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, 2017

 

 

 

ITEM 1.    SCHEDULE OF INVESTMENTS.

SCHEDULE OF INVESTMENTS

Ivy High Income Opportunities Fund (in thousands)

    JUNE 30, 2017 (UNAUDITED)

 

 

 

COMMON STOCKS    Shares        Value  

Energy

        

Coal & Consumable Fuels – 0.0%

        

Foresight Energy L.P. (A)

      24        $ 115  
       

 

 

  

Oil & Gas Equipment & Services – 0.7%

 

Key Energy Services, Inc. (A)

      67          1,295  

Larchmont Resources
LLC (A)(B)(C)

      2          594  
       

 

 

  
          1,889  
       

 

 

  

Oil & Gas Exploration & Production – 0.2%

 

Midstates Petroleum Co., Inc. (A)

      32          403  
       

 

 

  

Total Energy – 0.9%

                 2,407  

TOTAL COMMON STOCKS – 0.9%

 

      $ 2,407  

(Cost: $2,404)

        

PREFERRED STOCKS

                    

Consumer Staples

        

Agricultural Products – 0.4%

        

Pinnacle Agriculture Enterprises
LLC (A)(B)

      1,358          1,051  
       

 

 

  

Total Consumer Staples – 0.4%

                 1,051  

TOTAL PREFERRED STOCKS – 0.4%

 

      $ 1,051  

(Cost: $617)

        
CORPORATE DEBT SECURITIES    Principal            

Consumer Discretionary

        

Advertising – 0.5%

        

Acosta, Inc.,
7.750%, 10–1–22 (D)

    $ 180          136  

Lamar Media Corp.,
5.375%, 1–15–24 (E)

      681          712  

Outfront Media Capital LLC and Outfront Media Capital Corp.,
5.625%, 2–15–24

      387          404  
       

 

 

  
          1,252  
       

 

 

  

Apparel Retail – 0.9%

        

Hot Topic, Inc.,
9.250%, 6–15–21 (D)(E)

      2,509          2,409  
       

 

 

  

Automotive Retail – 0.8%

        

Allison Transmission, Inc.,
5.000%, 10–1–24 (D)

      315          323  

Group 1 Automotive, Inc.,
5.000%, 6–1–22

      424          430  

Penske Automotive Group, Inc.,
5.500%, 5–15–26

      218          217  

Sonic Automotive, Inc.,
5.000%, 5–15–23 (E)

      1,379          1,312  
       

 

 

  
          2,282  
       

 

 

  

Broadcasting – 4.8%

        

Clear Channel Outdoor Holdings, Inc.,
6.500%, 11–15–22 (E)

      2,289          2,352  

Clear Channel Worldwide Holdings, Inc., Series A,
7.625%, 3–15–20

      54          53  

Clear Channel Worldwide Holdings, Inc., Series B,
7.625%, 3–15–20 (E)

      10,000          9,950  

Cumulus Media, Inc.,
7.750%, 5–1–19

      2,000          550  
       

 

 

  
          12,905  
       

 

 

  

Cable & Satellite – 22.5%

        

Altice Financing S.A.:

        

6.625%, 2–15–23 (D)

      832          883  

7.500%, 5–15–26 (D)(E)

      1,425          1,582  

Altice S.A.:

        

7.250%, 5–15–22 (D)(F)

    EUR 152          184  

7.750%, 5–15–22 (D)(E)

    $ 13,835          14,682  

6.250%, 2–15–25 (D)(F)

    EUR 184          229  

7.625%, 2–15–25 (D)(E)

    $ 11,190          12,309  

Altice U.S. Finance I Corp.,
5.500%, 5–15–26 (D)

      879          923  

Block Communications, Inc.,
6.875%, 2–15–25 (D)

      269          289  

Cablevision Systems Corp.,
5.875%, 9–15–22 (E)

      1,461          1,536  

CCO Holdings LLC and CCO Holdings Capital Corp.,
5.500%, 5–1–26 (D)

      485          515  

Columbus International, Inc.,
7.375%, 3–30–21 (D)

      268          284  

 

DISH DBS Corp.:

        

6.750%, 6–1–21 (E)

      7,500          8,325  

5.875%, 7–15–22 (E)

      2,000          2,150  

5.875%, 11–15–24

      212          226  

7.750%, 7–1–26

      657          779  

Neptune Finco Corp.:

        

10.125%, 1–15–23 (D)

      831          964  

6.625%, 10–15–25 (D)

      394          433  

10.875%, 10–15–25 (D)

      794          956  

Numericable – SFR S.A.,
7.375%, 5–1–26 (D)(E)

      4,194          4,550  

Sirius XM Radio, Inc.,
4.625%, 5–15–23 (D)(E)

      4,586          4,718  

VTR Finance B.V.,
6.875%, 1–15–24 (D)(E)

      3,584          3,799  

WaveDivision Escrow LLC and WaveDivision Escrow Corp.,
8.125%, 9–1–20 (D)

      569          589  
       

 

 

  
          60,905  
       

 

 

  

Casinos & Gaming – 2.5%

        

Gateway Casinos & Entertainment Ltd.,
8.250%, 3–1–24 (D)

      983          1,022  

Studio City Finance Ltd.,
8.500%, 12–1–20 (D)(E)

      2,100          2,184  

Wynn Macau Ltd.,
5.250%, 10–15–21 (D)(E)

      3,381          3,466  
       

 

 

  
          6,672  
       

 

 

  

Department Stores – 0.3%

        

Bon-Ton Stores, Inc. (The),
8.000%, 6–15–21

      2,224          895  
       

 

 

  

Education Services – 2.7%

        

Laureate Education, Inc.,
8.250%, 5–1–25 (D)(E)

      6,858          7,355  
       

 

 

  

Homefurnishing Retail – 0.9%

        

Restoration Hardware Holdings, Inc.,
Convertible:

        

0.000%, 6–15–19 (D)(G)

      1,569          1,428  

0.000%, 7–15–20 (D)(G)

      1,356          1,152  
       

 

 

  
          2,580  
       

 

 

  

Hotels, Resorts & Cruise Lines – 0.3%

        

Carlson Travel, Inc.,
6.750%, 12–15–23 (D)

      800          814  
       

 

 

  

Leisure Facilities – 0.4%

        

AMC Entertainment Holdings, Inc.:

        

5.875%, 11–15–26 (D)

      256          267  

6.125%, 5–15–27 (D)

      333          352  

Cedar Fair L.P., Magnum Management Corp., Canada’s Wonderland Co. and Millennium Operations LLC,
5.375%, 4–15–27 (D)

      471          498  
       

 

 

  
          1,117  
       

 

 

  

Movies & Entertainment – 2.5%

        

AMC Entertainment, Inc.,
5.750%, 6–15–25 (E)

      1,409          1,465  

Cinemark USA, Inc.:

        

5.125%, 12–15–22 (E)

      164          169  

4.875%, 6–1–23 (E)

      1,871          1,911  

EMI Music Publishing Group North America Holdings,
7.625%, 6–15–24 (D)

      523          582  

WMG Acquisition Corp.,
6.750%, 4–15–22 (D)(E)

      2,472          2,599  
       

 

 

  
          6,726  
       

 

 

  

Publishing – 0.6%

        

E.W. Scripps Co.,
5.125%, 5–15–25 (D)

      142          146  

MDC Partners, Inc.,
6.500%, 5–1–24 (D)

      1,377          1,374  
       

 

 

  
          1,520  
       

 

 

  

Specialized Consumer Services – 1.7%

        

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

        

5.500%, 10–1–21 (D)(E)

      1,396          1,445  

5.000%, 2–1–25 (D)

      457          469  

Nielsen Finance LLC and Nielsen Finance Co.,
5.000%, 4–15–22 (D)(E)

      2,677          2,777  
       

 

 

  
          4,691  
       

 

 

  

Specialty Stores – 0.9%

        

Cumberland Farms, Inc.,
6.750%, 5–1–25 (D)

      770          810  

Jo-Ann Stores Holdings, Inc.
(9.750% Cash or 10.500% PIK),
9.750%, 10–15–19 (D)(E)(H)

      1,766          1,740  
 

Jo-Ann Stores, Inc.,
8.125%, 3–15–19 (D)

      23          23  
       

 

 

  
          2,573  
       

 

 

  

Total Consumer Discretionary – 42.3%

                 114,696  

Consumer Staples

        

Food Distributors – 1.3%

        

Performance Food Group, Inc.,
5.500%, 6–1–24 (D)

      1,054          1,088  

Simmons Foods, Inc.,
7.875%, 10–1–21 (D)

      1,000          1,063  

U.S. Foods, Inc.,
5.875%, 6–15–24 (D)

      1,312          1,361  
       

 

 

  
          3,512  
       

 

 

  

Packaged Foods & Meats – 2.0%

        

JBS Investments GmbH (GTD by JBS S.A. and JBS Hungary Holdings Kft.),
7.750%, 10–28–20 (D)

      200          189  

JBS USA LLC and JBS USA Finance, Inc.:

        

5.875%, 7–15–24 (D)(E)

      1,892          1,774  

5.750%, 6–15–25 (D)

      1,794          1,686  

Post Holdings, Inc.:

        

5.500%, 3–1–25 (D)

      346          357  

8.000%, 7–15–25 (D)

      545          619  

5.000%, 8–15–26 (D)

      523          522  

5.750%, 3–1–27 (D)

      346          355  
       

 

 

  
          5,502  
       

 

 

  

Personal Products – 0.2%

        

Revlon Consumer Products Corp.,
5.750%, 2–15–21

      361          332  

Revlon Escrow Corp.,
6.250%, 8–1–24

      248          216  
       

 

 

  
          548  
       

 

 

  

Tobacco – 0.7%

        

Prestige Brands, Inc.,
5.375%, 12–15–21 (D)(E)

      1,820          1,877  
       

 

 

  

Total Consumer Staples – 4.2%

                 11,439  

Energy

        

Integrated Oil & Gas – 0.2%

        

Petrobras Global Finance B.V. (GTD by Petroleo Brasileiro S.A.):

        

6.125%, 1–17–22

      92          95  

7.375%, 1–17–27

      471          498  
       

 

 

  
          593  
       

 

 

  

Oil & Gas Drilling – 1.2%

        

KCA Deutag UK Finance plc:

        

7.250%, 5–15–21 (D)(E)

      617          546  

9.875%, 4–1–22 (D)

      991          961  

Noble Holding International Ltd.,
7.750%, 1–15–24

      459          362  

Offshore Drilling Holding S.A.,
8.375%, 9–20–20 (D)(E)(I)

      3,385          1,168  

Offshore Group Investment Ltd.,
0.000%, 11–1–19 (J)

      883          —  

Rowan Cos., Inc. (GTD by Rowan plc),
7.375%, 6–15–25

      277          259  

Trinidad Drilling Ltd.,
6.625%, 2–15–25 (D)

      23          22  
       

 

 

  
          3,318  
       

 

 

  

Oil & Gas Equipment & Services – 0.9%

        

Brand Energy & Infrastructure Services, Inc.,
8.500%, 7–15–25 (D)

      1,862          1,927  

SESI LLC,
7.125%, 12–15–21

      493          470  
       

 

 

  
          2,397  
       

 

 

  

Oil & Gas Exploration & Production – 4.2%

        

Bellatrix Exploration Ltd.,
8.500%, 5–15–20 (D)

      1,239          1,114  

California Resources Corp.,
8.000%, 12–15–22 (D)

      1,178          745  

Continental Resources, Inc. (GTD by Banner Pipeline Co. LLC),
5.000%, 9–15–22

      1,226          1,203  

Crownrock L.P.,
7.750%, 2–15–23 (D)

      369          389  

EnCana Corp.,
6.500%, 8–15–34

      512          585  

Endeavor Energy Resources L.P.:

        

7.000%, 8–15–21 (D)(E)

      2,087          2,160  

8.125%, 9–15–23 (D)

      340          359  

Gulfport Energy Corp.,
6.625%, 5–1–23

      112          112  

Laredo Petroleum, Inc.:

        

7.375%, 5–1–22 (E)

      2,596          2,622  

6.250%, 3–15–23

      339          336  

Murphy Oil USA, Inc. (GTD by Murphy USA),
5.625%, 5–1–27

      142          148  

Ultra Resources, Inc.:

        

6.875%, 4–15–22 (D)

      801          795  

7.125%, 4–15–25 (D)

      236          233  

Whiting Petroleum Corp.,
5.750%, 3–15–21

      543          510  
       

 

 

  
          11,311  
       

 

 

  

Oil & Gas Refining & Marketing – 1.5%

 

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

        

6.125%, 10–1–24 (D)

      243          247  

6.125%, 10–1–24

      225          229  

PDC Energy, Inc.,
6.125%, 9–15–24 (D)

      179          182  

Seven Generations Energy Ltd.:

        

8.250%, 5–15–20 (D)

      1,334          1,391  

6.750%, 5–1–23 (D)

      1,951          2,024  
       

 

 

  
          4,073  
       

 

 

  

Oil & Gas Storage & Transportation – 0.2%

        

Access Midstream Partners L.P.,
4.875%, 5–15–23

      547          567  
       

 

 

  

Total Energy – 8.2%

                 22,259  

Financials

        

Consumer Finance – 3.1%

        

Creditcorp,
12.000%, 7–15–18 (D)(E)

      5,248          4,513  

CURO Financial Technologies Corp.,
12.000%, 3–1–22 (D)(E)

      2,000          2,100  

Quicken Loans, Inc.,
5.750%, 5–1–25 (D)(E)

      1,688          1,743  
       

 

 

  
          8,356  
       

 

 

  

Diversified Capital Markets – 0.7%

        

Patriot Merger Corp.,
9.000%, 7–15–21 (D)(E)

      1,858          1,950  
       

 

 

  

Insurance Brokers – 1.0%

        

NFP Corp.,
6.875%, 7–15–25 (D)

      2,803          2,831  
       

 

 

  

Investment Banking & Brokerage – 0.1%

        

E*TRADE Financial Corp.,
5.875%, 12–29–49

      315          334  
       

 

 

  

Other Diversified Financial Services – 3.0%

        

AAF Holdings LLC and AAF Finance Co.
(12.000% Cash or 12.750% PIK),
12.000%, 7–1–19 (D)(H)

      811          847  

Balboa Merger Sub, Inc.,
11.375%, 12–1–21 (D)

      1,237          1,364  

New Cotai LLC and New Cotai Capital Corp.
(10.625% Cash or 10.625% PIK),
10.625%, 5–1–19 (D)(E)(H)

      6,708          5,903  
       

 

 

  
          8,114  
       

 

 

  

Property & Casualty Insurance – 0.1%

        

Hub International Ltd.,
7.875%, 10–1–21 (D)

      200          208  
       

 

 

  

Specialized Finance – 3.5%

        

Diamond 1 Finance Corp. and Diamond 2 Finance Corp.:

        

5.875%, 6–15–21 (D)

      306          321  

5.450%, 6–15–23 (D)

      217          236  

7.125%, 6–15–24 (D)

      306          336  

6.020%, 6–15–26 (D)

      435          479  

Flexi-Van Leasing, Inc.,
7.875%, 8–15–18 (D)(E)

      2,909          2,880  

Orchestra Borrower LLC and Orchestra Co-Issuer, Inc.,
6.750%, 6–15–22 (D)

      340          350  

TMX Finance LLC and TitleMax Finance Corp.,
8.500%, 9–15–18 (D)(E)

      4,985          4,736  
       

 

 

  
          9,338  
       

 

 

  

Thrifts & Mortgage Finance – 0.5%

        

Provident Funding Associates L.P. and PFG Finance Corp.,
6.375%, 6–15–25 (D)

      1,220          1,251  
       

 

 

  

Total Financials – 12.0%

                 32,382  

Health Care

        

Health Care Facilities – 2.2%

        

DaVita HealthCare Partners, Inc.,
5.125%, 7–15–24

      242          246  

Greatbatch Ltd.,
9.125%, 11–1–23 (D)(E)

      1,423          1,516  

HCA, Inc. (GTD by HCA Holdings, Inc.),
5.250%, 6–15–26

      183          197  

MPH Acquisition Holdings LLC,
7.125%, 6–1–24 (D)

      870          928  

Surgery Center Holdings, Inc.,
8.875%, 4–15–21 (D)

      623          675  

Tenet Healthcare Corp.:

        

7.500%, 1–1–22 (D)

      164          178  

8.125%, 4–1–22 (E)

      2,087          2,217  
       

 

 

  
          5,957  
       

 

 

  
 

Health Care Supplies – 2.8%

 

Kinetic Concepts, Inc. and KCI USA, Inc.,
12.500%, 11–1–21 (D)(E)

      2,213          2,489  

Universal Hospital Services, Inc.,
7.625%, 8–15–20 (E)

      5,152          5,236  
       

 

 

  
          7,725  
       

 

 

  

Pharmaceuticals – 2.5%

 

     

Concordia Healthcare Corp.:

        

9.500%, 10–21–22 (D)(E)

      2,891          492  

7.000%, 4–15–23 (D)

      154          22  

IMS Health, Inc.,
5.000%, 10–15–26 (D)

      525          541  

Jaguar Holding Co. II and Pharmaceutical Product Development LLC,
6.375%, 8–1–23 (D)

      1,061          1,118  

Valeant Pharmaceuticals International, Inc.:

        

7.000%, 10–1–20

      729          717  

5.500%, 3–1–23 (D)

      48          41  

VPII Escrow Corp.,
7.500%, 7–15–21 (D)

      829          803  

VRX Escrow Corp.:

        

5.375%, 3–15–20 (D)

      1,096          1,056  

5.875%, 5–15–23 (D)

      777          666  

6.125%, 4–15–25 (D)

      1,466          1,241  
       

 

 

  
          6,697  
       

 

 

  

Total Health Care – 7.5%

 

        20,379  

Industrials

        

Aerospace & Defense – 2.0%

 

KLX, Inc.,
5.875%, 12–1–22 (D)(E)

      2,475          2,599  

Park Aerospace Holdings Ltd.,
5.250%, 8–15–22 (D)

      92          96  

TransDigm, Inc.,
6.500%, 5–15–25

      471          479  

TransDigm, Inc. (GTD by TransDigm Group, Inc.),
6.500%, 7–15–24

      2,260          2,334  
       

 

 

  
          5,508  
       

 

 

  

Air Freight & Logistics – 0.4%

 

XPO Logistics, Inc.:

        

6.500%, 6–15–22 (D)

      577          606  

6.125%, 9–1–23 (D)

      315          328  
       

 

 

  
          934  
       

 

 

  

Building Products – 1.9%

 

Alcoa Nederland Holding B.V.:

        

6.750%, 9–30–24 (D)

      235          255  

7.000%, 9–30–26 (D)

      235          258  

Ply Gem Industries, Inc.,
6.500%, 2–1–22

      1,670          1,746  

Summit Materials LLC and Summit Materials Finance Corp.:

        

8.500%, 4–15–22

      174          197  

6.125%, 7–15–23

      2,044          2,141  

WESCO Distribution, Inc. (GTD by WESCO International, Inc.),
5.375%, 6–15–24

      436          455  
       

 

 

  
          5,052  
       

 

 

  

Diversified Support Services – 0.8%

 

Ahern Rentals, Inc.,
7.375%, 5–15–23 (D)

      1,896          1,555  

Ritchie Bros. Auctioneers, Inc.,
5.375%, 1–15–25 (D)

      462          481  

United Rentals (North America), Inc. (GTD by United Rentals, Inc.),
5.875%, 9–15–26

      217          231  
       

 

 

  
          2,267  
       

 

 

  

Environmental & Facilities Services – 0.3%

 

GFL Environmental, Inc.:

        

9.875%, 2–1–21 (D)

      389          423  

5.625%, 5–1–22 (D)

      339          347  
       

 

 

  
          770  
       

 

 

  

Research & Consulting Services – 0.3%

 

Eagle Holding Co. II LLC
(7.625% Cash or 8.375% PIK),
7.625%, 5–15–22 (D)(H)

      787          810  
       

 

 

  

Security & Alarm Services – 1.5%

 

Prime Security Services Borrower LLC,
9.250%, 5–15–23 (D)(E)

      3,826          4,157  
       

 

 

  

Trading Companies & Distributors – 0.3%

 

HD Supply, Inc.,
5.750%, 4–15–24 (D)

      754          801  
       

 

 

  

Total Industrials – 7.5%

                 20,299  

Information Technology

        

Application Software – 1.5%

        

Ensemble S Merger Sub, Inc.,
9.000%, 9–30–23 (D)

      460          478  

Kronos Acquisition Holdings, Inc.,
9.000%, 8–15–23 (D)(E)

      3,668          3,659  
       

 

 

  
          4,137  
       

 

 

  

Communications Equipment – 0.9%

 

West Corp.,
5.375%, 7–15–22 (D)(E)

      2,303          2,326  
       

 

 

  

Data Processing & Outsourced Services – 3.0%

 

Alliance Data Systems Corp.:

        

5.875%, 11–1–21 (D)

      608          629  

5.375%, 8–1–22 (D)(E)

      1,853          1,872  

Italics Merger Sub, Inc.,
7.125%, 7–15–23 (D)(E)

      5,170          5,262  

j2 Cloud Services LLC and j2 Global, Inc.,
6.000%, 7–15–25(D)

      468          482  
       

 

 

  
          8,245  
       

 

 

  

IT Consulting & Other Services – 1.5%

 

Cardtronics, Inc. and Cardtronics USA, Inc.,
5.500%, 5–1–25 (D)

      884          911  

NCR Escrow Corp.:

        

5.875%, 12–15–21 (E)

      1,154          1,200  

6.375%, 12–15–23 (E)

      1,765          1,893  
       

 

 

  
          4,004  
       

 

 

  

Semiconductors – 0.5%

 

Micron Technology, Inc.:

        

7.500%, 9–15–23

      882          986  

5.500%, 2–1–25

      414          437  
       

 

 

  
          1,423  
       

 

 

  

Technology Hardware, Storage & Peripherals – 0.7%

 

Western Digital Corp.:

        

7.375%, 4–1–23 (D)

      215          236  

10.500%, 4–1–24

      1,278          1,508  
       

 

 

  
          1,744  
       

 

 

  

Total Information Technology – 8.1%

 

        21,879  

Materials

        

Aluminum – 2.0%

 

Constellium N.V.:

        

8.000%, 1–15–23 (D)(E)

      1,892          1,949  

5.750%, 5–15–24 (D)(E)

      260          241  

6.625%, 3–1–25 (D)

      1,803          1,726  

Kaiser Aluminum Corp.,
5.875%, 5–15–24

      173          182  

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

        

6.250%, 8–15–24 (D)

      674          708  

5.875%, 9–30–26 (D)

      446          459  
       

 

 

  
          5,265  
       

 

 

  

Commodity Chemicals – 0.6%

 

NOVA Chemicals Corp.:

        

4.875%, 6–1–24 (D)

      1,215          1,210  

5.250%, 6–1–27 (D)

      486          484  
       

 

 

  
          1,694  
       

 

 

  

Construction Materials – 1.1%

 

Eagle Materials, Inc.,
4.500%, 8–1–26

      179          183  

Hillman Group, Inc. (The),
6.375%, 7–15–22 (D)(E)

      3,027          2,906  
       

 

 

  
          3,089  
       

 

 

  

Diversified Chemicals – 0.9%

 

PSPC Escrow Corp.,
6.500%, 2–1–22 (D)

      879          908  

PSPC Escrow II Corp.,
10.375%, 5–1–21 (D)(E)

      1,366          1,511  
       

 

 

  
          2,419  
       

 

 

  

Diversified Metals & Mining – 1.6%

 

Artsonig Pty Ltd.
(11.500% Cash or 12.000% PIK),
11.500%, 4–1–19 (D)(H)

      2,738          27  

Crystal Merger Sub, Inc.,
7.625%, 10–15–21 (D)(E)

      459          465  

FMG Resources August 2006 Partners Ltd.:

        

4.750%, 5–15–22 (D)

      913          916  

5.125%, 5–15–24 (D)

      974          974  

Lundin Mining Corp.:

        

7.500%, 11–1–20 (D)(E)

      1,215          1,277  

7.875%, 11–1–22 (D)

      584          637  
       

 

 

  
          4,296  
       

 

 

  

Fertilizers & Agricultural Chemicals – 0.7%

 

Pinnacle Operating Corp.,
9.000%, 5–15–23 (D)(E)

      1,956          1,859  
       

 

 

  

Metal & Glass Containers – 1.9%

 

ARD Finance S.A.,
7.125%, 9–15–23

      248          265  

BakerCorp International, Inc.,
8.250%, 6–1–19 (E)

      5,007          4,344  

HudBay Minerals, Inc.:

        

7.250%, 1–15–23 (D)

      188          194  

7.625%, 1–15–25 (D)

      282          295  
       

 

 

  
          5,098  
       

 

 

  

Paper Packaging – 0.5%

 

Flex Acquisition Co., Inc.,
6.875%, 1–15–25 (D)

      321          334  

Reynolds Group Issuer, Inc., Reynolds Group Issuer LLC and Reynolds Group Issuer (Luxembourg) S.A.,
5.125%, 7–15–23 (D)

      1,014          1,053  
       

 

 

  
          1,387  
       

 

 

  
 

Specialty Chemicals – 0.2%

 

Kraton Polymers LLC and Kraton Polymers Capital Corp.,
7.000%, 4–15–25 (D)

      475          499  
       

 

 

  

Steel – 0.1%

 

U.S. Steel Corp.,
8.375%, 7–1–21 (D)

      304          334  
       

 

 

  

Total Materials – 9.6%

                 25,940  

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          230  
       

 

 

  

Real Estate Development – 0.2%

 

Hub Holdings LLC and Hub Holdings Finance, Inc.
(8.125% Cash or 8.875% PIK),
8.125%, 7–15–19 (D)(H)

      570          572  
       

 

 

  

Total Real Estate – 0.3%

                 802  

Telecommunication Services

        

Alternative Carriers – 1.9%

 

Consolidated Communications Finance II Co.,
6.500%, 10–1–22

      812          808  

Level 3 Communications, Inc.,
5.750%, 12–1–22 (E)

      2,176          2,258  

Level 3 Escrow II, Inc.,
5.375%, 8–15–22

      1,411          1,453  

Zayo Group LLC and Zayo Capital, Inc.:

        

6.000%, 4–1–23

      310          326  

5.750%, 1–15–27 (D)

      365          382  
       

 

 

  
          5,227  
       

 

 

  

Integrated Telecommunication Services – 12.7%

 

Frontier Communications Corp.:

        

6.250%, 9–15–21

      10,811          9,649  

10.500%, 9–15–22 (E)

      4,155          3,963  

7.125%, 1–15–23 (E)

      195          162  

6.875%, 1–15–25 (E)

      562          443  

11.000%, 9–15–25 (E)

      1,564          1,451  

GCI, Inc.,
6.875%, 4–15–25 (E)

      2,870          3,103  

Sprint Corp.:

        

7.250%, 9–15–21 (E)

      11,196          12,441  

7.875%, 9–15–23 (E)

      2,735          3,145  
       

 

 

  
          34,357  
       

 

 

  

Wireless Telecommunication Service – 1.9%

 

Sable International Finance Ltd.,
6.875%, 8–1–22 (D)

      2,198          2,374  

Sprint Nextel Corp.:

        

9.000%, 11–15–18 (D)

      99          108  

7.000%, 8–15–20

      218          240  

11.500%, 11–15–21

      178          228  

T-Mobile USA, Inc.:

        

6.000%, 4–15–24

      773          827  

6.500%, 1–15–26 (E)

      1,305          1,440  
       

 

 

  
          5,217  
       

 

 

  

Total Telecommunication Services – 16.5%

 

        44,801  

TOTAL CORPORATE DEBT SECURITIES – 116.2%

 

      $ 314,876  

(Cost: $313,001)

        

LOANS (K)

                    

Consumer Discretionary

        

Advertising – 0.3%

        

Advantage Sales & Marketing, Inc. (ICE LIBOR plus 650 bps),
7.796%, 7–25–22 (J)

      955          912  
       

 

 

  

Apparel Retail – 2.0%

 

Talbots, Inc. (The) (ICE LIBOR plus 450 bps),
5.726%, 3–19–20

      1,598          1,491  

Talbots, Inc. (The) (ICE LIBOR plus 850 bps),
9.726%, 3–19–21

      949          812  

True Religion Apparel, Inc. (ICE LIBOR plus 487.5 bps):

        

6.101%, 7–30–19

      38          8  

6.171%, 7–30–19

      14,533          3,118  
       

 

 

  
          5,429  
       

 

 

  

Casinos & Gaming – 0.1%

 

Gateway Casinos & Entertainment Ltd. (ICE LIBOR plus 375 bps),
5.046%, 2–22–23

      324          326  
       

 

 

  

Department Stores – 1.3%

 

Belk, Inc. (ICE LIBOR plus 475 bps),
5.905%, 12–10–22

      3,950          3,352  
       

 

 

  

Education Services – 2.0%

 

Laureate Education, Inc. (ICE LIBOR plus 450 bps),
5.726%, 4–26–24

      5,432          5,454  
       

 

 

  

General Merchandise Stores – 2.7%

 

BJ’s Wholesale Club, Inc. (ICE LIBOR plus 375 bps),
4.968%, 2–3–24

      2,973          2,877  

BJ’s Wholesale Club, Inc. (ICE LIBOR plus 750 bps),
8.710%, 1–26–25

      2,335          2,256  

Orchard Acquisition Co. LLC (ICE LIBOR plus 600 bps),
7.313%, 2–8–19

      4,531          2,107  
       

 

 

  
          7,240  
       

 

 

  

Home Furnishings – 0.8%

 

Serta Simmons Bedding LLC (ICE LIBOR plus 800 bps),
9.179%, 11–8–24

      2,244          2,234  
       

 

 

  

Hotels, Resorts & Cruise Lines – 0.1%

 

Travel Leaders Group LLC (ICE LIBOR plus 525 bps),
6.476%, 1–19–24

      137          137  
       

 

 

  

Housewares & Specialties – 0.4%

 

KIK Custom Products, Inc. (ICE LIBOR plus 450 bps),
5.793%, 8–26–22

      1,162          1,172  
       

 

 

  

Restaurants – 0.6%

 

NPC International, Inc.,
0.000%, 4–18–25 (L)

      307          310  

NPC International, Inc. (ICE LIBOR plus 350 bps),
4.716%, 4–20–24

      331          333  

NPC International, Inc. (ICE LIBOR plus 750 bps),
8.716%, 4–18–25

      1,039          1,050  
       

 

 

  
          1,693  
       

 

 

  

Specialty Stores – 0.9%

 

Academy Sports + Outdoors,
0.000%, 7–2–22 (L)

      291          225  

Academy Sports + Outdoors (ICE LIBOR plus 400 bps):

        

5.172%, 7–2–22

      582          450  

5.220%, 7–2–22

      416          322  

Academy Sports + Outdoors (ICE LIBOR plus 500 bps),
5.226%, 7–2–22

      174          134  

Jo-Ann Stores, Inc. (ICE LIBOR plus 500 bps),
6.391%, 10–21–23

      1,215          1,208  
       

 

 

  
          2,339  
       

 

 

  

Total Consumer Discretionary – 11.2%

                 30,288  

Consumer Staples

 

Food Distributors – 0.3%

 

Chefs’ Warehouse, Inc. (The) (ICE LIBOR plus 575 bps),
6.980%, 6–22–22

      883          893  
       

 

 

  

Hypermarkets & Super Centers – 0.4%

 

GOBP Holdings, Inc. (ICE LIBOR plus 825 bps),
9.546%, 10–21–22

      979          983  
       

 

 

  

Packaged Foods & Meats – 0.3%

 

Shearer’s Foods LLC (ICE LIBOR plus 675 bps), 8.046%, 6–30–22 (J)

      748          722  
       

 

 

  

Total Consumer Staples – 1.0%

                 2,598  

Energy

        

Coal & Consumable Fuels – 1.7%

        

Foresight Energy LLC (ICE LIBOR plus 725 bps),
6.795%, 3–28–22

      3,087          2,935  

Westmoreland Coal Co. (ICE LIBOR plus 650 bps),
7.796%, 12–16–20

      1,782          1,572  
       

 

 

  
          4,507  
       

 

 

  

Oil & Gas Drilling – 0.6%

 

KCA Deutag Alpha Ltd. (ICE LIBOR plus 525 bps),
6.922%, 5–16–20

      1,936          1,734  
       

 

 

  
 

Oil & Gas Equipment & Services – 1.2%

 

Brand Energy & Infrastructure Services, Inc. (ICE LIBOR plus 425 bps):

        

5.464%, 6–21–24

      301          301  

5.496%, 6–21–24

      1,590          1,586  

Larchmont Resources LLC (10.000% Cash or 10.000% PIK),
10.000%, 8–7–20 (C)(H)(J)

      1,386          1,372  
       

 

 

  
          3,259  
       

 

 

  

Oil & Gas Exploration & Production – 1.5%

 

Chesapeake Energy Corp. (ICE LIBOR plus 750 bps),
8.686%, 8–23–21

      3,879          4,098  
       

 

 

  

Oil & Gas Storage & Transportation – 1.1%

 

Bowie Resources Holdings LLC (ICE LIBOR plus 1,075 bps),
11.976%, 2–16–21

      1,224          1,126  

Bowie Resources Holdings LLC (ICE LIBOR plus 575 bps),
6.976%, 8–12–20

      1,896          1,819  
       

 

 

  
          2,945  
       

 

 

  

Total Energy – 6.1%

                 16,543  

Financials

        

Insurance Brokers – 0.2%

        

NFP Corp.,
0.000%, 1–8–24 (L)

      145          145  

NFP Corp. (ICE LIBOR plus 350 bps),
4.796%, 1–8–24

      459          460  
       

 

 

  
          605  
       

 

 

  

Specialized Finance – 0.1%

        

Orchestra Borrower LLC and Orchestra Co-Issuer, Inc.,
0.000%, 12–2–21 (L)

      365          367  
       

 

 

  

Total Financials – 0.3%

                 972  

Industrials

        

Building Products – 0.3%

        

Hampton Rubber Co. & SEI Holding Corp.
(ICE LIBOR plus 800 bps),
9.226%, 3–27–22

      1,146          1,008  
       

 

 

  

Construction & Engineering – 0.2%

        

Tensar International Corp. (ICE LIBOR plus 850 bps),
9.796%, 7–10–22 (J)

      604          483  
       

 

 

  

Industrial Conglomerates – 1.1%

        

Crosby Worldwide Ltd. (ICE LIBOR plus 300 bps),
4.172%, 11–22–20

      456          413  

PAE Holding Corp. (ICE LIBOR plus 550 bps),
6.726%, 10–20–22

      2,143          2,154  

PAE Holding Corp. (ICE LIBOR plus 950 bps),
10.726%, 10–20–23

      370          370  
       

 

 

  
          2,937  
       

 

 

  

Industrial Machinery – 1.4%

        

Dynacast International LLC (ICE LIBOR plus 850 bps),
9.796%, 1–30–23 (J)

      3,719          3,719  
       

 

 

  

Total Industrials – 3.0%

                 8,147  

Information Technology

        

Application Software – 0.8%

        

TIBCO Software, Inc. (ICE LIBOR plus 450 bps),
5.730%, 12–4–20

      2,118          2,126  
       

 

 

  

Data Processing & Outsourced Services – 0.2%

 

Colorado Buyer, Inc. (ICE LIBOR plus 300 bps),
8.420%, 5–1–25

      381          383  
       

 

 

  

Internet Software & Services – 0.2%

        

Ancestry.com LLC (ICE LIBOR plus 825 bps),
9.460%, 10–19–24

      608          620  
       

 

 

  

IT Consulting & Other Services – 0.1%

        

Triple Point Group Holdings, Inc. (ICE LIBOR plus 425 bps),
5.546%, 7–13–20

      316          296  
       

 

 

  

Total Information Technology – 1.3%

                 3,425  

Materials

        

Diversified Metals & Mining – 0.2%

        

EP Minerals LLC (ICE LIBOR plus 750 bps),
8.702%, 8–20–21 (J)

      545          529  
       

 

 

  

Paper Packaging – 0.8%

        

FPC Holdings, Inc. (ICE LIBOR plus 800 bps),
9.296%, 5–27–20

      2,499          2,299  
       

 

 

  

Total Materials – 1.0%

                 2,828  

TOTAL LOANS – 23.9%

               $ 64,801  

(Cost: $79,160)

        
SHORT-TERM SECURITIES                  

Master Note – 0.4%

        

Toyota Motor Credit Corp. (1-Month U.S. LIBOR plus 15 bps),
1.440%, 7–5–17 (M)

      972          972  
       

 

 

  

TOTAL SHORT-TERM SECURITIES – 0.4%

               $ 972  

(Cost: $972)

        

TOTAL INVESTMENT SECURITIES – 141.8%

               $ 384,107  

(Cost: $396,154)

        

BORROWINGS (N) – (43.5)%

                 (118,000 ) 

CASH AND OTHER ASSETS, NET OF LIABILITIES – 1.7%

                 4,849  

NET ASSETS – 100.0%

               $ 270,956  
 

Notes to Schedule of Investments

 

(A) No dividends were paid during the preceding 12 months.

 

(B) Restricted securities. At June 30, 2017, the Fund owned the following restricted securities:

 

Security    Acquisition Date(s)    Shares      Cost      Market
Value		  

Larchmont Resources LLC

    12-8-16      2      $ 561      $ 594  

Pinnacle Agriculture Enterprises LLC

    3-10-17      1,358        617        1,051  
         $ 1,178      $ 1,645  

The total value of these securities represented 0.6% of net assets at June 30, 2017.

 

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

 

(D) 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, 2017 the total value of these securities amounted to $203,201 or 75.0% of net assets.

 

(E) All or a portion of securities with an aggregate value of $132,158 have been pledged as collateral on open borrowings.

 

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

 

(G) Zero coupon bond.

 

(H) 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.

 

(I) 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, 2017.

 

(J) Securities whose value was determined using significant unobservable inputs.

 

(K) Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2017. Description of the reference rate and spread, if applicable, are included in the security description.

 

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

 

(M) Variable rate security. Interest rate disclosed is that which is in effect at June 30, 2017. 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.

 

(N) Borrowings payable as a percentage of total investment securities is 30.7%.

The following forward foreign currency contracts were outstanding at June 30, 2017:

 

      Currency to be
Delivered		            Currency to be
Received		      Settlement
Date		    Counterparty    Unrealized
Appreciation		      Unrealized
Depreciation		  
Canadian Dollar      1,714      U.S. Dollar      1,290      7-24-17    Morgan Stanley International    $ —      $ 32  
Euro      356      U.S. Dollar      397      7-24-17    Morgan Stanley International      —        10  
                  $ —      $ 42  

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, 2017:

 

     Level 1      Level 2      Level 3  

Assets

        

Investments in Securities

        

Common Stocks

        

Energy

   $ 1,813      $ 594      $ —  

Total Common Stocks

   $ 1,813      $ 594      $ —  

Preferred Stocks

     —        1,051        —  

Corporate Debt Securities

     —        314,876        —  

Loans

     —        57,064        7,737  

Short-Term Securities

     —        972        —  

Total

   $ 1,813      $ 374,557      $ 7,737  

Liabilities

        

Forward Foreign Currency Contracts

   $ —      $ 42      $ —  

Payable for Borrowing

   $ —      $ 118,000      $ —  

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

 

     Loans  

Beginning Balance 10-1-16

   $ 17,062  

Net realized gain (loss)

     (433 ) 

Net change in unrealized appreciation (depreciation)

     459  

Purchases

     2,355  

Sales

     (8,826 ) 

Amortization/Accretion of premium/discount

     (75 ) 

Transfers into Level 3 during the period

     1,583  

Transfers out of Level 3 during the period

     (4,388 ) 

Ending Balance 6-30-17

   $ 7,737  

Net change in unrealized appreciation (depreciation) for all Level 3 investments still held as of 6-30-17

   $ 214  

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. During the period ended June 30, 2017, there were no transfers between Levels 1 and 2.

Information about Level 3 fair value measurements:

 

     

Fair Value at

6-30-17

      Valuation Technique(s)    Unobservable Input(s)

Assets

         

Loans

    $ 7,737     

Third-party vendor pricing service

   

Broker quotes

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, 2017 and the related unrealized appreciation (depreciation) were as follows:

 

Cost

   $ 396,154  
 

 

 

  

Gross unrealized appreciation

     15,987  

Gross unrealized depreciation

     (28,034 ) 
 

 

 

  

Net unrealized depreciation

   $ (12,047 ) 

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 29, 2017

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 29, 2017

 

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

Date: August 29, 2017