Ivy High Income Opportunties Fund

 

 

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: 811-22800

Ivy High Income Opportunities Fund

(Exact name of registrant as specified in charter)

6300 Lamar Avenue, Overland Park, Kansas 66202

(Address of principal executive offices) (Zip code)

Jennifer K. Dulski

6300 Lamar Avenue

Overland Park, Kansas 66202

(Name and address of agent for service)

 

 

Registrant’s telephone number, including area code: (913) 236-2000

Date of fiscal year end: September 30

Date of reporting period: June 30, 2018

 

 

 

ITEM 1.    SCHEDULE OF INVESTMENTS.

SCHEDULE OF INVESTMENTS

Ivy High Income Opportunities Fund (in thousands)

    JUNE 30, 2018 (UNAUDITED)

 

 

COMMON STOCKS    Shares        Value  

Consumer Discretionary

 

Apparel Retail – 1.3%

 

True Religion Apparel, Inc. (A)(B)(C)

      34        $ 3,318  
       

 

 

  

Broadcasting – 0.1%

 

Cumulus Media, Inc., Class A (A)

      11          177  
       

 

 

  

Total Consumer Discretionary – 1.4%

                 3,495  

Energy

 

Oil & Gas Equipment & Services – 0.2%

 

Larchmont Resources LLC (A)(B)(D)(E)

      2          457  
       

 

 

  

Oil & Gas Exploration & Production – 0.2%

 

Midstates Petroleum Co., Inc. (A)

      32          433  
       

 

 

  

Total Energy – 0.4%

                 890  

Financials

 

Other Diversified Financial Services – 0.8%

 

J.G. Wentworth Co. (The) (C)(D)

      249          2,302  
       

 

 

  

Total Financials – 0.8%

                 2,302  

Industrials

 

Air Freight & Logistics – 0.0%

 

BIS Industries Ltd. (C)(D)

      804          52  
       

 

 

  

Total Industrials – 0.0%

                 52  

TOTAL COMMON STOCKS – 2.6%

               $ 6,739  

(Cost: $3,898)

        

PREFERRED STOCKS

                    

Consumer Staples

 

Agricultural Products – 0.4%

 

Pinnacle Agriculture Enterprises LLC (A)(C)(D)

      1,358          1,125  
       

 

 

  

Total Consumer Staples – 0.4%

                 1,125  

Energy

 

Oil & Gas Exploration & Production – 1.2%

 

Targa Resources Corp.,

        

9.500% (A)(D)

      3          3,264  
       

 

 

  

Total Energy – 1.2%

                 3,264  

TOTAL PREFERRED STOCKS – 1.6%

               $ 4,389  

(Cost: $3,909)

        
CORPORATE DEBT SECURITIES    Principal            

Consumer Discretionary

 

Advertising – 0.2%

 

Acosta, Inc.,

        

7.750%, 10–1–22 (F)

    $ 180          90  

Outfront Media Capital LLC and Outfront Media Capital Corp.,

        

5.625%, 2–15–24

      387          392  
       

 

 

  
          482  
       

 

 

  

Automotive Retail – 0.7%

 

Allison Transmission, Inc.,

        

5.000%, 10–1–24 (F)

      315          310  

Penske Automotive Group, Inc.,

        

5.500%, 5–15–26

      218          213  

Sonic Automotive, Inc.,

        

5.000%, 5–15–23 (G)

      1,379          1,317  
       

 

 

  
          1,840  
       

 

 

  

Broadcasting – 5.1%

 

Clear Channel International B.V.,

        

8.750%, 12–15–20 (F)

      282          291  

Clear Channel Outdoor Holdings, Inc.,

        

6.500%, 11–15–22 (G)

      2,289          2,335  

Clear Channel Worldwide Holdings, Inc.,

        

Series A, 7.625%, 3–15–20

      54          54  

Clear Channel Worldwide Holdings, Inc.,

        

Series B, 7.625%, 3–15–20 (G)

      10,000          9,940  

Sirius XM Radio, Inc.,

        

4.625%, 5–15–23 (F)(G)

      887          868  
       

 

 

  
          13,488  
       

 

 

  

Cable & Satellite – 19.3%

 

Altice Financing S.A.:

        

6.625%, 2–15–23 (F)

      832          820  

7.500%, 5–15–26 (F)(G)

      1,425          1,378  

Altice S.A.:

        

7.250%, 5–15–22 (F)(H)

      EUR152          178  

7.750%, 5–15–22 (F)(G)

    $ 12,803          12,387  

6.250%, 2–15–25 (F)(H)

      EUR184          205  

7.625%, 2–15–25 (F)(G)(I)

    $ 9,892          9,101  

Altice U.S. Finance I Corp.:

        

5.375%, 7–15–23 (F)

      1,026          1,021  

5.500%, 5–15–26 (F)(G)

      1,216          1,173  

Block Communications, Inc.,

        

6.875%, 2–15–25 (F)

      269          268  

CCO Holdings LLC and CCO Holdings Capital Corp.:

        

5.500%, 5–1–26 (F)

      485          470  

5.000%, 2–1–28 (F)(G)

      1,642          1,503  

CSC Holdings LLC,

        

5.375%, 2–1–28 (F)(G)

      1,940          1,795  

DISH DBS Corp.:

        

6.750%, 6–1–21 (G)

      7,500          7,509  

5.875%, 7–15–22 (G)

      2,000          1,880  

5.875%, 11–15–24

      212          180  

7.750%, 7–1–26

      657          576  

Neptune Finco Corp.:

        

10.125%, 1–15–23 (F)

      831          916  

6.625%, 10–15–25 (F)

      394          403  

10.875%, 10–15–25 (F)

      594          685  

Numericable - SFR S.A.,

        

7.375%, 5–1–26 (F)(G)

      3,970          3,882  

VTR Finance B.V.,

        

6.875%, 1–15–24 (F)(G)

      4,531          4,552  
       

 

 

  
          50,882  
       

 

 

  

Casinos & Gaming – 3.9%

 

Everi Payments, Inc.,

        

7.500%, 12–15–25 (F)(G)

      1,684          1,688  

Gateway Casinos & Entertainment Ltd.,

        

8.250%, 3–1–24 (F)

      983          1,037  

Golden Nugget, Inc.:

        

6.750%, 10–15–24 (F)(G)

      2,466          2,466  

8.750%, 10–1–25 (F)

      986          1,013  

Stars Group Holdings B.V. and Stars Group (U.S.) Co-Borrower LLC,

        

7.000%, 7–15–26 (F)

      1,065          1,076  

Studio City Finance Ltd.,

        

8.500%, 12–1–20 (F)(G)

      2,100          2,111  

Wynn Macau Ltd.:

        

4.875%, 10–1–24 (F)

      340          324  

5.500%, 10–1–27 (F)

      494          472  
       

 

 

  
          10,187  
       

 

 

  

Education Services – 2.8%

 

Laureate Education, Inc.,

        

8.250%, 5–1–25 (F)(G)

      6,858          7,317  
       

 

 

  

Hotels, Resorts & Cruise Lines – 0.4%

 

Boyne USA, Inc.,

        

7.250%, 5–1–25 (F)

      1,019          1,062  
       

 

 

  

Leisure Facilities – 0.3%

 

Cedar Fair L.P., Magnum Management Corp., Canada’s Wonderland Co. and Millennium Operations LLC,

        

5.375%, 4–15–27

      877          864  
       

 

 

  

Movies & Entertainment – 0.3%

 

WMG Acquisition Corp.,

        

5.500%, 4–15–26 (F)

      780          773  
       

 

 

  

Publishing – 0.6%

 

E.W. Scripps Co.,

        

5.125%, 5–15–25 (F)

      142          133  

MDC Partners, Inc.,

        

6.500%, 5–1–24 (F)(G)

      1,695          1,471  
       

 

 

  
          1,604  
       

 

 

  

Restaurants – 0.7%

 

1011778 B.C. Unlimited Liability Co. and New Red Finance, Inc.,

        

5.000%, 10–15–25 (F)(G)

      1,878          1,777  
       

 

 

  

Specialized Consumer Services – 0.4%

 

Nielsen Co. (Luxembourg) S.a.r.l. (The),

        

5.500%, 10–1–21 (F)(G)

      1,071          1,077  
       

 

 

  

Specialty Stores – 1.4%

 

Arch Merger Sub, Inc.,

        

8.500%, 9–15–25 (F)(G)

      2,976          2,775  

Cumberland Farms, Inc.,

        

6.750%, 5–1–25 (F)

      770          780  
       

 

 

  
          3,555  
       

 

 

  

Total Consumer Discretionary – 36.1%

                 94,908  

Consumer Staples

 

Food Distributors – 0.9%

 

Performance Food Group, Inc.,

        

5.500%, 6–1–24 (F)

      1,054          1,041  

U.S. Foods, Inc.,

        

5.875%, 6–15–24 (F)

      1,330          1,353  
       

 

 

  
          2,394  
       

 

 

  

Packaged Foods & Meats – 5.0%

 

JBS Investments GmbH (GTD by JBS S.A. and JBS Hungary Holdings Kft.),

        

7.750%, 10–28–20 (F)

      200          204  

JBS USA LLC and JBS USA Finance, Inc.:

        

5.875%, 7–15–24 (F)(G)

      1,892          1,807  

5.750%, 6–15–25 (F)

      1,794          1,668  

JBS USA Lux S.A. and JBS USA Finance, Inc.,

        

6.750%, 2–15–28 (F)

      1,282          1,211  

Pilgrim’s Pride Corp.:

        

5.750%, 3–15–25 (F)

      357          343  

5.875%, 9–30–27 (F)

      1,275          1,182  

Post Holdings, Inc.:

        

5.500%, 3–1–25 (F)

      346          338  

5.000%, 8–15–26 (F)

      523          488  
 

5.750%, 3–1–27 (F)(G)

      2,222          2,144  

Simmons Foods, Inc.,

        

5.750%, 11–1–24 (F)(G)

      4,255          3,691  
       

 

 

  
          13,076  
       

 

 

  

Total Consumer Staples – 5.9%

                 15,470  

Energy

 

Oil & Gas Drilling – 1.7%

 

Ensco plc,

        

7.750%, 2–1–26

      1,017          961  

KCA Deutag UK Finance plc,

        

7.250%, 5–15–21 (F)(G)

      1,793          1,735  

Offshore Drilling Holding S.A.,

        

8.375%, 9–20–20 (F)(G)(J)

      3,385          1,709  

Offshore Group Investment Ltd.,

        

0.000%, 11–1–19 (C)(K)

      883          — *  

Trinidad Drilling Ltd.,

        

6.625%, 2–15–25 (F)

      23          22  
       

 

 

  
          4,427  
       

 

 

  

Oil & Gas Equipment & Services – 1.8%

 

Brand Energy & Infrastructure Services, Inc.,

        

8.500%, 7–15–25 (F)

      767          776  

McDermott Escrow 1, Inc. and McDermott Escrow 2, Inc.,

        

10.625%, 5–1–24 (F)(G)

      3,202          3,338  

SESI LLC,

        

7.125%, 12–15–21

      493          502  
       

 

 

  
          4,616  
       

 

 

  

Oil & Gas Exploration & Production – 4.8%

 

Bellatrix Exploration Ltd.,

        

8.500%, 5–15–20 (F)

      1,215          808  

Chesapeake Energy Corp.,

        

8.000%, 1–15–25 (I)

      157          160  

Crownrock L.P.,

        

5.625%, 10–15–25 (F)(G)

      2,927          2,825  

Endeavor Energy Resources L.P.:

        

5.500%, 1–30–26 (F)

      1,014          983  

5.750%, 1–30–28 (F)

      728          710  

Extraction Oil & Gas, Inc.,

        

5.625%, 2–1–26 (F)

      1,377          1,319  

Laredo Petroleum, Inc.,

        

6.250%, 3–15–23

      339          339  

Parsley Energy LLC and Parsley Finance Corp.,

        

5.625%, 10–15–27 (F)

      683          678  

PDC Energy, Inc.,

        

6.125%, 9–15–24

      179          183  

Sanchez Energy Corp.,

        

7.250%, 2–15–23 (F)

      257          254  

Seven Generations Energy Ltd.:

        

6.750%, 5–1–23 (F)(G)

      1,951          2,019  

5.375%, 9–30–25 (F)

      975          937  

Ultra Resources, Inc.,

        

6.875%, 4–15–22 (F)

      565          428  

Whiting Petroleum Corp.:

        

5.750%, 3–15–21

      543          555  

6.625%, 1–15–26 (F)

      510          526  
       

 

 

  
          12,724  
       

 

 

  

Oil & Gas Refining & Marketing – 1.2%

 

Callon Petroleum Co. (GTD by Callon Petroleum Operating Co.):

        

6.125%, 10–1–24

      468          474  

6.375%, 7–1–26 (F)

      158          158  

Comstock Resources, Inc. (10.000% Cash or 12.500% PIK),

        

10.000%, 3–15–20 (L)

      1,051          1,098  

EP Energy LLC and Everest Acquisition Finance, Inc.,

        

7.750%, 5–15–26 (F)

      793          811  

QEP Resources, Inc.,

        

5.625%, 3–1–26 (I)

      628          600  
       

 

 

  
          3,141  
       

 

 

  

Total Energy – 9.5%

                 24,908  

Financials

 

Consumer Finance – 3.3%

 

Creditcorp,

        

12.000%, 7–15–18 (F)(G)

      5,248          5,248  

CURO Financial Technologies Corp.,

        

12.000%, 3–1–22 (F)(G)

      1,744          1,892  

Quicken Loans, Inc.,

        

5.750%, 5–1–25 (F)(G)

      1,688          1,652  
       

 

 

  
          8,792  
       

 

 

  

Insurance Brokers – 1.5%

 

NFP Corp.,

        

6.875%, 7–15–25 (F)(G)

      3,971          3,892  
       

 

 

  

Investment Banking & Brokerage – 0.1%

 

VHF Parent LLC,

        

6.750%, 6–15–22 (F)

      340          353  
       

 

 

  

Other Diversified Financial Services – 4.7%

 

Balboa Merger Sub, Inc.,

        

11.375%, 12–1–21 (F)(G)

      2,687          2,902  

Icahn Enterprises L.P. and Icahn Enterprises Finance Corp.:

        

6.250%, 2–1–22

      1,523          1,553  

6.375%, 12–15–25

      508          509  

New Cotai LLC and New Cotai Capital Corp. (10.625% Cash or 10.625% PIK),

        

10.625%, 5–1–19 (F)(G)(L)

      7,439          7,328  
       

 

 

  
          12,292  
       

 

 

  

Property & Casualty Insurance – 1.5%

 

Amwins Group, Inc.,

        

7.750%, 7–1–26 (F)

      1,329          1,349  

Hub International Ltd.,

        

7.000%, 5–1–26 (F)(G)

      2,617          2,584  
       

 

 

  
          3,933  
       

 

 

  

Specialized Finance – 1.7%

 

Compass Group Diversified Holdings LLC,

        

8.000%, 5–1–26 (F)

      1,050          1,024  

Hadrian Merger Sub, Inc.,

        

8.500%, 5–1–26 (F)

      1,931          1,878  

TMX Finance LLC and TitleMax Finance Corp.,

        

11.125%, 4–1–23 (F)

      1,581          1,604  
       

 

 

  
          4,506  
       

 

 

  

Thrifts & Mortgage Finance – 0.5%

 

Provident Funding Associates L.P. and PFG Finance Corp.,

        

6.375%, 6–15–25 (F)

      1,220          1,188  
       

 

 

  

Total Financials – 13.3%

                 34,956  

Health Care

 

Health Care Facilities – 1.2%

 

DaVita HealthCare Partners, Inc.,

        

5.125%, 7–15–24

      242          235  

HCA, Inc. (GTD by HCA Holdings, Inc.),

        

5.250%, 6–15–26

      183          182  

MPH Acquisition Holdings LLC,

        

7.125%, 6–1–24 (F)

      870          892  

Surgery Center Holdings, Inc.,

        

8.875%, 4–15–21 (F)

      1,863          1,916  
       

 

 

  
          3,225  
       

 

 

  

Health Care Supplies – 2.9%

 

Kinetic Concepts, Inc. and KCI USA, Inc.,

        

12.500%, 11–1–21 (F)(G)

      2,213          2,445  

Universal Hospital Services, Inc.,

        

7.625%, 8–15–20 (G)

      5,152          5,139  
       

 

 

  
          7,584  
       

 

 

  

Life Sciences Tools & Services – 1.0%

 

Avantor, Inc.:

        

6.000%, 10–1–24 (F)

      837          828  

9.000%, 10–1–25 (F)(G)

      1,706          1,719  
       

 

 

  
          2,547  
       

 

 

  

Pharmaceuticals – 2.4%

 

Concordia Healthcare Corp.:

        

9.500%, 10–21–22 (F)(G)(M)

      2,891          174  

7.000%, 4–15–23 (F)(M)

      154          9  

Jaguar Holding Co. II and Pharmaceutical Product Development LLC,

        

6.375%, 8–1–23 (F)

      1,061          1,056  

Valeant Pharmaceuticals International, Inc.:

        

5.500%, 3–1–23 (F)

      48          45  

5.500%, 11–1–25 (F)

      488          481  

9.000%, 12–15–25 (F)

      351          364  

9.250%, 4–1–26 (F)

      1,042          1,082  

8.500%, 1–31–27 (F)

      792          804  

VPII Escrow Corp.,

        

7.500%, 7–15–21 (F)

      829          842  

VRX Escrow Corp.:

        

5.875%, 5–15–23 (F)

      777          730  

6.125%, 4–15–25 (F)

      715          658  
       

 

 

  
          6,245  
       

 

 

  

Total Health Care – 7.5%

                 19,601  

Industrials

 

Aerospace & Defense – 3.0%

 

KLX, Inc.,

        

5.875%, 12–1–22 (F)(G)

      3,007          3,124  

TransDigm UK Holdings plc,

        

6.875%, 5–15–26 (F)

      893          905  

TransDigm, Inc. (GTD by TransDigm Group, Inc.):

        

6.000%, 7–15–22

      1,000          1,005  

6.500%, 7–15–24 (G)

      2,260          2,300  

6.500%, 5–15–25 (I)

      471          476  
       

 

 

  
          7,810  
       

 

 

  

Building Products – 0.9%

 

Summit Materials LLC and Summit Materials Finance Corp.,

        

6.125%, 7–15–23 (G)

      2,044          2,075  

WESCO Distribution, Inc. (GTD by WESCO International, Inc.),

        

5.375%, 6–15–24

      436          428  
       

 

 

  
          2,503  
       

 

 

  

Diversified Support Services – 0.9%

 

Ahern Rentals, Inc.,

        

7.375%, 5–15–23 (F)(G)

      2,037          1,986  

Ritchie Bros. Auctioneers, Inc.,

        

5.375%, 1–15–25 (F)

      324          314  

United Rentals (North America), Inc. (GTD by United Rentals, Inc.),

        

5.875%, 9–15–26

      217          219  
       

 

 

  
          2,519  
       

 

 

  

Environmental & Facilities Services – 1.6%

 

GFL Environmental, Inc.:

        

5.625%, 5–1–22 (F)

      339          326  

5.375%, 3–1–23 (F)(G)

      1,840          1,702  

7.000%, 6–1–26 (F)

      1,578          1,511  

Tervita Escrow Corp.,

        

7.625%, 12–1–21 (F)

      529          540  

Waste Pro USA, Inc.,

        

5.500%, 2–15–26 (F)

      198          190  
       

 

 

  
          4,269  
       

 

 

  
 

Security & Alarm Services – 1.3%

 

     

Prime Security Services Borrower LLC,

        

9.250%, 5–15–23 (F)(G)

      3,102          3,311  
       

 

 

  

Total Industrials – 7.7%

                 20,412  

Information Technology

        

Application Software – 2.7%

 

     

Kronos Acquisition Holdings, Inc.,

        

9.000%, 8–15–23 (F)(G)

      3,668          3,301  

Solera LLC and Solera Finance, Inc.,

        

10.500%, 3–1–24 (F)(G)

      3,379          3,753  
       

 

 

  
          7,054  
       

 

 

  

Data Processing & Outsourced Services – 3.1%

 

     

Alliance Data Systems Corp.:

        

5.875%, 11–1–21 (F)

      608          620  

5.375%, 8–1–22 (F)(G)

      1,853          1,862  

Italics Merger Sub, Inc.,

        

7.125%, 7–15–23 (F)(G)

      5,170          5,223  

j2 Cloud Services LLC and j2 Global, Inc.,

        

6.000%, 7–15–25 (F)

      468          474  
       

 

 

  
          8,179  
       

 

 

  

IT Consulting & Other Services – 1.4%

 

     

Cardtronics, Inc. and Cardtronics USA, Inc.,

        

5.500%, 5–1–25 (F)

      294          266  

NCR Escrow Corp.,

        

6.375%, 12–15–23 (G)

      1,765          1,829  

Pioneer Holding Corp.,

        

9.000%, 11–1–22 (F)

      1,461          1,509  
       

 

 

  
          3,604  
       

 

 

  

Total Information Technology – 7.2%

                 18,837  

Materials

 

     

Aluminum – 1.4%

 

     

Constellium N.V.:

        

6.625%, 3–1–25 (F)(G)

      1,803          1,817  

5.875%, 2–15–26 (F)

      911          879  

Novelis Corp. (GTD by Novelis, Inc.):

        

6.250%, 8–15–24 (F)

      674          674  

5.875%, 9–30–26 (F)

      446          427  
       

 

 

  
          3,797  
       

 

 

  

Commodity Chemicals – 0.6%

 

     

NOVA Chemicals Corp.:

        

4.875%, 6–1–24 (F)

      1,215          1,154  

5.250%, 6–1–27 (F)

      486          453  
       

 

 

  
          1,607  
       

 

 

  

Construction Materials – 1.1%

 

     

Hillman Group, Inc. (The),

        

6.375%, 7–15–22 (F)(G)

      3,027          2,898  
       

 

 

  

Diversified Chemicals – 0.3%

 

     

PSPC Escrow Corp.,

        

6.500%, 2–1–22 (F)

      879          894  
       

 

 

  

Fertilizers & Agricultural Chemicals – 0.7%

 

     

Pinnacle Operating Corp.,

        

9.000%, 5–15–23 (F)(G)

      1,956          1,839  
       

 

 

  

Metal & Glass Containers – 2.3%

 

     

ARD Finance S.A. (7.125% Cash or 7.875% PIK),

        

7.125%, 9–15–23 (L)

      248          249  

ARD Securities Finance S.a.r.l. (8.750% Cash or 8.750% PIK),

        

8.750%, 1–31–23 (F)(L)

      600          610  

BakerCorp International, Inc.,

        

8.250%, 6–1–19 (G)

      4,738          4,584  

HudBay Minerals, Inc.:

        

7.250%, 1–15–23 (F)

      188          194  

7.625%, 1–15–25 (F)

      282          295  
       

 

 

  
          5,932  
       

 

 

  

Paper Packaging – 0.1%

 

Flex Acquisition Co., Inc.,

        

6.875%, 1–15–25 (F)

      321          309  
       

 

 

  

Specialty Chemicals – 0.2%

 

Kraton Polymers LLC and Kraton Polymers Capital Corp.,

        

7.000%, 4–15–25 (F)

      475          492  
       

 

 

  

Total Materials – 6.7%

 

        17,768  

Real Estate

 

Health Care REITs – 0.1%

 

MPT Operating Partnership L.P. and MPT Finance Corp. (GTD by Medical Properties Trust, Inc.),

        

5.250%, 8–1–26

      222          218  
       

 

 

  

Total Real Estate – 0.1%

 

        218  

Telecommunication Services

 

Alternative Carriers – 1.5%

 

Consolidated Communications Finance II Co.,

        

6.500%, 10–1–22 (G)

      1,848          1,723  

Level 3 Communications, Inc.,

        

5.750%, 12–1–22 (G)

      2,176          2,176  
       

 

 

  
          3,899  
       

 

 

  

Integrated Telecommunication Services – 12.8%

 

Frontier Communications Corp.:

        

6.875%, 1–15–25 (G)(I)

      1,856          1,195  

11.000%, 9–15–25 (G)

      2,876          2,300  

8.500%, 4–1–26 (F)(G)

      6,302          6,081  

GCI, Inc.,

        

6.875%, 4–15–25 (G)

      2,870          2,971  

Olympus Merger Sub, Inc.,

        

8.500%, 10–15–25 (F)(G)

      6,035          5,507  

Sprint Corp.:

        

7.250%, 9–15–21 (G)

      11,196          11,644  

7.875%, 9–15–23 (G)(I)

      3,034          3,146  

7.625%, 3–1–26

      777          791  
       

 

 

  
          33,635  
       

 

 

  

Wireless Telecommunication Service – 0.7%

 

Sable International Finance Ltd.,

        

6.875%, 8–1–22 (F)(G)

      1,194          1,229  

Sprint Nextel Corp.:

        

9.000%, 11–15–18 (F)

      99          101  

7.000%, 8–15–20

      218          226  

11.500%, 11–15–21

      178          210  
       

 

 

  
          1,766  
       

 

 

  

Total Telecommunication Services – 15.0%

 

        39,300  

TOTAL CORPORATE DEBT SECURITIES – 109.0%

 

      $ 286,378  

(Cost: $293,044)

        

LOANS (N)

                    

Consumer Discretionary

 

Advertising – 0.4%

 

Advantage Sales & Marketing, Inc. (ICE LIBOR plus 325 bps),

        

5.344%, 7–25–21

      330          311  

Advantage Sales & Marketing, Inc. (ICE LIBOR plus 650 bps),

        

8.594%, 7–25–22

      955          865  
       

 

 

  
          1,176  
       

 

 

  

Apparel Retail – 2.7%

 

J. Crew Group, Inc.,

        

0.000%, 3–5–21 (O)

      1,229          1,023  

Talbots, Inc. (The) (ICE LIBOR plus 450 bps),

        

6.594%, 3–19–20

      1,768          1,738  

Talbots, Inc. (The) (ICE LIBOR plus 850 bps),

        

10.594%, 3–19–21

      618          598  

TRLG Intermediate Holdings LLC,

        

10.000%, 10–27–22

      4,132          3,801  
       

 

 

  
          7,160  
       

 

 

  

Cable & Satellite – 0.0%

 

Liberty Cablevision of Puerto Rico LLC (ICE LIBOR plus 350 bps),

        

5.848%, 1–7–22

      39          38  
       

 

 

  

Department Stores – 0.3%

 

Belk, Inc. (ICE LIBOR plus 475 bps),

        

7.088%, 12–10–22

      1,172          904  
       

 

 

  

Education Services – 1.0%

 

Laureate Education, Inc. (ICE LIBOR plus 350 bps),

        

5.594%, 4–26–24

      2,602          2,599  
       

 

 

  

General Merchandise Stores – 2.0%

 

BJ’s Wholesale Club, Inc. (ICE LIBOR plus 375 bps),

        

5.530%, 2–3–24

      2,919          2,916  

BJ’s Wholesale Club, Inc. (ICE LIBOR plus 750 bps),

        

9.530%, 1–27–25

      2,325          2,345  
       

 

 

  
          5,261  
       

 

 

  

Housewares & Specialties – 0.4%

 

KIK Custom Products, Inc. (ICE LIBOR plus 400 bps),

        

6.094%, 5–15–23

      1,162          1,153  
       

 

 

  

Restaurants – 0.6%

 

NPC International, Inc. (ICE LIBOR plus 350 bps),

        

5.594%, 4–20–24

      328          329  

NPC International, Inc. (ICE LIBOR plus 750 bps),

        

9.594%, 4–18–25

      1,346          1,360  
       

 

 

  
          1,689  
       

 

 

  

Specialized Consumer Services – 0.7%

 

Asurion LLC:

        

0.000%, 11–3–24 (O)

      1,063          1,058  

0.000%, 8–4–25 (O)

      532          530  

Asurion LLC (ICE LIBOR plus 600 bps),

        

8.094%, 8–4–25

      233          236  
       

 

 

  
          1,824  
       

 

 

  

Specialty Stores – 1.4%

 

Jo-Ann Stores, Inc. (ICE LIBOR plus 500 bps),

        

7.509%, 10–16–23

      1,180          1,170  

Jo-Ann Stores, Inc. (ICE LIBOR plus 925 bps),

        

11.581%, 5–21–24 (C)

      2,627          2,594  
       

 

 

  
          3,764  
       

 

 

  

Textiles – 0.6%

 

SIWF Holdings, Inc.,

        

0.000%, 5–25–25 (O)

      529          531  

SIWF Holdings, Inc. (ICE LIBOR plus 425 bps),

        

6.323%, 5–25–25

      1,058          1,062  
       

 

 

  
          1,593  
       

 

 

  

Total Consumer Discretionary – 10.1%

 

        27,161  
 

Consumer Staples

 

Food Distributors – 0.3%

 

Dairyland USA Corp. (ICE LIBOR plus 400 bps),

        

6.090%, 6–22–22

      874          879  
       

 

 

  

Hypermarkets & Super Centers – 0.4%

 

GOBP Holdings, Inc. (ICE LIBOR plus 825 bps),

        

10.344%, 10–21–22

      979          982  
       

 

 

  

Total Consumer Staples – 0.7%

 

        1,861  

Energy

 

Coal & Consumable Fuels – 1.2%

 

Foresight Energy LLC (ICE LIBOR plus 725 bps),

        

8.109%, 3–28–22

      2,848          2,826  

Westmoreland Coal Co. (ICE LIBOR plus 650 bps),

        

8.834%, 12–16–20

      1,763          411  
       

 

 

  
          3,237  
       

 

 

  

Oil & Gas Drilling – 0.2%

 

KCA Deutag Alpha Ltd.,

        

0.000%, 5–16–20 (O)

      532          529  
       

 

 

  

Oil & Gas Equipment & Services – 0.5%

 

Larchmont Resources LLC (9.050% Cash or 9.050% PIK),

        

11.330%, 8–7–20 (C)(E)(L)

      1,460          1,438  
       

 

 

  

Oil & Gas Exploration & Production – 0.3%

 

California Resources Corp. (ICE LIBOR plus 475 bps),

        

6.838%, 12–31–22

      761          774  
       

 

 

  

Oil & Gas Storage & Transportation – 1.0%

 

Bowie Resources Holdings LLC (ICE LIBOR plus 1,075 bps),

        

12.844%, 2–16–21(C)

      1,032          929  

Bowie Resources Holdings LLC (ICE LIBOR plus 575 bps),

        

7.844%, 8–12–20

      1,634          1,604  
       

 

 

  
          2,533  
       

 

 

  

Total Energy – 3.2%

 

        8,511  

Financials

 

Asset Management & Custody Banks – 0.9%

 

Edelman Financial Holdings II, Inc.,

        

0.000%, 6–26–26 (O)

      1,703          1,712  

Tortoise Borrower LLC (ICE LIBOR plus 400 bps),

        

6.094%, 1–31–25 (C)

      683          687  
       

 

 

  
          2,399  
       

 

 

  

Financial Exchanges & Data – 0.4%

 

Hudson River Trading LLC (ICE LIBOR plus 425 bps),

        

6.344%, 4–3–25 (C)

      911          913  
       

 

 

  

Insurance Brokers – 0.2%

 

NFP Corp. (ICE LIBOR plus 300 bps),

        

5.094%, 1–8–24

      628          623  
       

 

 

  

Investment Banking & Brokerage – 1.2%

 

Jane Street Group LLC (ICE LIBOR plus 375 bps),

        

5.844%, 8–25–22 (C)

      2,990          3,008  
       

 

 

  

Property & Casualty Insurance – 0.2%

 

Hub International Ltd. (ICE LIBOR plus 300 bps),

        

5.360%, 4–25–25

      655          651  
       

 

 

  

Specialized Finance – 1.7%

 

Mayfield Agency Borrower, Inc. (ICE LIBOR plus 450 bps),

        

6.594%, 2–28–25

      3,380          3,376  

Mayfield Agency Borrower, Inc. (ICE LIBOR plus 850 bps),

        

10.594%, 2–28–26 (C)

      1,153          1,136  
       

 

 

  
          4,512  
       

 

 

  

Total Financials – 4.6%

 

        12,106  

Health Care

 

Health Care Equipment – 0.1%

 

LifeScan Global Corp.,

        

0.000%, 6–19–25 (C)(D)(O)

      266          255  
       

 

 

  

Health Care Facilities – 1.5%

 

Gentiva Health Services, Inc.:

        

0.000%, 6–21–25 (C)(O)

      3,191          3,167  

0.000%, 6–21–26 (C)(O)

      798          806  
       

 

 

  
          3,973  
       

 

 

  

Health Care Services – 0.8%

 

Heartland Dental LLC,

        

0.000%, 4–30–25 (C)(O)

      256          254  

Heartland Dental LLC (ICE LIBOR plus 375 bps),

        

5.844%, 4–30–25 (C)

      1,706          1,696  
       

 

 

  
          1,950  
       

 

 

  

Life Sciences Tools & Services – 0.0%

 

Avantor, Inc. (ICE LIBOR plus 400 bps),

        

6.094%, 9–22–24

      77          77  
       

 

 

  

Pharmaceuticals – 0.3%

 

Concordia International Corp. (ICE LIBOR plus 425 bps),

        

6.344%, 10–21–21

      1,044          928  
       

 

 

  

Total Health Care – 2.7%

                 7,183  

Industrials

        

Building Products – 0.4%

 

Hampton Rubber Co. & SEI Holding Corp. (ICE LIBOR plus 800 bps),

        

10.094%, 3–27–22

      1,146          1,049  
       

 

 

  

Construction & Engineering – 1.5%

 

McDermott Technology (Americas), Inc. (ICE LIBOR plus 500 bps),

        

7.094%, 5–10–25

      3,265          3,277  

Tensar International Corp. (ICE LIBOR plus 850 bps),

        

10.834%, 7–10–22 (C)

      603          554  
       

 

 

  
          3,831  
       

 

 

  

Diversified Support Services – 0.4%

 

USS Ultimate Holdings, Inc. (ICE LIBOR plus 375 bps),

        

5.844%, 8–25–24

      563          563  

USS Ultimate Holdings, Inc. (ICE LIBOR plus 775 bps),

        

9.844%, 8–25–25

      472          473  
       

 

 

  
          1,036  
       

 

 

  

Industrial Conglomerates – 0.9%

 

Crosby Worldwide Ltd. (ICE LIBOR plus 300 bps),

        

5.084%, 11–22–20

      118          116  

PAE Holding Corp. (ICE LIBOR plus 550 bps),

        

7.594%, 10–20–22

      1,973          1,975  

PAE Holding Corp. (ICE LIBOR plus 950 bps),

        

11.594%, 10–20–23

      349          349  
       

 

 

  
          2,440  
       

 

 

  

Industrial Machinery – 1.4%

 

Dynacast International LLC (ICE LIBOR plus 850 bps),

        

10.834%, 1–30–23 (C)

      3,719          3,719  
       

 

 

  

Total Industrials – 4.6%

 

        12,075  

Information Technology

 

Application Software – 0.3%

 

Applied Systems, Inc. (ICE LIBOR plus 700 bps),

        

9.334%, 9–18–25

      788          810  
       

 

 

  

Data Processing & Outsourced Services – 0.8%

 

Colorado Buyer, Inc.,

        

0.000%, 5–1–25 (O)

      271          270  

Colorado Buyer, Inc. (ICE LIBOR plus 300 bps),

        

9.610%, 5–1–25

      646          643  

Great Dane Merger Sub, Inc. (ICE LIBOR plus 375 bps),

        

5.860%, 5–22–25 (C)

      1,314          1,314  
       

 

 

  
          2,227  
       

 

 

  

Total Information Technology – 1.1%

 

        3,037  

Telecommunication Services

 

Integrated Telecommunication Services – 1.3%

 

West Corp. (3–Month ICE LIBOR plus 400 bps),

        

6.094%, 10–10–24

      3,184          3,170  

Westmoreland Coal Co.,

        

0.000%, 5–22–19 (O)

      66          66  

Westmoreland Coal Co. (3–Month U.S. LIBOR plus 825 bps),

        

10.581%, 5–22–19

      296          296  
       

 

 

  
          3,532  
       

 

 

  

Total Telecommunication Services – 1.3%

 

        3,532  

TOTAL LOANS – 28.3%

 

      $ 75,466  

(Cost: $76,713)

        
SHORT-TERM SECURITIES                  

Commercial Paper (P) – 3.2%

 

J.M. Smucker Co. (The),

        

2.200%, 7–2–18

      8,402          8,400  
       

 

 

  

Master Note – 3.1%

 

Toyota Motor Credit Corp. (1–Month U.S. LIBOR plus 15 bps),

        

2.240%, 7–6–18 (Q)

      8,176          8,176  
       

 

 

  

Money Market Funds – 0.1%

 

Dreyfus Institutional Preferred Government Money Market Fund - Institutional Shares,

        

1.850%, (R)(S)

      265          265  
       

 

 

  

TOTAL SHORT-TERM SECURITIES – 6.4%

 

      $ 16,841  

(Cost: $16,842)

        

TOTAL INVESTMENT SECURITIES – 147.9%

 

      $ 389,813  

(Cost: $394,406)

        

BORROWINGS (T) – (46.3)%

                 (122,000 ) 

LIABILITIES, NET OF CASH AND
OTHER ASSETS – (1.6)%

                 (4,252 ) 

NET ASSETS – 100.0%

               $ 263,561  
 

Notes to Schedule of Investments

 

*

Not shown due to rounding.

 

(A)

No dividends were paid during the preceding 12 months.

 

(B)

Listed on an exchange outside the United States.

 

(C)

Securities whose value was determined using significant unobservable inputs.

 

(D)

Restricted securities. At June 30, 2018, the Fund owned the following restricted securities:

 

Security      Acquisition Date(s)      Shares        Cost        Market
Value		  

BIS Industries Ltd.

     

12–22–17

        804        $ 76        $ 52  

J.G. Wentworth Co. (The)

     

1–25–18

        249          2,193          2,302  

Larchmont Resources LLC

     

12–8–16

        2          560          457  

Pinnacle Agriculture Enterprises LLC

     

3–10–17

        1,358          617          1,125  

Targa Resources Corp., 9.500%

     

10–24–17

        3          3,292          3,264  
              Principal                    

LifeScan Global Corp., 0.000%, 06–19–25

     

6–19–18

      $ 266          257          255  
               $ 6,995        $ 7,456  

The total value of these securities represented 2.8% of net assets at June 30, 2018.

 

(E)

Deemed to be an affiliate due to the Fund owning at least 5% of the voting securities.

 

(F)

Securities were purchased pursuant to an exemption from registration available under Rule 144A under the Securities Act of 1933 and may only be resold in transactions exempt from registration, normally to qualified institutional buyers. At June 30, 2018 the total value of these securities amounted to $208,863 or 79.2% of net assets.

 

(G)

All or a portion of securities with an aggregate value of $133,504 have been pledged as collateral on open borrowings.

 

(H)

Principal amounts are denominated in the indicated foreign currency, where applicable (EUR - Euro).

 

(I)

All or a portion of securities with an aggregate value of $259 are on loan.

 

(J)

Step bond that pays an initial coupon rate for the first period and then a higher or lower coupon rate for the following periods. Interest rate disclosed is that which is in effect at June 30, 2018.

 

(K)

Zero coupon bond.

 

(L)

Payment-in-kind bond which may pay interest in additional par and/or in cash. Rates shown are the current rate and possible payment rates.

 

(M)

Non-income producing as the issuer has either missed its most recent interest payment or declared bankruptcy.

 

(N)

Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2018. Description of the reference rate and spread, if applicable, are included in the security description.

 

(O)

All or a portion of this position has not settled. Full contract rates do not take effect until settlement date.

 

(P)

Rate shown is the yield to maturity at June 30, 2018.

 

(Q)

Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2018. Date shown represents the date that the variable rate resets. Description of the reference rate and spread, if applicable, are included in the security description.

 

(R)

Investment made with cash collateral received from securities on loan.

 

(S)

Rate shown is the annualized 7-day yield at June 30, 2018.

 

(T)

Borrowings payable as a percentage of total investment securities is 31.3%.

The following forward foreign currency contracts were outstanding at June 30, 2018:

 

      Currency to be
Delivered		            Currency to be
Received		      Settlement
Date		    Counterparty    Unrealized
Appreciation		      Unrealized
Depreciation		  
Euro      332      U.S. Dollar      411      7–5–18    Morgan Stanley International    $ 23      $ —  

The Fund’s investments are reported at fair value. Fair value is defined as the price that the Fund would receive upon selling an asset or would pay upon satisfying a liability in an orderly transaction between market participants at the measurement date.

Accounting standards establish 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. 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 reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the factors that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Reoccurring fair value measurements of Level 3 securities shall include a reconciliation of the beginning to ending balances for reported fair market values. A fair value hierarchy and Level 3 reconciliation, if applicable, have been included in the Notes to Schedule of Investments for the Fund.

An individual investment’s fair value measurement 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 as follows:

Level 1 – Observable input such as quoted prices, available in active markets, for identical assets or liabilities.

Level 2 – Significant other observable inputs, which may include, but are not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs.

Level 3 – Significant unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available, which may include assumptions made by the Board or persons acting at their direction that are used in determining the fair market value of investments.

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of June 30, 2018:

 

     Level 1      Level 2      Level 3  

Assets

        

Investments in Securities

        

Common Stocks

        

Consumer Discretionary

   $ —      $ 177      $ 3,318  

Energy

     433        457        —  

Financials

     —        —        2,302  

Industrials

     —        —        52  

Total Common Stocks

   $ 433      $ 634      $ 5,672  

Preferred Stocks

     —        3,264        1,125  

Corporate Debt Securities

     —        286,378        — *  

Loans

     —        48,959        26,507  

Short-Term Securities

     265        16,576        —  

Total

   $ 698      $ 355,811      $ 33,304  

Forward Foreign Currency Contracts

   $ —      $ 23      $ —  

During the period ended June 30, 2018, there were no transfers between Level 1 and 2.

The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:

 

     Common
Stocks		      Preferred
Stocks		      Loans  

Beginning Balance 10-1-17

   $ —      $ 856      $ 8,538  

Net realized gain (loss)

     —        —        (45 ) 

Net change in unrealized appreciation (depreciation)

     3,167        269        13  

Purchases

     2,505        —        19,834  

Sales

     —        —        (1,520 ) 

Amortization/Accretion of premium/discount

     —        —        68  

Transfers into Level 3 during the period

     —        —        1,374  

Transfers out of Level 3 during the period

     —        —        (1,755 ) 

Ending Balance 6-30-18

   $ 5,672      $ 1,125      $ 26,507  

Net change in unrealized appreciation (depreciation) for all Level 3 investments still held as of 6-30-18

   $ 3,167      $ 269      $ 160  

Transfers from Level 2 to Level 3 occurred primarily due to the lack of observable market data due to decreased market activity or information for these securities. Transfers from Level 3 to Level 2 occurred primarily due to the increased availability of observable market data due to increased market activity or information. As shown above, transfers in and out of Level 3 represent the values as of the beginning of the reporting period.

Information about Level 3 fair value measurements:

 

     

Fair Value at

6-30-18

      Valuation Technique(s)    Unobservable Input(s)    Input
Value(s)		  

Assets

            

Common Stocks

    $ 3,318     

Market comparable approach

   

Adjusted EBITDA multiple

      9.99x  
     2,302     

Market comparable approach

   

Broker quotes

      N/A  
     52     

Market comparable approach

   

Adjusted EBITDA multiple

      5.10x  

Preferred Stocks

      1,125     

Market comparable approach

   

Adjusted EBITDA multiple

      10.70x  
                

Illiquidity discount

      10%  

Loans

      26,507     

Third-party vendor pricing service

   

Broker quotes

      N/A  

Significant increase (decrease) in the adjusted EBITDA multiple could result in higher (lower) fair value measurement.

The following acronyms are used throughout this schedule:

GTD = Guaranteed

ICE = Intercontinental Exchange

LIBOR = London Interbank Offered Rate

PIK = Payment in Kind

REIT = Real Estate Investment Trust

For Federal income tax purposes, cost of investments owned at June 30, 2018 and the related unrealized appreciation (depreciation) were as follows:

 

Cost

   $ 394,406  
 

 

 

  

Gross unrealized appreciation

     9,028  

Gross unrealized depreciation

     (13,621 ) 
 

 

 

  

Net unrealized depreciation

   $ (4,593 ) 

ITEM 2.    CONTROLS AND PROCEDURES.

 

(a)

The Registrant’s Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, based on their evaluation of the Registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, have concluded that such controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective and adequately designed to ensure that information required to be disclosed by the Registrant in its reports that it files or submits is accumulated and communicated to the Registrant’s management, including the Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

 

(b)

There were no significant changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940, as amended) 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.

A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)).

Attached hereto as Exhibit 99.CERT.

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.

 

Ivy High Income Opportunities Fund
(Registrant)
By       /s/ Jennifer K. Dulski
  Jennifer K. Dulski, Secretary

Date: August 28, 2018

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

 

By       /s/ Philip J. Sanders
  Philip J. Sanders, Principal Executive Officer

Date: August 28, 2018

 

By       /s/ Joseph W. Kauten
  Joseph W. Kauten, Principal Financial Officer

Date: August 28, 2018