<PAGE>
PACHOLDER HIGH YIELD FUND, INC.
- --------------------------------------------------------------------------------
Dear Stockholders:
For the quarter ended March 31, 2000, the Pacholder High Yield Fund, Inc. (the
"Fund") posted a total return of -3.46%, compared to the CS First Boston Domes-
tic Plus High Yield Index(TM) (the "Index") total return of -2.04%, under-per-
forming the Index by 142 basis points. The Fund's under-performance for the
quarter is attributable to the cost of its leverage; the underlying portfolio,
gross of fees and expenses, actually outperformed the market by approximately
62 basis points. While the leverage on the Fund has had a negative effect on
total return over the past 18 months, it generally has enhanced the Fund's
long-term returns and has increased the amount of dividends available to the
common shareholders.
Overview of First Quarter 2000
At the end of last year we thought that there would be an increase in demand
for high yield debt after the Y2K issue had passed; however, this has not been
the case. During the first quarter of 2000 there were approximately $3.2 bil-
lion of net outflows from open-end high yield funds, making it the fourth con-
secutive quarter of outflows. It appears that the relative strength in the eq-
uity markets and rising short-term interest rates have kept investors cautious
about adding high yield assets to their portfolios. As a result of the weak de-
mand for the asset class and the resulting difficulty in placing new deals in
the market, the new issue volume dropped to $16.8 billion for the quarter. Not
since the third quarter of 1996 has there been less new issue volume.
As a result of these factors, returns in the high yield market suffered during
the quarter and the asset class under-performed most other major fixed income
categories as well as most equity styles. For example, the 10-year US Treasury
Note returned 3.84% during the quarter, while the S&P 500 returned 2.19%. The
average price of the Index fell nearly 4 points during the quarter to 83.19% of
par, resulting in an increase yield-to-worst to 12.83% from 11.93%. The average
spread widened even more than the yield-to-worst would indicate because of the
fall in the intermediate term Treasury yields. The average spread of the Index
widened to 665 basis points from 554 at the end of the year. However, since the
end of the quarter, high yield has performed much better on a relative basis.
The equity markets have been extremely volatile, with the NASDAQ composite down
more than 30% from its March 10, 2000 peak.
Performance during the first quarter of 2000 among high yield industry sectors
tended to reflect the performance of the sectors in the equity markets. Only a
few sectors performed well, and many performed poorly. The few sectors that
performed well were those that were supported by strong equity market perfor-
mance, such as Telecommunications. Many of these sectors are heavy with highly
speculative not-rated and CCC rated issues. As a result, the CCC sector of the
high yield market outperformed the B and BB sectors this quarter. Generally,
this is not the case in a down quarter; more speculative sectors tend to per-
form worst in a weak market. Despite this unusual market, the Fund has not
changed its investment style, which is to buy and hold a diversified portfolio
of fundamentally sound investments and diligently manage the risk in the port-
folio. Since the Fund's inception in November 1988 this formula has provided
the shareholders of this Fund an average annual return of 9.84%.
The Fund's portfolio is well diversified with investments in 140 companies
across 28 different industries. Our highest portfolio concentration continues
to be in the Telecommunications segment of the market, which accounts for 18.0%
of the portfolio. We believe that this fast-growing segment of the market will
continue to provide good returns for the Fund.
Conclusion
We continue to believe that the high yield market offers exceptional value at
today's prices and yields. We expect that at some point the asset class will
see a greater number of investors realize the value in the market and that we
will see the technical factors become more positive. Although it is hard to
predict when this will occur, our experience in the high yield market indicates
that market turns are often very rapid. In the meantime, high yield bond in-
vestors are receiving significant current income.
As always, we appreciate your interest in the Fund and look forward to your
continued support.
Sincerely,
/s/ Anthony L. Longi, Jr. /s/ William J. Morgan
President Chairman
April 28, 2000
- -------------------------------------
Please visit our web site, www.phf-hy.com, for information on the Fund's NAV,
share price, news releases, and SEC filings. We created this site to provide
shareholders quick and easy access to the timeliest information available re-
garding the Fund.
- -------------------------------------
DIVIDEND REINVESTMENT PLAN
The Fund's Dividend Reinvestment Plan offers you an automatic way to reinvest
your dividends and capital gains distributions in additional shares of the
Fund. For an enrollment form and detailed information about the Plan, please
contact Firstar Bank, N.A. Corporate Trust Services, 425 Walnut Street, ML
5125, P.O. Box 1118, Cincinnati, OH 45201-1118, and (800) 637-7549.
<PAGE>
PACHOLDER HIGH YIELD FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets
March 31, 2000 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent
Par of Net
Description (000) Value Assets
<S> <C> <C> <C>
- -------------------------------------------------------------------------------
CORPORATE DEBT SECURITIES -- 94.0%
AIR TRANSPORT -- 0.7%
Atlantic Coast Airlines, Tranche C Pass-Thru
Cert, 8.75%, 1/1/07/2/ $ 1,288 $ 1,280,738 0.7%
------------ ---
AUTO PARTS & EQUIPMENT -- 4.2%
Dura Operating Corp., Sr Sub Nt,
9%, 5/1/09 1,600 1,416,000 0.7
Group 1 Automotive, Inc., Sr Sub Nt, 10.875%,
3/1/09 1,500 1,365,000 0.7
Hayes Lemmerz International, Inc.,
Sr Sub Nt, 9.125%, 7/15/07 1,500 1,338,750 0.7
JL French Automotive Castings, Inc., Sr Sub Nt,
11.5%, 6/1/09 1,000 980,000 0.5
JPS Automotive Products Corp., Sr Nt, 11.125%,
6/15/01 1,350 1,377,000 0.7
Oshkosh Truck Corp., Sr Sub Nt, 8.75%, 3/1/08 1,500 1,428,750 0.8
Safety Components International, Inc., Sr Sub Nt,
10.125%, 7/15/07/4/ 1,000 140,000 0.1
------------ ---
8,045,500 4.2
BEVERAGE & TOBACCO -- 0.5%
National Wine & Spirits, Inc., Sr Nt, 10.125%,
1/15/09 1,000 955,000 0.5
------------ ---
BROADCAST RADIO & TV -- 6.2%
Ackerly Group, Inc., Sr Sub Nt,
9%, 1/15/09 1,000 925,000 0.5
Charter Communications Holdings LLC, Sr Nt, 10%,
4/1/09/2/ 1,000 965,000 0.5
Citadel Broadcasting Company, Sr Sub Nt, 10.25%,
7/1/07 1,500 1,470,000 0.8
Granite Broadcasting Corp., Sr Sub Nt, 10.375%,
5/15/05 2,375 2,244,375 1.2
Lamar Advertising Co., Sr Sub Nt, 9.25%, 8/15/07 1,000 970,000 0.5
Radio One, Inc., Sr Sub Nt,
7/12%, 5/15/04 2,220 2,364,300 1.2
Salem Communications, Sr Sub Nt, 9.5%, 10/1/07 1,000 930,000 0.5
Tri-State Outdoor Media, Sr Nt,
11%, 5/15/08 2,000 1,910,000 1.0
------------ ---
11,778,675 6.2
</TABLE>
<TABLE>
<CAPTION>
Percent
Par of Net
Description (000) Value Assets
<S> <C> <C> <C>
- -------------------------------------------------------------------------------
BUILDING -- 5.2%
American Builders & Contractors Supply Co., Inc.,
Sr Sub Nt, 10.625%, 5/15/07 $ 1,500 $ 1,245,000 0.6%
Associated Materials, Inc., Sr Sub Nt, 9.25%,
3/1/08 1,000 910,000 0.5
DR Horton, Inc., Sr Nt, 10.5%, 4/1/05 1,125 1,096,875 0.6
Fedders North America, Inc., Sr Sub Nt, 9.375%,
8/15/07 1,500 1,410,000 0.7
MMI Products, Inc., Sr Sub Nt, 11.25%, 4/15/07 2,000 2,020,000 1.1
Omega Cabinets, Ltd, Sr Sub Nt, 10.5%, 6/15/07 2,250 2,238,750 1.2
Williams Scotsman, Inc., Sr Nt, 9.875%, 6/1/07 1,000 940,000 0.5
------------ ---
9,860,625 5.2
BUSINESS SERVICES & EQUIPMENT -- 2.5%
Knoll Inc., Sr Sub Nt,
10.875%, 3/15/06 1,525 1,525,000 0.8
Pierce Leahy Command Corp., Sr Nt. 8.125%,
5/15/08 1,000 850,000 0.4
Pierce Leahy Corp., Sr Sub Nt, 11.125%, 7/15/06 1,375 1,399,063 0.7
United Stationers Supply Co., Sr Sub Nt, 12.75%,
5/1/05 1,000 1,065,000 0.6
------------ ---
4,839,063 2.5
CABLE TELEVISION -- 1.6%
Classic Cable, Inc., Sr Sub Nt, 9.375%, 8/1/09 1,250 1,162,500 0.6
RCN Corp., Sr Nt, 10%, 10/15/07 1,400 1,253,000 0.7
RCN Corp., Sr Disc Nt,
0/9.8%, 2/15/08 1,000 580,000 0.3
------------ ---
2,995,500 1.6
</TABLE>
2
<PAGE>
PACHOLDER HIGH YIELD FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets (continued)
March 31, 2000 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent
Par of Net
Description (000) Value Assets
<S> <C> <C> <C>
- -------------------------------------------------------------------------------
CHEMICALS/PLASTIC -- 3.9%
Berry Plastics Corp., Sr Sub Nt, 12.25%, 4/15/04 $ 1,750 $ 1,723,750 0.9%
Indesco International, Inc., Sr Sub Nt, 9.75%,
4/15/08 1,750 595,000 0.3
Philipp Brothers Chemicals, Inc., Sr Sub Nt,
9.875%, 6/1/08 1,750 1,452,500 0.8
Polymer Group, Inc., Sr Sub Nt,
9%, 7/1/07 1,500 1,305,000 0.7
Portola Packaging Inc., Sr Nt, 10.75%, 10/1/05 1,500 1,305,000 0.7
Tekni-Plex Inc., Sr Sub Nt,
9.25%, 3/1/08 1,000 950,000 0.5
------------ ---
7,331,250 3.9
CLOTHING & TEXTILE -- 1.1%
Coyne International Enterprises Corp., Sr Sub Nt,
11.25%, 6/1/08 2,500 2,025,000 1.1
------------ ---
CONTAINERS & GLASS PRODUCTS -- 0.5%
LLS Corp., Sr Sub Nt,
11.625%, 8/1/09 1,000 910,000 0.5
------------ ---
COSMETICS/TOILETRIES -- 0.8%
Drypers Corp., Sr Nt,
10.25%, 6/15/07 1,425 1,083,000 0.6
JB Williams Holdings Inc., Sr Nt,
12%, 3/1/04 375 386,250 0.2
------------ ---
1,469,250 0.8
DRUGS -- 1.0%
King Pharmaceutical, Inc., Sr Sub Nt, 10.75%,
2/15/09 1,250 1,237,500 0.7
Twin Laboratories, Inc., Sr Sub Nt, 10.25%,
5/15/06 650 658,125 0.3
------------ ---
1,895,625 1.0
ECOLOGICAL SERVICES & EQUIPMENT -- 2.2%
American Eco Corp., Sr Nt,
9.625%, 5/15/08 2,000 760,000 0.4
ICF Kaiser International Inc., Sr Sub Nt 13%,
12/31/03/4/ 1,500 740,625 0.4
Marsulex, Inc., Sr Sub Nt,
9.625%, 7/1/08 1,250 1,131,250 0.6
Norcal Waste Systems, Sr Nt,
13.5%, 11/15/05 1,500 1,560,000 0.8
------------ ---
4,191,875 2.2
</TABLE>
<TABLE>
<CAPTION>
Percent
Par of Net
Description (000) Value Assets
<S> <C> <C> <C>
- -------------------------------------------------------------------------------
ELECTRONICS/ELECTRIC -- 6.6%
Airxcel, Inc., Sr Sub Nt,
11%, 11/15/07 $ 1,500 $ 1,305,000 0.7%
Communications Instruments, Inc., Sr Sub Nt, 10%,
9/15/04 2,130 1,491,000 0.8
Dialog Corp., Sr Sub Nt, 11%, 11/15/07 1,700 1,649,000 0.9
Elgar Holdings, Inc., Sr Nt,
9.875%, 2/1/08 1,000 490,000 0.3
Flextronics International Ltd, Sr Sub Nt, 8.75%,
10/15/07 2,000 1,880,000 1.0
Viasystems, Inc., Sr Sub Nt,
9.75%, 6/1/07 2,500 2,100,000 1.1
Wesco Distribution, Inc., Sr Sub Nt, 9.125%,
6/1/08 2,500 2,162,500 1.1
Windmere-Durable Holdings, Inc.,
Sr Sub Nt, 10%, 7/31/08 1,500 1,425,000 0.7
------------ ---
12,502,500 6.6
EQUIPMENT LEASING -- 1.3%
Coinmach Corp., Ser D Sr Nt, 11.75%, 11/15/05 1,750 1,645,000 0.8
United Rentals, Inc., Sr Sub Nt,
9.5%, 6/1/08 1,000 915,000 0.5
------------ ---
2,560,000 1.3
FOOD SERVICE -- 4.4%
American Restaurant Group, Inc., Sr Nt, 11.5%,
2/15/03 1,250 843,750 0.5
American Rice, Inc., Bank Debt, 10.75%,
5/31/99/3/ 75 0 0.0
Apple South, Inc., Sr Nt,
9.75%, 6/1/06 1,500 1,215,000 0.6
Avado Brands, Inc., Sr Sub Nt, 11.75%, 6/15/09 500 290,000 0.2
Domino's, Inc., Sr Sub Nt,
10.375%, 1/15/09 1,750 1,601,250 0.8
Foodmaker Corp., Sr Nt,
9.75%, 11/1/03 1,000 997,500 0.5
Fresh Foods, Inc., Sr Nt,
10.75%, 6/1/06 1,630 978,000 0.5
TPI Enterprises, Sub Deb,
8.25%, 7/15/02 1,955 752,675 0.4
Volume Services America, Inc., Sr Sub Nt, 11.25%,
3/1/09 1,750 1,680,000 0.9
------------ ---
8,358,175 4.4
</TABLE>
3
<PAGE>
PACHOLDER HIGH YIELD FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets (continued)
March 31, 2000 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent
Par of Net
Description (000) Value Assets
<S> <C> <C> <C>
- -------------------------------------------------------------------------------
FOREST PRODUCTS -- 4.7%
Ainsworth Lumber Co. Ltd., Sr Nt, 12.5%, 7/15/07 $ 3,000 $ 3,165,000 1.7%
Alabama Pine Pulp, Inc., Tranche B Bank Debt, 0%,
12/31/00 1,078 258,730 0.1
Alabama Pine Pulp, Inc., Tranche C Bank Debt, 0%,
12/31/00 1,489 357,293 0.2
American Tissue, Inc., Sr Sec Nt, 12.5%, 7/15/06 2,000 1,980,000 1.0
Crown Packaging, Ltd., Ser B Sr Nt, 10.75%,
11/1/00 2,250 1,850,625 1.0
Millar Western Forest Products Ltd, Sr Nt,
9.875%, 5/15/08 1,500 1,417,500 0.7
------------ ---
9,029,148 4.7
HEALTH CARE -- 2.8%
Concentra Operating Corp., Sr Sub Nt, 13%,
8/15/09 1,500 1,201,875 0.6
Fisher Scientific International, Inc., Sr Sub Nt,
9%, 2/1/08 1,100 1,001,000 0.5
Fisher Scientific International, Inc., Sr Sub Nt,
9%, 2/1/08 225 204,750 0.1
Hanger Orthopedic Group, Inc., Sr Sub Nt, 11.25%,
6/15/09 1,250 981,250 0.5
Healthsouth Corp., Sr Sub Nt,
9.5%, 4/1/01 1,000 988,032 0.5
Rose Hills Co., Sr Sub Nt,
9.5%, 11/15/04 1,750 1,102,500 0.6
------------ ---
5,479,407 2.8
HOME FURNISHINGS -- 1.2%
Home Products International, Inc., Sr Sub Nt,
9.625%, 5/15/08 1,500 1,305,000 0.7
Mattress Discounters Co., Sr Nt w/warrant,
12.625%, 7/15/07/2/ 1,000 895,000 0.5
------------ ---
2,200,000 1.2
HOTEL & CASINOS -- 2.6%
Aladdin Gaming, Sr Disc Nt,
0/13.5%, 3/1/10 2,750 1,388,750 0.7
Hollywood Park, Inc., Sr Sub Nt, 9.5%, 8/1/07 1,250 1,218,750 0.7
Prime Hospitality Corp., 1st Mtg, 9.25%, 1/15/06 1,000 985,000 0.5
Prime Hospitality Corp., Sr Sub Nt, 9.75%, 4/1/07 1,375 1,320,000 0.7
------------ ---
4,912,500 2.6
</TABLE>
<TABLE>
<CAPTION>
Percent
Par of Net
Description (000) Value Assets
<S> <C> <C> <C>
- -------------------------------------------------------------------------------
INDUSTRIAL EQUIPMENT -- 4.3%
Anchor Lamina, Inc., Sr Sub Nt, 9.875%, 2/1/08 $ 2,000 $ 1,480,000 0.8%
Columbus McKinnon Corp., Sr Sub Nt, 8.5%, 4/1/08 1,250 1,103,125 0.6
International Knife & Saw, Sr Sub Nt, 11.375%,
11/15/06 2,500 1,700,000 0.9
Jackson Products, Inc., Sr Sub Nt, 9.5%, 4/15/05 2,000 1,800,000 0.9
Precision Partners, Inc., Sr Sub Nt, 12%,
3/15/09/2/ 1,175 763,750 0.4
Simonds Industries, Inc., Sr Sub Nt, 10.25%,
7/1/08 1,800 1,296,000 0.7
------------ ---
8,142,875 4.3
LEISURE -- 2.8%
Bally Total Fitness Holding Corp., Sr Sub Nt,
9.875%, 10/15/07 1,500 1,372,500 0.7
Guitar Center Mgmt., Sr Nt,
11%, 7/1/06 1,520 1,489,600 0.8
SFX Entertainment, Inc., Sr Sub Nt, 9.125%,
12/1/08 2,500 2,462,500 1.3
------------ ---
5,324,600 2.8
NON-FERROUS METALS -- 2.1%
Better Minerals and Aggregates Co., Sr Sub Nt,
13%, 9/15/09/2/ 1,250 1,239,063 0.7
Echo Bay Mines Ltd., Jr Sub Debs, 11%, 4/1/27 1,000 630,000 0.3
Oglebay Norton Co., Sr Sub Nt,
10%, 2/1/09 1,625 1,495,000 0.8
Renco Metals Inc., Sr Nt, 11.5%, 7/1/03 1,000 550,000 0.3
------------ ---
3,914,063 2.1
OIL & GAS -- 3.6%
Coho Energy, Inc., Sr Sub Nt PIK,
15%, 3/31/08/3/ 2,000 2,000,000 1.0
Giant Industries Inc., Sr Sub Nt, 9.75%, 11/15/03 875 844,375 0.4
Giant Industries Inc., Sr Sub Nt,
9%, 9/1/07 1,000 900,000 0.5
Northern Offshore ASA, Sr Nt,
10%, 5/15/05 1,000 600,000 0.3
Orion Refining Corp., Sr Nt,
10%, 11/15/04/2/ 2,859 2,573,015 1.4
------------ ---
6,917,390 3.6
</TABLE>
4
<PAGE>
PACHOLDER HIGH YIELD FUND, INC.
- --------------------------------------------------------------------------------
Statement of Net Assets (continued)
March 31, 2000 (Unaudited)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Percent
Par of Net
Description (000) Value Assets
<S> <C> <C> <C>
- -------------------------------------------------------------------------------
PUBLISHING -- 3.4%
Liberty Group Publishing, Inc., Sr Sub Nt,
9.375%, 2/1/08 $ 2,000 $ 1,720,000 0.9%
Liberty Group Publishing, Inc., Sr Disc Nt,
0/11.625%, 2/1/09 1,125 562,500 0.3
Perry-Judd, Sr Sub Nt,
10.625%, 12/15/07 2,750 2,310,000 1.2
Phoenix Color Corp., Sr Sub Nt, 10.375%, 2/1/09 2,000 1,810,000 1.0
------------ ---
6,402,500 3.4
RETAILERS -- 2.7%
Central Tractor Farm & Country, Sr Nt, 10.625%,
4/1/07 1,500 1,320,000 0.7
Frank's Nursery & Crafts, Sr Sub Nt, 10.25%,
3/1/08 1,750 507,500 0.3
G&G Retail, Inc., Sr Sub Nt,
11%, 5/15/06 1,750 1,435,000 0.7
Travelcenters of America, Sr Sub Nt, 10.25%,
4/1/07 2,000 1,920,000 1.0
------------ ---
5,182,500 2.7
STEEL -- 1.8%
LTV Corp., Sr Nt, 11.75%, 11/15/09/2/ 1,000 972,500 0.5
NS Group, Inc., Sr Nt,
13.5%, 7/15/03 2,500 2,550,000 1.3
------------ ---
3,522,500 1.8
TELECOMMUNICATIONS/CELLULAR COMMUNICATION -- 18.0%
Alaska Communications Systems Holdings, Inc., Sr
Sub Nt,
9.375%, 5/15/09 1,000 900,000 0.5
Arch Communications Group, Inc., Sr Nt, 12.75%,
7/1/07 750 611,250 0.3
Arch Communications Group, Inc., Sr Nt, 14%,
11/1/04 1,250 1,050,000 0.6
Centennial Cellular, Sr Sub Nt, 10.75%, 12/15/08 2,375 2,351,250 1.2
Convergent Communications, Inc., Sr Nt, 13%,
4/1/08 3,750 2,700,000 1.4
Crown Castle Int'l Corp., Sr Nt, 0/10.375%,
5/15/11 1,500 847,500 0.4
Crown Castle Int'l Corp., Sr Sub Nt, 9.5%, 8/1/11 1,000 935,000 0.5
</TABLE>
<TABLE>
<CAPTION>
Percent
Par of Net
Description (000) Value Assets
<S> <C> <C> <C>
- ----------------------------------------------------------------------
TELECOMMUNICATIONS/CELLULAR COMMUNICATION (continued)
Dobson/Sygnet Communications Corp., Sr
Nt, 12.25%, 12/15/08 $ 1,750 $ 1,802,500 0.9%
DTI Holdings, Inc., Sr Disc Nt, 0/12.5%,
3/1/08 5,000 2,325,000 1.2
Exodus Communications, Inc., Sr Nt
10.75%, 12/15/09 1,500 1,485,000 0.8
GCI, Inc., Sr Nt, 9.75%, 8/1/07 2,500 2,300,000 1.2
Global Crossing Holdings, Ltd., Sr Nt,
9.125%, 11/15/06 750 712,500 0.4
GlobeNet Communications Group, Ltd., Sr
Nt, 13%, 7/15/07 1,750 1,723,750 0.9
McLeod USA, Inc., Sr Nt,
8.375%, 3/15/08 1,000 895,000 0.5
Metrocall Inc., Sr Sub Nt,
10.375%, 10/1/07 2,500 2,093,750 1.1
Metromedia Fiber Network, Inc., Sr Nt,
10%, 12/15/09 1,000 953,750 0.5
Nextel Communications, Inc., Sr Nt,
9.375%, 11/15/09 1,000 920,000 0.5
Nextlink Communications, Inc., Sr Nt,
10.5%, 12/1/09/2/ 1,250 1,184,375 0.6
Paging Network do Brasil Holding Co.
LLC, Sr Nt, 13.5%, 6/6/05 500 75,000 0.1
Pathnet, Inc., Sr Nt, 12.25%, 4/15/08 1,000 680,000 0.4
Price Communications Wireless, Inc., Sr
Sec Nt, 9.125%, 12/15/06 1,000 970,000 0.5
PSINet, Inc., Sr Nt,
10.5%, 12/1/06/2/ 1,250 1,193,750 0.6
Rural Cellular Corp., Sr Sub Nt, 9.625%,
5/15/08 2,050 1,968,000 1.0
Splitrock Services, Inc., Sr Nt, 11.75%,
7/15/08 2,250 2,373,750 1.2
Williams Communications Group, Inc., Sr
Nt, 10.875%, 10/1/09 1,250 1,234,375 0.7
------------ ----
34,285,500 18.0
TRANSPORTATION -- 1.3%
Moran Transportation Co., Bank Debt,
8.25%, 12/31/05 2,469 2,456,406 1.3
------------ ----
Total Corporate Debt Securities
(amortized cost $197,317,582) 178,768,165 94.0
------------ ----
</TABLE>
5
<PAGE>
PACHOLDER HIGH YIELD FUND, INC.
- -------------------------------------------------------------------------------
Statement of Net Assets (concluded)
March 31, 2000 (Unaudited)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares/ Percent
Par of Net
Description (000) Value Assets
<S> <C> <C> <C>
- -----------------------------------------------------------------------------
EQUITY INVESTMENTS -- 2.3%
Aladdin Gaming/Capital Corp., Warrants,
3/1/10/1/,/2/ 27,500 $ 0 0.0%
Arch Communications Group, Inc., Common Stock/1/ 10,000 77,500 0.0
Arch Communications Group, Inc., Warrants,
9/1/01/4/ 23,483 26,418 0.0
Classic Communications, Inc., Common Stock/4/ 5,250 82,688 0.0
Concentric Network Corp., Pfd, 13.5% PIK, 6/1/10 1,255 1,279,817 0.7
Convergent Communications, Inc., Common Stock/1/ 10,800 117,450 0.1
DTI Holdings, Inc., Warrants, 3/1/08/1/,/3/ 25,000 0 0.0
G&G Retail, Inc., Warrants, 5/15/02/1/,/3/ 1,750 0 0.0
Glasstech, Inc., Warrants, 6/30/04/1/,/3/ 1,000 0 0.0
Gulf States Steel, Warrants, 4/15/03/1/,/3/ 500 0 0.0
Harvard Industries, Inc., Common Stock/1/ 191,199 955,995 0.6
Optel, Inc., Class C Common Stock/1/,/3/ 750 0 0.0
Orion Refining Corp. Class A Conv Pfd Stock/1/ 97 1 0.0
Orion Refining Corp. Class C Conv Pfd Stock/1/ 622 26,746 0.0
Paging Network do Brasil Holding Co. LLC,
Warrants/1/,/3/ 500 0 0.0
Pathnet, Inc., Warrants, 4/15/08/1/,/2/ 1,000 10,000 0.0
Paxson Communications, Pfd, 12.5% PIK,
10/31/06/1/,/2/ 1 0 0.0
Phonetel Technologies, Inc., Common Stock/1/ 286,900 358,625 0.2
Rural Cellular Corp., Pfd, 11.375% PIK, 5/15/10 1,228 1,166,600 0.6
Sabreliner Corp., Warrants, 4/15/03/1/,/3/ 500 0 0.0
San Jacinto Holdings, Common Stock/1/,/3/ 2,246 0 0.0
Splitrock Services, Inc., Common Stock/1/ 4,000 164,000 0.1
TransContinental Corp, Pfd, 6%/1/ 60,000 40,980 0.0
TCR Holding Corp., Pfd, Class B/1/ 50,747 507 0.0
TCR Holding Corp., Pfd, Class C/1/ 27,911 279 0.0
TCR Holding Corp., Pfd, Class D/1/ 73,583 736 0.0
TCR Holding Corp., Pfd, Class E/1/ 152,241 1,522 0.0
US Leather, Inc., Common Stock/1/,/3/ 93,269 0 0.0
----------- ---
Total Equity Investments
(cost $7,430,852) 4,309,864 2.3
----------- ---
</TABLE>
<TABLE>
<CAPTION>
Shares/ Percent
Par of Net
Description (000) Value Assets
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------
SECURITIES LENDING PROGRAM ASSETS -- 4.3%
Lehman Brothers Holdings, Inc. 6.525%,
dated 3/31/00, matures 4/3/00
(at amortized cost) 3,309 $ 3,308,861 1.7%
Salomon Brothers Corp.
6.575%, dated 3/31/00, matures 4/3/00 (at
amortized cost) 5,000 5,000,000 2.6
------------ -----
Total Securities Lending Program Assets 8,308,861 4.3
------------ -----
COMMERCIAL PAPER -- 0.8%
American Express Credit Corp., 6.07%,
4/7/00 500 499,410 0.3
Ford Motor Credit Co.,
6.08%, 4/7/00 500 499,409 0.2
General Electric Capital Corp., 6.04%,
4/7/00 500 499,413 0.3
------------ -----
Total Commercial Paper
(at amortized cost) 1,498,232 0.8
------------ -----
TOTAL INVESTMENTS
(amortized cost $214,555,527) $192,885,122 101.4
------------ -----
Payable Upon Return of Securities Loaned (8,308,861) (4.4)
Other Assets in Excess of Liabilities 5,630,469 3.0
------------ -----
Net Assets $190,206,730 100.0%
Less: Outstanding Preferred Stock (70,000,000)
------------
Net Assets Applicable to 9,504,994 Shares of
Common Stock Outstanding $120,206,730
============
Net Asset Value Per Common Share
($120,206,730/9,504,994) $ 12.65
============
- -----------------------------------------------------------------------------
</TABLE>
/1/Non-income producing security.
/2/Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. These securities
amounted to $11,077,190 or 5.8% of net assets.
/3/Board valued security. These securities amounted to $2,000,000 or 1.0% of
net assets.
/4/Securities in default.
- -------------------------------------------------------------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
Pacholder High Yield Fund, Inc.
First Quarter Report
March 31, 2000
- --------------------------------------------------------------------------------
PACHOLDER HIGH YIELD FUND, INC.
Directors and Officers
William J. Morgan Anthony L. Longi, Jr.
Chairman and Treasurer President
John F. Williamson James P. Shanahan, Jr.
Director Secretary
George D. Woodard James E. Gibson
Director Senior Vice President
Daniel A. Grant Mark H. Prenger
Director Assistant Treasurer
Investment Objective
A closed-end fund seeking a high level of total return
through current income and capital appreciation by
investing primarily in high yield, lower rated fixed-income securities
of domestic companies.
Investment Advisor
Pacholder & Company, LLC
Administrator
Kenwood Administrative Management, Inc.
Custodian and Transfer Agent
Firstar Bank, N.A.
Legal Counsel
Kirkpatrick & Lockhart LLP
Independent Auditors
Deloitte & Touche LLP
Executive Offices
Pacholder High Yield Fund, Inc.
8044 Montgomery Road
Suite 480
Cincinnati, OH 45236
(513) 985-3200
Web Site
www.phf-hy.com
This report is for the informa-
tion of shareholders of Pacholder
High Yield Fund, Inc. It is not a
prospectus, offering circular or
other representation intended for
use in connection with the pur-
chase or sale of shares of the
Fund or any securities mentioned
in this report.
- --------------------------------------------------------------------------------
