N-Q 1 d139805dnq.htm DUFF & PHELPS UTILITY AND CORPORATE BOND TRUST INC. Duff & Phelps Utility and Corporate Bond Trust Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number 811-07358

Duff & Phelps Utility and Corporate

Bond Trust Inc.

(Exact name of registrant as specified in charter)

200 South Wacker Drive, Suite 500, Chicago, Illinois 60606

(Address of principal executive offices) (Zip code)

 

Alan M. Meder   Lawrence R. Hamilton, Esq.
Duff & Phelps Utility and Corporate Bond Trust Inc.   Mayer Brown LLP
200 South Wacker Drive, Suite 500   71 South Wacker Drive
Chicago, Illinois 60606   Chicago, Illinois 60606

(Name and address of agents for service)

Registrant’s telephone number, including area code: (800) 338-8214

Date of fiscal year end: October 31

Date of reporting period: January 31, 2016


ITEM 1. SCHEDULE OF INVESTMENTS.

See the Statement of Net Assets below.


DUFF & PHELPS UTILITY AND CORPORATE BOND TRUST INC.

STATEMENT OF NET ASSETS

January 31, 2016

(Unaudited)

 

        Principal        

Amount

(000)

    

Description

  

Value

(Note 1)

 

 

 

    

 

  

 

 

 
   LONG-TERM INVESTMENTS - 139.7%   
   Corporate Bonds - 139.0%   
   Electric, Gas and Water - 59.5%   
  $4,000       CMS Energy Corporation,   
  

5.05%, 3/15/22 (a)

     $4,445,912   
  10,000       CalEnergy Company, Inc.,   
  

8.48%, 9/15/28 (a)(b)

     14,500,650   
  5,000       CenterPoint Energy Resources Corp.,   
  

6.00%, 5/15/18 (a)(b)

     5,386,280   
  10,713       The Cleveland Electric Illuminating Company,   
  

8.875%, 11/15/18 (a)(b)

     12,605,141   
  5,000       Commonwealth Edison Company,   
  

6.95%, 7/15/18 (a)

     5,578,190   
  5,000       Consolidated Edison Company of New York Inc.,   
  

5.85%, 4/01/18 (a)(b)

     5,431,740   
  2,000       The Detroit Edison Company,   
  

3.45%, 10/01/20

     2,116,030   
  4,000       Dominion Resources, Inc.,   
  

5.20%, 8/15/19

     4,370,120   
  10,000       Entergy Texas, Inc.,   
  

7.125%, 2/01/19 (a)(b)

     11,379,100   
  5,475       Exelon Generation Company, LLC,   
  

6.20%, 10/01/17 (a)(b)

     5,821,836   
  10,000       Hydro-Quebec,   
  

7.50%, 4/01/16 (Canada) (a)

     10,103,520   
  8,115       Indiana Michigan Power Company,   
  

7.00%, 3/15/19 (a)

     9,278,650   
  2,000       Integrys Energy Group, Inc.,   
  

4.17%, 11/01/20

     2,154,034   
  7,000       National Fuel Gas Company,   
  

6.50%, 4/15/18 (a)(b)

     7,513,534   
  4,000       Nevada Power Company,   
  

7.125%, 3/15/19

     4,578,268   
  5,000       Oncor Electric Delivery Company, LLC,   
  

7.00%, 9/01/22 (a)(b)

     6,076,645   
  5,000       PSEG Power LLC,   
  

5.32%, 9/15/16 (a)(b)

     5,113,385   
  10,000       Progress Energy, Inc.,   
  

7.05%, 3/15/19 (a)(b)

     11,423,080   
  8,000       Sempra Energy,   
  

6.15%, 6/15/18 (a)(b)

     8,664,680   
  7,785       South Carolina Electric & Gas Company,   
  

6.50%, 11/01/18 (a)(b)

     8,800,966   
  5,000       Southern California Edison Company,   
  

3.875%, 6/01/21 (a)

     5,391,290   
  5,230       Talen Energy Supply, LLC,   
  

6.50%, 5/01/18

     4,870,438   
  4,100       Western Massachusetts Electric Company,   
  

3.50%, 9/15/21

     4,307,222   
  5,000       Xcel Energy, Inc.,   
  

5.613%, 4/01/17 (a)

     5,238,220   
     

 

 

 
        165,148,931   
     

 

 

 

 

The accompanying notes are an integral part of this financial statement.

 

1


DUFF & PHELPS UTILITY AND CORPORATE BOND TRUST INC.

STATEMENT OF NET ASSETS — (Continued)

January 31, 2016

(Unaudited)

 

        Principal        

Amount

(000)

    

Description

  

Value

(Note 1)

 

 

 

    

 

  

 

 

 
   Financial - 32.9%   
  $5,000      

American Express Company,

  
  

6.15%, 8/28/17 (a)

     $5,330,585   
  3,000       AvalonBay Communities, Inc.,   
  

3.95%, 1/15/21 (a)

     3,194,976   
  5,000       Bank of America Corporation,   
  

6.50%, 8/01/16 (a)(b)

     5,130,605   
  3,000       Citigroup Inc.,   
  

4.50%, 1/14/22

     3,234,129   
  4,000       Duke Realty Limited Partnership,   
  

3.875%, 10/15/22

     4,090,576   
  5,000       General Electric Capital Corporation,   
  

4.375%, 9/16/20 (a)(b)

     5,502,540   
  4,000       The Goldman Sachs Group, Inc.,   
  

5.25%, 7/27/21 (a)(b)

     4,442,480   
  5,000       Health Care Property Investors, Inc.,   
  

6.00%, 1/30/17 (a)

     5,207,110   
  5,000       JPMorgan Chase & Co.,   
  

6.00%, 1/15/18

     5,389,455   
  4,000       KeyCorp.,   
  

5.10%, 3/24/21 (a)

     4,448,476   
  4,000       Kimco Realty Corporation,   
  

3.20%, 5/01/21

     4,069,780   
  2,250       Liberty Property Limited Partnership,   
  

4.125%, 6/15/22

     2,326,576   
  5,000       National City Corporation,   
  

6.875%, 5/15/19 (a)(b)

     5,694,660   
  3,000       Prologis, L.P.,   
  

6.875%, 3/15/20

     3,479,001   
  6,000       Realty Income Corporation,   
  

6.75%, 8/15/19 (a)

     6,881,934   
  4,000       Regency Centers, L.P.,   
  

4.80%, 4/15/21

     4,357,360   
  4,000       Simon Property Group, L.P.,   
  

4.375%, 3/01/21 (a)(b)

     4,386,216   
  3,000       UDR, Inc.,   
  

4.625%, 1/10/22

     3,265,791   
  6,000       Wachovia Bank NA,   
  

6.00%, 11/15/17 (a)(b)

     6,448,374   
  4,000       Welltower, Inc.,   
  

6.125%, 4/15/20 (a)

     4,529,828   
     

 

 

 
        91,410,452   
     

 

 

 
   Oil & Gas Storage, Transportation and Production - 25.2%   
  8,000       EQT Corporation,   
  

8.125%, 6/01/19 (a)

     8,648,192   
  5,000       Enterprise Products Operating LLC,   
  

6.50%, 1/31/19 (a)

     5,396,900   
  5,000       Kinder Morgan Energy Partners, L.P.,   
  

7.75%, 3/15/32 (a)

     4,629,655   
  3,500       Magellan Midstream Energy Partners, L.P.,   
  

6.40%, 7/15/18

     3,782,730   
  5,000       Magellan Midstream Energy Partners, L.P.,   
  

6.55%, 7/15/19 (a)

     5,520,855   

 

The accompanying notes are an integral part of this financial statement.

 

2


DUFF & PHELPS UTILITY AND CORPORATE BOND TRUST INC.

STATEMENT OF NET ASSETS — (Continued)

January 31, 2016

(Unaudited)

 

        Principal        

Amount

(000)

    

Description

  

Value

(Note 1)

 

 

 

    

 

  

 

 

 
  $9,441       ONEOK Partners, L.P.,   
  

6.15%, 10/01/16 (a)

     $9,654,206   
  4,000       Plains All American Pipeline, L.P.,   
  

5.00%, 2/01/21

     3,778,076   
  7,000       Spectra Energy Capital LLC,   
  

6.20%, 4/15/18 (a)

     7,397,817   
  10,000       Trans-Canada PipeLines Limited,   
  

9.875%, 1/01/21 (Canada) (a)(b)

     12,628,500   
  8,571       Williams Partners L.P.,   
  

7.25%, 2/01/17 (a)(b)

     8,565,043   
     

 

 

 
        70,001,974   
     

 

 

 
   Industrial - 19.4%   
  3,000       CSX Corporation,   
  

4.25%, 6/01/21 (a)(b)

     3,222,951   
  3,000       CVS Health Corporation,   
  

4.125%, 5/15/21

     3,221,196   
  4,000       Caterpillar Inc.,   
  

3.90%, 5/27/21

     4,287,848   
  6,000       The Dow Chemical Company,   
  

9.00%, 4/01/21

     7,503,750   
  5,000       Sun Company, Inc.,   
  

9.00%, 11/01/24

     5,857,803   
  5,275       Tele-Communications, Inc.,   
  

10.125%, 4/15/22 (a)

     7,132,454   
  3,200       Tele-Communications, Inc.,   
  

9.875%, 6/15/22 (a)

     4,231,187   
  5,000       Time Warner, Inc.,   
  

9.15%, 2/01/23

     6,638,035   
  5,000       Wal-Mart Stores, Inc.,   
  

6.75%, 10/15/23

     6,377,260   
  5,000       Xerox Corporation,   
  

6.35%, 5/15/18

     5,336,695   
     

 

 

 
        53,809,179   
     

 

 

 
   Telecommunications - 2.0%   
  5,000       Verizon Communications Inc.,   
  

6.35%, 4/01/19 (a)

     5,651,420   
     

 

 

 
        5,651,420   
     

 

 

 
  

Total Corporate Bonds

  
  

(Cost $400,380,208)

     386,021,956   
     

 

 

 

            Shares             

             
   Non-Convertible Preferred Stock - 0.5%   
   Financial - 0.5%   
  50,000       Vornado Realty Trust, Series I,   
  

6.625%

     1,289,000   
     

 

 

 
  

Total Non-Convertible Preferred Stock

  
  

(Cost $1,175,000)

     1,289,000   
     

 

 

 

 

The accompanying notes are an integral part of this financial statement.

 

3


DUFF & PHELPS UTILITY AND CORPORATE BOND TRUST INC.

STATEMENT OF NET ASSETS — (Continued)

January 31, 2016

(Unaudited)

 

        Principal        

Amount

(000)

    

Description

  

Value

(Note 1)

 

 

 

    

 

  

 

 

 
   U.S. Government and Agency Mortgage-Backed Securities - 0.2%   
   Federal National Mortgage Association,   
   Pass-Through Certificates,   
  $80      

8.00%, 10/01/30

     $102,330   
  268      

7.00%, 12/01/31

     317,807   
   Government National Mortgage Association,   
   Pass-Through Certificates,   
  5      

7.00%, 3/15/26

     5,231   
  32      

8.00%, 11/15/30

     34,468   
     

 

 

 
  

Total U.S. Government and Agency Mortgage-Backed Securities

  
  

(Cost $395,934)

     459,836   
     

 

 

 
  

TOTAL INVESTMENTS - 139.7%

  
  

(Cost $401,951,142)

     $387,770,792   
     

 

 

 
  

Other assets in excess of liabilities - 5.3%

     14,825,916   
  

Borrowings - (45.0)%

     (125,000,000
     

 

 

 
  

NET ASSETS APPLICABLE TO COMMON STOCK - 100.0%

         $277,596,708   
     

 

 

 

 

(a) 

All or a portion of this security has been pledged as collateral for borrowings and made available for loan.

(b) 

All or a portion of this security has been loaned.

The percentage shown for each investment category is the total value of that category as a percentage of the net assets

applicable to common stock of the Fund.

 

The accompanying notes are an integral part of this financial statement.

 

4


DUFF & PHELPS UTILITY AND CORPORATE BOND TRUST INC.

STATEMENT OF NET ASSETS — (Continued)

January 31, 2016

(Unaudited)

 

Note 1. Investment Valuation

The Fund’s investments are carried at fair value which is defined as the price that the Fund would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. The three-tier hierarchy of inputs established to classify fair value measurements for disclosure purposes is summarized in the three broad levels listed below:

Level 1 – quoted prices in active markets for identical securities.

Level 2 – other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds,

credit risks, etc.).

Level 3 – significant unobservable inputs (including the Fund’s own assumptions in determining fair value of investments).

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. For more information about the Fund’s policy regarding valuation of investments and other significant accounting policies, please refer to the Fund’s most recent financial statements contained in its annual report. The following is a summary of the inputs used to value each of the Fund’s investments at January 31, 2016:

 

      Level 1      Level 2  

Corporate bonds

     –            $ 386,021,956   

Non-convertible preferred stock

   $ 1,289,000         –        

U.S. Government and Agency mortgage-backed securities

     –              459,836   

 

 

Total

   $ 1,289,000       $ 386,481,792   

 

 

 

 

There were no Level 3 priced securities held and there were no transfers between Level 1 and Level 2 related to securities held at January 31, 2016.

Note 2. Federal Tax Cost

At October 31, 2015, the Fund’s most recent fiscal tax year-end, the federal tax cost of investments and aggregate gross unrealized appreciation (depreciaton) were as follows:

 

Federal Tax Cost

  

Unrealized

Appreciation

  

Unrealized

Depreciation

  

Net

Unrealized

Depreciation

$396,457,516

   $9,501,581    $(19,215,439)    $(9,713,858)

The difference between the book basis and tax basis of unrealized appreciation (depreciation) and cost of investments is primarily attributable to the difference between book and tax amortization methods for premiums and discounts on fixed income securities.

Other information regarding the Fund is available on the Fund’s website at www.ducfund.com or the Securities and Exchange

Commission’s website at www.sec.gov.

 

5


ITEM 2. CONTROLS AND PROCEDURES.

(a) The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective, based on an evaluation of those controls and procedures made as of a date within 90 days of the filing date of this report as required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Securities Exchange Act of 1934.

(b) There has been no change in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

ITEM 3. EXHIBITS.

Exhibit 99.CERT Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

(Registrant)   DUFF & PHELPS UTILITY AND CORPORATE BOND TRUST INC.
By (Signature and Title)   /s/ NATHAN I. PARTAIN
 

 

 

Nathan I. Partain

 

President and Chief Executive Officer

 

(Principal Executive Officer)

Date

 

March 18, 2016

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

 

By (Signature and Title)   /s/ NATHAN I. PARTAIN
 

 

 

Nathan I. Partain

 

President and Chief Executive Officer

 

(Principal Executive Officer)

Date

 

March 18, 2016

By (Signature and Title)

 

/s/ ALAN M. MEDER

 

 

 

Alan M. Meder

 

Treasurer and Assistant Secretary

 

(Principal Financial and Accounting Officer)

Date

 

March 18, 2016