- --------------------------------------------------------------------------------
August 10, 1998
Dear Shareholder:
The Board of Directors is pleased to report that the first half of 1998 was a
very productive period for our Fund. The Board authorized a rights offering and
an offering of additional shares of Auction Term Preferred Stock (ATP). These
offerings are a continuation of the Board's strategy of reducing the Fund's
operating expense ratio and supporting the dividend by increasing the Fund's
size when the investment environment appears to offer attractive opportunities.
Completed in March, the rights offering raised $76.7 million and was 66%
oversubscribed. In May, the Fund issued an additional $60 million of ATP to
increase the leverage in the Fund to the same level as had existed prior to the
rights offering. The total gross proceeds of these offerings added $136.7
million to the Fund's portfolio, at a cost of .72% of the money raised. The
Fund's ratio of operating expenses to average net assets applicable to common
stock, annualized as of June 30th, was reduced to 80 basis points versus 92
basis points at December 31, 1997, a decline of 13%.
The market price of the Fund's shares closed at $5.125 on June 30th, a yield of
10%, annualizing the current dividend of $.0425 per month. Shares issued in the
March rights offering were sold at $4.72 per share. At $5.125, the stock was
trading at a 3.4% premium to the net asset value of $4.94 at the end of the
quarter. The Fund's total returns for the periods ended June 30, 1998 are shown
below. It is important to note that the Fund is highly leveraged. The leverage
magnifies the Fund's returns. In a rising market, the Fund's total return should
outperform its competitors. In a falling market, the Fund's total return should
underperform the market.
<TABLE>
<CAPTION>
Total Returns for the Periods
Ended June 30, 1998 (Unaudited)
-------------------------------------------------------
Six Months One Year Three Years
------------ ---------- ---------------------------
Cumulative Avg. Annual
------------ ------------
<S> <C> <C> <C> <C>
New America High Income Fund
(NAV and Dividends) 2.4% 9.7% 48.4% 14.1%
New America High Income Fund
(Stock Price and Dividends) (5.0) 11.3 48.2 14.0
- -----------------------------
New America High Income Fund
(NAV and Dividends)* 5.0 12.6 57.8 16.4
Lipper Closed-End Fund
Leveraged High Yield Average
(NAV and Dividends)* 4.2 11.7 48.5 14.1
</TABLE>
*Returns are adjusted for dilutive effect of rights offerings as calculated by
Lipper Analytical Services, Inc.
Source: Lipper Analytical Services, Inc., New America
Year 2000 Problem
Like other mutual funds and organizations around the world, the Fund could be
adversely affected if its computer systems or those of its service providers do
not properly process dates beginning with January 1, 2000 and information
related to those dates (the "Year 2000 Problem"). The Fund's own computer
systems and software, which are used primarily in the preparation of financial
statements, maintaining the portfolio database and analyzing income flows to
project dividend payments and for compliance monitoring and reporting,
<PAGE>
- --------------------------------------------------------------------------------
were manufactured or created after the Year 2000 Problem was widely understood
and thus are not susceptible to the Year 2000 Problem. However, we, like
everybody else, live in an interconnected world and receive data from suppliers
who as yet cannot certify that their systems will not be affected by the Year
2000 Problem. The Fund's principal data supplier is State Street Bank and Trust
Company ("State Street Bank"). State Street Bank is the custodian of the Fund's
assets and the shareholder accounting agent. State Street Bank and the Fund's
other data suppliers have responded to our requests regarding how they intend to
address the Year 2000 Problem and have assured the Fund that their systems
upgrades are on track and will be complete before the year 2000.
In addition, we have sought and received assurances from Fund service providers,
including Wellington Management Company, LLP and State Street Bank, that they
have taken and are taking appropriate measures to address the Year 2000 Problem
and do not currently expect their computer systems or those of their service
providers to experience a Year 2000 Problem which would have a material adverse
impact on the Fund. Our program to monitor the Year 2000 Problem is an ongoing
one, and we will continue to request, receive, and review updates from the
Fund's data and service providers on their Year 2000 Problem preparedness.
Because of the highly complex nature of the Year 2000 Problem and the extent to
which we cannot effect or control remedial measures by those on whom the Fund
must directly or indirectly rely for its operation, there can, however, be no
absolute assurance that the Year 2000 Problem will not have a material adverse
impact on the Fund.
Euro Conversion
Beginning January 1, 1999, certain member countries of the European Union will
begin the process of substituting a single European currency, the euro, for
their national currencies. Because it currently invests only in U.S. dollar
denominated securities, the Fund does not anticipate experiencing any material
adverse effect from the conversion process.
High Yield Market Update
While the high yield market commenced the year with fortitude, it ended the
first half of the year with a slight degree of trepidation. We would opine,
however, that much of the recent uncertainty is of a technical, not fundamental
nature. Market valuations were somewhat pressured during the latter part of the
period for several reasons. First, new high yield issue volumes, which have been
running at an all time record pace, finally appeared to catch up with or
overtake demand. We expect that this mismatch between supply and demand will be
self-correcting, as new issuers will step back from the market if they are not
able to issue paper at reasonable levels. Second, both the equity and high yield
markets have been increasingly concerned about the potential for earnings
weakness resulting from the Asian crisis. We do believe that U.S. economic
growth will be reduced as a result of the Asian weakness; on the positive side,
any potential upward pressure on interest rates in the U.S. will also probably
be mitigated. Commodity producers may be particularly hampered by low commodity
prices, resulting from the Asian weakness. Nevertheless, the U.S. economy
remains
2
<PAGE>
- --------------------------------------------------------------------------------
healthy at this time, and we continue to focus on those issues that we believe
offer prospects for favorable credit improvement. Finally, as the markets become
increasingly globalized, valuation shifts in one market (such as the emerging
markets) tend to have a more immediate impact in another, such as the U.S. high
yield market.
With respect to industry trends, as we reported in our January letter to
shareholders, communications issuers continue to be highly active. These issuers
have been eager to finance their capital expenditure requirements to build
market share in their developing businesses such as wireless telephony,
satellite communications systems and competitive networks, including internet
connectivity, to existing wired infrastructure. We would note that given the
developmental nature of these companies, they tend to be huge users of capital
and are therefore very sensitive to the health of the capital markets,
especially the equity market. (The portfolio remains relatively underweighted to
this nature of issuer, given our concerns about the ultimate success of many of
these new and competing ventures.)
Thank you for your interest in The New America High Income Fund.
Sincerely yours,
/s/ Robert F. Birch /s/ Catherine A. Smith
- ------------------- ----------------------
Robert F. Birch Catherine A. Smith
President Senior Vice President
The New America High Income Fund, Inc. Wellington Management Company, LLP
3
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Schedule of Investments -- June 30, 1998 (Unaudited) (Dollar Amounts in
Thousands)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Moody's Value
Amount/Units Rating (Note 1(a))
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
CORPORATE DEBT SECURITIES -- 87.24% (e)
- --------------------------------------------------------------------------------
Aerospace and Defense -- 2.17%
$4,000 Argo-Tech Corporation, Senior
Subordinated Notes, 8.625%,
10/01/07 ........................ B3 $4,000
3,500 K&F Industries, Inc., Senior
Subordinated Notes, 9.25%,
10/15/07 ........................ B3 3,517
3,775 Moog, Inc., Senior Subordinated
Notes, 10%, 05/01/06 ............ B2 4,058
------
11,575
------
Automobile -- 3.96%
7,000 Accuride Corporation, Senior
Subordinated Notes, 9.25%,
02/01/08 (i) .................... B2 7,000
1,500 Federal-Mogul Corporation, Notes,
7.875%, 07/01/10 ................ Ba2 1,504
3,500 Federal-Mogul Corporation, Senior
Notes, 8.80%, 04/15/07 .......... Ba2 3,718
4,000 Key Plastics, Inc., Senior
Subordinated Notes, 10.25%,
03/15/07 ........................ B3 4,150
3,000 LDM Technologies, Inc., Senior
Subordinated Notes, 10.75%,
01/15/07 ........................ B3 3,120
1,500 Lear Corporation, Subordinated
Notes, 9.50%, 07/15/06 .......... Ba3 1,635
------
21,127
------
Banking -- 2.74%
2,500 First Nationwide (Parent) Holdings,
Inc., Senior Notes, 12.50%,
04/15/03 ........................ B3 2,844
1,500 FirstFed Financial Corp., Notes,
11.75%, 10/01/04 ................ B2 1,620
3,500 Hawthorne Financial Corporation,
Notes, 12.50%, 12/31/04 ......... (f) 3,675
7,000 Western Financial Bank,
Subordinated Capital
Debentures, 8.875%, 08/01/07 .... B1 6,475
------
14,614
------
</TABLE>
<TABLE>
<CAPTION>
Principal Moody's Value
Amount/Units Rating (Note 1(a))
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Beverage, Food and Tobacco -- 1.37%
$ 810 Aurora Foods Inc., Series C,
Senior Subordinated Notes,
9.875%, 02/15/07 ................ B1 $ 859
410 Aurora Foods Inc., Series E,
Senior Subordinated Notes,
8.75%, 07/01/08 (i) ............. B1 415
4,000 Del Monte Foods Company,
Senior Discount Notes, 12.50%,
12/15/07 (g)(i) ................. Caa2 2,600
3,500 Eagle Family Foods, Inc., Senior
Subordinated Notes, 8.75%,
01/15/08 (i) .................... B3 3,412
------
7,286
------
Buildings and Real Estate -- 3.53%
6,000 Kaufman and Broad Home
Corporation, Senior
Subordinated Notes, 9.625%,
11/15/06 ........................ Ba3 6,330
5,000 Standard Pacific Corp., Senior
Notes, 8.50%, 06/15/07 .......... Ba2 5,019
2,000 Standard Pacific Corp., Senior
Notes, 8%, 02/15/08 ............. Ba2 1,965
2,000 Toll Corp., Senior Subordinated
Notes, 7.75%, 09/15/07 .......... Ba3 1,975
3,500 U.S. Home Corporation, Senior
Subordinated Notes, 8.88%,
08/15/07 ........................ B1 3,570
------
18,859
------
Chemicals, Plastics and Rubber -- 3.10%
1,500 Buckeye Cellulose Corporation,
Senior Subordinated Notes,
8.50%, 12/15/05 ................. Ba3 1,515
2,180 Buckeye Technologies Inc., Senior
Subordinated Notes, 8%,
10/15/10 (i) .................... Ba3 2,196
2,000 LaRoche Industries Inc., Senior
Subordinated Notes, 9.50%,
09/15/07 ........................ B3 1,945
3,500 PCI Chemicals Canada Inc.,
Senior Secured Notes, 9.25%,
10/15/07 ........................ B2 3,412
</TABLE>
The accompanying notes are an integral
part of these financial statements.
4
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Schedule of Investments -- June 30, 1998 (Unaudited) -- Continued (Dollar
Amounts in Thousands)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Moody's Value
Amount/Units Rating (Note 1(a))
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
CORPORATE DEBT SECURITIES -- continued
- --------------------------------------------------------------------------------
$1,900 Philipp Brothers Chemicals Inc.,
Senior Subordinated Notes,
9.875%, 06/01/08 (i) ................ B3 $ 1,914
2,000 Pioneer Americas Acquisition
Corp., Senior Secured Notes,
9.25%, 06/15/07 ..................... B2 1,980
3,500 Sovereign Specialty Chemicals,
Inc., Senior Subordinated Notes,
9.50%, 08/01/07 ..................... B3 3,570
------
16,532
------
Containers, Packaging and Glass -- 8.50%
2,190 APP Finance (VII) Mauritius
Limited, Guaranteed Convertible
Notes, 3.50%, 04/30/03 (i) ........ (f) 1,726
2,250 APP International Finance
Company B.V., Guaranteed
Secured Notes, 11.75%,
10/01/05 .......................... Caa1 1,980
2,000 BWAY Corporation, Senior
Subordinated Notes, 10.25%,
04/15/07 .......................... B2 2,150
2,500 Calmar Inc., Senior Subordinated
Notes, 11.50%, 08/15/05 ........... B3 2,891
1,805 Container Corporation of America,
Senior Notes, Series B, 10.75%,
05/01/02 .......................... B1 1,976
6,195 Container Corporation of America,
Senior Notes, 9.75%, 04/01/03 ..... B1 6,644
5,000 Doman Industries Limited, Senior
Notes, 8.75%, 03/15/04 ............ B1 4,887
2,000 Domtar Inc., Debentures, 9.50%,
08/01/16 .......................... Ba1 2,178
7,000 Gaylord Container Corporation,
Senior Notes, 9.375%, 06/15/07 .... B3 6,703
1,000 Grupo Industrial Durango, S.A. de
C.V., Notes, 12.625%, 08/01/03 .... B1 1,070
3,175 Repap New Brunswick Inc.,
Second Priority Senior Secured
Notes, 10.625%, 04/15/05 .......... Caa1 3,207
7,000 Silgan Corporation, Senior
Subordinated Debentures, 9%,
06/01/09 .......................... B1 7,298
</TABLE>
<TABLE>
<CAPTION>
Principal Moody's Value
Amount/Units Rating (Note 1(a))
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
$2,500 Tembec Finance Corp., Senior
Notes, 9.875%, 09/30/05 ............. B1 $ 2,650
------
45,360
------
Diversified/Conglomerate Manufacturing -- 3.83%
1,155 AMTROL Inc., Senior
Subordinated Notes, 10.625%,
12/31/06 .......................... B3 1,120
2,500 Cathay International Limited,
Senior Notes, 13%, 04/15/08 (i) ... Ba3 2,200
3,000 Falcon Building Products, Inc.,
Senior Subordinated Notes,
9.50%, 06/15/07 ................... B3 2,955
1,500 International Wire Group, Inc.,
Senior Subordinated Notes,
Series B, 11.75%, 06/01/05 ........ B3 1,650
1,000 International Wire Group, Inc.,
Senior Subordinated Notes,
11.75%, 06/01/05 .................. B3 1,100
3,500 Johnstown America Industries,
Inc., Senior Subordinated Notes,
11.75%, 08/15/05 .................. B3 3,876
825 Johnstown America Industries,
Inc., Senior Subordinated Notes,
Series C, 11.75%, 08/15/05 ........ B3 914
2,500 Nortek, Inc., Senior Notes, 9.25%,
03/15/07 .......................... B1 2,569
1,000 Nortek, Inc., Senior Notes,
9.125%, 09/01/07 .................. B1 1,022
3,000 Roller Bearing Company of
America, Senior Subordinated
Notes, 9.625%, 06/15/07 ........... B3 3,038
------
20,444
------
Diversified/Conglomerate Service -- 3.14%
515 Concentric Network Corporation,
Senior Notes, 12.75%, 12/15/07 (f) 548
4,000 DecisionOne Corporation, Senior
Subordinated Notes, 9.75%,
08/01/07 .......................... B3 3,860
1,750 DecisionOne Holdings Corp.,
Units, Senior Discount
Debentures, 11.50%, 08/01/08,
Warrants, exp. 08/01/07 (g) ....... Caa1 1,046
</TABLE>
The accompanying notes are an integral
part of these financial statements.
5
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Schedule of Investments -- June 30, 1998 (Unaudited) -- Continued (Dollar
Amounts in Thousands)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Moody's Value
Amount/Units Rating (Note 1(a))
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
CORPORATE DEBT SECURITIES -- continued
- --------------------------------------------------------------------------------
$2,500 Guangdong Enterprises (Holdings)
Limited, Senior Notes, 8.875%,
05/22/07 (i) ...................... Baa3 $ 1,838
2,500 Multicanal S.A., Notes, 9.25%,
02/01/02 .......................... Ba3 2,375
2,000 Pierce Leahy Corp., Senior
Subordinated Notes, 9.125%,
07/15/07 .......................... B3 2,080
5,000 UNICCO Service Company, Senior
Subordinated Notes, 9.875%,
10/15/07 .......................... B3 5,038
------
16,785
------
Diversified Natural Resources, Metals and Minerals -- .77%
3,000 P&L Coal Holdings Corporation,
Senior Notes, 8.875%,
05/15/08 (i) ...................... Ba3 3,086
1,000 P&L Coal Holdings Corporation,
Senior Subordinated Notes,
9.625%, 05/15/08 (i) .............. B2 1,029
------
4,115
------
Electronics -- 2.06%
5,000 Advanced Micro Devices, Inc.
Senior Secured Notes, 11%,
08/01/03 .......................... Ba3 5,300
2,000 Fairchild Semiconductor
Corporation, Senior
Subordinated Notes, 10.125%,
03/15/07 .......................... B2 2,040
4,000 Samsung Electronics America,
Inc., Guaranteed Notes, 9.75%,
05/01/03 (i) ...................... Ba1 3,680
------
11,020
------
Farming and Agriculture -- .47%
2,580 Aracruz Celulose S.A., Notes,
10.375%, 01/31/02 (i) ............. B1 2,503
------
Finance -- 3.64%
2,000 Arcadia Financial Ltd., Senior
Notes, 11.50%, 03/15/07 ........... B2 2,000
4,000 Emergent Group, Inc., Senior
Notes, Series B, 10.75%,
09/15/04 .......................... B3 2,960
</TABLE>
<TABLE>
<CAPTION>
Principal Moody's Value
Amount/Units Rating (Note 1(a))
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
$5,000 Olympic Financial Ltd., Units,
Senior Notes, 11.50%, 03/15/07,
Warrants, exp. 03/15/07 ........... B2 $ 5,000
3,750 Resource America, Inc., Senior
Notes, 12%, 08/01/04 .............. Caa1 4,003
2,500 Southern Pacific Funding
Corporation, Senior Notes,
11.50%, 11/01/04 .................. B3 2,475
3,000 United Companies Financial
Corporation, Subordinated,
Notes, 8.375%, 07/01/05 ........... Ba3 2,978
------
19,416
------
Grocery -- .82%
2,000 Homeland Stores, Inc., Senior
Subordinated Notes, 10%,
08/01/03 .......................... (f) 1,860
2,500 Pathmark Stores, Inc.,
Subordinated Notes, 11.625%,
06/15/02 .......................... Caa2 2,528
------
4,388
------
Healthcare, Education and Childcare -- 5.59%
2,200 Beverly Enterprises, Inc., Senior
Notes, 9%, 02/15/06 ............... B1 2,283
3,500 Columbia/HCA Healthcare
Corporation, Notes, 7.25%,
05/20/08 .......................... Ba2 3,391
6,000 Fisher Scientific International Inc.,
Senior Subordinated Notes, 9%,
02/01/08 .......................... B3 5,970
2,000 Kinetic Concepts, Inc., Senior
Subordinated Notes, 9.625%,
11/01/07 .......................... B3 2,015
2,595 Mediq/PRN Life Support Services,
Inc., Senior Subordinated Notes,
11%, 06/01/08 (i) ................. B3 2,673
3,000 PharMerica, Inc., Senior
Subordinated Notes, 8.375%,
04/01/08 (i) ...................... B2 3,022
2,500 Tenet Healthcare Corporation,
Senior Subordinated Notes,
8.125%, 12/01/08 (i) .............. Ba3 2,513
8,000 Universal Hospital Services, Inc.,
Senior Notes, 10.25%, 03/01/08 (i). B3 8,000
------
29,867
------
</TABLE>
The accompanying notes are an integral
part of these financial statements.
6
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Schedule of Investments -- June 30, 1998 (Unaudited) -- Continued (Dollar
Amounts in Thousands)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Moody's Value
Amount/Units Rating (Note 1(a))
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
CORPORATE DEBT SECURITIES -- continued
- --------------------------------------------------------------------------------
Hotels, Motels, Inns and Gaming -- 3.42%
$5,000 Fitzgeralds Gaming Corporation,
Senior Secured Notes, 12.25%,
12/15/04 (i) ....................... B3 $ 4,925
6,420 John Q. Hammons Hotels, L.P.,
First Mortgage Notes, 8.875%,
02/15/04 ........................... B1 6,460
3,000 Hollywood Casino Corporation,
Senior Secured Notes, 12.75%,
11/01/03 ........................... B2 3,322
3,500 Lady Luck Gaming Corporation,
First Mortgage Notes, 11.875%,
03/01/01 ........................... B2 3,570
------
18,277
------
Leisure, Amusement, Motion Pictures and
Entertainment -- 1.48%
2,000 EchoStar DBS Corporation, Senior
Secured Notes, 12.50%,
07/01/02 ........................... Caa1 2,245
3,000 Innova S. de R. L., Senior
Exchange Notes, 12.875%,
04/01/07 ........................... B2 3,067
2,500 Muzak Limited Partnership, Senior
Notes, 10%, 10/01/03 ............... Ba3 2,588
------
7,900
------
Mining, Steel, Iron and Non-Precious Metals -- 4.99%
3,500 ACINDAR Industria Argentina de
Aceros S.A., Notes, 11.25%,
02/15/04 ........................... B2 3,500
2,000 AK Steel Corporation, Senior
Notes, 9.125%, 12/15/06 ............ Ba2 2,095
3,500 Armco Inc., Senior Notes, 9%,
09/15/07 ........................... B2 3,474
4,000 Bayou Steel Corporation, First
Mortgage Notes, 9.50%,
05/15/08 (i) ....................... B1 3,965
4,000 CSN Iron, S.A., Guaranteed
Notes, 9.125%, 06/01/07 (i) ........ B1 3,180
1,500 GS Technologies Operating Co.,
Inc., Senior Notes, 12.25%,
10/01/05 ........................... B2 1,658
</TABLE>
<TABLE>
<CAPTION>
Principal Moody's Value
Amount/Units Rating (Note 1(a))
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
$3,500 Neenah Corporation, Senior
Subordinated Notes, 11.125%,
05/01/07 ........................... B3 $ 3,815
500 Pohang Iron & Steel Co., Ltd.,
Notes, 7.375%, 05/15/05 ............ Ba1 403
1,000 Pohang Iron & Steel Co., Ltd.,
Notes, 7.125%, 07/15/04 ............ Ba1 810
3,500 Weirton Steel Corporation, Senior
Notes, 11.375%, 07/01/04 ........... B2 3,749
------
26,649
------
Oil and Gas -- 9.56%
5,000 Abraxas Petroleum Corporation,
Senior Notes, 11.50%, 11/01/04 ..... B2 5,150
2,500 Clark Refining & Marketing, Inc.,
Senior Notes, 8.375%, 11/15/07 ..... Ba3 2,513
7,000 Costilla Energy, Inc., Senior Notes,
10.25%, 10/01/06 ................... B2 7,105
7,000 Cross Timbers Oil Company,
Senior Subordinated Notes,
9.25%, 04/01/07 .................... B2 7,210
4,000 Dailey International Inc., Senior
Notes, 9.50%, 02/15/08 ............. B2 3,920
4,000 Kelley Oil & Gas Corporation,
Senior Subordinated Notes,
10.375%, 10/15/06 .................. B3 4,040
2,500 Petroleos Mexicanos, Global
Guaranteed Notes, 8.85%,
09/15/07............................ Ba2 2,387
5,000 Plains Resources Inc., Senior
Subordinated Notes, 10.25%,
03/15/06 ........................... B2 5,212
5,000 RAM Energy, Inc., Senior Notes,
11.50%, 02/15/08 ................... B3 4,950
3,500 Tuboscope Inc., Senior Notes,
7.50%, 02/15/08 .................... Ba2 3,507
5,000 Wainco Oil Corporation, Senior
Notes, 9.125%, 02/15/06 ............ B1 5,037
------
51,031
------
Personal and Non-Durable Consumer Products -- 1.67%
4,000 Chattem, Inc., Senior
Subordinated Notes, 8.875%,
04/01/08 (i) ....................... B2 3,950
</TABLE>
The accompanying notes are an integral
part of these financial statements.
7
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Schedule of Investments -- June 30, 1998 (Unaudited) -- Continued (Dollar
Amounts in Thousands)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Moody's Value
Amount/Units Rating (Note 1(a))
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
CORPORATE DEBT SECURITIES -- continued
- --------------------------------------------------------------------------------
$3,000 The Fonda Group, Inc., Senior
Subordinated Notes, 9.50%,
03/01/07 ......................... B3 $2,895
2,085 WestPoint Stevens Inc., Senior
Notes, 7.875%, 06/15/08 (i) ...... Ba3 2,085
------
8,930
------
Personal Transportation -- 0.63%
5,000 Braniff, Inc., Senior Reset Notes,
15%, 04/01/99 (a)(b)(c)(d) ....... (f) 0
3,500 Valujet, Inc., Senior Notes,
10.25%, 04/15/01 ................. B3 3,386
------
3,386
------
Printing, Publishing and Broadcasting -- 8.39%
3,500 Allbritton Communications
Company, Senior Subordinated
Notes, 8.875%, 02/01/08 .......... B3 3,780
6,460 American Pad & Paper Company
of Delware, Inc., Senior
Subordinated Notes, 13%,
11/15/05 ......................... B3 6,525
3,000 Chancellor Media Corporation,
Senior Subordinated Notes,
9.375%, 10/01/04 ................. B2 3,150
2,250 CSC Holdings Inc., Senior
Debentures, Series B, 8.125%,
08/15/09 ......................... Ba2 2,396
1,500 Falcon Holdings Group, L.P.,
Senior Debentures, 8.375%,
04/15/10 (i) ..................... B2 1,492
4,500 Fox/Liberty Networks, LLC, Senior
Notes, 8.875%, 08/15/07 .......... B1 4,579
3,500 Globo Comunicacoes e
Participacoes S.A., Notes,
10.625%, 12/05/08 (i) ............ B1 3,115
1,735 Jacor Communications Company,
Senior Subordinated Notes,
9.75%, 12/15/06 .................. B2 1,880
1,000 Jacor Communications Company,
Senior Subordinated Notes,
8.75%, 06/15/07 .................. B2 1,036
2,895 Lin Television Corporation, Senior
Subordinated Notes, 8.375%,
03/01/08 (i) ..................... B2 2,953
</TABLE>
<TABLE>
<CAPTION>
Principal Moody's Value
Amount/Units Rating (Note 1(a))
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
$ 940 Net Sat Services Ltd., Senior
Secured Notes, 12.75%, 08/05/04 .. B2 $ 912
3,500 Pindo Deli Finance Mauritius
Limited, Guaranteed Senior
Notes, 10.75%, 10/01/07 .......... Caa1 2,450
4,250 Rifkin Acquisition Partners,
L.L.L.P., Senior Subordinated
Notes, 11.125%, 01/15/06 ......... B3 4,675
2,500 Sullivan Graphics, Inc., Senior
Subordinated Exchange Notes,
12.75%, 08/01/05 ................. Caa1 2,625
3,500 Tevecap S.A., Senior Notes,
12.625%, 11/26/04 ................ B2 3,238
------
44,806
------
Telecommunications -- 10.23%
2,500 Adelphia Communications
Corporation, Senior Notes,
9.875%, 03/01/07 ................. B2 2,706
1,500 Adelphia Communications
Corporation, Senior Notes,
8.375%, 02/01/08 ................. B2 1,500
765 Advanced Radio Telecom Corp.,
Senior Notes, 14%, 02/15/07 ...... Caa2 815
555 American Mobile Satellite
Corporation, Units, Senior
Notes, 12.25%, 04/01/08,
Warrants, exp. 04/01/08 (i) ...... (f) 522
7,000 BTI Telecom Corp., Senior Notes,
10.50%, 09/15/07 ................. B3 6,860
2,000 GST Network Funding Inc., Senior
Secured Equipment Funding
Discount Notes, 10.50%,
05/01/08 (g)(i) .................. (f) 1,210
1,965 Hyperion Telecommunications,
Inc., Senior Secured Notes,
12.25%, 09/01/04 ................. B3 2,117
2,000 Intermedia Communications Inc.,
Senior Notes, 8.875%, 11/01/07 ... B2 2,045
3,500 Intermedia Communications Inc.,
Senior Notes, 8.50%, 01/15/08 .... B2 3,509
4,000 Iridium LLC, Senior Notes, Series
C, 11.25%, 07/15/05 .............. B3 4,010
2,000 Iridium Operating LLC,
Guaranteed Senior Notes,
Series D, 10.875%, 07/15/05 ...... B3 1,985
</TABLE>
The accompanying notes are an integral
part of these financial statements.
8
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Schedule of Investments -- June 30, 1998 (Unaudited) -- Continued (Dollar
Amounts in Thousands)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal Moody's Value
Amount/Units Rating (Note 1(a))
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
CORPORATE DEBT SECURITIES -- continued
- --------------------------------------------------------------------------------
$1,000 ITC DeltaCom, Inc., Senior Notes,
8.875%, 03/01/08 ................. B2 $ 1,025
5,000 IXC Communications, Inc., Senior
Subordinated Notes, 9%,
04/15/08 (i) ..................... B3 5,012
2,500 Korea Telecom, Notes, 7.625%,
04/15/07 ......................... Ba1 1,943
5,000 McLeodUSA, Incorporated, Senior
Notes, 9.25%, 07/15/07 ........... B2 5,187
2,250 MobileMedia Communications,
Inc., Senior Subordinated Notes,
9.375%, 11/01/07 (a)(c) .......... C 653
2,000 Philippine Long Distance
Telephone Company, Medium
Term Notes, 7.85%, 03/06/07 ...... Ba2 1,760
3,500 PSINet Inc., Senior Notes, 10%,
02/15/05 ......................... B3 3,570
2,000 Rogers Cantel Inc., Senior
Secured Debentures, 9.75%,
06/01/16 ......................... Ba3 2,090
1,000 Rogers Cantel Inc., Senior
Secured Notes, 8.30%, 10/01/07 ... Ba3 981
3,985 Telecommunications Techniques
Co., LLC, Senior Subordinated
Notes, 9.75%, 05/15/08 (i) ....... B3 4,075
1,000 Viatel, Inc., Units, Senior Notes,
11.25%, 04/15/08, Series A
Preferred Stock (i) .............. Caa1 1,050
-------
54,625
-------
Textiles and Leather -- .78%
2,750 Clark-Schwebel, Inc., Senior
Notes, 10.50%, 04/15/06 .......... B2 3,039
1,165 Galey & Lord, Inc., Senior
Subordinated Notes, 9.125%,
03/01/08 ......................... B3 1,124
-------
4,163
-------
Utilities -- .40%
2,000 Texas-New Mexico Power
Company, Secured Debentures,
10.75%, 09/15/03 ................. Ba3 2,162
-------
Total Corporate Debt Securities
(Total cost of $470,860).......... 465,820
-------
</TABLE>
<TABLE>
<CAPTION>
Principal Moody's Value
Amount/Units Rating (Note 1(a))
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
GOVERNMENT OBLIGATIONS (FOREIGN) -- 2.34%
- --------------------------------------------------------------------------------
Sovereigns -- 2.34%
$2,901 Federal Republic of Brazil,
Capitalization Bonds, 8%,
04/15/14 ......................... B1 $ 2,136
1,500 Republic of Argentina, Bonds,
11.375%, 01/30/17 ................ Ba3 1,584
2,500 Republic of Argentina, Global
Bonds, 11%, 10/09/06 ............. Ba3 2,641
2,500 Republic of Korea, Global Bonds,
8.875%, 04/15/08 ................. Ba1 2,250
2,500 Republic of Venezuela, Convertible
Bonds, 9.25%, 09/15/27 ........... Ba2 1,950
2,500 Republic of Venezuela, Unsecured
Global Bonds, 9.25%, 09/15/27 .... Ba2 1,950
-------
Total Government Obligations
(Foreign)
(Total cost of $13,496) .......... 12,511
-------
</TABLE>
<TABLE>
<CAPTION>
Moody's Value
Shares Rating (Note 1(a))
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
PREFERRED STOCK--1.49% (e)
- --------------------------------------------------------------------------------
Banking -- 0.00%
62,935 WestFed Holdings, Inc., Cumulative,
Series A, 15.50% (a)(d)(h) ............ (f) 0
Containers, Packaging and Glass -- .45%
275 SF Holdings Group, Inc., Units,
Exchangeable Preferred Stock,
13.75%, Class C Common Stock (i) ... (f) 2,413
Hotels, Motels, Inns and Gaming -- .19%
30,000 Fitzgeralds Gaming Corporation,
Units, Cumulative Preferred Stock,
15%, Warrants, exp. 12/19/98 .......... ca 1,005
Insurance -- .58%
2,850 Superior National Capital Trust I,
Trust Preferred Securities, 10.75% .... b1 3,072
Machinery -- .27%
1,350 Fairfield Manufacturing Company,
Inc., Cumulative Exchangeable,
11.25% ................................ (f) 1,458
-----
Total Preferred Stock
(Total cost of $12,707) ................ 7,948
-----
</TABLE>
The accompanying notes are an integral
part of these financial statements.
9
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Schedule of Investments -- June 30, 1998 (Unaudited) -- Continued (Dollar
Amounts in Thousands)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Value
Shares (Note 1(a))
- ----------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK and WARRANTS -- .04% (e)
- ----------------------------------------------------------------------
12,500 Benedek Communications
Corporation, Warrants, exp.
07/01/07 (b)(h) ....................... $ 38
515 Concentric Network Corporation,
Warrants, exp. 12/15/07 (h)(i) ........ 67
1,500 MGC Communications, Inc.,
Warrants, exp. 10/01/04 (h)(i) ........ 90
27,474 WestFed Holdings, Inc., Series B
(a)(d)(h) ............................. 0
----
Total Common Stock and
Warrants
(Total cost of $283) .................. 195
----
</TABLE>
<TABLE>
<CAPTION>
Principal Value
Amount (Note 1(a))
- --------------------------------------------------------------------------------
<S> <C> <C>
SHORT-TERM INVESTMENTS -- 6.30% (e)
- --------------------------------------------------------------------------------
$ 33,630 Lehman Brothers Repurchase
Agreement, 5.75%, 07/01/98,
(Collateral: U.S. Treasury bond
stripped principal, 11/15/15,
$93,055 principal, $34,808
current value) ........................ 33,630
------
Total Short-Term Investments
(Total cost of $33,630) ............... 33,630
------
TOTAL INVESTMENTS (Total cost of $530,976) $520,104
========
</TABLE>
(a) Denotes issuer is in bankruptcy proceedings.
(b) Restricted as to public resale. At the date of acquisition, these securities
were valued at cost. The total value of restricted securities owned at June
30, 1998 was $38 or 0.01% of total assets.
(c) Nonincome producing security which is on nonaccrual and which has defaulted
on interest payments.
(d) Security is valued at fair value using methods determined by the Board of
Directors. The total value of these securities at June 30, 1998 was $0.
(e) Percentages indicated are based on total assets of $533,956.
(f) Not rated.
(g) Security is a step interest or accrual bond. Interest on these bonds accrue
based upon the effective interest rate.
(h) Nonincome producing.
(i) Securities are exempt from registration under Rule 144A of the Securities
Act of 1933. Such securities may be resold, normally to qualified
institutional buyers in transactions exempt from registration. See Note 1(a)
of the Notes to Financial Statements for valuation policy. Total market
value of Rule 144A securities amounted to $89,911 as of June 30, 1998.
The accompanying notes are an integral
part of these financial statements.
10
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
Balance Sheet
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets: (Dollars in thousands, except per share amounts)
INVESTMENTS IN SECURITIES, at value (Identified
cost of $530,976, see Schedule of Investments
and Notes 1 and 2) ............................ $520,104
RECEIVABLES:
Investment securities sold ..................... 1,547
Interest and dividends ......................... 12,238
PREPAID EXPENSES ................................ 67
---------
Total assets .................................. $533,956
---------
Liabilities:
PAYABLES:
Investment securities purchased ................ $ 410
Dividend payable on common stock ............... 420
Dividend payable on preferred stock ............ 395
ACCRUED EXPENSES (Note 3) ....................... 260
ACCRUED OFFERING EXPENSES (Note 11) ............. 99
ACCRUED FINANCING EXPENSES (Note 5) ............. 64
---------
Total liabilities ............................. $ 1,648
---------
Net Assets:
AUCTION TERM PREFERRED STOCK:
$1.00 par value, 1,000,000 shares authorized,
8,400 shares issued and outstanding,
liquidation preference of $25,000 per share
(Notes 5 and 6) .............................. $210,000
---------
COMMON STOCK:
$0.01 par value, 200,000,000 shares authorized,
65,201,393 shares issued and outstanding ..... $ 652
CAPITAL IN EXCESS OF PAR VALUE .................. 404,981
UNDISTRIBUTED NET INVESTMENT INCOME
(Note 2) ...................................... 3,840
ACCUMULATED NET REALIZED LOSS FROM
SECURITIES TRANSACTIONS (Note 2) .............. (76,293)
NET UNREALIZED DEPRECIATION ON
INVESTMENTS ................................... (10,872)
---------
Net assets applicable to common stock
(Equivalent to $4.94 per share, based on
65,201,393 shares outstanding) ............... $322,308
---------
Total Net Assets ................................ $532,308
=========
</TABLE>
- --------------------------------------------------------------------------------
Statement of Operations
For the Six Months Ended
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Investment Income: (Note 1) (Dollars in thousands, except per
share amounts)
Interest income ................................ $21,153
Dividend income ................................ 449
Other Income ................................... 274
-------
Total investment income ....................... $21,876
-------
Expenses:
Cost of Leverage:
Preferred and auction fees ..................... $ 166
-------
Total cost of leverage ........................ $ 166
-------
Professional services expenses:
Management fees (Note 3) ....................... $ 656
Custodian and transfer agent fees .............. 132
Legal fees ..................................... 60
Audit fees ..................................... 33
-------
Total professional services expenses .......... $ 881
-------
Administrative expenses:
General administrative fees .................... $ 129
Directors' fees ................................ 97
NYSE fees ...................................... 25
Shareholder meeting expenses ................... 15
Miscellaneous expenses ......................... 14
-------
Total administrative expenses ................. $ 280
-------
Total expenses ................................ $ 1,327
-------
Net investment income ......................... $20,549
-------
Realized and Unrealized Gain on Investments:
Realized gain on investments, net .............. $10,026
Change in net unrealized depreciation on
investments and forward foreign currency
contracts ................................... (13,053)
-------
Net loss on investments ....................... (3,027)
-------
Net increase in net assets resulting from operations $17,522
-------
Cost of Preferred Leverage:
Distributions to preferred stockholders ........ $(4,654)
Net swap settlement receipts (Note 7) .......... 16
-------
Total cost of preferred leverage .............. $(4,638)
-------
Net increase in net assets resulting from operations
less cost of preferred leverage ............. $12,884
=======
- --------------------------------------------------------------
Amount Available for Distribution to Common Stockholders
Net investment income .......................... $20,549
Total cost of preferred leverage .............. (4,638)
-------
Net amount available for distribution to common
stockholders ............................... $15,911
=======
</TABLE>
The accompanying notes are an integral
part of these financial statements.
11
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended For the Year Ended
June 30, 1998 December 31,
(Unaudited) 1997
------------------ -------------------
<S> <C> <C>
From Operations: (Dollars in thousands, except per share amounts)
Net investment income .......................................................... $ 20,549 $ 31,539
Realized gain on investments, net .............................................. 10,026 11,676
Change in net unrealized appreciation on investments and forward foreign
currency contracts ............................................................ (13,053) (331)
--------- ---------
Net increase in net assets resulting from operations .......................... $ 17,522 $ 42,884
--------- ---------
From Fund Share Transactions:
Proceeds from sale of Auction Term Preferred Stock (2,000 shares), net of $734
of offering costs and sales load (Note 5) ..................................... $ -- $ 49,266
Proceeds from sale of Auction Term Preferred Stock (2,400 shares), net of $720..
of offering costs and sales load (Note 5) ..................................... 59,280 --
Proceeds from rights offering (11,982,048 shares), net of $400 of offering
costs (Note 11) ............................................................... -- 53,639
Proceeds from rights offering (16,241,851 shares), net of $310 of offering
costs (Note 11) ............................................................... 76,352 --
Net asset value of 506,226 shares and 754,386 shares issued to common
stockholders for reinvestment of dividends in 1998 and 1997, respectively ..... 2,608 3,786
--------- ---------
Increase in net assets resulting from fund share transactions ................. $ 138,240 $ 106,691
--------- ---------
Distributions to Stockholders:
Preferred dividends ($554 and $1,265 per share, respectively) .................. $ (4,654) $ (7,588)
Net swap settlement receipts ................................................... 16 174
Common Dividends:
From net investment income ($.21 and $.53 per share, respectively) ............ (12,441) (24,496)
In excess of net investment income ($.01 per share in 1997) ................... -- (448)
--------- ---------
Decrease in net assets resulting from distributions to stockholders ........... $ (17,079) $ (32,358)
--------- ---------
Total net increase in net assets ................................................ $ 138,683 $ 117,217
--------- ---------
Net Assets Applicable to Common and Preferred Stock:
Beginning of period ............................................................ $ 393,625 $ 276,408
--------- ---------
End of period (Including $3,840 and $370 of undistributed net investment
income at June 30, 1998 and December 31, 1997, respectively) .................. $ 532,308 $ 393,625
========= =========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
12
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
Financial Highlights
Selected Per Share Data and Ratios
For Each Share of Common Stock Outstanding Throughout the Period
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the
Six Months
Ended
June 30, 1998
(Unaudited) (d)
-----------------
<S> <C>
NET ASSET VALUE:
Beginning of period ............ $ 5.03
------
NET INVESTMENT INCOME .36#
NET REALIZED AND
UNREALIZED
GAIN (LOSS) ON
INVESTMENTS AND
FORWARD FOREIGN
CURRENCY CONTRACTS ............. (.05)#
-----
TOTAL FROM
INVESTMENT
OPERATIONS ................... .31
-----
DISTRIBUTIONS:
Dividends from net
investment income:
To preferred
stockholders
(including
net swap settlement
receipts/payments) ........... (.08)
To common
stockholders ................. (.21)
Dividends in excess of
net investment income:
To common
stockholders .................. --
Returns of capital:
To common
stockholders .................. --
-----
TOTAL
DISTRIBUTIONS ................ (.29)
-----
Effect of rights offering and
related expenses; and
Auction Term Preferred
Stock offering costs and
sales load ..................... (.11)
-----
NET ASSET VALUE:
End of period .................. $ 4.94
======
PER SHARE MARKET VALUE:
End of period .................. $ 5.13
======
TOTAL INVESTMENT RETURN+ (5.00)%
======
<CAPTION>
For the Years Ended December 31,
1997 (d) 1996 1995 1994 (c) 1993 1992 (a) 1991 1990
---------- ---------- ---------- ------------- ---------- ---------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE:
Beginning of period ............ $ 4.94 $ 4.71 $ 4.13 $ 5.15 $ 4.32 $ 3.79 $ 3.42 $ 6.23
------- ------- ------- -------- ------- ------- ------- ---------
NET INVESTMENT INCOME .70# .69 .67 .72# .59 .57 .65 .92
NET REALIZED AND
UNREALIZED
GAIN (LOSS) ON
INVESTMENTS AND
FORWARD FOREIGN
CURRENCY CONTRACTS ............. .25# .22 .62 (.82)# .89 .57 .38 (2.82)
------- ------- ------- -------- ------- ------- ------- ---------
TOTAL FROM
INVESTMENT
OPERATIONS ................... .95 .91 1.29 (.10) 1.48 1.14 1.03 (1.90)
------- ------- ------- -------- ------- ------- ------- ---------
DISTRIBUTIONS:
Dividends from net
investment income:
To preferred
stockholders
(including
net swap settlement
receipts/payments) ........... (.16) (.16) (.17) (.17) (.05) (.06) (.10) (.16)
To common
stockholders ................. (.53) (.52) (.50) (.53) (.53) (.55) (.56) (.75)
Dividends in excess of
net investment income:
To common
stockholders .................. (.01) -- (.04) -- (.07) -- -- --
Returns of capital:
To common
stockholders .................. -- -- -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- -------- ---------
TOTAL
DISTRIBUTIONS ................ (.70) (.68) (.71) (.70) (.65) (.61) (.66) (.91)
-------- -------- -------- -------- -------- -------- -------- ---------
Effect of rights offering and
related expenses; and
Auction Term Preferred
Stock offering costs and
sales load ..................... (.16) -- -- (.22) -- -- -- --
-------- -------- -------- -------- -------- -------- -------- ---------
NET ASSET VALUE:
End of period .................. $ 5.03 $ 4.94 $ 4.71 $ 4.13 $ 5.15 $ 4.32 $ 3.79 $ 3.42
======== ======== ======== ======== ======== ======== ======== =========
PER SHARE MARKET VALUE:
End of period .................. $ 5.63 $ 5.13 $ 4.75 $ 4.00 $ 5.13 $ 4.13 $ 3.63 $ 2.50
======== ======== ======== ======== ======== ======== ======== =========
TOTAL INVESTMENT RETURN+ 21.97% 19.89% 33.50% (11.88)% 40.08% 29.70% 70.77% (47.94)%
======== ======== ======== ======== ======== ======== ======== =========
<CAPTION>
For the Period From
For the Years February 26, 1988
Ended (Commencement
December 31, of Operations) to
1989 December 31, 1988
------------- --------------------
<S> <C> <C>
NET ASSET VALUE:
Beginning of period ............ $ 8.60 $ 9.25
--------- -------
NET INVESTMENT INCOME 1.54 1.42
NET REALIZED AND
UNREALIZED
GAIN (LOSS) ON
INVESTMENTS AND
FORWARD FOREIGN
CURRENCY CONTRACTS ............. (2.26) (.66)
--------- -------
TOTAL FROM
INVESTMENT
OPERATIONS ................... (.72) .76
--------- -------
DISTRIBUTIONS:
Dividends from net
investment income:
To preferred
stockholders
(including
net swap settlement
receipts/payments) ........... (.30) (.23)
To common
stockholders ................. (1.25) (1.18)
Dividends in excess of
net investment income:
To common
stockholders .................. -- --
Returns of capital:
To common
stockholders .................. (.10) --
--------- -------
TOTAL
DISTRIBUTIONS ................ (1.65) (1.41)
--------- -------
Effect of rights offering and
related expenses; and
Auction Term Preferred
Stock offering costs and
sales load ..................... -- --
--------- -------
NET ASSET VALUE:
End of period .................. $ 6.23 $ 8.60
========= =======
PER SHARE MARKET VALUE:
End of period .................. $ 5.88 $ 10.00
========= =======
TOTAL INVESTMENT RETURN+ (30.04)% 13.28%
========= =======
</TABLE>
The accompanying notes are an integral
part of these financial statements.
13
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
Financial Highlights
Selected Per Share Data and Ratios
For Each Share of Common Stock Outstanding Throughout the Period -- Continued
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the
Six Months
Ended
June 30, 1998
(Unaudited) (d)
-----------------
<S> <C>
NET ASSETS, END OF
PERIOD, APPLICABLE
TO COMMON STOCK (b) ............. $ 322,308
=========
NET ASSETS, END OF
PERIOD, APPLICABLE
TO PREFERRED
STOCK (b) ....................... $ 210,000
=========
TOTAL NET ASSETS, END
OF PERIOD (b) ................... $ 532,308
=========
EXPENSE RATIOS:
Ratio of interest expense
to average net assets** --
Ratio of preferred and
other debt expenses to
average net assets** ........... .11%*
Ratio of operating
expenses to average
net assets** ................... .80%*
Ratio of litigation settlement
expense to average net
assets** ....................... --
---------
RATIO OF TOTAL EXPENSES
TO AVERAGE NET ASSETS** ......... .91%*
=========
RATIO OF NET INVESTMENT
INCOME TO AVERAGE
NET ASSETS** .................... 14.13%*
RATIO OF TOTAL EXPENSES
TO AVERAGE NET
ASSETS APPLICABLE
TO COMMON AND
PREFERRED STOCK ................. .58%*
PORTFOLIO TURNOVER
RATE ............................ 157.16%*
<CAPTION>
For the Years Ended December 31,
1997 (d) 1996 1995 1994 (c) 1993 1992 (a)
------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSETS, END OF
PERIOD, APPLICABLE
TO COMMON STOCK (b) ............. $ 243,625 $ 176,408 $ 164,823 $ 141,590 $ 130,673 $ 107,897
========= ========= ========= ========= ========= =========
NET ASSETS, END OF
PERIOD, APPLICABLE
TO PREFERRED
STOCK (b) ....................... $ 150,000 $ 100,000 $ 100,000 $ 100,000 $ 35,000 $ 35,000
========= ========= ========= ========= ========= =========
TOTAL NET ASSETS, END
OF PERIOD (b) ................... $ 393,625 $ 276,408 $ 264,823 $ 241,590 $ 165,673 $ 142,897
========= ========= ========= ========= ========= =========
EXPENSE RATIOS:
Ratio of interest expense
to average net assets** -- -- -- .01% 1.83% 3.95%
Ratio of preferred and
other debt expenses to
average net assets** ........... .13% .16% .18% .22% .51% .87%
Ratio of operating
expenses to average
net assets** ................... .92% 1.16% 1.39% 1.31% 2.01% 1.63%
Ratio of litigation settlement
expense to average net
assets** ....................... -- -- .80% -- -- --
--------- --------- --------- --------- --------- ---------
RATIO OF TOTAL EXPENSES
TO AVERAGE NET ASSETS** ......... 1.05% 1.32% 2.37% 1.54% 4.35% 6.45%
========= ========= ========= ========= ========= =========
RATIO OF NET INVESTMENT
INCOME TO AVERAGE
NET ASSETS** .................... 13.86% 14.36% 14.61% 15.89% 11.86% 13.49%
RATIO OF TOTAL EXPENSES
TO AVERAGE NET
ASSETS APPLICABLE
TO COMMON AND
PREFERRED STOCK ................. .66% .83% 1.44% .89% 3.38% 4.82%
PORTFOLIO TURNOVER
RATE ............................ 108.84% 53.45% 62.66% 58.56% 85.76% 129.86%
<CAPTION>
For the Period From
February 26, 1988
(Commencement
For the Years Ended December 31, of Operations) to
1991 1990 1989 December 31, 1988
------------- ------------- ------------- --------------------
<S> <C> <C> <C> <C>
NET ASSETS, END OF
PERIOD, APPLICABLE
TO COMMON STOCK (b) ............. $ 93,227 $ 83,813 $ 152,156 $ 202,363
========= ========= ========= =========
NET ASSETS, END OF
PERIOD, APPLICABLE
TO PREFERRED
STOCK (b) ....................... $ 35,000 $ 35,000 $ 58,500 $ 79,000
========= ========= ========= =========
TOTAL NET ASSETS, END
OF PERIOD (b) ................... $ 128,227 $ 118,813 $ 210,656 $ 281,363
========= ========= ========= =========
EXPENSE RATIOS:
Ratio of interest expense
to average net assets** 4.51% 5.63% 4.98% 4.58%*
Ratio of preferred and
other debt expenses to
average net assets** ........... 1.08% .84% .34% .32%*
Ratio of operating
expenses to average
net assets** ................... 1.64% 1.49% .97% .97%*
Ratio of litigation settlement
expense to average net
assets** ....................... -- -- -- --
--------- --------- --------- ---------
RATIO OF TOTAL EXPENSES
TO AVERAGE NET ASSETS** ......... 7.23% 7.96% 6.29% 5.87%*
========= ========= ========= =========
RATIO OF NET INVESTMENT
INCOME TO AVERAGE
NET ASSETS** .................... 17.47% 19.60% 20.28% 18.83%*
RATIO OF TOTAL EXPENSES
TO AVERAGE NET
ASSETS APPLICABLE
TO COMMON AND
PREFERRED STOCK ................. 5.22% 5.89% 4.49% 4.22%*
PORTFOLIO TURNOVER
RATE ............................ 121.15% 49.98% 65.39% 149.00%*
</TABLE>
(a) Prior to the appointment on February 19, 1992 of Wellington Management
Company, LLP, the Fund was advised by Ostrander Capital Management, L.P.
(b) Dollars in thousands.
(c) The Fund entered into a refinancing transaction on January 4, 1994, and the
per share data and ratios for the year ended December 31, 1994 reflect this
transaction.
(d) As discussed in Note 5, the Fund issued Series C ATP on May 6, 1997 and
Series D ATP on May 20, 1998. The per share data and ratios for the year
ended December 31, 1997 and the six months ended June 30, 1998 reflect
these transactions.
* Annualized.
** Ratios calculated on the basis of expenses and net investment income
applicable to the common shares relative to the average net assets of the
common stockholders only. The expense ratio and net investment income ratio
do not reflect the effect of dividend payments (including net swap
settlement receipts/payments) to preferred stockholders.
# Calculation is based on average shares outstanding during the indicated
period due to the per share effect of the Fund's June 1994, March 1997 and
March 1998 rights offerings.
+ Total investment return is calculated assuming a purchase of common stock
at the current market value on the first day and a sale at the current
market value on the last day of each year reported. Dividends and
distributions are assumed for purposes of this calculation to be reinvested
at prices obtained under the dividend reinvestment plan. This calculation
does not reflect brokerage commissions.
The accompanying notes are an integral
part of these financial statements.
14
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
Information Regarding
Senior Securities
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30, 1998 As of December 31,
(Unaudited) 1997
--------------- ------------------
<S> <C> <C>
TOTAL AMOUNT OUTSTANDING:
Notes ..................................... $ -- $ --
Preferred Stock ........................... 210,000,000 150,000,000
Short-term Loan ........................... -- --
ASSET COVERAGE:
Per Note (1) .............................. $ -- $ --
Per Preferred Stock Share (2) ............. 63,370 65,604
Per $1,000 of Short-term Loan (1) ......... -- --
INVOLUNTARY LIQUIDATION PREFERENCE:
Preferred Stock Share (3) ................. $ 25,000 $ 25,000
APPROXIMATE MARKET VALUE:
Per Note .................................. $ -- $ --
Per Preferred Stock Share (3) ............. 25,000 25,000
Per $1,000 of Short-term Loan ............. -- --
<CAPTION>
As of December 31,
1996 1995 1994 1993
--------------- --------------- --------------- --------------
<S> <C> <C> <C> <C>
TOTAL AMOUNT OUTSTANDING:
Notes ..................................... $ -- $ -- $ -- $ --
Preferred Stock ........................... 100,000,000 100,000,000 100,000,000 35,000,000
Short-term Loan ........................... -- -- -- 45,000,000
ASSET COVERAGE:
Per Note (1) .............................. $ -- $ -- $ -- $ --
Per Preferred Stock Share (2) ............. 69,102 66,206 60,398 473,351
Per $1,000 of Short-term Loan (1) ......... -- -- -- 4,682
INVOLUNTARY LIQUIDATION PREFERENCE:
Preferred Stock Share (3) ................. $ 25,000 $ 25,000 $ 25,000 $ 100,000
APPROXIMATE MARKET VALUE:
Per Note .................................. $ -- $ -- $ -- $ --
Per Preferred Stock Share (3) ............. 25,000 25,000 25,000 100,000
Per $1,000 of Short-term Loan ............. -- -- -- 1,000
</TABLE>
<TABLE>
<CAPTION>
As of December 31,
1992 1991 1990 1989 1988
-------------- -------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C> <C>
TOTAL AMOUNT OUTSTANDING:
Notes ..................................... $45,490,000 $45,490,000 $47,990,000 $96,100,000 $105,000,000
Preferred Stock ........................... 35,000,000 35,000,000 35,000,000 58,500,000 79,000,000
Short-term Loan ........................... -- -- -- -- --
ASSET COVERAGE:
Per Note (1) .............................. $ 4,141 $ 3,819 $ 3,476 $ 3,192 $ 3,680
Per Preferred Stock Share (2) ............. 408,277 366,363 339,466 360,096 356,156
Per $1,000 of Short-term Loan (1) ......... -- -- -- -- --
INVOLUNTARY LIQUIDATION PREFERENCE:
Preferred Stock Share (3) ................. $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000
APPROXIMATE MARKET VALUE:
Per Note .................................. $ 1,000 $ 1,000 $ 1,000 $ 1,000 $ 1,000
Per Preferred Stock Share (3) ............. 100,000 100,000 100,000 100,000 100,000
Per $1,000 of Short-term Loan ............. -- -- -- -- --
</TABLE>
(1) Calculated by subtracting the Fund's total liabilities (not including senior
securities) from the Fund's total assets and dividing such amounts by the
number of Notes outstanding.
(2) Calculated by subtracting the Fund's total liabilities (including the Notes
but not including the Preferred Stock) from the Fund's total assets and
dividing such amount by the number of Preferred Shares outstanding.
(3) Plus accumulated and unpaid dividends.
The accompanying notes are an integral
part of these financial statements.
15
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Significant Accounting and Other Policies
The New America High Income Fund, Inc. (the Fund) was organized as a
corporation in the state of Maryland on November 19, 1987 and is registered with
the Securities and Exchange Commission as a diversified, closed-end investment
company under the Investment Company Act of 1940. The Fund commenced operations
on February 26, 1988. The investment objective of the Fund is to provide high
current income while seeking to preserve stockholders' capital through
investment in a professionally managed, diversified portfolio of "high yield"
fixed-income securities.
The Fund invests primarily in fixed maturity corporate debt securities that
are rated less than investment grade. Risk of loss upon default by the issuer is
significantly greater with respect to such securities compared to investment
grade securities because these securities are generally unsecured and are often
subordinated to other creditors of the issuer and because these issuers usually
have high levels of indebtedness and are more sensitive to adverse economic
conditions, such as a recession, than are investment grade issuers. In some
cases, the collection of principal and timely receipt of interest is dependent
upon the issuer attaining improved operating results, selling assets or
obtaining additional financing.
See the schedule of investments for information on individual securities as
well as industry diversification and credit quality ratings.
The Fund's financial statements have been prepared in conformity with
generally accepted accounting principles that require the management of the Fund
to, among other things, make estimates and assumptions that affect the reported
amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of
revenues and expenses during the reporting periods. Actual results could differ
from those estimates.
The following is a summary of significant accounting policies consistently
followed by the Fund, which are in conformity with those generally accepted in
the investment company industry.
(a) Valuation of Investments--Investments for which market quotations are
readily available are stated at market value, which is determined by using the
most recently quoted bid price provided by an independent pricing service or
principal market maker. Independent pricing services provide market quotations
based primarily on quotations from dealers and brokers, market transactions,
accessing data from quotations services, offering sheets obtained from dealers
and various relationships between securities. Short-term investments having
maturities of 60 days or less are stated at amortized cost, which approximates
market value. Following procedures approved by the Board of Directors,
investments for which market quotations are not readily available (primarily
fixed-income corporate bonds and notes) are stated at fair value on the basis of
subjective valuations furnished by securities dealers and brokers. Other
investments, with a cost of approximately $7,695,000 and a value of $0, are
valued in good faith at fair market value using methods determined by the Board
of Directors.
(b) Interest and Dividend Income--Interest income is accrued on a daily
basis. Discount on short-term investments is amortized to investment income.
Market discounts or premiums on corporate debt securities are not amortized for
financial statement purposes. All income on original issue discount and step
interest bonds is accrued based on the effective interest method for both
financial reporting and tax reporting purposes as required by federal income tax
regulations. Dividend payments received in additional securities are recorded on
the ex-dividend date in an amount equal to the value of the security on such
date.
(c) Federal Income Taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code of 1986, as amended, applicable to
regulated
16
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements--Continued
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
investment companies and to distribute substantially all of its taxable income
to its shareholders each year. Accordingly, no federal income tax provision is
required.
(2) Tax Matters and Distributions
At June 30, 1998, the total cost of securities (excluding temporary cash
investments) for federal income tax purposes was approximately $497,346,000.
Aggregate gross unrealized gain on securities in which there was an excess of
value over tax cost was approximately $8,257,000. Aggregate unrealized loss on
securities in which there was an excess of tax cost over value was approximately
$19,129,000. Net unrealized loss for tax purposes at June 30, 1998 was
approximately $10,872,000.
At June 30, 1998, the Fund had approximate capital loss carryovers
available to offset future capital gain, if any, to the extent provided by
regulations:
<TABLE>
<CAPTION>
Carryover Available Expiration Date
- --------------------- ------------------
<S> <C>
$49,666,000 December 31, 1998
34,426,000 December 31, 1999
2,227,000 December 31, 2002
-----------
$86,319,000
===========
</TABLE>
To the extent that capital loss carryovers are used to offset realized
capital gains, it is unlikely that gains so offset will be distributed to
shareholders.
Distributions on common stock are declared based upon annual projections of
the Fund's investment company taxable income. The Fund records all dividends and
distributions payable to shareholders on the ex-dividend date and declares and
distributes income dividends monthly.
In accordance with Statement of Position 93-2, the Fund has recorded
several reclassifications in the capital accounts. These reclassifications have
no impact on the net asset value of the Fund and are designed generally to
present undistributed net investment income or accumulated net realized gains
and losses on a tax basis, which is considered to be more informative to the
shareholder. As of December 31, 1997, the Fund has reclassified approximately
$818,000 primarily related to amortization of market discounts on corporate
bonds from accumulated net realized loss from securities transactions to
undistributed net investment income.
The difference between earnings for financial statement purposes and
earnings for tax purposes is primarily due to the tax treatment of the
amortization of market discounts on corporate bonds and the recognition of
interest income on corporate bonds that have defaulted on their interest
payments.
(3) Investment Advisory Agreement
Wellington Management Company, LLP, the Fund's Investment Advisor, earned
approximately $656,000 in management fees during the six months ended June 30,
1998. Management fees paid by the Fund to Wellington Management are calculated
at .45 of 1% (on an annual basis) of the average weekly value of the Fund's net
assets attributable to common stock ($322.3 million at June 30, 1998). At June
30, 1998, the fee payable to the Investment Advisor was approximately $120,000,
which was included in accrued expenses on the accompanying balance sheet.
(4) Forward Foreign Currency Contract
The Fund has in the past entered into forward foreign currency contracts in
connection with the purchase and sale of foreign investments but does not expect
to enter into any in the future. All commitments were marked to market at the
applicable exchange rates and any unrealized gains or losses were recorded in
the Fund's financial statements. The aggregate principal amounts of the
contracts were not recorded in the financial statements. The Fund records
realized gains or losses at the time the forward contract is offset by entry
into a closing transaction or by delivery of the currency. Risks may arise upon
entering into these contracts from the potential inability of counterparties to
meet the terms of their contracts and from unanticipated movements in the
17
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements--Continued
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
value of a foreign currency relative to the U.S. dollar. At June 30, 1998 there
were no forward foreign currency contracts outstanding.
(5) Auction Term Preferred Stock (ATP)
On January 4, 1994, the Fund issued 1,200 shares of Series A ATP and 800
shares of Series B ATP. The underwriting discount of $1,500,000 and offering
expenses of $336,000 associated with the ATP offering were recorded as a
reduction of the capital in excess of par value on common stock. On May 6, 1997,
the Fund issued 2,000 shares of Series C ATP. The underwriting discount of
$437,500 and offering expenses of $297,000 were recorded as a reduction of the
capital in excess of par value on common stock. On May 20, 1998, the Fund issued
2,400 shares of Series D ATP. The underwriting discount of $510,000 and offering
expenses of $210,000 were recorded as a reduction of the capital in excess of
par value on common stock. At June 30, 1998 the Fund has approximately $64,000
in net outstanding liabilities associated with the offering. The ATP's dividends
are cumulative at a rate determined at an auction, and dividend periods will
typically be 28 days unless notice is given for periods to be longer or shorter
than 28 days. Dividend rates ranged from 5.54% to 6.14% for the six months ended
June 30, 1998.
The ATP is redeemable, at the option of the Fund, or subject to mandatory
redemption (if the Fund is in default of certain coverage requirements) at a
redemption price equal to $25,000 per share plus accumulated and unpaid
dividends. The ATP has a liquidation preference of $25,000 per share plus
accumulated and unpaid dividends. The Fund is required to maintain certain asset
coverages with respect to the ATP under the Fund's Charter and the 1940 Act.
(6) ATP Auction-Related Matters
Bankers Trust Company (BTC) serves as the ATP's auction agent pursuant to
an agreement entered into on January 4, 1994. The term of the agreement is
unlimited and may be terminated by either party. BTC may resign upon notice to
the Fund, such resignation to be effective on the earlier of the 90th day after
the delivery of such notice and the date on which a successor auction agent is
appointed by the Fund. The Fund may also replace BTC as auction agent at any
time.
After each auction, BTC as auction agent will pay to each broker-dealer,
from funds provided by the Fund, a maximum service charge at the annual rate of
.25 of 1% or such other percentage subsequently agreed to by the Fund and the
broker-dealers, of the purchase price of shares placed by such broker-dealers at
such auction. In the event an auction scheduled to occur on an auction date
fails to occur for any reason, the broker-dealers will be entitled to service
charges as if the auction had occurred and all holders of shares placed by them
had submitted valid hold orders. The Fund incurred approximately $151,000 for
service charges through June 30, 1998. This amount is included under the caption
preferred and auction fees in the accompanying statement of operations.
(7) Interest Rate Swaps
The Fund has entered into five interest payment swap arrangements with
BankBoston, N.A. (BBNA) for the purpose of partially hedging its dividend
payment obligations with respect to the ATP. Pursuant to each of the Swap
Arrangements the Fund makes payments to BBNA on a monthly basis at fixed annual
rates. In exchange for such payments BBNA makes payments to the Fund on a
monthly basis at a variable rate determined with reference to the 30-day, AA
rated commercial paper rate for the swap effective February 7, 1994 and one
month LIBOR for the other swaps. The variable rates ranged from 5.49% to 6.00%
for the six months ended June 30, 1998. The effective date, notional
18
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements--Continued
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
amount, maturity and fixed rates of the swaps are as follows:
<TABLE>
<CAPTION>
Fixed
Effective Notional Annual
Date Amount Maturity Rate
<S> <C> <C> <C>
2/7/94 $65 million 2/7/99 5.25%
10/2/97 $10 million 10/2/02 6.225%
10/7/97 $20 million 10/7/02 6.07%
6/2/98 $15 million 6/2/03 5.90%
2/8/99 $65 million 2/7/04 5.83%
</TABLE>
The Fund follows hedge accounting (off-balance-sheet) with respect to the swap
agreements and settles the net amount receivable or payable from each party
every 30 days. For the six months ended June 30, 1998, the Fund's obligations
under the swap agreements were less than the amount receivable from BBNA by
approximately $16,000 and is included in the accompanying statement of
operations.
The Fund is exposed to credit loss in the event of nonperformance by
counterparties on interest rate swaps, but the Fund does not anticipate
nonperformance by any counterparty. While notional contract amounts are used to
express the volume of interest rate swap agreements, the amounts potentially
subject to credit risk, in the event of nonperformance by counterparties, are
substantially smaller. The estimated fair value of the interest rate swap
agreements at June 30, 1998 amounted to approximately $620,000 unrealized loss.
This value is not included in total net assets.
(8) Repurchase Agreements
At the time the Fund enters into a repurchase agreement, the value of the
underlying security, including accrued interest, will be equal to or exceed the
value of the repurchase agreement, and, in the case of repurchase agreements
exceeding one day, the value of the underlying security, including accrued
interest, is required during the term of the agreement to be equal to or exceed
the value of the repurchase agreement.
The underlying securities for all repurchase agreements are held in
safekeeping in an investment account of State Street Bank and Trust Company
(SSBT), the Fund's custodian, at the Federal Reserve Bank of Boston. In the case
of repurchase agreements exceeding one day, SSBT's Money Market Department
monitors the market value of the underlying securities by pricing them daily,
and in the event any individual repurchase agreement is not fully
collateralized, SSBT advises the Fund and additional collateral is obtained.
(9) Purchase and Sales of Securities
Purchases and proceeds of sales or maturities of long-term securities
during the six months ended June 30, 1998 were as follows:
<TABLE>
<S> <C>
Purchases of securities $449,496,000
Sales of securities $338,318,000
</TABLE>
(10) Certain Transactions
A partner of Goodwin, Procter & Hoar, general counsel to the Fund, serves
as a Director of the Fund. Fees earned by Goodwin, Procter & Hoar amounted to
approximately $173,000 for the six months ended June 30, 1998. The Fund paid
approximately $68,000 during the six months ended June 30, 1998 to two officers
of the Fund for the provision of certain administrative services.
(11) Rights Offering
The Fund issued to stockholders of record as of the close of business on
February 10, 1998, rights to subscribe for an aggregate of 16,241,851 shares of
common stock, $.01 par value per share, of the Fund. One right was issued for
each three full shares of common stock beneficially held on the record date. The
rights entitled a stockholder to acquire at the subscription price of $4.72 per
share one share for each right held. The subscription price was 92% of the
average of the last reported sales price of the Fund's Common Stock on the New
York Stock Exchange on March 18, 1998, the expiration date and the nine
preceding business days. On March 25, 1998, the
19
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
Notes to Financial Statements--Continued
June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Fund completed its rights offering. Proceeds of approximately $76,662,000 and
shares of 16,241,851 were recorded. In addition, the deferred offering expense
balance of $310,000 was netted against the rights offering proceeds. At June
30, 1998, the Fund had approximately $99,000 in net outstanding liabilities
associated with the offering.
- --------------------------------------------------------------------------------
From time to time in the future, the Fund may effect redemptions and/or
repurchases of its ATP as provided in the applicable constituent instruments or
as agreed upon by the Fund and sellers. The Fund intends to effect such
redemptions and/or repurchases to the extent necessary to maintain applicable
asset coverage requirements.
20
<PAGE>
The New America High Income Fund, Inc.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Directors
Robert F. Birch
Joseph L. Bower
Richard E. Floor
Bernard J. Korman
Franco Modigliani
Ernest E. Monrad
Officers
Robert F. Birch - President
Ellen E. Terry - Vice President, Treasurer
Richard E. Floor - Secretary
Investment Advisor
Wellington Management Company, LLP
75 State Street
Boston, MA 02109
Administrator
The New America High Income Fund, Inc.
33 Broad Street
Boston, MA 02109
(617) 263-6400
Custodian and Transfer Agent
State Street Bank and Trust Company
P.O. Box 8200
Boston, MA 02266-8200
(617) 328-5000 ext. 6406
(800) 426-5523
Listed: NYSE
Symbol: HYB
21
<PAGE>
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<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE>
State Street Bank and Trust Company
P.O. Box 8200
Boston, Massachusetts 02266-8200
The New
America
High Income
Fund, Inc.
- --------------------------------------------------------------------------------
Semi-Annual
- --------------------------------------------------------------------------------
Report
- --------------------------------------------------------------------------------
June 30, 1998
- --------------------------------------------------------------------------------
