legacy Reserves Finance Corp. 6.625%, 12/01/21 584 30 614 385,440 19,800 405,240 8.00%, 12/01/20 205 10 215 145,550 7,100 152,650 Linn Energy LLC/Linn Energy Finance Corp. 6.25%, 11/01/19 1,098 52 1,150 258,030 12,220 270,250 MarkWest Energy Partners LP/ MarkWest Energy Finance Corp. 4.875%, 12/01/24-6/01/25 1,220 65 1,285 1,140,700 60,950 1,201,650 Memorial Resource Development Corp. 5.875%, 7/01/22 359 20 379 338,357 18,850 357,207 Midstates Petroleum Co., Inc./ Midstates Petroleum Co. LLC 9.25%, 6/01/21 365 20 385 65,700 3,600 69,300 Newfield Exploration Co. 5.375%, 1/01/26 400 20 420 380,000 19,000 399,000 5.625%, 7/01/24 239 16 255 236,610 15,840 252,450 Northern Blizzard Resources, Inc. 7.25%, 2/01/22 (b) 726 38 764 595,320 31,160 626,480 Oasis Petroleum, Inc. 6.875%, 3/15/22 377 20 397 321,392 17,050 338,442 Offshore Group Investment Ltd. 7.50%, 11/01/19 483 30 513 141,881 8,813 150,694 Pacific Drilling SA 5.375%, 6/01/20 (b) 441 - 441 234,833 - 234,833 Paragon Offshore PLC 6.75%, 7/15/22(b) 266 - 266 40,565 - 40,565 7.25%, 8/15/24(b) 873 60 933 133,133 9,150 142,283 PHI, Inc. 5.25%, 3/15/19 723 45 768 643,922 39,825 683,747 Precision Drilling Corp. 6.50%, 12/15/21 299 20 319 260,130 17,400 277,530 QEP Resources, Inc. 5.375%, 10/01/22 1,095 60 1,155 985,500 54,000 1,039,500 Range Resources Corp. 4.875%, 5/15/25 (b) 585 27 612 523,575 24,165 547,740 Sabine Oil & Gas Corp. 7.25%, 6/15/19 (e) 415 20 435 58,100 2,800 60,900 Sabine Pass Liquefaction LLC 5.625%, 2/01/21(l) 1,000 - 1,000 992,500 - 992,500 5.625%, 3/01/25(b) 275 92 367 263,656 88,205 351,861 5.75%, 5/15/24 571 100 671 551,015 96,500 647,515 6.25%, 3/15/22 565 - 565 560,762 - 560,762 SandRidge Energy, Inc. 7.50%, 2/15/23 315 15 330 73,238 3,488 76,726 Seven Generations Energy Ltd. 6.75%, 5/01/23(b) 93 7 100 84,630 6,370 91,000 8.25%, 5/15/20(b) 554 30 584 537,380 29,100 566,480 SM Energy Co. 5.00%, 1/15/24 150 20 170 134,625 17,950 152,575 5.625%, 6/01/25 342 25 367 311,220 22,750 333,970 6.50%, 1/01/23 239 - 239 235,510 - 235,510 Southern Star Central Corp. 5.125%, 7/15/22 (b) 380 20 400 368,600 19,400 388,000 Swift Energy Co. 7.875%, 3/01/22 315 15 330 81,113 3,863 84,976 Targa Resources Partners LP/ Targa Resources Partners Finance Corp. 4.25%, 11/15/23 1,075 55 1,130 940,625 48,125 988,750 6.75%, 3/15/24(b) 160 10 170 157,400 9,838 167,238 Tervita Corp. 8.00%, 11/15/18(b) 346 15 361 254,310 11,025 265,335 10.875%, 2/15/18(b) 332 20 352 166,000 10,000 176,000 Transocean, Inc. 6.80%, 3/15/38 855 45 900 542,925 28,575 571,500 Triangle USA Petroleum Corp. 6.75%, 7/15/22 (b) 425 20 445 199,750 9,400 209,150 Vanguard Natural Resources LLC/VNR Finance Corp. 7.875%, 4/01/20 215 10 225 128,731 5,988 134,719 W&T Offshore, Inc. 8.50%, 6/15/19 290 15 305 130,500 6,750 137,250 Whiting Petroleum Corp. 1.25%, 4/01/20(b)(j) 295 17 312 259,784 14,971 274,755 5.75%, 3/15/21 205 17 222 190,394 15,789 206,183 6.25%, 4/01/23 707 36 743 657,510 33,480 690,990 WPX Energy, Inc. 6.00%, 1/15/22 280 15 295 246,400 13,200 259,600 8.25%, 8/01/23 170 10 180 159,800 9,400 169,200 ---------------------------------------------------- 26,007,611 1,538,808 27,546,419 ---------------------------------------------------- Other Industrial - 1.2% Algeco Scotsman Global Finance PLC 8.50%, 10/15/18(b) 244 - 244 212,890 - 212,890 10.75%, 10/15/19(b) 745 - 745 409,750 - 409,750 B456 Systems, Inc. 3.75%, 4/15/16 (c)(h)(j) 270 - 270 11,475 - 11,475 Belden, Inc. 5.50%, 4/15/23 (b) EUR 290 - 290 319,281 - 319,281 General Cable Corp. 4.50%, 11/15/29(j)(m) U.S.$ 319 17 336 217,917 11,613 229,530 5.75%, 10/01/22 387 20 407 333,788 17,250 351,038 Laureate Education, Inc. 9.25%, 9/01/19 (b) - 55 55 - 43,725 43,725 10.00%, 9/01/19 (b) 982 - 982 780,690 - 780,690 Modular Space Corp. 10.25%, 1/31/19 (b) 420 23 443 250,950 13,743 264,693 New Enterprise Stone & Lime Co., Inc. 11.00%, 9/01/18 537 30 567 456,450 25,500 481,950 13.00% (7.00% Cash and 6.00% PIK), 3/15/18(i) 402 22 424 417,687 22,949 440,636 Safway Group Holding LLC/ Safway Finance Corp. 7.00%, 5/15/18 (b) 422 17 439 433,605 17,467 451,072 ---------------------------------------------------- 3,844,483 152,247 3,996,730 ---------------------------------------------------- Services - 0.5% ADT Corp. (The) 2.25%, 7/15/17 - 15 15 - 14,925 14,925 4.125%, 4/15/19 446 20 466 456,035(a) 20,450 476,485 6.25%, 10/15/21 270 20 290 291,600 21,600 313,200 Cerved Group SpA 8.00%, 1/15/21 (b) EUR 135 - 135 158,280 - 158,280 Geo Debt Finance SCA 7.50%, 8/01/18 (b) 180 - 180 187,051 - 187,051 IHS, Inc. 5.00%, 11/01/22 U.S.$ 237 30 267 239,370 30,300 269,670 Mobile Mini, Inc. 7.875%, 12/01/20 309 20 329 321,360 20,800 342,160 ---------------------------------------------------- 1,653,696 108,075 1,761,771 ---------------------------------------------------- Technology - 4.6% Alcatel-Lucent USA, Inc. 8.875%, 1/01/20 (b) 651 - 651 703,894 - 703,894 Avaya, Inc. 7.00%, 4/01/19(b) 180 41 221 146,250 33,313 179,563 10.50%, 3/01/21(b) 767 30 797 297,213 11,625 308,838 Blackboard, Inc. 7.75%, 11/15/19 (b) 155 10 165 133,300 8,600 141,900 BMC Software Finance, Inc. 8.125%, 7/15/21 (b) 715 35 750 553,231 27,081 580,312 Brightstar Corp. 9.50%, 12/01/16 (b) 883 60 943 887,592 60,312 947,904 CDW LLC/CDW Finance Corp. 5.00%, 9/01/23 258 13 271 267,675 13,488 281,163 5.50%, 12/01/24 577 49 626 604,407 51,327 655,734 Ceridian HCM Holding, Inc. 11.00%, 3/15/21 (b) 325 15 340 286,000 13,200 299,200 CommScope Holding Co., Inc. 6.625% (6.625% Cash or 7.375% PIK), 6/01/20 (b)(i) 170 10 180 176,800 10,400 187,200 Dell, Inc. 5.875%, 6/15/19 540 35 575 558,819 36,220 595,039 6.50%, 4/15/38 610 36 646 516,975 30,510 547,485 Energizer Holdings, Inc. 5.50%, 6/15/25 (b) 223 12 235 227,460 12,240 239,700 Ensemble S Merger Sub, Inc. 9.00%, 9/30/23 (b) 221 14 235 221,553 14,035 235,588 First Data Corp. 7.00%, 12/01/23(b) 2,140 160 2,300 2,177,450 162,800 2,340,250 11.75%, 8/15/21 358 30 388 408,120 34,200 442,320 12.625%, 1/15/21 817 45 862 936,486 51,581 988,067 Goodman Networks, Inc. 12.125%, 7/01/18 775 - 775 271,250 - 271,250 Infor Software Parent LLC/ Infor Software Parent, Inc. 7.125% (7.125% Cash or 7.875% PIK), 5/01/21 (b)(i) 319 20 339 276,133 17,312 293,445 Infor US, Inc. 5.75%, 8/15/20(b) 208 27 235 212,160 27,540 239,700 6.50%, 5/15/22(b) 850 50 900 805,375 47,375 852,750 Micron Technology, Inc. 5.50%, 2/01/25 1,369 71 1,440 1,303,972 67,627 1,371,599 MSCI, Inc. 5.25%, 11/15/24(b) 338 32 370 355,745 33,680 389,425 5.75%, 8/15/25(b) 166 8 174 175,047 8,436 183,483 Nokia Oyj 5.375%, 5/15/19 - 15 15 - 16,031 16,031 NXP BV/NXP Funding LLC 3.75%, 6/01/18 (b) 515 - 515 516,287 - 516,287 Open Text Corp. 5.625%, 1/15/23 (b) 130 7 137 131,300 7,070 138,370 Sabre GLBL, Inc. 5.375%, 4/15/23 (b) 159 9 168 161,385 9,135 170,520 Sanmina Corp. 4.375%, 6/01/19 (b) 666 32 698 679,320 32,640 711,960 Sensata Technologies BV 4.875%, 10/15/23 (b) - 50 50 - 48,938 48,938 SunGard Data Systems, Inc. 7.625%, 11/15/20 - 40 40 - 41,704 41,704 ---------------------------------------------------- 13,991,199 928,420 14,919,619 ---------------------------------------------------- Transportation - Airlines - 0.1% Air Canada 6.75%, 10/01/19(b) - 15 15 - 15,900 15,900 8.75%, 4/01/20 (b) 292 20 312 319,010 21,850 340,860 ---------------------------------------------------- 319,010 37,750 356,760 ---------------------------------------------------- Transportation - Services - 0.6% Avis Budget Car Rental LLC/Avis Budget Finance, Inc. 5.25%, 3/15/25 (b) - 40 40 - 39,850 39,850 CEVA Group PLC 9.00%, 9/01/21 (b) 150 - 150 128,250 - 128,250 Con-way, Inc. 6.70%, 5/01/34 335 21 356 222,535 15,279 237,814 Hertz Corp. (The) 5.875%, 10/15/20 1,051 65 1,116 1,087,785 67,275 1,155,060 XPO Logistics, Inc. 6.50%, 6/15/22 (b) 555 16 571 495,337 11,602 506,939 ---------------------------------------------------- 1,933,907 134,006 2,067,913 ---------------------------------------------------- 195,181,879 11,667,101 206,848,980 ---------------------------------------------------- Financial Institutions - 10.7% Banking - 5.8% ABN AMRO Bank NV 4.31%, 3/10/16 (n) EUR 980 50 1,030 1,080,351 55,120 1,135,471 Ally Financial, Inc. 4.125%, 3/30/20 U.S.$ 1,255 85 1,340 1,295,787 87,762 1,383,549 8.00%, 12/31/18-11/01/31 1,340 86 1,426 1,545,525 102,885 1,648,410 Baggot Securities Ltd. 10.24%, 11/30/15 (b) (n) EUR 169 - 169 187,699 - 187,699 Bank of America Corp. Series AA 6.10%, 3/17/25(n) U.S.$ 206 9 215 208,318 9,081 217,399 Series X 6.25%, 9/05/24(n) - 50 50 - 50,703 50,703 Series Z 6.50%, 10/23/24(n) 251 11 262 262,298 11,495 273,793 Bank of Ireland 10.00%, 7/30/16 (b) EUR 304 100 404 351,045 115,475 466,520 Barclays Bank PLC 6.86%, 6/15/32(b) (n) U.S.$ 75 30 105 85,875 34,350 120,225 7.625%, 11/21/22 200 - 200 228,375 - 228,375 BBVA International Preferred SAU 1.613%, 12/22/15(k) (n) EUR 79 - 79 84,681 - 84,681 4.952%, 9/20/16(b) (n) 550 50 600 603,900 54,900 658,800 BNP Paribas SA 7.375%, 8/19/25 (b) (n) U.S.$ 625 - 625 646,875 - 646,875 Citigroup, Inc. 5.95%, 1/30/23 (n) 538 46 584 533,965 45,655 579,620 Commerzbank AG 8.125%, 9/19/23 (b) 342 - 342 396,009 - 396,009 Countrywide Capital III Series B 8.05%, 6/15/27 600 - 600 747,775 - 747,775 Credit Agricole SA 7.589%, 1/30/20(n) GBP 450 50 500 752,686 83,632 836,318 7.875%, 1/23/24(b) (n) U.S.$ 587 - 587 601,675 - 601,675 Credit Suisse Group AG 7.50%, 12/11/23 (b) (n) 882 - 882 930,510 - 930,510 Danske Bank A/S 5.684%, 2/15/17 (n) GBP 330 - 330 516,359 - 516,359 Equiniti Newco 2 PLC 7.125%, 12/15/18 (b) 320 - 320 505,373 - 505,373 HBOS Capital Funding LP 4.939%, 5/23/16 (n) EUR 217 - 217 241,010 - 241,010 HT1 Funding GmbH 6.352%, 6/30/17 (n) 825 40 865 907,212 43,986 951,198 ING Groep NV 6.00%, 4/16/20(n) U.S.$ 219 - 219 218,726 - 218,726 6.50%, 4/16/25(n) 234 - 234 228,150 - 228,150 LBG Capital No.1 PLC 8.00%, 6/15/20 (b) (n) 148 - 148 166,500 - 166,500 Lloyds Bank PLC 4.385%, 5/12/17 (n) - 50 50 - 56,632 56,632 Lloyds Banking Group PLC 6.413%, 10/01/35(b) (n) 517 - 517 576,455 - 576,455 6.657%, 5/21/37(b) (n) 152 35 187 170,240 39,200 209,440 7.50%, 6/27/24(n) 234 - 234 248,625 - 248,625 RBS Capital Trust C 4.243%, 1/12/16 (k) (n) EUR 1,325 35 1,360 1,449,367 38,285 1,487,652 Royal Bank of Scotland Group PLC Series U 7.64%, 9/30/17 (n) U.S.$ 800 100 900 835,600 104,450 940,050 Societe Generale SA 5.922%, 4/05/17(b) (n) 432 - 432 440,372 - 440,372 8.00%, 9/29/25(b) (n) 308 - 308 312,348 - 312,348 Zions Bancorporation 5.65%, 11/15/23 145 10 155 150,256 10,363 160,619 5.80%, 6/15/23(n) 350 20 370 346,500 19,800 366,300 ---------------------------------------------------- 17,856,442 963,774 18,820,216 ---------------------------------------------------- Brokerage - 0.1% E*TRADE Financial Corp. 5.375%, 11/15/22 - 15 15 - 16,038 16,038 Lehman Brothers Holdings, Inc. 5.625%, 1/24/13 (h) (o) 5,500 - 5,500 415,250 - 415,250 ---------------------------------------------------- 415,250 16,038 431,288 ---------------------------------------------------- Finance - 3.7% AerCap Aviation Solutions BV 6.375%, 5/30/17 300 - 300 312,750 - 312,750 Artsonig Pty Ltd. 11.50% (11.50% Cash or 12.00% PIK), 4/01/19 (b) (i) 448 24 472 33,632 1,789 35,421 CIT Group, Inc. 3.875%, 2/19/19 - 20 20 - 20,300 20,300 5.25%, 3/15/18 - 95 95 - 99,631 99,631 5.50%, 2/15/19 (b) 2,296 30 2,326 2,436,630 31,837 2,468,467 Creditcorp 12.00%, 7/15/18 (b) 355 20 375 260,925 14,700 275,625 Enova International, Inc. 9.75%, 6/01/21 720 40 760 610,200 33,900 644,100 International Lease Finance Corp. 5.875%, 4/01/19 1,200 70 1,270 1,287,516 75,105 1,362,621 8.25%, 12/15/20 635 90 725 758,825 107,550 866,375 8.75%, 3/15/17 143 20 163 154,261 21,575 175,836 8.875%, 9/01/17 687 40 727 762,570 44,400 806,970 Molycorp, Inc. 3.25%, 6/15/16 (e) (j) 385 385 2,406 2,406 Navient Corp. 4.625%, 9/25/17 470 20 490 475,264 20,224 495,488 4.875%, 6/17/19 965 50 1,015 933,638 48,375 982,013 5.00%, 10/26/20 500 30 530 468,125 28,088 496,213 5.875%, 10/25/24 20 - 20 17,850 - 17,850 6.125%, 3/25/24 35 - 35 31,588 - 31,588 7.25%, 1/25/22 37 35 72 36,445 34,475 70,920 8.00%, 3/25/20 1,885 80 1,965 1,998,100(a) 84,800 2,082,900 TMX Finance LLC/TitleMax Finance Corp. 8.50%, 9/15/18 (b) 997 60 1,057 782,645 47,100 829,745 ---------------------------------------------------- 11,363,370 713,849 12,077,219 ---------------------------------------------------- Insurance - 0.6% American Equity Investment Life Holding Co. 6.625%, 7/15/21 - 30 30 - 31,800 31,800 Genworth Holdings, Inc. 4.80%, 2/15/24 - 30 30 - 21,900 21,900 HUB International Ltd. 7.875%, 10/01/21 (b) 464 30 494 462,840 29,925 492,765 Liberty Mutual Group, Inc. 7.80%, 3/15/37 (b) 715 40 755 838,337 46,900 885,237 Wayne Merger Sub LLC 8.25%, 8/01/23 (b) 457 20 477 454,144 27,825 481,969 ---------------------------------------------------- 1,755,321 158,350 1,913,671 ---------------------------------------------------- Other Finance - 0.4% ACE Cash Express, Inc. 11.00%, 2/01/19 (b) 146 10 156 48,180 3,300 51,480 CNG Holdings, Inc. 9.375%, 5/15/20 (b) 325 13 338 164,531 6,581 171,112 iPayment, Inc. 9.50%, 12/15/19(b) 17 6 23 17,267 6,331 23,598 Series AI 9.50%, 12/15/19 710 9 719 732,758 9,563 742,321 Speedy Group Holdings Corp. 12.00%, 11/15/17 (b) 519 30 549 373,680 21,600 395,280 ---------------------------------------------------- 1,336,416 47,375 1,383,791 ---------------------------------------------------- REITS - 0.1% FelCor Lodging LP 6.00%, 6/01/25 294 15 309 304,290 15,525 319,815 ---------------------------------------------------- 33,031,089 1,914,911 34,946,000 ---------------------------------------------------- Utility - 3.2% Electric - 3.2% AES Corp./VA 4.875%, 5/15/23 628 20 648 582,470 18,550 601,020 7.375%, 7/01/21 965 74 1,039 1,027,725 78,810 1,106,535 Calpine Corp. 5.50%, 2/01/24 270 15 285 256,500 14,250 270,750 5.75%, 1/15/25 1,360 60 1,420 1,288,600 56,850 1,345,450 7.875%, 1/15/23(b) 213 41 254 228,709 44,024 272,733 DPL, Inc. 6.75%, 10/01/19 250 20 270 256,250 20,500 276,750 Dynegy, Inc. 5.875%, 6/01/23 - 26 26 - 24,310 24,310 6.75%, 11/01/19 845 45 890 842,887 44,887 887,774 7.375%, 11/01/22 615 35 650 616,537 35,087 651,624 7.625%, 11/01/24 85 - 85 85,213 - 85,213 FirstEnergy Corp. Series A 2.75%, 3/15/18 - 20 20 - 20,042 20,042 Series B 4.25%, 3/15/23 - 29 29 - 29,312 29,312 Series C 7.375%, 11/15/31 482 20 502 575,187 23,867 599,054 GenOn Energy, Inc. 7.875%, 6/15/17 465 29 494 431,287 26,898 458,185 NRG Energy, Inc. 6.25%, 7/15/22 135 6 141 124,200 5,520 129,720 7.625%, 1/15/18 - 25 25 - 26,188 26,188 7.875%, 5/15/21 716 40 756 712,420 39,800 752,220 Series WI 6.25%, 5/01/24 1,253 44 1,297 1,121,435 39,380 1,160,815 Talen Energy Supply LLC 4.60%, 12/15/21 726 37 763 623,108 31,756 654,864 6.50%, 5/01/18 170 10 180 172,975 10,175 183,150 TerraForm Power Operating LLC 6.125%, 6/15/25 (b) 390 20 410 351,000 18,000 369,000 Texas Competitive Electric Holdings Co. LLC/TCEH Finance, Inc. 11.50%, 10/01/20 (b) (p) 761 - 761 256,838 - 256,838 Viridian Group FundCo II Ltd. 7.50%, 3/01/20 (b) EUR 314 - 314 343,995 - 343,995 ---------------------------------------------------- 9,897,336 608,206 10,505,542 ---------------------------------------------------- Total Corporates - Non- 238,110,304 14,190,218 252,300,522 Investment Grade ---------------------------------------------------- (cost $269,220,281) CORPORATES - INVESTMENT GRADE - 5.8% Financial Institutions - 3.7% Banking - 2.0% BPCE SA 5.70%, 10/22/23 (b) U.S.$ 682 - 682 730,146 - 730,146 Cooperatieve Centrale Raiffeisen-Boerenleenbank BA/Netherlands 8.40%, 6/29/17 (b) (n) 330 - 330 357,324 - 357,324 HSBC Capital Funding LP/Jersey 10.176%, 6/30/30(b) (n) 674 35 709 1,011,261 52,850 1,064,111 JPMorgan Chase & Co. Series Q 5.15%, 5/01/23(n) 473 35 508 455,262 33,687 488,949 Series R 6.00%, 8/01/23(n) 336 20 356 340,872 20,290 361,162 Series S 6.75%, 2/01/24(n) 157 7 164 169,168 7,543 176,711 Nationwide Building Society 6.00%, 12/15/16 (n) GBP 839 40 879 1,306,336 62,281 1,368,617 Nordea Bank AB 6.125%, 9/23/24 (b) (n) U.S.$ 464 - 464 458,200 - 458,200 Santander UK PLC 5.00%, 11/07/23 (b) 500 - 500 521,460 - 521,460 Standard Chartered PLC 5.20%, 1/26/24 (b) 549 - 549 574,583(a) - 574,583 6.409%, 1/30/17 - 100 100 - 101,000 101,000 Wells Fargo & Co. Series S 5.90%, 6/15/24 (n) 127 55 182 129,858 56,237 186,095 ---------------------------------------------------- 6,054,470 333,888 6,388,358 ---------------------------------------------------- Brokerage - 0.1% GFI Group, Inc. 8.625%, 7/19/18 (m) 374 19 393 405,790 20,615 426,405 ---------------------------------------------------- Finance - 0.3% General Electric Capital Corp. Series A 7.125%, 6/15/22(n) 400 - 400 470,000 - 470,000 Series B 6.25%, 12/15/22(n) 400 - 400 445,840 - 445,840 HSBC Finance Capital Trust IX 5.911%, 11/30/35 200 - 200 200,200 - 200,200 ---------------------------------------------------- 1,116,040 - 1,116,040 ---------------------------------------------------- Insurance - 1.1% MetLife Capital Trust IV 7.875%, 12/15/37 (b) 750 - 750 930,000 - 930,000 MetLife, Inc. Series C 5.25%, 6/15/20 (n) 159 49 208 160,490 49,459 209,949 Mitsui Sumitomo Insurance Co., Ltd. 7.00%, 3/15/72 (b) 489 50 539 568,286 58,107 626,393 Nationwide Mutual Insurance Co. 9.375%, 8/15/39 (b) 325 20 345 491,310 30,235 521,545 Progressive Corp. (The) 6.70%, 6/15/37 500 25 525 502,500 25,125 527,625 Prudential Financial, Inc. 5.625%, 6/15/43 756 40 796 791,154 41,860 833,014 XLIT Ltd. 5.50%, 3/31/45 - 12 12 - 11,511 11,511 ---------------------------------------------------- 3,443,740 216,297 3,660,037 ---------------------------------------------------- REITS - 0.2% DDR Corp. 7.875%, 9/01/20 - 40 40 - 48,486 48,486 EPR Properties 7.75%, 7/15/20 417 55 472 489,807 64,603 554,410 Senior Housing Properties Trust 6.75%, 12/15/21 - 30 30 - 33,270 33,270 ---------------------------------------------------- 489,807 146,359 636,166 ---------------------------------------------------- Industrial - 1.7% 11,509,847 717,159 12,227,006 ---------------------------------------------------- Basic - 0.2% Freeport-McMoRan, Inc. 2.375%, 3/15/18 525 25 550 480,375 22,875 503,250 5.45%, 3/15/43 29 3 32 20,699 2,141 22,840 Glencore Funding LLC 2.125%, 4/16/18 (b) 16 3 19 13,960 2,618 16,578 ---------------------------------------------------- 515,034 27,634 542,668 ---------------------------------------------------- Communications - Media - 0.3% CCO Safari II LLC 4.908%, 7/23/25(b) 345 20 365 350,686 20,329 371,015 6.484%, 10/23/45(b) 510 25 535 528,866(a) 25,925 554,791 ---------------------------------------------------- 879,552 46,254 925,806 ---------------------------------------------------- Communications - Telecommunications - 0.5% Embarq Corp. 7.995%, 6/01/36 272 30 302 286,110 31,556 317,666 Qwest Corp. 6.75%, 12/01/21 600 15 615 644,700 16,118 660,818 6.875%, 9/15/33 612 - 612 607,236 - 607,236 ---------------------------------------------------- 1,538,046 47,674 1,585,720 ---------------------------------------------------- Consumer Cyclical - Automotive - 0.1% Volkswagen Group of America Finance LLC 2.45%, 11/20/19 (b) 400 - 400 382,532 - 382,532 ---------------------------------------------------- Consumer Cyclical - Other - 0.0% Seminole Tribe of Florida, Inc. 6.535%, 10/01/20 (b) 94 - 94 99,640 - 99,640 ---------------------------------------------------- Consumer Non-Cyclical - 0.0% Forest Laboratories LLC 5.00%, 12/15/21 (b) - 10 10 - 10,808 10,808 ---------------------------------------------------- Energy - 0.6% Cimarex Energy Co. 4.375%, 6/01/24 215 5 220 213,861 4,973 218,834 Enterprise Products Operating LLC Series A 8.375%, 8/01/66 - 14 14 - 13,755 13,755 Kinder Morgan Finance Co. LLC 5.70%, 1/05/16 - 29 29 - 29,216 29,216 Kinder Morgan, Inc./DE 5.55%, 6/01/45 146 - 146 122,910 - 122,910 Series G 7.75%, 1/15/32 148 - 148 149,794 - 149,794 7.80%, 8/01/31 169 10 179 171,225 10,132 181,357 Noble Energy, Inc. 5.875%, 6/01/24 611 30 641 613,531 30,124 643,655 Regency Energy Partners LP/ Regency Energy Finance Corp. 4.50%, 11/01/23 19 5 24 17,438 4,589 22,027 5.00%, 10/01/22 346 27 373 336,259 26,240 362,499 5.50%, 4/15/23 357 12 369 346,219 11,638 357,857 ---------------------------------------------------- 1,971,237 130,667 2,101,904 ---------------------------------------------------- 5,386,041 263,037 5,649,078 ---------------------------------------------------- Utility - 0.4% Electric - 0.3% EDP Finance BV 6.00%, 2/02/18 (b) 480 - 480 510,240 - 510,240 PPL Capital Funding, Inc. Series A 6.70%, 3/30/67 375 20 395 316,875 16,900 333,775 ---------------------------------------------------- 827,115 16,900 844,015 ---------------------------------------------------- Natural Gas - 0.1% Empresa de Energia de Bogota SA ESP 6.125%, 11/10/21 (b) 350 - 350 367,676 - 367,676 ---------------------------------------------------- 1,194,791 16,900 1,211,691 ---------------------------------------------------- Total Corporates - Investment 18,090,679 997,096 19,087,775 Grade (cost $18,605,116) --------------------------------------------------- BANK LOANS - 4.4% Industrial - 3.5% Basic - 0.5% FMG Resources (August 2006) Pty LTD (FMG America Finance, Inc.) 3.75%, 6/30/19(k) 587 20 607 495,362 16,836 512,198 Ineos US Finance LLC 4.25%, 3/31/22(k) 522 25 547 514,276 24,489 538,765 Magnetation LLC 12.00%, 3/07/16(c)(d)(i) 711 38 749 634,557 33,544 668,101 ---------------------------------------------------- 1,644,195 74,869 1,719,064 ---------------------------------------------------- Capital Goods - 0.2% ClubCorp Club Operations, Inc. 4.25%, 7/24/20(k) 516 - 516 515,993 - 515,993 ---------------------------------------------------- Communications - Media - 0.3% Advantage Sales & Marketing, Inc. 7.50%, 7/25/22(k) 311 - 311 286,030 - 286,030 TWCC Holding Corp. 7.00%, 6/26/20(k) 525 - 525 523,850 - 523,850 ---------------------------------------------------- - 809,880 - 809,880 ---------------------------------------------------- Consumer Cyclical - Automotive - 0.2% CS Intermediate Holdco 2 LLC 4.00%, 4/04/21(k) 331 - 331 328,020 - 328,020 Navistar, Inc. 6.50%, 8/07/20(k) 420 - 420 394,800 - 394,800 ---------------------------------------------------- 722,820 722,820 ---------------------------------------------------- Consumer Cyclical - Entertainment - 0.1% NCL Corporation Ltd. (aka Norwegian Cruise Lines) 4.00%, 11/19/21(k) 69 4 73 69,301 3,850 73,151 Station Casinos LLC 4.25%, 3/02/20(k) 340 - 340 339,848 - 339,848 ---------------------------------------------------- 409,149 3,850 412,999 ---------------------------------------------------- Consumer Cyclical - Other - 0.3% CityCenter Holdings LLC 4.25%, 10/16/20(k) 909 - 909 909,720 - 909,720 La Quinta Intermediate Holdings L.L.C. 3.75%, 4/14/21(k) 183 - 183 181,193 - 181,193 ---------------------------------------------------- - 1,090,913 - 1,090,913 ---------------------------------------------------- Consumer Cyclical - Retailers - 0.3% Dollar Tree, Inc. 3.50%, 7/06/22(k) 18 - 18 17,875 - 17,875 Harbor Freight Tools USA, Inc. 4.75%, 7/26/19(k) 464 - 464 465,070 - 465,070 J. Crew Group, Inc. 4.00%, 3/05/21(k) 219 16 235 160,798 11,641 172,439 Men's Wearhouse, Inc. (The) 5.00%, 6/18/21 141 7 148 141,246 7,264 148,510 Michaels Stores, Inc. 4.00%, 1/28/20(k) 173 - 173 173,101 - 173,101 ---------------------------------------------------- 958,090 18,905 976,995 ---------------------------------------------------- Consumer Non-Cyclical - 0.5% Acadia Healthcare Company, Inc. 4.25%, 2/11/22(k) 26 - 26 26,053 - 26,053 Air Medical Group Holdings, Inc. 4.50%, 4/28/22(k) 236 13 249 231,747 13,056 244,803 Concordia Healthcare Corp. 10/20/21(q) 231 14 245 221,568 13,428 234,996 Grifols Worldwide Operations Limited 3.19%, 2/27/21(k) 197 10 207 196,535 9,852 206,387 Ortho-Clinical Diagnostics Holdings Luxembourg S.A.r.l. 4.75%, 6/30/21(k) 179 9 188 175,815 9,279 185,094 Pharmedium Healthcare Corp. 7.75%, 1/28/22(k) 780 40 820 781,623 40,083 821,706 ---------------------------------------------------- 1,633,341 85,698 1,719,039 ---------------------------------------------------- Other Industrial - 0.5% Atkore International, Inc. 7.75%, 10/09/21(k) 490 25 515 427,525 21,812 449,337 Gardner Denver, Inc. 4.25%, 7/30/20(k) 294 - 294 275,390 - 275,390 Gates Global LLC 4.25%, 7/06/21(k) 203 - 203 189,795 - 189,795 Travelport Finance (Luxembourg) S.A r.l. 5.75%, 9/02/21(k) 419 23 442 414,930 23,052 437,982 Unifrax Holding Co. 4.50%, 11/28/18(k) EUR 242 - 242 264,513 - 264,513 ---------------------------------------------------- 1,572,153 44,864 1,617,017 ---------------------------------------------------- Technology - 0.4% Avaya, Inc. 4.82%, 10/26/17(k) U.S.$ 257 - 257 214,642 - 214,642 6.50%, 3/31/18(k) 46 - 46 37,846 - 37,846 BMC Software Finance, Inc. 5.00%, 9/10/20(k) 364 20 384 327,294 17,934 345,228 First Data Corporation 3.70%, 3/23/18(k) 350 - 350 347,126 - 347,126 Smart Modular Technologies (Global), Inc. 8.25%, 8/26/17(k) 297 - 297 279,039 - 279,039 ---------------------------------------------------- 1,205,947 17,934 1,223,881 ---------------------------------------------------- Transportation - Airlines - 0.2% Delos Finance S.A.r.l. 3.50%, 3/06/21(k) 570 - 570 569,647 - 569,647 ---------------------------------------------------- 11,132,128 246,120 11,378,248 ---------------------------------------------------- Utility - 0.9% Electric - 0.9% Energy Future Intermediate Holding Company LLC (EFIH Finance, Inc.) 4.25%, 6/19/16 (k) 2,710 150 2,860 2,708,641 149,907 2,858,548 ---------------------------------------------------- Total Bank Loans (cost $14,725,488) 13,840,769 396,027 14,236,796 ---------------------------------------------------- Shares Shares Shares -------------------------------------------- COMMON STOCKS - 2.2% Clear Channel Outdoor Holdings, Inc. - Class A 32,000 2,000 34,000 239,360 14,960 254,320 Crown Castle International Corp. 9,194 480 9,674 785,719 41,021 826,740 DISH Network Corp. - Class A(h) 2,510 150 2,660 158,055 9,445 167,500 Dynegy, Inc.(h) 14,605 768 15,373 283,775 14,922 298,697 eDreams ODIGEO SA(h) 36,590 5,140 41,730 97,774 13,735 111,509 Eldorado Resorts, Inc.(h) 19,987 1,332 21,319 197,871 13,187 211,058 EMC Corp./MA 11,388 710 12,098 298,593 18,616 317,209 Emeco Holdings Ltd.(h) 1,050,000 55,000 1,105,000 40,967 2,146 43,113 EP Energy Corp. - Class A(h) 22,713 1,456 24,169 125,149 8,022 133,171 Exide Corp.(c) (d) (h) 586,000 - 586,000 1 - 1 Exide Technologies(d) (g) (h) 19,782 - 19,782 56,577 - 56,577 General Motors Co. 14,160 760 14,920 494,326 26,532 520,858 Hovnanian Enterprises, Inc. - Class A(h) 35,347 1,894 37,241 72,815 3,902 76,717 International Game Technology PLC 18,000 1,000 19,000 291,960 16,220 308,180 iPayment, Inc.(h) 44,784 579 45,363 230,638 2,982 233,620 Las Vegas Sands Corp. 8,388 450 8,838 415,290 22,279 437,569 LifePoint Health, Inc.(h) 4,559 260 4,819 314,024 17,909 331,933 LyondellBasell Industries NV - Class A 1,996 110 2,106 185,448 10,220 195,668 MDC Holdings, Inc. 12,258 637 12,895 318,585 16,556 335,141 Navistar International Corp.(h) 24,764 1,533 26,297 304,597 18,856 323,453 Neenah Enterprises, Inc.(c) (d) (h) 58,199 - 58,199 275,281 - 275,281 Nortek, Inc.(h) 5,410 280 5,690 331,903 17,178 349,081 SBA Communications Corp. - Class A(h) 4,879 290 5,169 580,699 34,516 615,215 Townsquare Media, Inc. - Class A(h) 26,530 1,300 27,830 290,769 14,248 305,017 Travelport LLC 15,482 - 15,482 209,781 - 209,781 Travelport Worldwide Ltd. 2,580 1,430 4,010 34,959 19,376 54,335 Triangle Petroleum Corp.(h) 34,470 - 34,470 41,364 - 41,364 Whiting Petroleum Corp.(h) 4,706 299 5,005 81,084 5,152 86,236 --------------------------------------------------- Total Common Stocks 6,757,364 361,980 7,119,344 (cost $7,461,204) --------------------------------------------------- PREFERRED STOCKS - 1.9% Financial Institutions - 1.7% Banking - 1.3% GMAC Capital Trust I 8.125% 43,000 2,375 45,375 1,110,690 61,346 1,172,036 Goldman Sachs Group, Inc. (The) Series J 5.50% 23,525 1,550 25,075 585,537 38,580 624,117 Morgan Stanley 6.875% 20,825 2,000 22,825 563,316 54,100 617,416 US Bancorp Series F 6.50% 35,000 2,000 37,000 1,014,300 57,960 1,072,260 Wells Fargo & Co. 5.85% 2,300 - 2,300 59,777 - 59,777 Wells Fargo & Co. 6.625% 28,225 - 28,225 794,252 - 794,252 ---------------------------------------------------- 4,127,872 211,986 4,339,858 ---------------------------------------------------- REITS - 0.4% National Retail Properties, Inc. Series E 5.70% 6,300 - 6,300 158,508 - 158,508 Public Storage Series W 5.20% 5,400 1,000 6,400 133,434 24,710 158,144 Public Storage Series X 5.20% 1,000 - 1,000 24,830 - 24,830 Sovereign Real Estate Investment Trust 12.00%(b) 624 - 624 792,480 - 792,480 Welltower, Inc. 6.50% - 500 500 - 13,275 13,275 ---------------------------------------------------- 1,109,252 37,985 1,147,237 ---------------------------------------------------- 5,237,124 249,971 5,487,095 ---------------------------------------------------- Industrial - 0.1% Consumer Cyclical - Other - 0.0% Hovnanian Enterprises, Inc. 7.625%(h) 5,130 325 5,455 34,628 2,128 36,756 ---------------------------------------------------- Energy - 0.1% Energy XXI Ltd. 5.625% 3,250 250 3,500 78,000 6,000 84,000 Halcon Resources Corp. 5.75% 635 35 670 105,410 5,810 111,220 Sanchez Energy Corp. 4.875% 10,350 550 10,900 164,306 7,863 172,169 SandRidge Energy, Inc. 8.50% 4,500 200 4,700 33,975 1,510 35,485 ---------------------------------------------------- 381,691 21,183 402,874 ---------------------------------------------------- 416,319 23,311 439,630 ---------------------------------------------------- Utility - 0.1% Electric - 0.1% SCE Trust III 5.75% 5,525 - 5,525 153,871 - 153,871 ---------------------------------------------------- Total Preferred Stocks 5,807,314 273,282 6,080,596 (cost $6,345,964) ---------------------------------------------------- Principal Principal Principal Amount Amount Amount (000) (000) (000) ---------------------------------------- COLLATERALIZED MORTGAGE OBLIGATIONS - 1.5% Non-Agency Floating Rate - 0.6% HarborView Mortgage Loan Trust Series 2007-4, Class 2A1 0.417%, 7/19/47 (k) 682 - 682 556,997 - 556,997 Residential Accredit Loans, Inc. Trust Series 2007-QH6, Class A1 - 0.387%, 7/25/37 (k) 1,278 - 1,278 1,049,071 - 1,049,071 Structured Asset Mortgage Investments II Trust Series 2007-AR6, Class A1 1.722%, 8/25/47 (k) 494 - 494 409,729 - 409,729 ---------------------------------------------------- 2,015,797 - 2,015,797 ---------------------------------------------------- GSE Risk Share Floating Rate - 0.5% Federal Home Loan Mortgage Corp. Structured Agency Credit Risk Debt Notes Series 2013-DN1, Class M2 7.347%, 7/25/23(k) - 50 50 - 57,679 57,679 Series 2013-DN2, Class M2 4.447%, 11/25/23(k) 380 50 430 378,088 49,871 427,959 Series 2014-DN1, Class M3 4.697%, 2/25/24(k) 375 - 375 370,843 - 370,843 Series 2014-HQ2, Class M3 3.947%, 9/25/24(k) 435 - 435 405,524 - 405,524 Federal National Mortgage Association Connecticut Avenue Securities Series 2013-C01, Class M2 5.447%, 10/25/23 (k) - 50 50 - 52,271 52,271 Series 2014-C01, Class M2 4.597%, 1/25/24(k) 333 - 333 332,669 - 332,669 Series 2015-C03, Class 1M2 5.197%, 7/25/25(k) 85 - 85 84,681 - 84,681 Series 2015-C03, Class 2M2 5.197%, 7/25/25(k) 30 - 30 29,964 - 29,964 ---------------------------------------------------- 1,601,769 159,821 1,761,590 ---------------------------------------------------- Non-Agency Fixed Rate - 0.4% Alternative Loan Trust Series 2006-28CB, Class A14 6.25%, 10/25/36 - 30 30 - 25,207 25,207 CSMC Mortgage-Backed Trust Series 2006-7, Class 3A12 6.25%, 8/25/36 249 - 249 216,319 - 216,319 Residential Accredit Loans, Inc. Trust Series 2005-QA10, Class A31 3.663%, 9/25/35 1,252 - 1,252 1,043,478 - 1,043,478 ---------------------------------------------------- 1,259,797 25,207 1,285,004 ---------------------------------------------------- Total Collateralized Mortgage 4,877,363 185,028 5,062,391 Obligations ---------------------------------------------------- (cost $4,943,671) EMERGING MARKETS - CORPORATE BONDS - 1.5% Industrial - 1.3% Basic - 0.1% Sappi Papier Holding GmbH 7.75%, 7/15/17 (b) U.S.$ 200 - 200 208,000 - 208,000 ---------------------------------------------------- Capital Goods - 0.2% CEMEX Espana SA/Luxembourg 9.875%, 4/30/19 (b) 172 - 172 183,395 - 183,395 Cemex SAB de CV 5.70%, 1/11/25 (b) 670 - 670 619,750 - 619,750 ---------------------------------------------------- 803,145 - 803,145 ---------------------------------------------------- Communications - Telecommunications - 0.1% Digicel Ltd. 6.75%, 3/01/23 (b) 525 - 525 472,500 - 472,500 ---------------------------------------------------- Consumer Cyclical - Retailers - 0.1% Edcon Ltd. 9.50%, 3/01/18(b) EUR 381 - 381 259,759 - 259,759 9.50%, 3/01/18(b) U.S.$ 150 - 150 93,000 - 93,000 ---------------------------------------------------- 352,759 - 352,759 ---------------------------------------------------- Consumer Non-Cyclical - 0.7% Arcelik AS 5.00%, 4/03/23 (b) 498 - 498 467,498 - 467,498 Cosan Luxembourg SA 5.00%, 3/14/23 (b) 570 - 570 484,500 - 484,500 Minerva Luxembourg SA 7.75%, 1/31/23 (b) 725 - 725 715,937 - 715,937 Tonon Luxembourg SA 7.25%, 1/24/20 (b) (i) 420 - 420 142,692 - 142,692 USJ Acucar e Alcool SA 9.875%, 11/09/19 (b) 850 - 850 331,500 - 331,500 Virgolino de Oliveira Finance SA 10.50%, 1/28/18 (e) (f) 930 - 930 12,090 - 12,090 ---------------------------------------------------- 2,154,217 - 2,154,217 ---------------------------------------------------- Transportation - Airlines - 0.1% Guanay Finance Ltd. 6.00%, 12/15/20 (b) 283 - 283 287,245 - 287,245 ---------------------------------------------------- 4,277,866 - 4,277,866 ---------------------------------------------------- Utility - 0.2% Electric - 0.2% ContourGlobal Power Holdings SA 7.125%, 6/01/19 (b) 760 - 760 754,300 - 754,300 ---------------------------------------------------- Total Emerging Markets - 5,032,166 - 5,032,166 Corporate Bonds ---------------------------------------------------- (cost $7,167,294) COMMERCIAL MORTGAGE-BACKED SECURITIES - 1.4% Non-Agency Fixed Rate CMBS - 1.4% Bear Stearns Commercial Mortgage Securities Trust Series 2006-PW13, Class AJ 5.611%, 9/11/41 167 - 167 168,827 - 168,827 Citigroup Commercial Mortgage Trust Series 2014-GC23, Class D 4.507%, 7/10/47 (b) - 50 50 - 44,064 44,064 GS Mortgage Securities Trust Series 2006-GG6, Class AJ 5.522%, 4/10/38 1,000 - 1,000 1,002,711 - 1,002,711 Series 2014-GC18, Class D 4.948%, 1/10/47 (b) - 100 100 - 90,204 90,204 JPMBB Commercial Mortgage Securities Trust Series 2013-C17, Class D 4.887%, 1/15/47 (b) - 100 100 - 91,596 91,596 LB-UBS Commercial Mortgage Trust Series 2006-C1, Class AJ 5.276%, 2/15/41 1,565 - 1,565 1,569,058 - 1,569,058 Series 2007-C1, Class AJ 5.484%, 2/15/40 1,380 - 1,380 1,415,843 - 1,415,843 ML-CFC Commercial Mortgage Trust Series 2006-4, Class AJ 5.239%, 12/12/49 315 - 315 313,940 - 313,940 ---------------------------------------------------- Total Commercial Mortgage-Backed 4,470,379 225,864 4,696,243 Securities ---------------------------------------------------- (cost $4,502,258) GOVERNMENTS - TREASURIES - 0.9% Brazil - 0.1% Brazil Notas do Tesouro Nacional Series B 6.00%, 8/15/50 BRL 600 30 630 361,979 18,099 380,078 ---------------------------------------------------- United States - 0.8% U.S. Treasury Bonds 3.125%, 11/15/41 (r) U.S.$ 1,755 - 1,755 1,838,180 - 1,838,180 U.S. Treasury Notes 1.875%, 8/31/22 - 600 600 - 599,813 599,813 ---------------------------------------------------- 1,838,180 599,813 2,437,993 ---------------------------------------------------- Total Governments - Treasuries 2,200,159 617,912 2,818,071 (cost $2,896,969) ---------------------------------------------------- GOVERNMENTS - SOVEREIGN AGENCIES - 0.7% Brazil - 0.2% Petrobras Global Finance BV 5.625%, 5/20/43 733 45 778 480,701 29,511 510,212 ---------------------------------------------------- Colombia - 0.0% Ecopetrol SA 5.875%, 5/28/45 159 10 169 129,585 8,150 137,735 ---------------------------------------------------- Dominican Republic - 0.1% Banco de Reservas de la Republica Dominicana 7.00%, 2/01/23 (b) 460 - 460 457,974 - 457,974 ---------------------------------------------------- Morocco - 0.1% OCP SA 5.625%, 4/25/24 (b) 232 - 232 242,324 - 242,324 ---------------------------------------------------- United Kingdom - 0.3% Royal Bank of Scotland Group PLC 8.00%, 8/10/25 (n) 1,040 - 1,040 1,086,800 - 1,086,800 ---------------------------------------------------- Total Governments - Sovereign 2,397,384 37,661 2,435,045 Agencies (cost $2,484,730) ---------------------------------------------------- ASSET-BACKED SECURITIES - 0.7% Home Equity Loans - Floating Rate - 0.5% GSAA Home Equity Trust Series 2006-6, Class AF5 6.241%, 3/25/36 (k) 1,174 - 1,174 662,015 - 662,015 Lehman XS Trust Series 2007-6, Class 3A5 5.075%, 5/25/37 (l) 777 - 777 969,945 - 969,945 ---------------------------------------------------- 1,631,960 - 1,631,960 ---------------------------------------------------- Home Equity Loans - Fixed Rate - 0.2% CWABS Asset-Backed Certificates Trust Series 2005-7, Class AF5W 5.054%, 10/25/35 737 - 737 732,498 - 732,498 ---------------------------------------------------- Total Asset-Backed Securities 2,364,458 - 2,364,458 (cost $1,898,231) ---------------------------------------------------- LOCAL GOVERNMENTS - MUNICIPAL BONDS - 0.6% United States - 0.6% Buckeye Tobacco Settlement Financing Authority Series 2007A-2 5.875%, 6/01/47 165 - 165 141,143 - 141,143 Golden State Tobacco Securitization Corp. Series 2007A-1 5.125%, 6/01/47 310 - 310 261,432 - 261,432 State of California Series 2010 7.60%, 11/01/40 325 - 325 486,636 - 486,636 7.95%, 3/01/36 700 - 700 836,465 - 836,465 Tobacco Settlement Financing Corp./NJ Series 2007-1A 5.00%, 6/01/41 165 - 165 132,719 - 132,719 Tobacco Settlement Financing Corp/VA Series 2007-B1 5.00%, 6/01/47 220 - 220 165,400 - 165,400 ---------------------------------------------------- Total Local Governments - Municipal Bonds 2,023,795 - 2,023,795 (cost $1,664,210) ---------------------------------------------------- AGENCIES - 0.2% United States - 0.2% CITGO Petroleum Corp. 6.25%, 8/15/22 (b) 484 29 513 474,320 28,420 502,740 ---------------------------------------------------- (cost $513,694) Shares Shares Shares ---------------------------------------- WARRANTS - 0.1% FairPoint Communications, Inc., expiring 1/24/18 (c) (h) 12,643 - 12,643 379 - 379 iPayment Holdings, Inc., expiring 12/29/22(c)(d)(h) 234,094 11,721 245,815 234,094 11,721 245,815 Talon Equity Co. NV, expiring 11/24/15(c) (d) (h) 671 - 671 0 - 0 ---------------------------------------------------- Total Warrants 234,473 11,721 246,194 (cost $86,974) ---------------------------------------------------- Principal Principal Principal Amount Amount Amount (000) (000) (000) ---------------------------------------- EMERGING MARKETS - SOVEREIGNS - 0.1% Venezuela - 0.1% Venezuela Government International Bond 9.25%, 9/15/27 U.S.$ 430 20 450 188,125 8,750 196,875 (cost $398,944) ---------------------------------------------------- Contracts Contracts Contracts ---------------------------------------- OPTIONS PURCHASED - CALLS - 0.0% Options on Indices - 0.0% EURO STOXX 50 Volatility Index Expiration: Nov 2015, Exercise Price: EUR 3,500.00 (h) (s) 1,952 123 2,075 40,230 2,535 42,765 iShares iBoxx High Yield Corp. Expiration: Dec 2015, Exercise Price: $89.00 (h)(t) 1,941 102 2,043 19,410 204 19,614 ---------------------------------------------------- 59,640 2,739 62,379 ---------------------------------------------------- Options on Funds and Investment Trusts - 0.0% SPDR S&P 500 ETF Trust Expiration: Nov 2015, Exercise Price: $ 210.00 (h) (t) 173 11 184 27,074 1,721 28,795 SPDR S&P 500 ETF Trust Expiration: Dec 2015, Exercise Price: $ 227.00 (h) (t) 683 36 719 3,415 180 3,595 ---------------------------------------------------- Options on Equities - 0.0% 30,489 1,901 32,390 ---------------------------------------------------- Beazer Homes USA, Inc. Expiration: Nov 2015, Exercise Price: $ 22.00 (h)(t) 178 9 187 2,670 23 2,693 Diageo PLC Expiration: Dec 2015, Exercise Price: GBP 20.00 (h)(s) 64,469 3,344 67,813 15,893 824 16,717 ---------------------------------------------------- 18,563 847 19,410 ---------------------------------------------------- Total Options Purchased - Calls 108,692 5,487 114,179 (premiums paid $191,262) ---------------------------------------------------- OPTIONS PURCHASED - PUTS - 0.0% Options on Funds and Investment Trusts - 0.0% Boardwalk Real Estate Investment Trust Expiration: Nov 2015, Exercise Price: CAD 52.00 (h) (s) 25,739 1,630 27,369 7,458 472 7,930 SPDR S&P 500 ETF Trust Expiration: Nov 2015, Exercise Price: $ 187.00 (h) (t) 314 20 334 4,710 300 5,010 SPDR S&P 500 ETF Trust Expiration: Nov 2015, Exercise Price: $ 194.00 (h) (t) 329 21 350 11,350 725 12,075 SPDR S&P 500 ETF Trust Expiration: Nov 2015, Exercise Price: $ 200.00 (h) (t) 206 13 219 16,068 1,014 17,082 ---------------------------------------------------- 39,586 2,511 42,097 ---------------------------------------------------- Notional Notional Notional Amount Amount Amount (000) (000) (000) ---------------------------------------- Swaptions - 0.0% CDX-NAHY.25 RTP, Barclays Bank PLC (Buy Protection) Expiration: Nov 2015, Exercise Rate: 101.00% (h) 10,310 660 10,970 19,945 1,277 21,222 ---------------------------------------------------- Total Options Purchased - Puts 59,531 3,788 63,319 (premiums paid $184,185) ---------------------------------------------------- Shares Shares Shares ---------------------------------------- INVESTMENT COMPANIES - 0.0% Funds and Investment Trusts - 0.0% iShares Russell 2000 ETF - 434 434 - 50,058 50,058 (cost $49,298) ---------------------------------------------------- SHORT-TERM INVESTMENTS - 2.3% Investment Companies - 1.4% AB Fixed Income Shares, Inc. - Government STIF Portfolio, 0.13%(u) (v) 2,365,667 1,992,398 4,358,065 2,365,667 1,992,398 4,358,065 ---------------------------------------------------- (cost $4,358,065) Principal Principal Principal Amount Amount Amount (000) (000) (000) ---------------------------------------- Agency Discount Note - 0.6% Federal Home Loan Bank Discount Notes Zero Coupon, 1/06/16 (r) U.S.$ 2,000 - 2,000 1,999,675 - 1,999,675 (cost $1,999,675) ---------------------------------------------------- U.S. Treasury Bills - 0.3% U.S. Treasury Bill Zero Coupon, 1/14/16 (r) 1,000 - 1,000 1,000,000 - 1,000,000 (cost $1,000,000) ---------------------------------------------------- Time Deposits - 0.0% BBH, Grand Cayman (0.237)%, 11/02/15 EUR - 0^ 0^ - 5 5 0.03%, 11/02/15 U.S.$ - 5 5 - 5,341 5,341 0.05%, 11/02/15 CAD - 0^ 0^ - 1 1 0.854%, 11/02/15 AUD - 0^ 0^ - 0+ 0+ 5.25%, 11/02/15 ZAR - 2 2 - 113 113 BTMU, Grand Cayman 0.005%, 11/02/15 JPY - 5,359 5,359 - 44,410 44,410 DNB, Oslo - 0.08%, 11/02/15 GBP - 29 29 - 43,948 43,948 ---------------------------------------------------- Total Time Deposits - 93,818 93,818 (cost $93,175) ---------------------------------------------------- Total Short-Term Investments 5,365,342 2,086,216 7,451,558 (cost $7,450,915) ---------------------------------------------------- Total Investments - 101.3% 312,402,617 19,479,508 331,882,125 (cost $350,790,688) ---------------------------------------------------- Other assets less liabilities - (1/3%) (4,428,218) 203,864 (4,224,354) ---------------------------------------------------- Net Assets - 100.0% $ 307,974,399 $ 19,683,372 $ 327,657,771 ----------------------------------------------------
Futures -------------------------------------------- AB Pooling Portfolio High-Yield Portfolio -------------------------------------------- Number Value at Unrealized of Expiration Original October 31, Appreciation/ Type Contracts Month Value 2015 (Depreciation) ------------------------------------------------------------------------------------------------------------------------------------ Purchased Contracts Russell 2000 Mini Futures 8 December 2015 $ 923,282 $ 926,640 $ 3,358 U.S. T-Note 10 Yr (CBT) Futures 29 December 2015 3,751,911 3,702,938 (48,973) Sold Contracts S&P 500 E-Mini Index Futures 31 December 2015 3,104,494 3,214,235 (109,741) -------------- AB High Yield Portfolio $ (155,356) -------------------------------------------- -------------- Number Value at Unrealized of Expiration Original October 31, Appreciation/ Type Contracts Month Value 2015 (Depreciation) ------------------------------------------------------------------------------------------------------------------------------------ Purchased Contracts U.S. T-Note 10 Yr Futures (CBT) 3 December 2015 $ 384,930 $ 383,063 $ (1,867) Sold Contracts S&P 500 E-Mini Index Futures 2 December 2015 200,287 207,370 (7,083) -------------- $ (8,950) -------------- Pro-Forma Combined Portfolio -------------------------------------------- Number Value at Unrealized of Expiration Original October 31, Appreciation/ Type Contracts Month Value 2015 (Depreciation) ------------------------------------------------------------------------------------------------------------------------------------ Purchased Contracts Russell 2000 Mini Futures 8 December 2015 $ 923,282 $ 926,640 $ 3,358 U.S. T-Note 10 Yr (CBT) Futures 32 December 2015 4,136,841 4,086,001 (50,840) Sold Contracts S&P 500 E-Mini Index Futures 33 December 2015 3,304,781 3,421,605 (116,824) -------------- $ (164,306) -------------
Forwards -------------------------------------------- AB Pooling Portfolio High-Yield Portfolio -------------------------------------------- Contracts to In Exchange Unrealized Deliver For Settlement Appreciation/ Counterparty (000) (000) Date (Depreciation) --------------------------------------------------------------------------------------------------------------------------------- BNP Paribas SA USD 835 PEN 2,718 11/17/2015 $ (9,208) BNP Paribas SA USD 457 MXN 7,816 11/20/2015 15,466 BNP Paribas SA USD 165 EUR 150 12/3/2015 (264) Citibank, NA BRL 2,211 USD 573 11/4/2015 (350) Citibank, NA USD 566 BRL 2,211 11/4/2015 7,476 Citibank, NA BRL 2,211 USD 560 12/2/2015 (7,760) Deutsche Bank AG BRL 1,091 USD 272 11/4/2015 (10,824) Deutsche Bank AG USD 283 BRL 1,091 11/4/2015 173 Royal Bank of Scotland PLC GBP 5,946 USD 9,128 11/10/2015 (38,587) Royal Bank of Scotland PLC NZD 1,555 USD 1,026 11/20/2015 (26,015) Standard Chartered Bank BRL 1,120 USD 276 11/4/2015 (14,301) Standard Chartered Bank USD 290 BRL 1,120 11/4/2015 177 Standard Chartered Bank KRW 966,726 USD 812 11/13/2015 (34,068) State Street Bank & Trust Co. USD 751 SEK 6,198 11/5/2015 (25,670) State Street Bank & Trust Co. GBP 24 USD 37 11/10/2015 191 State Street Bank & Trust Co. GBP 91 USD 139 11/10/2015 (1,697) State Street Bank & Trust Co. USD 60 GBP 39 11/10/2015 193 State Street Bank & Trust Co. USD 586 BRL 2,311 12/2/2015 7,412 State Street Bank & Trust Co. EUR 11,540 USD 12,739 12/3/2015 44,161 State Street Bank & Trust Co. USD 100 EUR 91 12/3/2015 653 State Street Bank & Trust Co. USD 175 EUR 158 12/3/2015 (1,159) State Street Bank & Trust Co. USD 852 JPY 102,969 12/11/2015 1,805 State Street Bank & Trust Co. AUD 749 USD 533 12/18/2015 181 ------------ $ (92,015) ------------ AB High Yield Portfolio -------------------------------------------- Contracts to In Exchange Unrealized Deliver For Settlement Appreciation/ Counterparty (000) (000) Date (Depreciation) --------------------------------------------------------------------------------------------------------------------------------- Brown Brothers Harriman & Co. USD 41 SEK 341 11/5/2015 $ (1,392) Brown Brothers Harriman & Co. USD 44 GBP 29 11/10/2015 (91) Brown Brothers Harriman & Co. NZD 81 USD 54 11/20/2015 (1,214) Brown Brothers Harriman & Co. USD 24 MXN 402 11/20/2015 771 Brown Brothers Harriman & Co. EUR 444 USD 490 12/3/2015 1,697 Brown Brothers Harriman & Co. USD 44 JPY 5,359 12/11/2015 9 Brown Brothers Harriman & Co. AUD 40 USD 28 12/18/2015 7 Deutsche Bank AG BRL 93 USD 23 11/4/2015 (911) Deutsche Bank AG USD 24 BRL 93 11/4/2015 7 Goldman Sachs Bank USA USD 27 BRL 108 12/2/2015 473 Royal Bank of Scotland PLC GBP 185 USD 284 11/10/2015 (1,201) Royal Bank of Scotland PLC USD 44 PEN 142 11/17/2015 (586) Standard Chartered Bank BRL 92 USD 24 11/4/2015 (7) Standard Chartered Bank USD 24 BRL 92 11/4/2015 410 Standard Chartered Bank KRW 50,312 USD 42 11/13/2015 (1,773) Standard Chartered Bank BRL 77 USD 20 12/2/2015 (226) ------------ $ (4,027) ------------ Pro-Forma Combined Portfolio -------------------------------------------- Contracts to In Exchange Unrealized Deliver For Settlement Appreciation/ Counterparty (000) (000) Date (Depreciation) --------------------------------------------------------------------------------------------------------------------------------- BNP Paribas SA USD 835 PEN 2,718 11/17/2015 $ (9,208) BNP Paribas SA USD 457 MXN 7,816 11/20/2015 15,466 BNP Paribas SA USD 165 EUR 150 12/3/2015 (264) Brown Brothers Harriman & Co. USD 41 SEK 341 11/5/2015 (1,392) Brown Brothers Harriman & Co. USD 44 GBP 29 11/10/2015 (91) Brown Brothers Harriman & Co. NZD 81 USD 54 11/20/2015 (1,214) Brown Brothers Harriman & Co. USD 24 MXN 402 11/20/2015 771 Brown Brothers Harriman & Co. EUR 444 USD 490 12/3/2015 1,697 Brown Brothers Harriman & Co. USD 44 JPY 5,359 12/11/2015 9 Brown Brothers Harriman & Co. AUD 40 USD 28 12/18/2015 7 Citibank, NA BRL 2,211 USD 573 11/4/2015 (350) Citibank, NA USD 566 BRL 2,211 11/4/2015 7,476 Citibank, NA BRL 2,211 USD 560 12/2/2015 (7,760) Deutsche Bank AG BRL 1,184 USD 295 11/4/2015 (11,735) Deutsche Bank AG USD 307 BRL 1,184 11/4/2015 180 Goldman Sachs Bank USA USD 27 BRL 108 12/2/2015 473 Royal Bank of Scotland PLC GBP 6,131 USD 9,412 11/10/2015 (39,788) Royal Bank of Scotland PLC NZD 1,555 USD 1,026 11/20/2015 (26,015) Royal Bank of Scotland PLC USD 44 PEN 142 11/17/2015 (586) Standard Chartered Bank BRL 1,212 USD 300 11/4/2015 (14,308) Standard Chartered Bank USD 314 BRL 1,212 11/4/2015 587 Standard Chartered Bank KRW 1,017,038 USD 854 11/13/2015 (35,841) Standard Chartered Bank BRL 77 USD 20 12/2/2015 (226) State Street Bank & Trust Co. USD 751 SEK 6,198 11/5/2015 (25,670) State Street Bank & Trust Co. GBP 24 USD 37 11/10/2015 191 State Street Bank & Trust Co. GBP 91 USD 139 11/10/2015 (1,697) State Street Bank & Trust Co. USD 60 GBP 39 11/10/2015 193 State Street Bank & Trust Co. USD 586 BRL 2,311 12/2/2015 7,412 State Street Bank & Trust Co. EUR 11,540 USD 12,739 12/3/2015 44,161 State Street Bank & Trust Co. USD 100 EUR 91 12/3/2015 653 State Street Bank & Trust Co. USD 175 EUR 158 12/3/2015 (1,159) State Street Bank & Trust Co. USD 852 JPY 102,969 12/11/2015 1,805 State Street Bank & Trust Co. AUD 749 USD 533 12/18/2015 181 ------------ $ (96,042) ------------
Put Options Written AB Pooling Portfolio High-Yield Portfolio ---------------------------------------------
Exercise Expiration Premiums Description Contracts Price Month Received U.S. $ Value --------------------------------------------------------------------------------------------------------------------------------- iShares iBoxx High Yield Corp.(s) 1,941 $ 76.00 December 2015 $ 75,615 $ 25,233) SPDR S&P 500 ETF Trust(s) 314 177.00 November 2015 21,025 (1,884) SPDR S&P 500 ETF Trust(s) 329 184.00 November 2015 14,785 (3,619) SPDR S&P 500 ETF Trust(s) 206 190.00 November 2015 6,377 (4,429) Taylor Morrison Home Corp.(s) 153 22.50 January 2016 41,015 (65,025) --------------------------- $ 158,817 $ (100,190) --------------------------- AB High Yield Portfolio --------------------------------------------- Exercise Expiration Premiums Description Contracts Price Month Received U.S. $ Value --------------------------------------------------------------------------------------------------------------------------------- iShares iBoxx High Yield Corp.(s) 102 $ 76.00 December 2015 $ 3,974 $ (1,326) SPDR S&P 500 ETF Trust(s) 20 177.00 November 2015 1,339 (120) SPDR S&P 500 ETF Trust(s) 21 184.00 November 2015 944 (231) SPDR S&P 500 ETF Trust(s) 13 190.00 November 2015 402 (279) Taylor Morrison Home Corp.(s) 8 22.50 January 2016 2,145 (3,400) ---------------------------- $ 8,803 $ (5,356) ----------------------------- Pro-Forma Combined Portfolio --------------------------------------------- Exercise Expiration Premiums Description Contracts Price Month Received U.S. $ Value --------------------------------------------------------------------------------------------------------------------------------- iShares iBoxx High Yield Corp.(s) 2,043 $ 76.00 December 2015 $ 79,589 $ (26,559) SPDR S&P 500 ETF Trust(s) 334 177.00 November 2015 22,364 (2,004) SPDR S&P 500 ETF Trust(s) 350 184.00 November 2015 15,729 (3,850) SPDR S&P 500 ETF Trust(s) 219 190.00 November 2015 6,779 (4,708) Taylor Morrison Home Corp.(s) 161 22.50 January 2016 43,160 (68,425) -------------------------------- $ 167,620 $ (105,546) --------------------------------
Credit Default Swaptions Written AB Pooling Portfolio High-Yield Portfolio -----------------------------------------
Notional Counter- Buy/Sell Strike Expiration Amount Premiums Market Description party Protection Rate Date (000) Received Value ------------------------------------------------------------------------------------------------------------------------------- Put - CDX-NAHY Series 24, 5 Year Index Barclays Sell 98.00% 11/18/15 $ 10,310 $ 9,279 $ (4,311) Bank PLC AB High Yield Portfolio ----------------------------------------- Notional Counter- Buy/Sell Strike Expiration Amount Premiums Market Description party Protection Rate Date (000) Received Value ------------------------------------------------------------------------------------------------------------------------------- Put - CDX-NAHY Series 24, 5 Year Index Barclays Sell 98.00% 11/18/15 $ 660 $ 594 $ (276) Bank PLC Pro-Forma Combined Portfolio ----------------------------------------- Notional Counter- Buy/Sell Strike Expiration Amount Premiums Market Description party Protection Rate Date (000) Received Value ------------------------------------------------------------------------------------------------------------------------------- Put - CDX-NAHY Series 24, 5 Year Index Barclays Sell 98.00% 11/18/15 $ 10,970 $ 9,873 $ (4,587) Bank PLC
Centrally Cleared Credit Default Swaps AB Pooling Portfolio High-Yield Portfolio -----------------------------------------
Implied Credit Spread Fixed at Rate October Notional Unrealized Clearing Broker/(Exchange) (Pay) 31, Amount Market Appreciation/ & Referenced Obligation Receive 2015 (000) Value (Depreciation) ------------------------------------------------------------------------------------------------------------------------------ Buy Contracts Morgan Stanley & Co., LLC/(INTRCONX) CDX-NAHY Series 20, 5 Year Index, 6/20/18* (5.00)% 2.24% $ 10,230 $ (775,258) $ (335,498) CDX-NAHY Series 24, 5 Year Index, 6/20/20* (5.00) 3.59 1,921 (121,775) (62,399) CDX-NAHY Series 24, 5 Year Index, 6/20/20* (5.00) 3.59 8,087 (512,773) (160,182) CDX-NAIG Series 23, 5 Year Index, 12/20/19* (1.00) 0.72 12,410 (152,671) 677 iTraxx Europe Crossover Series 23, 5 Year (5.00) 3.13 EUR 6,220 (572,641) 2,363 Index, 6/20/20* iTraxx-XOVER Series 21, 5 Year Index, 6/20/19* (5.00) 2.05 0^^ (16) (41) Sale Contracts Morgan Stanley & Co., LLC/(INTRCONX) CDX-NAIG Series 20, 5 Year Index, 6/20/18* 1.00 0.43 $ 5,980 96,954 65,996 ------------------------------- $ (2,038,180) $ (489,084) ------------------------------- AB High Yield Portfolio ----------------------------------------- Implied Credit Spread Fixed at Rate October Notional Unrealized Clearing Broker/(Exchange) (Pay) 31, Amount Market Appreciation/ & Referenced Obligation Receive 2015 (000) Value (Depreciation) ------------------------------------------------------------------------------------------------------------------------------ Buy Contracts Citigroup Global Markets, Inc./(INTRCONX) iTraxx Europe Crossover Series 23, 5 Year Index, 6/20/20* (5.00)% 3.13% EUR 160 $ (14,661) $ 2,127 Sale Contracts Citigroup Global Markets, Inc./(INTRCONX) CDX-NAHY Series 24, 5 Year Index, 6/20/20* 5.00 3.59 $ 344 21,734 5,917 CDX-NAHY Series 24, 5 Year Index, 6/20/20* 5.00 3.59 143 9,019 2,441 CDX-NAHY Series 25, 5 Year Index, 12/20/20* 5.00 4.27 162 6,019 6,322 CDX-NAHY Series 25, 5 Year Index, 12/20/20* 5.00 4.27 162 6,019 5,924 CDX-NAHY Series 25, 5 Year Index, 12/20/20* 5.00 4.27 162 6,019 5,876 CDX-NAHY Series 25, 5 Year Index, 12/20/20* 5.00 4.27 162 6,019 5,701 CDX-NAHY Series 25, 5 Year Index, 12/20/20* 5.00 4.27 112 4,162 4,635 CDX-NAHY Series 25, 5 Year Index, 12/20/20* 5.00 4.27 112 4,162 4,437 CDX-NAHY Series 25, 5 Year Index, 12/20/20* 5.00 4.27 112 4,162 4,327 CDX-NAHY Series 25, 5 Year Index, 12/20/20* 5.00 4.27 112 4,162 1,228 ------------------------------ $ 56,816 $ 48,935 ------------------------------ Pro-Forma Combined Portfolio ---------------------------------------- Implied Credit Spread Fixed at Rate October Notional (Unrealized Clearing Broker/(Exchange) (Pay) 31, Amount Market Appreciation/ & Referenced Obligation Receive 2015 (000) Value Depreciation) ------------------------------------------------------------------------------------------------------------------------------ Buy Contracts Citigroup Global Markets, Inc./(INTRCONX) iTraxx Europe Crossover Series 23, 5 Year Index, 6/20/20* (5.00)% 3.13% EUR 160 $ (14,661) $ 2,127 Morgan Stanley & Co., LLC/(INTRCONX) CDX-NAHY Series 20, 5 Year Index, 6/20/18* (5.00) 2.24 $ 10,230 (775,258) (335,498) CDX-NAHY Series 24, 5 Year Index, 6/20/20* (5.00) 3.59 1,921 (121,775) (62,399) CDX-NAHY Series 24, 5 Year Index, 6/20/20* (5.00) 3.59 8,087 (512,773) (160,182) CDX-NAIG Series 23, 5 Year Index, 12/20/19* (1.00) 0.72 12,410 (152,671) 677 iTraxx Europe Crossover Series 23, 5 Year Index, 6/20/20* (5.00) 3.13 EUR 6,220 (572,641) 2,363 iTraxx-XOVER Series 21, 5 Year Index, 6/20/19* (5.00) 2.05 0^^ (16) (41) Sale Contracts Citigroup Global Markets, Inc./(INTRCONX) CDX-NAHY Series 24, 5 Year Index, 6/20/20* 5.00 3.59 $ 344 21,734 5,917 CDX-NAHY Series 24, 5 Year Index, 6/20/20* 5.00 3.59 143 9,019 2,441 CDX-NAHY Series 25, 5 Year Index, 12/20/20* 5.00 4.27 162 6,019 6,322 CDX-NAHY Series 25, 5 Year Index, 12/20/20* 5.00 4.27 162 6,019 5,924 CDX-NAHY Series 25, 5 Year Index, 12/20/20* 5.00 4.27 162 6,019 5,876 CDX-NAHY Series 25, 5 Year Index, 12/20/20* 5.00 4.27 162 6,019 5,701 CDX-NAHY Series 25, 5 Year Index, 12/20/20* 5.00 4.27 112 4,162 4,635 CDX-NAHY Series 25, 5 Year Index, 12/20/20* 5.00 4.27 112 4,162 4,437 CDX-NAHY Series 25, 5 Year Index, 12/20/20* 5.00 4.27 112 4,162 4,327 CDX-NAHY Series 25, 5 Year Index, 12/20/20* 5.00 4.27 112 4,162 1,228 Morgan Stanley & Co., LLC/(INTRCONX) CDX-NAIG Series 20, 5 Year Index, 6/20/18* 1.00 0.43 5,980 96,954 65,996 ------------------------------- $ (1,981,364) $ (440,149) * Termination date -------------------------------
Centrally Cleared Interest Rate Swaps AB Pooling Portfolio High-Yield Portfolio ----------------------------------------------
Clearing Broker Notional Termination Payments Payments Unrealized /(Exchange) Amount Date made received Appreciation/ (000) by the by the (Depreciation) Fund Fund --------------------------------------------------------------------------------------------------------------------------- Morgan Stanley & Co., LLC/(CME) $17,030 9/02/25 2.25% 3 Month LIBOR $(344,875) Pro-Forma Combined Portfolio ---------------------------------------------- Clearing Broker Notional Termination Payments Payments Unrealized /(Exchange) Amount Date made received Appreciation/ (000) by the by the (Depreciation) Fund Fund --------------------------------------------------------------------------------------------------------------------------- Morgan Stanley & Co., LLC/(CME) $17,030 9/02/25 2.25% 3 Month LIBOR $(344,875)
Credit Default Swaps AB Pooling Portfolio High-Yield Portfolio -----------------------------------------------
Implied Credit Fixed Spread Rate at Upfront (Pay) October Notional Premiums Unrealized Swap Counterparty & Receive 31, Amount Market Paid Appreciation/ Referenced Obligation 2015 (000) Value (Received) (Depreciation) --------------------------------------------------------------------------------------------------------------------------- Buy Contracts Bank of America, NA CDX-NAHY Series 20, 5 Year Index, 6/20/18* (5.00)% 2.24% $ 1,546 $ (117,132) $ (24,147) $ (92,985) Barclays Bank PLC Beazer Homes USA, Inc., 9.125%, 6/15/18, 3/20/17* (5.00) 1.85 1,085 (50,684) (43,407) (7,277) K. Hovnanian Enterprises, Inc., 8.625%, 1/15/17, 3/20/17* (5.00) 7.87 1,018 37,819 (29,109) 66,928 Tenet Healthcare Corp., 6.875%, 11/15/31, 6/20/17* (5.00) 1.27 1,132 (73,578) (61,845) (11,733) Citibank, NA Bombardier Inc., 7.450%, 5/01/34, 3/20/17* (5.00) 5.68 572 4,440 (27,410) 31,850 Bombardier Inc., 7.450%, 5/01/34, 3/20/17* (5.00) 5.68 568 4,409 (28,105) 32,514 U.S. Steel Corp., 6.650%, 6/01/37, 3/20/17* (5.00) 8.42 1,052 51,831 (39,189) 91,020 Credit Suisse International Western Union Co., 3.650%, 8/22/18, 3/20/17* (1.00) 0.22 570 (6,584) (1,006) (5,578) Western Union Co., 3.650%, 8/22/18, 9/20/17* (1.00) 0.32 550 (7,455) (4,602) (2,853) Deutsche Bank AG iHeartCommunications, Inc., 6.875%, 6/15/18, 3/20/17* (5.00) 36.39 56 30,283 4,127 26,156 Goldman Sachs Bank USA Community Health Systems, Inc., 8.000%, 11/15/19, 3/20/17* (5.00) 1.00 1,130 (68,063) (50,335) (17,728) Dell, Inc., 7.100%, 4/15/28, 3/20/17* (1.00) 0.88 1,027 (1,802) 11,284 (13,086) First Data Corp., 12.625%, 1/15/21, 3/20/17* (5.00) 0.82 1,058 (66,323) (36,639) (29,684) Newmont Mining Corp., 5.875%, 4/01/35, 3/20/17* (1.00) 0.24 1,140 (12,589) (2,941) (9,648) Nine West Holdings, Inc., 6.875%, 3/15/19, 3/20/17* (5.00) 12.51 1,050 126,749 (42,118) 168,867 Goldman Sachs International British Telecommunications PLC, 5.750% 12/07/28, 6/20/20* (1.00) 0.71 EUR 3,330 (51,943) (82,446) 30,503 Morgan Stanley Capital Services LLC CDX-NAIG Series 20, 5 Year Index, 6/20/18* (1.00) 0.43 $ 6,840 (110,897) (50,203) (60,694) iHeartCommunications, Inc., 6.875%, 6/15/18, 6/20/18* (5.00) 36.39 64 34,073 4,644 29,429 Sale Contracts Barclays Bank PLC Beazer Homes USA, Inc., 9.125%, 6/15/18, 3/20/19* 5.00 4.31 739 17,522 26,460 (8,938) CCO Holdings, LLC, 7.250%, 10/30/17, 6/20/19* 5.00 1.58 582 71,980 47,544 24,436 K. Hovnanian Enterprises, Inc., 8.625%, 1/15/17, 12/20/18* 5.00 11.82 739 (126,839) 11,605 (138,444) K. Hovnanian Enterprises, Inc., 8.625%, 1/15/17, 9/20/20* 5.00 12.23 443 (108,841) (123,221) 14,380 K. Hovnanian Enterprises, Inc., 8.625%, 1/15/17, 9/20/20* 5.00 12.23 177 (43,487) (49,312) 5,825 MGM Resorts International, 7.625%, 1/15/17, 6/20/17* 5.00 0.72 470 34,874 (8,563) 43,437 MGM Resorts International, 7.625%, 1/15/17, 6/20/18* 5.00 1.21 689 70,793 23,424 47,369 Tenet Healthcare Corporation, 6.875%, 11/15/31, 6/20/19* 5.00 3.54 760 37,938 47,155 (9,217) Citibank, NA Advanced Micro Devices, Inc., 7.750%, 8/01/20, 9/20/20* 5.00 11.19 270 (55,400) (64,312) 8,912 Bombardier, Inc., 7.450%, 5/01/34, 3/20/19* 5.00 8.70 380 (36,977) 26,101 (63,078) Bombardier, Inc., 7.450%, 5/01/34, 3/20/19* 5.00 8.70 380 (36,977) 26,652 (63,629) MGM Resorts International, 7.625%, 1/15/17, 6/20/18* 5.00 1.21 909 93,397 31,782 61,615 U.S. Steel Corp., 6.650%, 6/01/37, 3/20/19* 5.00 13.55 760 (158,377) 17,110 (175,487) Credit Suisse International Dell, Inc., 7.10%, 4/15/28, 12/20/18* 1.00 1.88 380 (9,734) (31,644) 21,910 MGM Resorts International, 7.625%, 1/15/17, 6/20/18* 5.00 1.21 332 34,112 12,087 22,025 Western Union Co., 3.650%, 8/22/18, 3/20/19* 1.00 0.72 380 3,557 (8,843) 12,400 Western Union Co., 3.650%, 8/22/18, 9/20/19* 1.00 0.89 360 1,437 (3,894) 5,331 Goldman Sachs Bank USA Community Health Systems, Inc., 8.000%, 11/15/19, 3/20/19* 5.00 2.86 760 53,257 42,897 10,360 ConvaTec Healthcare E S.A., 10.875%, 12/15/18, 6/20/17* 5.00 0.46 EUR 590 52,014 (41,996) 94,010 Dell, Inc., 7.100%, 4/15/28, 3/20/19* 1.00 2.05 $ 760 (26,621) (57,885) 31,264 First Data Corp., 12.625%, 1/15/21, 3/20/19* 5.00 2.23 760 70,726 12,726 58,000 K. Hovnanian Enterprises, Inc., 8.625%, 1/15/17, 9/20/20* 5.00 12.23 160 (39,311) (41,931) 2,620 Newmont Mining Corp., 5.875%, 4/01/35, 3/20/19* 1.00 0.86 760 3,370 (19,499) 22,869 Nine West Holdings, Inc., 6.875%, 3/15/19, 3/20/19* 5.00 24.18 760 (316,706) 17,101 (333,807) Morgan Stanley Capital Services LLC AK Steel Corp., 7.625%, 5/15/20, 3/20/16* 5.00 15.84 550 (19,208) 676 (19,884) U.S. Steel Corp., 6.650%, 6/01/37, 9/20/19* 5.00 13.96 141 (33,236) 5,868 (39,104) U.S. Steel Corp., 6.650%, 6/01/37, 9/20/19* 5.00 13.96 212 (50,044) 9,340 (59,384) --------------------------------------------- $ (794,227) $ (596,019) $ (198,208) --------------------------------------------- AB High Yield Portfolio -------------------------------------- Implied Credit Fixed Spread Rate at Upfront (Pay) October Notional Premiums Unrealized Swap Counterparty & Receive 31, Amount Market Paid Appreciation/ Referenced Obligation 2015 (000) Value (Received) (Depreciation) ------------------------------------------------------------------------------------------------------------------------------- Buy Contracts Credit Suisse International Western Union Co., 3.650% 8/22/18, 9/20/17* (1.00)% 0.32% $ 60 $ (812) $ (503) $ (309) Goldman Sachs International British Telecommunications PLC, 5.750% 12/07/28, 6/20/20* (1.00) 0.71 EUR 170 (2,642) (4,259) 1,617 Sale Contracts Bank of America, NA Abengoa S.A., 8.500% 3/31/16, 12/20/20* 5.00 49.43 15 (11,329) (11,327) (2) Barclays Bank PLC Altice Finco S.A., 9.000% 6/15/23, 12/20/20* 5.00 4.12 40 2,022 1,839 183 Unitymedia GmbH, 6.125% 1/15/25, 12/20/20* 5.00 1.96 70 11,924 11,818 106 Citibank, NA Advanced Micro Devices, Inc., 7.750% 8/01/20, 9/20/20* 5.00 11.19 $ 20 (4,107) (4,767) 660 Credit Suisse International: Altice Finco S.A., 9.000% 6/15/23, 12/20/20* 5.00 4.12 EUR 100 5,212 4,566 646 Numericable-Sfr Sas, 5.375% 5/15/22, 12/20/20* 5.00 3.30 80 7,699 7,167 532 Western Union Co., 3.650% 8/22/18, 9/20/19* 1.00 0.89 $ 40 157 (433) 590 Goldman Sachs International Convatec Healthcare E S.A., 10.875% 12/15/18, 9/20/19* 5.00 1.18 EUR 25 4,154 3,873 281 K. Hovnanian Enterprises, Inc., 8.625%, 1/15/17, 9/20/20* 5.00 12.23 $ 10 (2,458) (2,622) 164 Wind Acquisition Finance S.A., 7.000% 4/23/21, 9/20/20* 5.00 3.05 EUR 30 3,066 3,331 (265) JPMorgan Chase Bank, NA Virgin Media Finance PLC, 7.000% 4/15/23, 9/20/19* 5.00 1.87 60 8,093 5,825 2,268 Wind Acquisition Finance S.A., 11.750% 7/15/17, 9/20/19* 5.00 2.47 70 7,580 4,904 2,676 Morgan Stanley & Co. International PLC AK Steel Corp., 7.625% 5/15/20, 9/20/19* 5.00 22.73 $ 30 (11,960) 282 (12,242) MGM Resorts International, 7.625% 1/15/17, 9/20/19* 5.00 1.84 70 8,493 5,871 2,622 U.S. Steel Corp., 6.650%, 6/01/37, 9/20/19* 5.00 13.96 20 (4,729) 883 (5,612) ------------------------------------------------ $ 20,363 $ 26,448 $ (6,085) ------------------------------------------------ Pro-Forma Combined Portfolio -------------------------------------- Implied Credit Fixed Spread Rate at Upfront (Pay) October Notional Premiums Unrealized Swap Counterparty & Receive 31, Amount Market Paid Appreciation/ Referenced Obligation 2015 (000) Value (Received) (Depreciation) --------------------------------------------------------------------------------------------------------------------------------- Buy Contracts Bank of America, NA CDX-NAHY Series 20, 5 Year Index, 6/20/18* (5.00)% 2.24% $ 1,546 $ (117,132) $ (24,147) $ (92,985) Barclays Bank PLC Beazer Homes USA, Inc., 9.125%, 6/15/18, 3/20/17* (5.00) 1.85 1,085 (50,684) (43,407) (7,277) K. Hovnanian Enterprises, Inc., 8.625%, 1/15/17, 3/20/17* (5.00) 7.87 1,018 37,819 (29,109) 66,928 Tenet Healthcare Corp., 6.875%, 11/15/31, 6/20/17* (5.00) 1.27 1,132 (73,578) (61,845) (11,733) Citibank, NA Bombardier Inc., 7.450%, 5/01/34, 3/20/17* (5.00) 5.68 572 4,440 (27,410) 31,850 Bombardier Inc., 7.450%, 5/01/34, 3/20/17* (5.00) 5.68 568 4,409 (28,105) 32,514 U.S. Steel Corp., 6.650%, 6/01/37, 3/20/17* (5.00) 8.42 1,052 51,831 (39,189) 91,020 Credit Suisse International Western Union Co., 3.650%, 8/22/18, 3/20/17* (1.00) 0.22 570 (6,584) (1,006) (5,578) Western Union Co., 3.650%, 8/22/18, 9/20/17* (1.00) 0.32 610 (8,267) (5,105) (3,162) Deutsche Bank AG iHeartCommunications, Inc., 6.875%, 6/15/18, 3/20/17* (5.00) 36.39 56 30,283 4,127 26,156 Goldman Sachs Bank USA Community Health Systems, Inc., 8.000%, 11/15/19, 3/20/17* (5.00) 1.00 1,130 (68,063) (50,335) (17,728) Dell, Inc., 7.100%, 4/15/28, 3/20/17* (1.00) 0.88 1,027 (1,802) 11,284 (13,086) First Data Corp., 12.625%, 1/15/21, 3/20/17* (5.00) 0.82 1,058 (66,323) (36,639) (29,684) Newmont Mining Corp., 5.875%, 4/01/35, 3/20/17* (1.00) 0.24 1,140 (12,589) (2,941) (9,648) Nine West Holdings, Inc., 6.875%, 3/15/19, 3/20/17* (5.00) 12.51 1,050 126,749 (42,118) 168,867 Goldman Sachs International British Telecommunications PLC, 5.750% 12/07/28, 6/20/20* (1.00) 0.71 EUR 3,500 (54,585) (86,705) 32,120 Morgan Stanley Capital Services LLC CDX-NAIG Series 20, 5 Year Index, 6/20/18* (1.00) 0.43 $ 6,840 (110,897) (50,203) (60,694) iHeartCommunications, Inc., 6.875%, 6/15/18, 6/20/18* (5.00) 36.39 64 34,073 4,644 29,429 Sale Contracts Bank of America, NA Abengoa S.A., 8.500% 3/31/16, 12/20/20* 5.00 49.43 15 (11,329) (11,327) (2) Barclays Bank PLC Altice Finco S.A., 9.000% 6/15/23, 12/20/20* 5.00 4.12 40 2,022 1,839 183 Beazer Homes USA, Inc., 9.125%, 6/15/18, 3/20/19* 5.00 4.31 739 17,522 26,460 (8,938) CCO Holdings, LLC, 7.250%, 10/30/17, 6/20/19* 5.00 1.58 582 71,980 47,544 24,436 K. Hovnanian Enterprises, Inc., 8.625%, 1/15/17, 12/20/18* 5.00 11.82 739 (126,839) 11,605 (138,444) K. Hovnanian Enterprises, Inc., 8.625%, 1/15/17, 9/20/20* 5.00 12.23 443 (108,841) (123,221) 14,380 K. Hovnanian Enterprises, Inc., 8.625%, 1/15/17, 9/20/20* 5.00 12.23 177 (43,487) (49,312) 5,825 MGM Resorts International, 7.625%, 1/15/17, 6/20/17* 5.00 0.72 470 34,874 (8,563) 43,437 MGM Resorts International, 7.625%, 1/15/17, 6/20/18* 5.00 1.21 689 70,793 23,424 47,369 Tenet Healthcare Corporation, 6.875%, 11/15/31, 6/20/19* 5.00 3.54 760 37,938 47,155 (9,217) Unitymedia GmbH, 6.125% 1/15/25, 12/20/20* 5.00 1.96 70 11,924 11,818 106 Citibank, NA Advanced Micro Devices, Inc., 7.750%, 8/01/20, 9/20/20* 5.00 11.19 290 (59,507) (69,079) 9,572 Bombardier, Inc., 7.450%, 5/01/34, 3/20/19* 5.00 8.70 380 (36,977) 26,101 (63,078) Bombardier, Inc., 7.450%, 5/01/34, 3/20/19* 5.00 8.70 380 (36,977) 26,652 (63,629) MGM Resorts International, 7.625%, 1/15/17, 6/20/18* 5.00 1.21 909 93,397 31,782 61,615 U.S. Steel Corp., 6.650%, 6/01/37, 3/20/19* 5.00 13.55 760 (158,377) 17,110 (175,487) Credit Suisse International Altice Finco S.A., 9.000% 6/15/23, 12/20/20* 5.00 4.12 EUR 100 5,212 4,566 646 Dell, Inc., 7.10%, 4/15/28, 12/20/18* 1.00 1.88 380 (9,734) (31,644) 21,910 MGM Resorts International, 7.625%, 1/15/17, 6/20/18* 5.00 1.21 332 34,112 12,087 22,025 Numericable-Sfr Sas, 5.375% 5/15/22, 12/20/20* 5.00 3.30 80 7,699 7,167 532 Western Union Co., 3.650%, 8/22/18, 3/20/19* 1.00 0.72 380 3,557 (8,843) 12,400 Western Union Co., 3.650%, 8/22/18, 9/20/19* 1.00 0.89 400 1,594 (4,327) 5,921 Goldman Sachs Bank USA Community Health Systems, Inc., 8.000%, 11/15/19, 3/20/19* 5.00 2.86 760 53,257 42,897 10,360 ConvaTec Healthcare E S.A., 10.875%, 12/15/18, 6/20/17* 5.00 0.46 EUR 590 52,014 (41,996) 94,010 Dell, Inc., 7.100%, 4/15/28, 3/20/19* 1.00 2.05 $ 760 (26,621) (57,885) 31,264 First Data Corp., 12.625%, 1/15/21, 3/20/19* 5.00 2.23 760 70,726 12,726 58,000 K. Hovnanian Enterprises, Inc., 8.625%, 1/15/17, 9/20/20* 5.00 12.23 160 (39,311) (41,931) 2,620 Newmont Mining Corp., 5.875%, 4/01/35, 3/20/19* 1.00 0.86 760 3,370 (19,499) 22,869 Nine West Holdings, Inc., 6.875%, 3/15/19, 3/20/19* 5.00 24.18 760 (316,706) 17,101 (333,807) Goldman Sachs International Convatec Healthcare E S.A., 10.875% 12/15/18, 9/20/19* 5.00 1.18 EUR 25 4,154 3,873 281 K. Hovnanian Enterprises, Inc., 8.625%, 1/15/17, 9/20/20* 5.00 12.23 $ 10 (2,458) (2,622) 164 Wind Acquisition Finance S.A., 7.000% 4/23/21, 9/20/20* 5.00 3.05 EUR 30 3,066 3,331 (265) JPMorgan Chase Bank, NA Virgin Media Finance PLC, 7.000% 4/15/23, 9/20/19* 5.00 1.87 60 8,093 5,825 2,268 Wind Acquisition Finance S.A., 11.750% 7/15/17, 9/20/19* 5.00 2.47 70 7,580 4,904 2,676 Morgan Stanley Capital Services LLC AK Steel Corp., 7.625%, 5/15/20, 3/20/16* 5.00 15.84 $ 550 (19,208) 676 (19,884) AK Steel Corp., 7.625% 5/15/20, 9/20/19* 5.00 22.73 30 (11,960) 282 (12,242) MGM Resorts International, 7.625% 1/15/17, 9/20/19* 5.00 1.84 70 8,493 5,871 2,622 U.S. Steel Corp., 6.650%, 6/01/37, 9/20/19* 5.00 13.96 20 (4,729) 883 (5,612) U.S. Steel Corp., 6.650%, 6/01/37, 9/20/19* 5.00 13.96 141 (33,236) 5,868 (39,104) U.S. Steel Corp., 6.650%, 6/01/37, 9/20/19* 5.00 13.96 212 (50,044) 9,340 (59,384) ------------------------------------------------ $ (773,864) $ (569,571) $ (204,293) * Termination date ------------------------------------------------
Total Return Swaps AB Pooling Portfolio High-Yield Portfolio --------------------------------------------
# of Rate Notional Unrealized Counterparty & Shares Paid/ Amount Maturity Appreciation/ Referenced Obligation or Units Received (000) Date (Depreciation) --------------------------------------------------------------------------------------------------------------------------- Receive Total Return on Reference Obligation Goldman Sachs International Markit iBoxx $ Liquid High Yield Total Return Index 8,073 LIBOR $ 1,827 12/21/15 $40,883 Markit iBoxx $ Liquid High Yield Total Return Index 15,253 LIBOR 3,490 12/21/15 39,086 Markit iBoxx $ Liquid High Yield Total Return Index 7,626 LIBOR 1,752 12/21/15 12,388 Morgan Stanley Capital Services LLC Markit iBoxx $ Liquid High Yield Total Return Index 19,652 LIBOR 4,488 12/21/15 58,963 Markit iBoxx $ Liquid High Yield Total Return Index 15,582 LIBOR 3,562 12/21/15 43,243 Markit iBoxx $ Liquid High Yield Total Return Index 15,463 LIBOR 3,551 12/21/15 26,666 Pay Total Return on Reference Obligation Morgan Stanley Capital Services LLC Markit iBoxx $ Liquid High Yield Total Return Index 13,384 LIBOR 3,090 12/21/15 (8,379) --------------- $ 212,850 --------------- AB High Yield Portfolio -------------------------------------------- # of Rate Notional Unrealized Counterparty & Shares Paid/ Amount Maturity Appreciation/ Referenced Obligation or Units Received (000) Date (Depreciation) --------------------------------------------------------------------------------------------------------------------------- Receive Total Return on Reference Obligation Bank of America, NA Markit iBoxx $ Liquid High Yield Total Return Index 7,246 LIBOR $ 1,670 12/28/15 $ 6,997 Goldman Sachs International Markit iBoxx $ Liquid High Yield Total Return Index 415 LIBOR 94 12/28/15 2,121 Markit iBoxx $ Liquid High Yield Total Return Index 782 LIBOR 179 12/28/15 2,035 Markit iBoxx $ Liquid High Yield Total Return Index 392 LIBOR 90 12/28/15 651 JPMorgan Chase Bank, NA Markit iBoxx $ Liquid High Yield Total Return Index 1,011 LIBOR 231 12/28/15 2,953 Morgan Stanley & Co. International PLC Markit iBoxx $ Liquid High Yield Total Return Index 796 LIBOR 182 12/28/15 2,241 Markit iBoxx $ Liquid High Yield Total Return Index 797 LIBOR 183 12/28/15 1,405 Markit iBoxx $ Liquid High Yield Total Return Index 4 LIBOR 1 12/28/15 11 Pay Total Return on Reference Obligation Morgan Stanley & Co. International PLC Markit iBoxx $ Liquid High Yield Total Return Index 866 LIBOR 200 12/21/15 (494) --------------- $ 17,920 --------------- Pro-Forma Combined Portfolio -------------------------------------------- # of Rate Notional Unrealized Counterparty & Shares Paid/ Amount Maturity Appreciation/ Referenced Obligation or Units Received (000) Date (Depreciation) --------------------------------------------------------------------------------------------------------------------------- Receive Total Return on Reference Obligation Bank of America, NA Markit iBoxx $ Liquid High Yield Total Return Index 7,246 LIBOR $ 1,670 12/28/15 $ 6,997 Goldman Sachs International Markit iBoxx $ Liquid High Yield Total Return Index 8,073 LIBOR 1,827 12/21/15 40,883 Markit iBoxx $ Liquid High Yield Total Return Index 15,253 LIBOR 3,490 12/21/15 39,086 Markit iBoxx $ Liquid High Yield Total Return Index 7,626 LIBOR 1,752 12/21/15 12,388 Markit iBoxx $ Liquid High Yield Total Return Index 415 LIBOR 94 12/28/15 2,121 Markit iBoxx $ Liquid High Yield Total Return Index 782 LIBOR 179 12/28/15 2,035 Markit iBoxx $ Liquid High Yield Total Return Index 392 LIBOR 90 12/28/15 651 JPMorgan Chase Bank, NA Markit iBoxx $ Liquid High Yield Total Return Index 1,011 LIBOR 231 12/28/15 2,953 Morgan Stanley Capital Services LLC Markit iBoxx $ Liquid High Yield Total Return Index 19,652 LIBOR 4,488 12/21/15 58,963 Markit iBoxx $ Liquid High Yield Total Return Index 15,582 LIBOR 3,562 12/21/15 43,243 Markit iBoxx $ Liquid High Yield Total Return Index 15,463 LIBOR 3,551 12/21/15 26,666 Markit iBoxx $ Liquid High Yield Total Return Index 796 LIBOR 182 12/28/15 2,241 Markit iBoxx $ Liquid High Yield Total Return Index 797 LIBOR 183 12/28/15 1,405 Markit iBoxx $ Liquid High Yield Total Return Index 4 LIBOR 1 12/28/15 11 Pay Total Return on Reference Obligation Morgan Stanley Capital Services LLC Markit iBoxx $ Liquid High Yield Total Return Index 14,250 LIBOR 3,290 12/21/15 (8,873) -------------- $ 230,770 --------------
Reverse Repurchase Agreements AB Pooling Portfolio High-Yield Portfolio ----------------------------------------------------
U.S. $ Value at Broker Interest Rate Maturity 31-Oct-15 --------------------------------------------------------------------------------------------------------------------------- Barclays Capital, Inc.+ (2.75%)* - $ 454,677 Barclays Capital, Inc.+ (2.00%)* - 137,631 Credit Suisse Securities (USA) LLC+ (1.50%)* - 136,539 Credit Suisse Securities (USA) LLC+ (1.00%)* - 186,870 Credit Suisse Securities (USA) LLC+ 0.00% - 1,403,150 Credit Suisse Securities (USA) LLC+ 0.01% - 3,686,020 Credit Suisse Securities (USA) LLC 0.01% 11/2/2015 1,492,523 Credit Suisse Securities (USA) LLC 0.01% 8/24/2016 1,052,500 RBC Capital Markets+ (0.25%)* - 576,406 --------------- $ 9,126,316 --------------- Pro-Forma Combined Portfolio ---------------------------------------------------- U.S. $ Value at Broker Interest Rate Maturity 31-Oct-15 ------------------------------------------------------------------------------------------------------------------------- Barclays Capital, Inc.+ (2.75%)* - $ 454,677 Barclays Capital, Inc.+ (2.00%)* - 137,631 Credit Suisse Securities (USA) LLC+ (1.50%)* - 136,539 Credit Suisse Securities (USA) LLC+ (1.00%)* - 186,870 Credit Suisse Securities (USA) LLC+ 0.00% - 1,403,150 Credit Suisse Securities (USA) LLC+ 0.01% - 3,686,020 Credit Suisse Securities (USA) LLC 0.01% 11/2/2015 1,492,523 Credit Suisse Securities (USA) LLC 0.01% 8/24/2016 1,052,500 RBC Capital Markets+ (0.25%)* - 576,406 --------------- $ 9,126,316 ---------------
+ The reverse repurchase agreement matures on demand. Interest rate resets daily and the rate shown is the rate in effect on October 31, 2015 * Interest payment due from counterparty. The type of underlying collateral and the remaining maturity of open reverse repurchase agreements in relation to the reverse repurchase agreements on the Statement of Assets and Liabilities is as follows: Remaining Contracted Maturity of the Agreements
Overnight Reverse Repurchase Agreements and Greater than Continuous Up to 30 Days 31-90 Days 90 Days Total -------------------------------------------------------------------------- Corporates - Non-Investment Grade $ 6,958,085 $ -0- $ -0- 1,052,500 8,010,585 Corporates - Investment Grade 1,115,731 -0- -0- -0- 1,115,731 ------------------------------------------------------------------------ Total $ 8,073,816 $ -0- $ -0- 1,052,500 9,126,316
^Principal amount less than 500. +Less than $0.50. ^^Notional amount less than 500. (a) Position, or a portion thereof, has been segregated to collateralize reverse repurchase agreements. (b) Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities are considered liquid and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At October 31, 2015, the aggregate market value of these securities amounted to $125,668,185 or 38.4% of net assets. (c) Illiquid security. (d) Fair valued by the Adviser. (e) Security is in default and is non-income producing. (f) Security is exempt from registration under Rule 144A of the Securities Act of 1933. These securities, which represent 0.05% of net assets as of October 31, 2015, are considered illiquid and restricted.
Percentage Restricted Acquisition Market of Securities Date Cost Value Net Assets ----------------------------------------------------------------------------------------------------------------------- Magnetation LLC/Mag Finance Corp. 5/15/13-2/19/15 $ 544,671 $ 149,600 0.05% 11.00%, 5/15/18 Virgolino de Oliveira Finance SA 2/13/13 954,757 12,090 0% 10.50%, 1/28/18
(g) Restricted and illiquid security.
Percentage Restricted Acquisition Market of Securities Date Cost Value Net Assets ----------------------------------------------------------------------------------------------------------------------- Exide Technologies Series AI 04/30/15 $ 1,225,756 $ 1,080,961 0.35% 11.00%, 4/30/20 Exide Technologies 04/30/15 37,522 56,577 0.02% Momentive Performance Materials, Inc. 7/16/14-10/24/14 0 0 0.00%
8.875%, 10/15/20 (h) Non-income producing security. (i) Pay-In-Kind Payments (PIK). The issuer may pay cash interest and/or interest in additional debt securities. Rates shown are the rates in effect at October 31, 2015. (j) Convertible security. (k) Floating Rate Security. Stated interest rate was in effect at October 31, 2015. (l) Variable rate coupon, rate shown as of October 31, 2015. (m) Coupon rate adjusts periodically based upon a predetermined schedule. Stated interest rate in effect at October 31, 2015. (n) Securities are perpetual and, thus, do not have a predetermined maturity date. The date shown, if applicable, reflects the next call date. (o) Defaulted matured security. (p) Defaulted. (q) This position or a portion of this position represents an unsettled loan purchase. The coupon rate will be determined at the time of settlement and will be based upon the London-Interbank Offered Rate ("LIBOR") plus a premium which was determined at the time of purchase. (r) Position, or a portion thereof, has been segregated to collateralize OTC derivatives outstanding. (s) One contract relates to 1 share. (t) One contract relates to 100 shares. (u) To obtain a copy of the fund's financial statements, please go to the Securities and Exchange Commission's website at www.sec.gov, or call AB at (800) 227-4618. (v) Investment in affiliated money market mutual fund. The rate shown represents the 7-day yield as of period end. Currency Abbreviations: AUD - Australian Dollar BRL - Brazilian Real CAD - Canadian Dollar EUR - Euro GBP - Great British Pound JPY - Japanese Yen KRW - South Korean Won MXN - Mexican Peso NZD - New Zealand Dollar PEN - Peruvian Sol SEK - Swedish Krona USD - United States Dollar ZAR - South African Rand Glossary: CBT - Chicago Board of Trade CDX-NAHY - North American High Yield Credit Default Swap Index CDX-NAIG - North American Investment Grade Credit Default Swap Index CMBS - Commercial Mortgage-Backed Securities CME - Chicago Mercantile Exchange ETF - Exchange Traded Fund IBOXHY - iBoxx $ Liquid High Yield Index INTRCONX - Inter-Continental Exchange LIBOR - London Interbank Offered Rates REIT - Real Estate Investment Trust RTP - Right to Pay SPDR - Standard & Poor's Depository Receipt SECURITY VALUATION Portfolio securities are valued at their current market value determined on the basis of market quotations or, if market quotations are not readily available or are deemed unreliable, at "fair value" as determined in accordance with procedures established by and under the general supervision of the Portfolio's Board of Directors (the "Board"). In general, the market values of securities which are readily available and deemed reliable are determined as follows: securities listed on a national securities exchange (other than securities listed on the NASDAQ Stock Market, Inc. ("NASDAQ")) or on a foreign securities exchange are valued at the last sale price at the close of the exchange or foreign securities exchange. If there has been no sale on such day, the securities are valued at the last traded price from the previous day. Securities listed on more than one exchange are valued by reference to the principal exchange on which the securities are traded; securities listed only on NASDAQ are valued in accordance with the NASDAQ Official Closing Price; listed or over the counter ("OTC") market put or call options are valued at the mid level between the current bid and ask prices. If either a current bid or current ask price is unavailable, the Adviser will have discretion to determine the best valuation (e.g. last trade price in the case of listed options); open futures contracts are valued using the closing settlement price or, in the absence of such a price, the most recent quoted bid price. If there are no quotations available for the day of valuation, the last available closing settlement price is used; U.S. Government securities and any other debt instruments having 60 days or less remaining until maturity are generally valued at market by an independent pricing vendor, if a market price is available. If a market price is not available, the securities are valued at amortized cost. This methodology is commonly used for short-term securities that have an original maturity of 60 days or less, as well as short-term securities that had an original term to maturity that exceeded 60 days. In instances when amortized cost is utilized, the Valuation Committee (the "Committee") must reasonably conclude that the utilization of amortized cost is approximately the same as the fair value of the security. Such factors the Committee will consider include, but are not limited to, an impairment of the creditworthiness of the issuer or material changes in interest rates. Fixed-income securities, including mortgage-backed and asset-backed securities, may be valued on the basis of prices provided by a pricing service or at a price obtained from one or more of the major broker-dealers. In cases where broker-dealer quotes are obtained, the Adviser may establish procedures whereby changes in market yields or spreads are used to adjust, on a daily basis, a recently obtained quoted price on a security. Swaps and other derivatives are valued daily, primarily using independent pricing services, independent pricing models using market inputs, as well as third party broker-dealers or counterparties. Investment companies are valued at their net asset value each day. FAIR VALUE MEASUREMENTS In accordance with U.S. GAAP regarding fair value measurements, fair value is defined as the price that the Portfolio would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a framework for measuring fair value, and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability (including those valued based on their market values as described in Note A.1 above). Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Portfolio. Unobservable inputs reflect the Portfolio's own assumptions about the assumptions that market participants would use in pricing the asset or liability based on the best information available in the circumstances. Each investment is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below. o Level 1--quoted prices in active markets for identical investments o Level 2--other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, credit risk, etc.) o Level 3--significant unobservable inputs (including the Portfolio's own assumptions in determining the fair value of investments) The fair value of debt instruments, such as bonds, and over-the-counter derivatives is generally based on market price quotations, recently executed market transactions (where observable) or industry recognized modeling techniques and are generally classified as Level 2. Pricing vendor inputs to Level 2 valuations may include quoted prices for similar investments in active markets, interest rate curves, coupon rates, currency rates, yield curves, option adjusted spreads, default rates, credit spreads and other unique security features in order to estimate the relevant cash flows which is then discounted to calculate fair values. If these inputs are unobservable and significant to the fair value, these investments will be classified as Level 3. In addition, non-agency rated investments are classified as Level 3. Where readily available market prices or relevant bid prices are not available for certain equity investments, such investments may be valued based on similar publicly traded investments, movements in relevant indices since last available prices or based upon underlying company fundamentals and comparable company data (such as multiples to earnings or other multiples to equity). Where an investment is valued using an observable input, such as another publicly traded security, the investment will be classified as Level 2. If management determines that an adjustment is appropriate based on restrictions on resale, illiquidity or uncertainty, and such adjustment is a significant component of the valuation, the investment will be classified as Level 3. An investment will also be classified as Level 3 where management uses company fundamentals and other significant inputs to determine the valuation. Options are valued using market-based inputs to models, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency, where such inputs and models are available. Alternatively the values may be obtained through unobservable management determined inputs and/or management's proprietary models. Where models are used, the selection of a particular model to value an option depends upon the contractual terms of, and specific risks inherent in, the option as well as the availability of pricing information in the market. Valuation models require a variety of inputs, including contractual terms, market prices, measures of volatility and correlations of such inputs. Exchange traded options generally will be classified as Level 2. For options that do not trade on exchange but trade in liquid markets, inputs can generally be verified and model selection does not involve significant management judgment. Options are classified within Level 2 on the fair value hierarchy when all of the significant inputs can be corroborated to market evidence. Otherwise such instruments are classified as Level 3. Valuations of mortgage-backed or other asset-backed securities, by pricing vendors, are based on both proprietary and industry recognized models and discounted cash flow techniques. Significant inputs to the valuation of these instruments are value of the collateral, the rates and timing of delinquencies, the rates and timing of prepayments, and default and loss expectations, which are driven in part by housing prices for residential mortgages. Significant inputs are determined based on relative value analyses, which incorporate comparisons to instruments with similar collateral and risk profiles, including relevant indices. Mortgage and asset backed securities for which management has collected current observable data through pricing services are generally categorized within Level 2. Those investments for which current observable data has not been provided are classified as Level 3. Other fixed income investments, including non-U.S. government and corporate debt, are generally valued using quoted market prices, if available, which are typically impacted by current interest rates, maturity dates and any perceived credit risk of the issuer. Additionally, in the absence of quoted market prices, these inputs are used by pricing vendors to derive a valuation based upon industry or proprietary models which incorporate issuer specific data with relevant yield/spread comparisons with more widely quoted bonds with similar key characteristics. Those investments for which there are observable inputs are classified as Level 2. Where the inputs are not observable, the investments are classified as Level 3. Bank loan prices are provided by third party pricing services and consist of a composite of the quotes received by the vendor into a consensus price. Bank loans are classified as Level 3, as significant input used in the fair value measurement of these instruments isthe market quotes that are received by the vendor and these inputs are not observable. The following is a summary of the inputs used to value each Portfolio's investments as of October 31, 2015: Portfolios
AB Pooling Portfolio AB High Pro-Forma High-Yield Yield Combined Portfolio Portfolio Portfolio ------------------------------------------------------------------------------------------------------------ Investments in Securities (Level 1) $ 12,787,952 $ 2,642,457 $ 15,430,409 Investments in Securities (Level 2) 268,905,290 15,874,612 284,779,902 Investments in Securities (Level 3) 29,538,186 1,004,600 30,542,786 ------------------------------------------------------------------------------------------------------------ Total for Investments in Securities $ 311,231,428 $19,521,669 $330,753,097 ============================================================================================================
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value. AB Pooling Portfolio High-Yield Portfolio
Corporates - Non- Investment Common Grade^ Bank Loans Stocks --------- ---------- ------ Balance as of 10/31/14 $ 3,582,498 $ 15,670,066 $ 376,377 Accrued discounts/(premiums) (41,810) (31,342) - Realized gain (loss) 14,367 (111,325) (244,355) Change in unrealized appreciation/depreciation (886,554) (123,464) 10,693 Purchases 2,045,212 3,653,734 148,805 Sales (1,126,322) (5,216,900) - Transfers in to Level 3 - - 494,692 Transfers out of Level 3 (398,765) - (223,715) ------------ ------------ ------------- Balance as of 10/31/15 $ 3,188,626 $ 13,840,769 $ 562,497 ------------ ------------ ------------- Net change in unrealized appreciation/depreciation from investments held as of 10/31/15* $ (841,649) $ (304,032) $ (81,000) ------------ ------------ -------------
Commercial Collateralized Mortgage-Back Mortgage Backed Asset-Backed Obligations Securities Securities -------------- ------------- ------------ Balance as of 10/31/14 $ 6,330,158 $ 4,545,018 $ 2,619,564 Accrued discounts/(premiums) 39,899 6,626 40,129 Realized gain (loss) 128,484 - 134,386 Change in unrealized appreciation/depreciation (235,700) (81,265) (90,627) Purchases/Payups 116,400 - - Sales/Paydowns (1,501,878) - (338,994) Transfers in to Level 3 - - - Transfers out of Level 3 - - - ------------- ------------ ------------ Balance as of 10/31/15 $ 4,877,363 $ 4,470,379 $ 2,364,458 ------------- ------------ ------------ Net change in unrealized appreciation/depreciation from investments held as of 10/31/15* $ (183,879) $ (81,265) $ (90,627) ------------- ------------- ------------- Warrants^ Total --------- ----- Balance as of 10/31/14 $ - $ 33,123,681 Accrued discounts/(premiums) - 13,502 Realized gain (loss) - (78,443) Change in unrealized appreciation/depreciation 151,340 (1,255,577) Purchases/Payups 82,754 6,046,905 Sales/Paydowns - (8,184,094) Transfers in to Level 3 - 494,692 Transfers out of Level 3 - (622,480) ------------- ------------- Balance as of 10/31/15 $ 234,094 $ 29,538,186+ ------------- ------------- Net change in unrealized appreciation/depreciation from investments held as of 10/31/15* $ 151,340 $ (1,431,112) ------------- -------------
AB High Yield Portfolio
Corporates - Non- Corporates - Investment Investment Grade^ Grade Bank Loans ------------ ---------- ----------- Balance as of 10/31/14 $ 207,734 $ 34,600 $ 326,756 Accrued discounts/(premiums) (4,561) - 1,465 Realized gain (loss) (99) - (1,384) Change in unrealized appreciation/depreciation (17,979) - (6,744) Purchases 37,392 - 164,973 Sales (39,509) - (89,039) Transfers in to Level 3 - - - Transfers out of Level 3 - (34,600) - -------------- ------------ ----------- Balance as of 10/31/15 $ 182,978 $ - $ 396,027 -------------- ------------ ----------- Net change in unrealized appreciation/depreciation from investments held as of 10/31/15* $ (16,780) $ - $ (8,203) -------------- ------------ ----------- Commercial Mortgage- Collateralized Common Backed Mortgage Stocks Securities Obligations ------------ ---------- ----------- Balance as of 10/31/14 $ - $ 238,158 $ 262,347 Accrued discounts/(premiums) - 225 (5,744) Realized gain (loss) - - (5,771) Change in unrealized appreciation/depreciation 1,535 (12,519) 2,930 Purchases/Payups 1,447 - - Sales/Paydowns - - (68,734) Transfers in to Level 3 - - - Transfers out of Level 3 - - - -------------- ------------ ----------- Balance as of 10/31/15 $ 2,982 $ 225,864 $ 185,028 -------------- ------------ ----------- Net change in unrealized appreciation/depreciation from investments held as of 10/31/15* $ 1,535 $ (12,519) $ (2,333) -------------- ------------ ----------- Warrants Total -------- ------ Balance as of 10/31/14 $ - $ 1,069,595 Accrued discounts/(premiums) - (8,615) Realized gain (loss) - (7,254) Change in unrealized appreciation/depreciation 7,501 (25,276) Purchases/Payups 4,220 208,032 Sales/Paydowns - (197,282) Transfers in to Level 3 - - Transfers out of Level 3 - (34,600) ------------- ------------- Balance as of 10/31/15 $ 11,721 $ 1,004,600+ s ------------- ------------- Net change in unrealized appreciation/depreciation from investments held as of 10/31/15* $ 7,501 $ (30,799) ------------- -------------
Pro-Forma Combined Portfolio
Corporates - Non- Corporates - Investment Investment Grade^ Grade Bank Loans ----------- ---------- ---------- Balance as of 10/31/14 $ 3,790,232 $ 34,600 $ 15,996,822 Accrued discounts/(premiums) (46,371) - (29,877) Realized gain (loss) 14,268 - (112,709) Change in unrealized appreciation/depreciation (904,533) - (130,208) Purchases 2,082,604 - 3,818,707 Sales (1,165,831) - (5,305,939) Transfers in to Level 3 - - - Transfers out of Level 3 (398,765) (34,600) - -------------- ------------ ------------ Balance as of 10/31/15 $ 3,371,604 $ - $ 14,236,796 -------------- ------------ ------------ - Net change in unrealized appreciation/depreciation - from investments held as of 10/31/15* $ (858,429)$ - $ (312,235) -------------- ------------ ------------ Commercial Collateralized Mortgage- Common Mortgage Backed Stocks Obligations Securities -------------- ------------ ------------ Balance as of 10/31/14 $ 376,377 $ 6,592,505 $ 4,783,176 Accrued discounts/(premiums) - 34,155 6,851 Realized gain (loss) (244,355) 122,713 - Change in unrealized appreciation/depreciation 12,228 (232,770) (93,784) Purchases/Payups 150,252 116,400 - Sales/Paydowns - (1,570,612) - Transfers in to Level 3 494,692 - - Transfers out of Level 3 (223,715) - - -------------- ------------ ------------ Balance as of 10/31/15 $ 565,479 $ 5,062,391 $ 4,696,243 -------------- ------------ ------------ - - - Net change in unrealized appreciation/depreciation - - - from investments held as of 10/31/15* $ (79,465) $ (186,212) $ (93,784) -------------- ------------ ------------ Asset-Backed Securities Warrants^ Total -------------- ------------ ------------ Balance as of 10/31/14 $ 2,619,564 $ - $ 34,193,276 Accrued discounts/(premiums) 40,129 - 4,887 Realized gain (loss) 134,386 - (85,697) Change in unrealized appreciation/depreciation (90,627) 158,841 (1,280,853) Purchases/Payups - 86,974 6,254,937 Sales/Paydowns (338,994) - (8,381,376) Transfers in to Level 3 - - 494,692 Transfers out of Level 3 - - (657,080) -------------- ------------ ------------ Balance as of 10/31/15 $ 2,364,458 $ 245,815 $ 30,542,786+ -------------- ------------ ------------ Net change in unrealized appreciation/depreciation from investments held as of 10/31/15* $ (90,627) $ 158,841 $ (1,461,911) -------------- ------------ ------------
^ The Portfolio held securities with zero market value at period end. * The unrealized appreciation/depreciation is included in net change in unrealized appreciation/depreciation on investments and other financial instruments in the accompanying statement of operations. + There were de minimis transfers under 1% of net assets during the reporting period. The following presents information about significant unobservable inputs related to the Portfolio's Level 3 investments at October 31, 2015. Securities priced (i) by third party vendors or (ii) using prior transaction prices, which approximates fair value, are excluded from the following table. Quantitative Information about Level 3 Fair Value Measurements AB Pooling Portfolio High-Yield Portfolio Range/ Fair Value at Valuation Unobservable Weighted 10/31/2015 Technique Input Average ------------------------------------------------------- Corporates - $749,482 Market Implied $512mil - Non-Investment Grade Approach Enterprise $596mil / NA Value Bank Loans $634,557 Market EBITDA* $28mil - Approach Projection $70mil / NA EBITDA* 6X/NA Multiple Scrap Value $154mil/ NA Common Stocks $56,577 Option Enterprise $512mil - Pricing Model Value $600mil / NA Exercise $730mil - Price $830mil / NA Years to 2.75yr - 4.75 Expiration yr / NA EV 22.2% - Volatility % 24.3% / NA Risk Free 0.99% - 1.52% Rate / NA $275,281 Market EBITDA* $48.7mil / NA Approach Projection EBITDA* 3.6X - Multiples 5.6X/4.6X AB High Yield Portfolio Range/ Fair Value at Valuation Unobservable Weighted 10/31/2015 Technique Input Average ------------------------------------------------------- Bank Loans $33,544 Market EBITDA* $28mil - Approach Projection $70mil / NA EBITDA* 6X/NA Multiple Scrap Value $154mil/ NA Pro-Forma Combined Portfolio Range/ Fair Value at Valuation Unobservable Weighted 10/31/2015 Technique Input Average ------------------------------------------------------- Corporates - $749,482 Market Implied $512mil - Non-Investment Grade Approach Enterprise $596mil / NA Value Bank Loans $668,101 Market EBITDA* $28mil - Approach Projection $70mil / NA EBITDA* 6X/NA Multiple Scrap Value $154mil/ NA Common Stocks $56,577 Option Enterprise $512mil - Pricing Model Value $600mil / NA Exercise $730mil - Price $830mil / NA Years to 2.75yr - 4.75 Expiration yr / NA EV 22.2% - Volatility % 24.3% / NA Risk Free 0.99% - 1.52% Rate / NA $275,281 Market EBITDA* $48.7mil / NA Approach Projection EBITDA* 3.6X - Multiples 5.6X/4.6X *Earnings before Interest, Taxes, Depreciation and Amortization. Securities for which market quotations are not readily available (including restricted securities) or are deemed unreliable are valued at fair value. Factors considered in making this determination may include, but are not limited to, information obtained by contacting the issuer, analysts, analysis of the issuer's financial statements or other available documents. In addition, the Portfolio may use fair value pricing for securities primarily traded in non-U.S. markets because most foreign markets close well before the Portfolio values its securities at 4:00 p.m., Eastern Time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, may have occurred in the interim and may materially affect the value of those securities. To account for this, the Fund may frequently value many of its foreign equity securities using fair value prices based on third party vendor modeling tools to the extent available. PART C OTHER INFORMATION ITEM 15. Indemnification. It is the Registrant's policy to indemnify its directors and officers, employees and other agents to the maximum extent permitted by Section 2-418 of the General Corporation Law of the State of Maryland, which is incorporated by reference herein, and as set forth in Article EIGHTH of Registrant's Articles of Amendment and Restatement of Articles of Incorporation, Article IX of the Registrant's Amended and Restated By-laws filed as Exhibit (2) in response to Item 16 and Section 10(a) of the Distribution Services Agreement filed as Exhibit (7)(a) in response to Item 16, all as set forth below. The liability of the Registrant's directors and officers is dealt with in Article EIGHTH of Registrant's Articles of Amendment and Restatement of Articles of Incorporation, as set forth below. The Investment Adviser's liability for any loss suffered by the Registrant or its shareholders is set forth in Section 4 of the Investment Advisory Contract filed as Exhibit (6) in response to Item 16, as set forth below. ARTICLE EIGHTH OF THE REGISTRANT'S ARTICLES OF AMENDMENT AND RESTATEMENT OF ARTICLES OF INCORPORATION READS AS FOLLOWS: (1) To the maximum extent that Maryland law in effect from time to time permits limitation of the liability of directors and officers of a corporation, no present or former director or officer of the Corporation shall be liable to the Corporation or its stockholders for money damages. (2) The Corporation shall have the power, to the maximum extent permitted by Maryland law in effect from time to time, to obligate itself to indemnify, and to pay or reimburse reasonable expenses in advance of final disposition of a proceeding to, (a) any individual who is a present or former director or officer of the Corporation or (b) any individual who, while a director or officer of the Corporation and at the request of the Corporation, serves or has served as a director, officer, partner or trustee of another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or any other enterprise from and against any claim or liability to which such person may become subject or which such person may incur by reason of his status as a present or former director or officer of the Corporation. The Corporation shall have the power, with the approval of the Board of Directors, to provide such indemnification and advancement of expenses to a person who served a predecessor of the Corporation in any of the capacities described in (a) or (b) above and to any employee or agent of the Corporation or a predecessor of the Corporation. (3) The provisions of this Article EIGHTH shall be subject to the limitations of the Investment Company Act. (4) Neither the amendment nor repeal of this Article EIGHTH, nor the adoption or amendment of any other provision of the Charter or Bylaws inconsistent with this Article EIGHTH, shall apply to or affect in any respect the applicability of the preceding sections of this Article EIGHTH with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption. ARTICLE IX OF THE REGISTRANT'S AMENDED AND RESTATED BYLAWS READS AS FOLLOWS: To the maximum extent permitted by Maryland law in effect from time to time, the Corporation shall indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, shall pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (a) any individual who is a present or former director or officer of the Corporation and who is made or threatened to be made a party to the proceeding by reason of his or her service in any such capacity or (b) any individual who, while a director or officer of the Corporation and at the request of the Corporation, serves or has served as a director, officer, partner or trustee of another corporation, real estate investment trust, partnership, joint venture, trust, employee benefit plan or other enterprise and who is made or threatened to be made a party to the proceeding by reason of his or her service in any such capacity. The Corporation may, with the approval of its Board of Directors or any duly authorized committee thereof, provide such indemnification and advance for expenses to a person who served a predecessor of the Corporation in any of the capacities described in (a) or (b) above and to any employee or agent of the Corporation or a predecessor of the Corporation. The termination of any claim, action, suit or other proceeding involving any person, by judgment, settlement (whether with or without court approval) or conviction or upon a plea of guilty or nolo contendere, or its equivalent, shall not create a presumption that such person did not meet the standards of conduct required for indemnification or payment of expenses to be required or permitted under Maryland law, these Bylaws or the Charter. Any indemnification or advance of expenses made pursuant to this Article shall be subject to applicable requirements of the 1940 Act. The indemnification and payment of expenses provided in these Bylaws shall not be deemed exclusive of or limit in any way other rights to which any person seeking indemnification or payment of expenses may be or may become entitled under any bylaw, regulation, insurance, agreement or otherwise. Neither the amendment nor repeal of this Article, nor the adoption or amendment of any other provision of the Bylaws or Charter inconsistent with this Article, shall apply to or affect in any respect the applicability of the preceding paragraph with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption. Section 10(a) of the Distribution Services Agreement reads as follows: Section 10. Indemnification. (a) The Fund agrees to indemnify, defend and hold the Underwriter, and any person who controls the Underwriter within the meaning of Section 15 of the Securities Act of 1933, as amended (the "Securities Act"), free and harmless form and against any and all claims, demands, liabilities and expenses (including the cost of investigating or defending such claims, demands or liabilities and any counsel fees incurred in connection therewith) which the Underwriter or any such controlling person may incur, under the Securities Act, or under common law or otherwise, arising out of or based upon any alleged untrue statements of a material fact contained in the Fund's Registration Statement or Prospectus or Statement of Additional Information in effect from time to time under the Securities Act or arising out of or based upon any alleged omission to state a material fact required to be stated in either thereof or necessary to make the statements in either thereof not misleading; provided, however, that in no event shall anything therein contained by so construed as to protect the Underwriter against any liability to the Fund or its security holders to which the Underwriter would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of its duties, or by reason of the Underwriter's reckless disregard of its obligations and duties under this agreement. The Fund's agreement to indemnify the Underwriter or any such controlling person, such notification to be given by letter or by telegram addressed to the Fund at its principal office in New York, New York, and sent to the Fund by the person against whom such action is brought within ten days after the summons or other first legal process shall have been served. The failure so to notify the Fund of the commencement of any such action shall not relieve the Fund from any liability which it may have to the person against whom such action is brought by reason of any such alleged untrue statement or omission otherwise than on account of the indemnity agreement contained in this Section 10. The Fund will be entitled to assume the defense of any such suit brought to enforce any such claim, and to retain counsel of good standing chosen by the Fund and approved by the Underwriter. In the event the Fund does elect to assume the defense of any such suit and retain counsel of good standing approved by the Underwriter, the defendant or defendants in such suit shall bear the fees and expenses of any additional counsel retained by any of them; but in case the Fund does not elect to assume the defense of any such suit, or in case the Underwriter does not approve of counsel chosen by the Fund, the Fund will reimburse the Underwriter or the controlling person or persons named as defendant or defendants in such suit, for the fees and expenses of any counsel retained by the Underwriter or such persons. The indemnification agreement contained in this Section 10 shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriter or any controlling person and shall survive the sale of any of the Fund's shares made pursuant to subscriptions obtained by the Underwriter. This agreement of indemnity will inure exclusively to the benefit of the Underwriter, to the benefit of its successors and assigns, and to the benefit of any controlling persons and their successors and assigns. The Fund agrees promptly to notify the Underwriter of the commencement of any litigation or proceeding against the Fund in connection with the issue and sale of any of its shares. Section 4 of the Investment Advisory Contract reads as follows: 4. We shall expect of you, and you will give us the benefit of, your best judgment and efforts in rendering these services to us, and we agree as an inducement to your undertaking these services that you shall not be liable hereunder for any mistake of judgment or in any event whatsoever, except for lack of good faith, provided that nothing herein shall be deemed to protect, or purport to protect, you against any liability to us or to our security holders to which you would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of your duties hereunder, or by reason of your reckless disregard of your obligations and duties hereunder. The foregoing summaries are qualified by the entire text of Registrant's Articles of Amendment and Restatement of Articles of Incorporation, Amended and Restated By-laws, the Investment Advisory Contract between Registrant and AllianceBernstein L.P. and the Distribution Services Agreement between Registrant and AllianceBernstein Investments, Inc. ("ABI"). Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that, in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer of controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. In accordance with Release No. IC-11330 (September 2, 1980), the Registrant will indemnify its directors, officers, investment manager and principal underwriters only if (1) a final decision on the merits was issued by the court or other body before whom the proceeding was brought that the person to be indemnified (the "indemnitee") was not liable by reason or willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his office ("disabling conduct") or (2) a reasonable determination is made, based upon a review of the facts, that the indemnitee was not liable by reason of disabling conduct, by (a) the vote of a majority of a quorum of the directors who are neither "interested persons" of the Registrant as defined in section 2(a)(19) of the Investment Company Act of 1940 nor parties to the proceeding ("disinterested, non-party directors"), or (b) an independent legal counsel in a written opinion. The Registrant will advance attorneys fees or other expenses incurred by its directors, officers, investment adviser or principal underwriters in defending a proceeding, upon the undertaking by or on behalf of the indemnitee to repay the advance unless it is ultimately determined that he is entitled to indemnification and, as a condition to the advance, (1) the indemnitee shall provide a security for his undertaking, (2) the Registrant shall be insured against losses arising by reason of any lawful advances, or (3) a majority of a quorum of disinterested, non-party directors of the Registrant, or an independent legal counsel in a written opinion, shall determine, based on a review of readily available facts (as opposed to a full trial-type inquiry), that there is reason to believe that the indemnitee ultimately will be found entitled to indemnification. The Registrant participates in a joint directors liability insurance policy issued by the ICI Mutual Insurance Company. Under this policy, outside trustees and directors are covered up to the limits specified for any claim against them for acts committed in their capacities as trustee or director. A pro rata share of the premium for this coverage is charged to each participating investment company. In addition, the Adviser's liability insurance policy, which is issued by a number of underwriters, including Greenwich Insurance Company as primary underwriter, extends to officers of the Registrant and such officers are covered up to the limits specified for any claim against them for acts committed in their capacities as officers of the investment companies sponsored by the Adviser. ITEM 16. Exhibits (1) (a) Articles of Amendment and Restatement to Articles of Incorporation of the Registrant dated, February 1, 2006 and filed February 23, 2006 - Incorporated by reference to Exhibit (a) to Post-Effective Amendment No. 87 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on January 31, 2007. (b) Articles of Amendment to Articles of Incorporation of the Registrant, dated November 2, 2007 and filed June 18, 2008 - Incorporated by reference to Exhibit (a)(2) to Post-Effective Amendment No. 89 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on January 28, 2009. (c) Articles Supplementary to Articles of Incorporation of the Registrant, dated November 30, 2009 and filed December 3, 2009 - Incorporated by reference to Exhibit (a)(3) to Post-Effective Amendment No. 93 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on December 21, 2009. (d) Articles Supplementary to Articles of Incorporation of the Registrant, dated December 17, 2009 and filed December 21, 2009 - Incorporated by reference to Exhibit (a)(4) to Post-Effective Amendment No. 95 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on January 26, 2010. (e) Articles of Amendment to Articles of Incorporation of the Registrant, dated September 22, 2010 and filed September 22, 2010 - Incorporated by reference to Exhibit (a)(5) to Post-Effective Amendment No. 99 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on January 28, 2011. (f) Articles Supplementary to Articles of Incorporation of the Registrant, dated September 21, 2011 and filed September 21, 2011 - Incorporated by reference to Exhibit (a)(6) to Post-Effective Amendment No. 103 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on September 23, 2011. (g) Articles Supplementary to Articles of Incorporation of the Registrant, dated January 6, 2012 and filed January 12, 2012 - Incorporated by reference to Exhibit (a)(7) to Post-Effective Amendment No. 115 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on March 19, 2013. (h) Articles Supplementary to Articles of Incorporation of the Registrant, dated March 5, 2013 and filed March 6, 2013 - Incorporated by reference to Exhibit (a)(8) to Post-Effective Amendment No. 115 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on March 19, 2013. (i) Articles Supplementary to Articles of Incorporation of the Registrant, dated November 21, 2013 and filed November 25, 2013 - Incorporated by reference to Exhibit (a)(9) to Post-Effective Amendment No. 119 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on December 11, 2013. (j) Articles Supplementary to Articles of Incorporation of the Registrant, dated December 30, 2013 and filed January 13, 2014 - Incorporated by reference to Exhibit (a)(10) to Post-Effective Amendment No. 122 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on January 31, 2014. (k) Articles Supplementary to Articles of Incorporation of the Registrant, dated February 6, 2014 and filed February 7, 2014 - Incorporated by reference to Exhibit (a)(11) to Post-Effective Amendment No. 123 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on February 12, 2014. (l) Articles Supplementary to Articles of Incorporation of the Registrant, dated and filed April 22, 2014 - Incorporated by reference to Exhibit (a)(12) to Post-Effective Amendment No. 126 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on April 28, 2014. (m) Articles Supplementary to Articles of Incorporation of the Registrant, dated November 11, 2014 and filed December 1, 2014 - Incorporated by reference to Exhibit (a)(13) to Post-Effective Amendment No. 131 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on December 12, 2014. (n) Articles of Amendment to Articles of Incorporation of the Registrant, dated and filed December 12, 2014 -Incorporated by reference to Exhibit (a)(14) to Post-Effective Amendment No. 133 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on January 30, 2015. (o) Articles of Amendment to Articles of Incorporation of the Registrant, effective and filed January 20, 2015 - Incorporated by reference to Exhibit (a)(15) to Post-Effective Amendment No. 133 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on January 30, 2015. (p) Articles Supplementary to Articles of Incorporation of the Registrant, dated and filed August 6, 2015 - Incorporated by reference to Exhibit (a)(16) to Post-Effective Amendment No. 139 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on August 10, 2015. (2) Amended and Restated By-Laws of the Registrant - Incorporated by reference to Exhibit 99.77Q1 - Other Exhibits of the Registrant's Semi-Annual Report on Form NSAR-A (File No. 811-02383), filed with the Securities and Exchange Commission on May 30, 2006. (3) Voting Trust Agreements - Not applicable. (4) Form of Agreement and Plan of Acquisition and Dissolution - filed as Appendix A to the Proxy Statement/Prospectus. (5) Instruments defining the rights of holders of the securities being registered - Not applicable. (6) Form of Investment Advisory Contract between the Registrant and AllianceBernstein L.P. - Incorporated by reference to Exhibit (d) to Post-Effective Amendment No. 142 of the Registrant's Registration Statement on Form N-1A (file Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on November 6, 2015. (7) (a) Distribution Services Agreement between the Registrant and AllianceBernstein Investments, Inc. (formerly known as Alliance Fund Distributors, Inc.), dated as of July 22, 1992, as amended, April 30, 1993 - Incorporated by reference to Exhibit 6(a) to Post-Effective Amendment No. 65 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on October 31, 1997. (b) Amendment to the Distribution Services Agreement between the Registrant and AllianceBernstein Investments, Inc. (formerly known as Alliance Fund Distributors, Inc.), dated as of June 4, 1996 - Incorporated by reference to Exhibit 6(f) to Post-Effective Amendment No. 64 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on October 31, 1996. (c) Form of Amendment to the Distribution Services Agreement between the Registrant and AllianceBernstein Investments, Inc. (formerly known as AllianceBernstein Research and Management, Inc.) - Incorporated by reference to Exhibit (e)(3) to Post-Effective Amendment No. 81 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on October 31, 2003. (d) Form of Amendment to the Distribution Services Agreement between the Registrant and AllianceBernstein Investments, Inc. (formerly known as AllianceBernstein Research and Management, Inc.), dated as of December 16, 2004 - Incorporated by reference to Exhibit (e)(4) to the Post-Effective Amendment No. 84 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on January 31, 2005. (e) Amendment to Distribution Services Agreement between the Registrant and AllianceBernstein Investments, Inc., dated as of June 14, 2006 - Incorporated by reference to Exhibit (e)(5) to Post-Effective Amendment No. 87 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on January 31, 2007. (f) Form of Selected Dealer Agreement between AllianceBernstein Investments, Inc. and selected dealers offering shares of Registrant - Incorporated by reference to Exhibit (e)(6) to Post-Effective Amendment No. 39 of the Registration Statement on Form N-1A of AllianceBernstein Large Cap Growth Fund, Inc. (File Nos. 33-49530 and 811-06730), filed with the Securities and Exchange Commission on October 15, 2009. (g) Form of Selected Agent Agreement between AllianceBernstein Investments, Inc. (formerly known as AllianceBernstein Research and Management, Inc.) and selected agents making available shares of the Registrant - Incorporated by reference to Exhibit (e)(6) to the Post-Effective Amendment No. 84 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on January 31, 2005. (h) Selected Dealer Agreement between Alliance Bernstein Investments, Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated making available shares of the Registrant effective April 30, 2009 - Incorporated by reference to Exhibit (e)(8) to Post-Effective Amendment No. 39 of the Registration Statement on Form N-1A of AllianceBernstein Large Cap Growth Fund, Inc. (File Nos. 33-49530 and 811-06730), filed with the Securities and Exchange Commission on October 15, 2009. (i) Loading Fund Operating Agreement between Alliance Bernstein Investments, Inc. and Charles Schwab & Co., Inc. making available shares of the Registrant, dated as of June 1, 2007 - Incorporated by reference to Exhibit (e)(9) to Post-Effective Amendment No. 39 of the Registration Statement on Form N-1-A of AllianceBernstein Large Cap Growth Fund, Inc. (File Nos. 33-49530 and 811-06730), filed with the Securities and Exchange Commission on October 15, 2009. (j) Cooperation Agreement between AllianceBernstein Investments, Inc. (formerly known as AllianceBernstein Research and Management, Inc.) and UBS AG, dated November 1, 2005 - Incorporated by reference to Exhibit (e)(10) to Post-Effective Amendment No. 39 of the Registration Statement on Form N-1A of AllianceBernstein Large Cap Growth Fund, Inc. (File Nos. 33-49530 and 811-06730), filed with the Securities and Exchange Commission on October 15, 2009. (k) Form of Amendment to the Distribution Services Agreement between the Registrant and AllianceBernstein Investments, Inc. - Incorporated by reference to Exhibit (e)(11) to Post-Effective Amendment No. 92 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on December 18, 2009. (l) Amendment to the Distribution Services Agreement between the Registrant and AllianceBernstein Investments, Inc., dated as of August 9, 2013 - Incorporated by reference to Exhibit (e)(12) to Post-Effective Amendment No. 126 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on April 28, 2014. (m) Form of Amendment to the Distribution Services Agreement between the Registrant and AllianceBernstein Investments, Inc. - Incorporated by reference to Exhibit (e)(13) to Post-Effective Amendment No. 142 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on November 6, 2015. (8) Bonus, profit sharing, pension or other similar contracts or arrangements - Not applicable. (9) (a) Master Custodian Agreement between the Registrant and State Street Bank and Trust Company, effective August 3, 2009 - Incorporated by reference to Exhibit (g) to Post-Effective Amendment No. 51 of the Registration Statement on Form N-1A of AllianceBernstein Variable Products Series Fund, Inc. (File Nos. 33-18647 and 811-05398), filed with the Securities and Exchange Commission on April 29, 2010. (b) Form of Amendment to the Master Custodian Agreement between Registrant and State Street Bank and Trust Company, effective [_____], 2015 - Incorporated by reference to Exhibit (g)(2) to Post-Effective Amendment No. 142 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on November 6, 2015. (c) Form of Novation and Amendment Agreement between the Registrant and Brown Brothers Harriman & Co., regarding the AB High Yield Portfolio - Incorporated by reference to Exhibit (g)(19) to Post-Effective Amendment No. 202 to the Registration Statement on Form N-1A of AB Cap Fund, Inc. (File Nos. 2-29901 and 811-01716), filed with the Securities and Exchange Commission on December 3, 2015. (10) (a) Rule 12b-1 Plan - See Exhibit (7)(a) hereto. (b) Amended and Restated Rule 18f-3 Plan, dated August 9, 2013 - Incorporated by reference to Exhibit (n) to Post-Effective Amendment No. 126 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on April 28, 2014. (11) Opinion and Consent of Seward & Kissel LLP regarding the legality of securities being registered - Filed herewith. (12) Opinion and Consent of Seward & Kissel LLP as to Tax matters - To be filed by amendment. (13) (a) Transfer Agency Agreement between the Registrant and AllianceBernstein Investor Services, Inc. (formerly known as Alliance Fund Services, Inc.), dated as of September 14, 1988 - Incorporated by reference to Exhibit 9 to Post-Effective Amendment No. 65 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on October 31, 1997. (b) Form of Amendment to Transfer Agency Agreement between the Registrant and AllianceBernstein Investor Services, Inc., dated as of June 14, 2006 - Incorporated by reference to Exhibit (h)(2) to Post-Effective Amendment No. 87 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on January 31, 2007. (c) Form of Expense Limitation Undertaking by AllianceBernstein L.P. (formerly known as Alliance Capital Management L.P.), with respect to Quality Bond Portfolio - Incorporated by reference to Exhibit (h)(3) to Post-Effective Amendment No. 84 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on January 31, 2005. (d) Form of Expense Limitation Agreement by AllianceBernstein L.P. with respect to AllianceBernstein Government Reserves Portfolio - Incorporated by reference to Exhibit (h)(4) to Post-Effective Amendment No. 115 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on March 19, 2013. (e) Form of Expense Limitation Agreement by AllianceBernstein L.P. with respect to AllianceBernstein Tax-Aware Fixed Income Portfolio - Incorporated by reference to Exhibit (h)(5) to Post-Effective Amendment No. 119 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on December 11, 2013. (f) Expense Limitation Agreement by AllianceBernstein L.P. with respect to AllianceBernstein Credit Long/Short Portfolio, dated May 7, 2014 - Incorporated by reference to Exhibit (h)(6) to Post-Effective Amendment No. 129 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on August 28, 2014. (g) Expense Limitation Agreement by AllianceBernstein L.P. with respect to AllianceBernstein High Yield Portfolio, dated July 15, 2014 - Incorporated by reference to Exhibit (h)(7) to Post-Effective Amendment No. 129 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on August 28, 2014. (h) Form of Expense Limitation Agreement by AllianceBernstein L.P. with respect to AB Income Fund - Incorporated by reference to Exhibit (h)(8) to Post-Effective Amendment No. 147 of the Registrant's Registration Statement on Form N-1A (File Nos. 2-48227 and 811-02383), filed with the Securities and Exchange Commission on April 21, 2016. (14) Consent of Independent Registered Public Accounting Firm - Filed herewith. (15) Financial statements omitted pursuant to Item 14(a)(1). - Not applicable. (16) Powers of Attorney for: John H. Dobkin, Michael J. Downey, William H. Foulk, Jr., D. James Guzy, Nancy P. Jacklin, Robert M. Keith, Garry L. Moody, Marshall C. Turner, Jr. and Earl D. Weiner - Filed herewith. ITEM 17. Undertakings. (1) The undersigned registrant agrees that prior to any public reoffering of the securities registered through the use of a prospectus which is a part of this registration statement by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c) of the Securities Act 17 CFR 230.145(c), the reoffering prospectus will contain the information called for by the applicable registration form for reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. (2) The undersigned registrant agrees that every prospectus that is filed under paragraph (1) above will be filed as a part of an amendment to the registration statement and will not be used until the amendment is effective, and that, in determining any liability under the 1933 Act, each post-effective amendment shall be deemed to be a new registration statement for the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering of them. (3) The undersigned registrant undertakes to file a post-effective amendment to this registration statement upon the closing of the Acquisition described in this registration statement that contains an opinion of counsel supporting the tax matters discussed in this registration statement. SIGNATURES ---------- As required by the Securities Act of 1933, as amended, this Registration Statement has been signed on behalf of the Registrant, in the City of New York and the State of New York, on the 20th day of May, 2016. AB BOND FUND, INC. By: Robert M. Keith* ---------------- Robert M. Keith President As required by the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated: Signature Title Date --------- ----- ---- (1) Principal Executive Officer: Robert M. Keith* President and Chief May 20, 2016 --------------- Executive Officer Robert M. Keith (2) Principal Financial and Accounting Officer: /s/ Joseph J. Mantineo Treasurer and Chief May 20, 2016 ---------------------- Financial Officer Joseph J. Mantineo (3) Directors: John H. Dobkin* Michael J. Downey* William H. Foulk, Jr.* D. James Guzy* Nancy P. Jacklin* Robert M. Keith* Garry L. Moody* Marshall C. Turner, Jr.* Earl D. Weiner* *By: /s/ Stephen J. Laffey May 20, 2016 --------------------- Stephen J. Laffey (Attorney-in-fact) Index to Exhibits ----------------- Exhibit No. Description of Exhibits ----------- ----------------------- (11) Opinion and Consent of Seward & Kissel LLP (14) Consent of Independent Registered Public Accounting Firm (16) Powers of Attorney EX-11 2 d7141647_ex11.txt Exhibit (11) Seward & Kissel LLP 901 K Street, N.W. Suite 800 Washington, D.C. 20001 Telephone: (202) 737-8833 Facsimile: (202) 737-5184 May 20, 2016 AB Bond Fund, Inc. 1345 Avenue of the Americas New York, New York 10105 Ladies and Gentlemen: We are counsel to AB Bond Fund, Inc., a Maryland corporation (the "Company"). The opinions set forth below are being rendered in connection with the Company's registration statement on Form N-14 (the "Registration Statement") to be filed with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), in which this letter is to be included as an exhibit. The Company is registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as an open-end management investment company (File No. 811-02383). The Registration Statement pertains to the proposed issuance of Class Z shares of common stock, par value $.001 per share ("Shares"), in AB High Yield Portfolio (the "Acquiring Fund"), a series of the Company, pursuant to an Agreement and Plan of Acquisition and Dissolution, a form of which is included as Appendix A to the Proxy Statement/Prospectus in the Registration Statement (the "Plan"). When duly executed and delivered by the parties thereto, the Plan will provide for the transfer of all of the assets and liabilities of AB High-Yield Portfolio (the "Acquired Fund"), a series of AB Pooling Portfolios, a Massachusetts business trust, to the Acquiring Fund in exchange for Shares, which will be distributed to shareholders of the Acquired Fund. We have examined the Charter and Bylaws of the Company and applicable amendments and supplements thereto, the Plan in the form approved by the Board of Directors of the Company and a copy of the Registration Statement in which this letter is to be included as an exhibit. We have also examined and relied upon such corporate records of the Company and other documents and certificates with respect to factual matters as we have deemed necessary to render the opinion expressed herein. We have assumed, without independent verification, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, and the conformity with originals of all documents submitted to us as copies. Based on such examination and assumptions, we are of the opinion that: (i) The Company is a corporation duly incorporated and existing under and by virtue of the laws of the State of Maryland, is in good standing with the State Department of Assessments and Taxation of Maryland, and is registered under the 1940 Act, as an open-end, management investment company; and (ii) The Shares proposed to be issued in accordance with the terms of the Plan, to the extent that the number of Shares to be issued and distributed to shareholders of the Acquired Fund does not exceed the number of authorized and unissued Shares at the time of their issuance, when so issued, will constitute validly issued shares, fully paid and non-assessable, under the laws of the State of Maryland. We do not express an opinion with respect to any laws other than the laws of Maryland applicable to the due authorization, valid issuance and non-assessability of shares of common stock of corporations formed pursuant to the provisions of the Maryland General Corporation Law. Accordingly, our opinion does not extend to, among other laws, the federal securities laws or the securities or "blue sky" laws of Maryland or any other jurisdiction. Members of this firm are admitted to the bars of the State of New York and the District of Columbia. We hereby consent to the filing of this opinion with the Commission as an exhibit to the Registration Statement and to the reference to our firm in the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission. Very truly yours, /s/ Seward & Kissel LLP EX-14 3 d7128737_ex-14.txt Exhibit (14) CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the reference to our firm under the captions "Service Providers" within the Prospectus and "Financial Information" within the Statement of Additional Information of AB Pooling Portfolios - AB High-Yield Portfolio and AB Bond Fund, Inc. - AB High Yield Portfolio, which is included in the Registration Statement on Form N-14 of AB Bond Fund, Inc. We also consent to the incorporation by reference of our reports dated October 30, 2015 and December 30, 2015, with respect to the financial statements and financial highlights of The AB Pooling Portfolios - AB High-Yield Portfolio and AB Bond Fund, Inc. - AB High Yield Portfolio, as of August 31, 2015 and October 31, 2015, respectively, which are included in this Registration Statement on Form N-14 of AB Bond Fund, Inc. /s/ ERNST & YOUNG LLP New York, New York May 19, 2016 EX-16 4 d6823003_ex16.txt Exhibit (16) POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Robert M. Keith, Emilie D. Wrapp, Eric C. Freed, Nancy E. Hay and Stephen J. Laffey and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AB Bond Fund, Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ John H. Dobkin ------------------ John H. Dobkin Dated: August 4, 2015 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Robert M. Keith, Emilie D. Wrapp, Eric C. Freed, Nancy E. Hay and Stephen J. Laffey, and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AB Bond Fund, Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ Michael J. Downey --------------------- Michael J. Downey Dated: August 4, 2015 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Robert M. Keith, Emilie D. Wrapp, Eric C. Freed, Nancy E. Hay and Stephen J. Laffey, and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AB Bond Fund, Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ William H. Foulk, Jr. ------------------------- William H. Foulk, Jr. Dated: August 4, 2015 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Robert M. Keith, Emilie D. Wrapp, Eric C. Freed, Nancy E. Hay and Stephen J. Laffey, and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AB Bond Fund, Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ D. James Guzy ----------------- D. James Guzy Dated: August 4, 2015 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Robert M. Keith, Emilie D. Wrapp, Eric C. Freed, Nancy E. Hay and Stephen J. Laffey, and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AB Bond Fund, Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ Nancy P. Jacklin -------------------- Nancy P. Jacklin Dated: August 4, 2015 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Robert M. Keith, Emilie D. Wrapp, Eric C. Freed, Nancy E. Hay and Stephen J. Laffey, and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AB Bond Fund, Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ Robert M. Keith ------------------- Robert M. Keith Dated: August 4, 2015 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Robert M. Keith, Emilie D. Wrapp, Eric C. Freed, Nancy E. Hay and Stephen J. Laffey, and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AB Bond Fund , Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ Garry L. Moody ------------------ Garry L. Moody Dated: August 4, 2015 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Robert M. Keith, Emilie D. Wrapp, Eric C. Freed, Nancy E. Hay and Stephen J. Laffey, and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AB Bond Fund, Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ Marshall C. Turner, Jr. --------------------------- Marshall C. Turner, Jr. Dated: August 4, 2015 POWER OF ATTORNEY ----------------- KNOW ALL PERSONS BY THESE PRESENTS, that the person whose signature appears below hereby revokes all prior powers granted by the undersigned to the extent inconsistent herewith and constitutes and appoints Robert M. Keith, Emilie D. Wrapp, Eric C. Freed, Nancy E. Hay and Stephen J. Laffey, and each of them, to act severally as attorneys-in-fact and agents, with power of substitution and resubstitution, for the undersigned in any and all capacities, solely for the purpose of signing the Registration Statement, and any amendments thereto, on Form N-14 of AB Bond Fund, Inc. and filing the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact, or their substitute or substitutes, may do or cause to be done by virtue hereof. /s/ Earl D. Weiner ------------------ Earl D. Weiner Dated: August 4, 2015 COVER 5 filename5.txt SEWARD & KISSEL LLP 901 K Street, NW Suite 800 Washington, DC 20001 Telephone: (202) 737-8833 Facsimile: (202) 737-5184 May 20, 2016 VIA EDGAR --------- Division of Investment Management Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549 RE: AB Bond Fund, Inc. (the "Fund") File No. 811-02383 -------------------------------- Dear Sir or Madam: Attached for filing is the Fund's Registration Statement on Form N-14 (the "Registration Statement") in connection with the proposed acquisition by AB High Yield Portfolio, a series of the Fund, of all of the assets, and assumption of all of the liabilities, of AB High-Yield Portfolio, a series of The AB Pooling Portfolios. This Registration Statement is filed pursuant to Rule 488 under the 1933 Act. If you have any questions regarding the filing, you can contact Paul M. Miller or the undersigned at 202-737-8833. Sincerely, /s/ Anna C. Weigand ------------------- Anna C. Weigand cc: Paul M. Miller