CORPORATE
HIGH YIELD
FUND, INC.
[GRAPHIC OMITTED]
STRATEGIC
Performance
Semi-Annual Report
November 30, 1999
<PAGE>
CORPORATE HIGH YIELD FUND, INC.
The Benefits and Risks of Leveraging
Corporate High Yield Fund, Inc. has the ability to utilize leverage through
borrowings or issuance of short-term debt securities or shares of Preferred
Stock. The concept of leveraging is based on the premise that the cost of assets
to be obtained from leverage will be based on short-term interest rates, which
normally will be lower than the return earned by the Fund on its longer-term
portfolio investments. Since the total assets of the Fund (including the assets
obtained from leverage) are invested in higher-yielding portfolio investments,
the Fund's Common Stock shareholders are the beneficiaries of the incremental
yield.
Leverage creates risks for holders of Common Stock including the likelihood of
greater net asset value and market price volatility. In addition, there is the
risk that fluctuations in interest rates on borrowings (or in the dividend rates
on any Preferred Stock, if the Fund were to issue Preferred Stock) may reduce
the Common Stock's yield and negatively impact its market price. If the income
derived from securities purchased with assets received from leverage exceeds the
cost of leverage, the Fund's net income will be greater than if leverage had not
been used. Conversely, if the income from the securities purchased is not
sufficient to cover the cost of leverage, the Fund's net income will be less
than if leverage had not been used, and therefore the amount available for
distribution to Common Stock shareholders will be reduced. In this case, the
Fund may nevertheless decide to maintain its leveraged position in order to
avoid capital losses on securities purchased with leverage. However, the Fund
will not generally utilize leverage if it anticipates that its leveraged capital
structure would result in a lower rate of return for its Common Stock than would
be obtained if the Common Stock were unleveraged for any significant amount of
time.
<PAGE>
Corporate High Yield Fund, Inc., November 30, 1999
DEAR SHAREHOLDER
High-Yield Market Overview
The high-yield market, which has been in the doldrums for over a year, has
reached valuations that look attractive from a historical perspective. Interest
rate malaise, earnings disappointments and an unfavorable technical picture
pushed yields higher and led to weak performance for the high-yield market as a
whole. Over the past six months, the unmanaged benchmark CS First Boston High
Yield Index lost 0.71%, and the yield of the Index is more than 12%. While this
is better than the 1.61% loss on ten-year US Treasury securities, the high-yield
market has clearly been uninspiring. We believe that, in hindsight, such periods
of weakness generally prove to provide good value for long-term investors.
High-yield fundamentals appear to be poised for a favorable longer-term outlook,
although near-term setbacks are still likely. For example, we believe that while
interest rates may rise further in this tightening cycle, it is likely that most
of the damage has been done. Yields on ten-year Treasury notes rose from 4.65%
at December 31, 1998 to over 6% at November 31, 1999. Further more, the
difference between yields in the high-yield market and yields of US Treasury
bonds has been at historically high levels, paying investors relatively more
than in the past for the additional credit risk of investing in the high-yield
universe. As measured by the CS First Boston High Yield Index, this difference,
or yield spread, stood at 6.01% on November 30, 1999, compared to 5.64% on May
31, 1999. By contrast, the average spread to US Treasury issues since 1986 has
been near 5.2%.
Corporate earnings trends, while not entirely out of the woods, have encountered
support from a growing world economy. A better earnings environment is notable
in commodities such as oil, gas and paper. Improved cash flows have allowed some
corporate bond issuers to repurchase their high-yield bonds at a discount in the
open market, thus reducing debt and interest expense while strengthening
earnings.
Fund Performance
For the six months ended November 30, 1999, the total investment return on the
Fund's Common Stock was -1.01%, based on a change in the per share net asset
value from $12.12 to $11.30, and assuming reinvestment of $0.675 per share
income dividends. During this same period, the net annualized yield of the
Fund's Common Stock was 13.70%. Fund performance was affected by overall
high-yield market weakness exacerbated by leverage. (For a complete explanation
of the benefits and risks of leveraging, see page 1 of this report to
shareholders.) The Fund benefited during the period from our overweighting in
emerging markets.
Leverage Strategy
The Fund was on average about 25% leveraged during the six-month period ended
November 30, 1999. Thus, the Fund borrowed the equivalent of 25% of total assets
invested, earning incremental yield on the investments we made with the borrowed
funds. On November 30, 1999, the Fund was 24.1% leveraged, having borrowed $87.5
million at a borrowing cost of 6.1875%. Given our view that the high-yield
market offers long-term value, we expect to maintain leverage near current
levels.
Investment Strategy
Our strategy has been to continue to search out value in the market. Purchases
during the last six months have predominantly reflected this perspective, as we
have concentrated buys in downtrodden industry sectors, such as energy and
transportation, and in growth sectors such as communications. We sold a number
of positions where bond price appreciation was modest because of either small
risk premiums relative to US Treasury bonds or a limited potential for credit
improvement.
During the six-month period ended November 30, 1999, we maintained credit
quality in the portfolio near the benchmark CS First Boston High Yield Index.
Throughout this time, spreads between ratings categories did not present unusual
return opportunities. Even within a rating category, bond selection has been the
critical factor in performance. We would like to point out that in the current
market, bond prices are pushed down dramatically if a company reports earnings
disappointments or fails to meet expectations. This applies to bonds of
better-rated companies as well as those with weaker credit ratings.
We have weighted several industries more heavily than the benchmark index
because of our view that these industries represent good value relative to
other industries in the high yield universe. Our largest broad industry exposure
is in communications, which includes communications satellites, telephony and
wireless communications. This broad category totaled 21.5% of long-term
investments at November 30, 1999. We believe that this industry has excellent
long-term growth prospects, as demand for communications services, both wireline
and wireless, has been expanding worldwide. Holdings in this category included
Nextel Communications Inc., a rapidly growing wireless telephone operator, and
Nextlink Communications Inc., a high growth alternative telecommunications
provider. Other overweighted industry sectors included energy, healthcare,
transportation and chemicals. These sectors have all been downtrodden over the
past year and should represent value in coming quarters. We believe that
earnings rebounds by many participants in these industries will provide support
to bond prices.
We continue to overweight emerging markets, which represented 11% of total
long-term investments as of November 30, 1999. Typically, these investments are
in bonds of companies with stronger credit profiles than is usual for high-yield
companies. An example of one of these holdings is Telefonica de Argentina, one
of two telephone companies sharing the Argentine market. Emerging market bonds
have bounced back from their lows during the Asian economic crisis of the fall
of 1998 and appear poised for further improvement as strength in the world
economy supports earnings growth.
In Conclusion
We thank you for your investment in Corporate High Yield Fund, Inc., and we look
forward to assisting you with your financial needs in the months and years
ahead.
Sincerely,
/s/ Terry K. Glenn
Terry K. Glenn
President and Director
/s/ Vincent T. Lathbury III
Vincent T. Lathbury III
Senior Vice President and
Portfolio Manager
/s/ Elizabeth M. Phillips
Elizabeth M. Phillips
Vice President and Portfolio Manager
January 6, 2000
PROXY RESULTS
During the six-month period ended November 30, 1999, Corporate High Yield Fund,
Inc.'s stockholders voted on the following proposals. The proposals were
approved at the stockholders' meeting on August 25, 1999. The description of
each proposal and number of shares voted are as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Shares Voted Shares Withheld
For From Voting
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. To elect the Fund's Board of Directors: Terry K. Glenn 12,080,074 335,861
Joe Grills 12,076,910 339,025
Walter Mintz 12,054,730 361,205
Robert S. Salomon Jr. 12,063,812 352,123
Melvin R. Seiden 12,062,639 353,296
Stephen B. Swensrud 12,065,580 350,355
Arthur Zeikel 12,076,187 339,748
- ----------------------------------------------------------------------------------------------------------
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
2. To ratify the selection of Deloitte & Touche LLP as the Fund's
independent auditors for the current fiscal year. 12,190,779 87,161 137,995
- ----------------------------------------------------------------------------------------------------------
</TABLE>
2 & 3
<PAGE>
Corporate High Yield Fund, Inc., November 30, 1999
SCHEDULE OF INVESTMENTS
<TABLE>
<CAPTION>
S&P Moody's Face
INDUSTRIES Rating Rating Amount Corporate Bonds Value
======================================================================================================================
<S> <C> <C> <C> <C> <C>
Aerospace & L-3 Communications Corp.:
Defense--1.7% B B2 $ 1,850,000 10.375% due 5/01/2007 $ 1,910,125
B B2 3,000,000 8.50% due 5/15/2008 2,835,000
-----------
4,745,125
======================================================================================================================
Airlines--1.0% USAir Inc.:
BB Ba3 2,160,366 11.20% due 3/19/2005 (g) 2,289,686
BB Ba3 500,000 10.375% due 3/01/2013 477,140
-----------
2,766,826
======================================================================================================================
Automotive--0.9% NR* Caa3 3,000,000 Breed Technologies Inc., 9.25% due 4/15/2008 (c) 30,000
BB+ Ba2 2,750,000 Federal-Mogul Corporation, 7.375% due 1/15/2006 2,527,976
-----------
2,557,976
======================================================================================================================
Broadcasting/Radio BB- Ba3 3,000,000 Antenna TV SA, 9% due 8/01/2007 2,700,000
& Television--2.5% B- B3 2,000,000 Cumulus Media, Inc., 10.375% due 7/01/2008 2,085,000
B+ B2 2,250,000 Globo Comunicacoes e Participacoes, Ltd., 10.50% due
12/20/2006 (h) 1,867,500
-----------
6,652,500
======================================================================================================================
Cable--2.2% B- B2 3,000,000 Avalon Cable of Michigan, 9.375% due 12/01/2008 3,018,750
B+ B2 3,250,000 Charter Communications Holdings LLC, 8.625% due 4/01/2009 3,071,250
-----------
6,090,000
======================================================================================================================
Cable-- Australis Media Ltd. (c)(j):
International--5.9% D NR* 118,416 1.75%/15.75% due 5/15/2003 1,184
D NR* 6,922,000 1.75%/15.75% due 5/15/2003 (a) 69,220
BB B1 4,000,000 Cablevision SA, 13.75% due 5/01/2009 (h) 3,920,000
B- B3 1,500,000 Diamond Cable Communications PLC, 13.25% due 9/30/2004 1,610,625
B- B3 3,500,000 International Cabletel, Inc., 11.643%** due 2/01/2006 3,132,500
D Caa3 3,000,000 Supercanal Holdings SA, 11.50% due 5/15/2005 (c)(h) 1,560,000
TeleWest Communications PLC**:
B+ B1 2,250,000 11.001% due 10/01/2007 2,081,250
B+ B1 5,925,000 9.094% due 4/15/2009 (h) 3,614,250
-----------
15,989,029
======================================================================================================================
Chemicals--7.0% BBB- Baa3 3,500,000 Equistar Chemicals LP, 8.50% due 2/15/2004 3,497,781
NR* B2 3,750,000 Huntsman Corporation, 9.50% due 7/01/2007 (h) 3,525,000
B+ B3 5,000,000 Huntsman ICI Chemicals, 0/13.375%** due 12/31/2009 (h) 1,490,000
BB Ba3 5,500,000 Lyondell Chemical Company, 9.625% due 5/01/2007 5,665,000
B+ B2 2,750,000 Octel Developments PLC, 10% due 5/01/2006 2,736,250
BB- B3 2,000,000 Sterling Chemicals Inc., 12.375% due 7/15/2006 2,060,000
-----------
18,974,031
======================================================================================================================
Communications-- B+ B2 6,250,000 Orion Network Systems, Inc., 15.16%** due 1/15/2007 2,906,250
2.2% B- B3 4,250,000 Satelites Mexicanos SA, 10.125% due 11/01/2004 3,081,250
-----------
5,987,500
======================================================================================================================
Computer Services/ BB- Ba3 2,750,000 Amkor Technologies Inc., 9.25% due 5/01/2006 (h) 2,667,500
Electronics--6.1% CCC+ B3 4,500,000 MCMS Inc., 9.75% due 3/01/2008 1,935,000
B B2 4,000,000 SCG Holding Corporation, 12% due 8/01/2009 (h) 4,220,000
NR* NR* 3,500,000 Splitrock Services Inc., 11.75% due 7/15/2008 3,290,000
B- B2 4,750,000 Zilog Inc., 9.50% due 3/01/2005 4,370,000
-----------
16,482,500
======================================================================================================================
Consumer Products-- B- B2 500,000 Chattem, Inc., 8.875% due 4/01/2008 448,750
1.4% B B3 1,500,000 Corning Consumer Products, 9.625% due 5/01/2008 1,179,375
CCC+ Caa1 3,175,000 Syratech Corp., 11% due 4/15/2007 2,238,375
-----------
3,866,500
======================================================================================================================
Consumer Services-- BB- B2 2,000,000 Avis Rent A Car, Inc., 11% due 5/01/2009 2,095,000
1.7% B+ B2 5,750,000 Protection One Alarm Monitoring, 8.625% due 1/15/2009 (h) 2,472,500
-----------
4,567,500
======================================================================================================================
Diversified--1.3% CCC+ Caa2 3,750,000 Foamex LP, 13.50% due 8/15/2005 3,520,312
======================================================================================================================
Energy--5.3% CCC- Caa1 2,350,000 Belden & Blake Corp., 9.875% due 6/15/2007 1,410,000
NR* Ca 3,250,000 Forcenergy, Inc., 8.50% due 2/15/2007 (c) 2,660,937
CCC B3 3,500,000 Ocean Rig Norway AS, 10.25% due 6/01/2008 2,835,000
BB- B1 3,500,000 Tesoro Petroleum Corp., 9% due 7/01/2008 3,373,125
NR* C 10,450,000 TransAmerican Energy Corp., 13.163%** due 6/15/2002 (c) 1,097,250
B- B3 2,000,000 United Refining Co., 10.75% due 6/15/2007 1,315,000
CCC- Caa3 2,350,000 Wiser Oil Company, 9.50% due 5/15/2007 1,809,500
-----------
14,500,812
======================================================================================================================
Entertainment--3.0% B+ B1 1,950,000 Intrawest Corp., 9.75% due 8/15/2008 1,901,250
B- B3 3,750,000 Premier Parks Inc., 9.75% due 6/15/2007 3,717,188
B- Caa1 3,250,000 Regal Cinemas Inc., 9.50% due 6/01/2008 2,648,750
-----------
8,267,188
======================================================================================================================
Financial CCC- Caa3 4,500,000 Amresco Inc., 9.875% due 3/15/2005 2,407,500
Services--4.0% BB Ba3 2,750,000 Port Arthur Finance Corporation, 12.50% due 1/15/2009 2,750,000
BB- Ba3 3,000,000 RBF Finance Company, 11% due 3/15/2006 3,150,000
BB+ Ba3 2,500,000 Sovereign Bancorp, 10.50% due 11/15/2006 2,525,000
-----------
10,832,500
======================================================================================================================
Foreign Government B+ B2 2,000,000 Republic of Brazil, 10.125% due 5/15/2027 1,595,000
Obligations--0.6%
======================================================================================================================
</TABLE>
4 & 5
<PAGE>
Corporate High Yield Fund, Inc., November 30, 1999
SCHEDULE OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
S&P Moody's Face
INDUSTRIES Rating Rating Amount Corporate Bonds Value
======================================================================================================================
<S> <C> <C> <C> <C> <C>
Gaming--3.9% D Caa1 $6,000,000 GB Property Funding Corp., 10.875% due 1/15/2004 (c) $ 4,192,500
BB+ Ba2 1,750,000 Harrah's Operating Co. Inc., 7.875% due 12/15/2005 1,690,937
Jazz Casino Co. LLC:
NR* NR* 3,882,912 5.987% due 11/15/2009 (d) 2,523,893
NR* NR* 210,000 Contingent Notes, due 11/15/2009 (e) 0
Venetian Casino/LV Sands:
B- Caa1 750,000 12.25% due 11/15/2004 626,250
CCC+ Caa3 3,000,000 10% due 11/15/2005 1,680,000
-----------
10,713,580
======================================================================================================================
Health Services-- B- B3 4,750,000 ALARIS Medical Systems, Inc., 9.75% due 12/01/2006 3,990,000
9.8% BB+ Ba2 2,250,000 Columbia HCA/Healthcare Corp., 7.15% due 3/30/2004 2,120,625
CCC+ B2 3,500,000 Extendicare Health Services, 9.35% due 12/15/2007 2,065,000
B+ ba3 950,000 Fresenius Medical Capital Trust I, 9% due 12/01/2006 900,125
B+ ba3 2,050,000 Fresenius Medical Capital Trust II, 7.875% due 2/01/2008 1,865,500
BB Ba3 1,750,000 ICN Pharmaceutical Inc., 8.75% due 11/15/2008 (h) 1,645,000
CCC+ B3 5,250,000 Kinetic Concepts, Inc., 9.625% due 11/01/2007 3,780,000
B- Caa1 3,375,000 Magellan Health Services, 9% due 2/15/2008 2,716,875
D C 3,500,000 Mariner Post--Acute Network, 9.50% due 11/01/2007 140,000
NR* B2 3,000,000 Quest Diagnostic Inc., 10.75% due 12/15/2006 3,120,000
B+ Ba3 4,500,000 Quorum Health Group Inc., 8.75% due 11/01/2005 4,286,250
-----------
26,629,375
======================================================================================================================
Hotels & BB Ba2 4,500,000 HMH Properties, Inc., 8.45% due 12/01/2008 4,168,125
Motels--1.5%
======================================================================================================================
Independent Power BB Ba3 2,250,000 AES Corporation, 8.50% due 11/01/2007 2,095,312
Producers--1.8% BB+ Ba1 1,500,000 Calpine Corporation, 8.75% due 7/15/2007 1,475,625
BB Ba3 1,000,000 Midland Funding II, 13.25% due 7/23/2006 (g) 1,191,100
-----------
4,762,037
======================================================================================================================
Industrial Neff Corp.:
Services--1.3% B B3 3,000,000 10.25% due 6/01/2008 2,910,000
B B3 750,000 10.25% due 6/01/2008 727,500
-----------
3,637,500
======================================================================================================================
Internet B- B3 4,000,000 PSINet Inc., 11% due 8/01/2009 4,080,000
Transport--2.8% B- B3 3,500,000 Verio Inc., 10.625% due 11/15/2009 (h) 3,561,250
-----------
7,641,250
======================================================================================================================
Metals & Mining-- B- B3 3,750,000 Great Lakes Carbon Corp., 11.75% due 5/15/2008 (d) 3,506,250
3.7% CCC+ B3 4,200,000 Kaiser Aluminum & Chemical Corp., 12.75% due 2/01/2003 4,168,500
CCC+ Caa2 3,250,000 Metal Management Inc., 10% due 5/15/2008 2,372,500
-----------
10,047,250
======================================================================================================================
Packaging--1.3% B+ Ba3 3,750,000 Vicap SA, 11.375% due 5/15/2007 3,412,500
======================================================================================================================
Paper & Forest B B2 2,400,000 Ainsworth Lumber Company, 12.50% due 7/15/2007 (d) 2,640,000
Products--6.7% B- B2 4,000,000 Container Corporation of America, 9.75% due 4/01/2003 4,080,000
Doman Industries Limited:
B Caa1 4,000,000 8.75% due 3/15/2004 3,370,000
B+ B3 1,500,000 12% due 7/01/2004 1,560,000
CCC+ Caa1 3,500,000 Repap New Brunswick, 10.625% due 4/15/2005 3,220,000
CCC+ Caa1 3,000,000 Tjiwi Kimia Finance Mauritius, 10% due 8/01/2004 2,145,000
CCC+ Caa1 1,500,000 Tjiwi Kimia International BV, 13.25% due 8/01/2001 1,327,500
-----------
18,342,500
======================================================================================================================
Product CCC+ Caa1 3,000,000 AmeriServe Food Distributors, 10.125% due 7/15/2007 945,000
Distribution--1.7% Fisher Scientific International:
B- B3 2,250,000 9% due 2/01/2008 2,137,500
B- B3 1,500,000 9% due 2/01/2008 1,425,000
-----------
4,507,500
======================================================================================================================
Publishing & B B2 4,500,000 MDC Communications Corp., 10.50% due 12/01/2006 4,432,500
Printing--1.6%
======================================================================================================================
Real Estate--1.8% BB- Ba3 5,250,000 Forest City Enterprises Inc., 8.50% due 3/15/2008 4,882,500
======================================================================================================================
Specialty B B2 3,750,000 Jo-Ann Stores Inc., 10.375% due 5/01/2007 3,712,500
Retailing--1.4%
======================================================================================================================
Steel--1.6% NR* B2 2,250,000 CSN Iron SA, 9.125% due 6/01/2007 (h) 1,788,750
B Caa1 3,500,000 Republic Technology, 13.75% due 7/15/2009 (b)(h) 2,450,000
-----------
4,238,750
======================================================================================================================
Telephony--10.8% B+ B2 3,500,000 Call-Net Enterprises, Inc., 9.27%** due 8/15/2007 2,100,000
NR* NR* 3,250,000 Comtel Brasileira Ltd., 10.75% due 9/26/2004 (h) 3,103,750
B- B3 2,750,000 Esprit Telecom Group PLC, 10.875% due 6/15/2008 2,708,750
BB Ba2 1,750,000 Global Crossing Holding Limited, 9.50% due 11/15/2009 (h) 1,728,125
Intermedia Communications Inc.:
B B2 1,500,000 10.503%** due 7/15/2007 1,095,000
B B2 1,000,000 8.60% due 6/01/2008 912,500
B+ B2 1,750,000 Metromedia Fiber Network, 10% due 12/15/2009 1,778,438
Nextlink Communications Inc.:
B B2 3,750,000 12.50% due 4/15/2006 4,012,500
B B2 1,500,000 9% due 3/15/2008 1,417,500
B B2 2,000,000 10.75% due 6/01/2009 2,040,000
NR* NR* 3,500,000 Tele1 Europe BV, 13% due 5/15/2009 3,465,000
BBB- B1 5,000,000 Telefonica de Argentina SA, 11.875% due 11/01/2004 5,125,000
-----------
29,486,563
======================================================================================================================
Textiles--1.1% B B2 3,000,000 Polymer Group Inc., 8.75% due 3/01/2008 2,872,500
======================================================================================================================
</TABLE>
6 & 7
<PAGE>
Corporate High Yield Fund, Inc., November 30, 1999
SCHEDULE OF INVESTMENTS (continued)
<TABLE>
<CAPTION>
S&P Moody's Face
INDUSTRIES Rating Rating Amount Corporate Bonds Value
======================================================================================================================
<S> <C> <C> <C> <C> <C>
Transportation-- B- B3 $ 4,000,000 American Reefer Co. Ltd., 10.25% due 3/01/2008 $ 2,240,000
8.4% BB- NR* 3,750,000 Autopistas del Sol SA, 10.25% due 8/01/2009 (h) 2,906,250
BB- Ba3 4,000,000 Eletson Holdings, Inc., 9.25% due 11/15/2003 3,600,000
NR* C 4,000,000 Hvide Marine, Inc., 8.375% due 2/15/2008 (c) 1,620,000
BB- B1 3,750,000 Sea Containers Ltd., 12.50% due 12/01/2004 3,900,000
BB Ba2 1,500,000 Stena AB, 10.50% due 12/15/2005 1,466,250
B+ B2 3,000,000 TFM, SA de CV, 11.974%** due 6/15/2009 1,867,500
B- B2 4,250,000 Transtar Holdings L.P., 12.625%** due 12/15/2003 4,255,313
D Caa3 4,450,000 Trism Inc., 10.75% due 12/15/2000 (c) 934,500
------------
22,789,813
======================================================================================================================
Utilities--2.0% NR* NR* 5,106,532 Tucson Electric & Power Co., 10.21% due 1/01/2009 (f)(g) 5,408,890
======================================================================================================================
Waste NR* Ca 4,000,000 Mid-American Waste Systems, Inc., 12.25% due 2/15/2003 (c) 120,000
Management--0.0%
======================================================================================================================
Wireless Nextel Communications Inc.:
Communications-- B B1 2,250,000 9.505%** due 10/31/2007 1,617,188
Domestic Paging & B B1 3,000,000 9.375% due 11/15/2009 (h) 2,977,500
Cellular--7.0% B B3 5,000,000 Pinnacle Holdings Inc., 11.675%** due 3/15/2008 3,137,500
NR* NR* 3,975,000 TeleCorp PCS Inc., 11.78%** due 4/15/2009 (h) 2,563,875
CCC+ B3 2,750,000 Triton PCS Inc., 11.351%** due 5/01/2008 1,952,500
B- B2 3,500,000 VoiceStream Wireless Corporation/Voicestream Wireless
Holding Company, 10.375% due 11/15/2009 (h) 3,648,750
B- B3 3,000,000 Western Wireless Corp., 10.50% due 2/01/2007 3,150,000
------------
19,047,313
======================================================================================================================
Wireless NR* NR* 3,000,000 Celcaribe SA, 14.50% due 3/15/2004 2,190,000
Communications-- NR* B3 2,000,000 ClearNet Communications, 12.473%** due 12/15/2005 1,945,000
International B B3 6,208,000 Comunicacion Celular SA, 13.154%** due 3/01/2005 (h) 3,111,760
Paging & CCC+ Caa1 1,750,000 Dolphin Telecom PLC, 17.456%** due 6/01/2008 848,750
Cellular--8.6% B- Caa1 2,000,000 McCaw International Ltd., 11.757%** due 4/15/2007 1,280,000
B- Caa1 7,750,000 Millicom International Cellular SA, 14.147%** due 6/01/2006 5,967,500
BBB Ba3 3,500,000 Orange PLC, 8% due 8/01/2008 3,561,250
CCC+ Caa1 7,500,000 Telesystem International Wireless Inc., 17.158%** due
6/30/2007 4,425,000
------------
23,329,260
======================================================================================================================
Total Investments in Corporate Bonds
(Cost--$393,367,956)--125.6% 341,577,505
======================================================================================================================
Shares
Held Common Stocks
======================================================================================================================
Energy--1.3% 321,384 CHI Energy, Inc. (c) 3,535,224
======================================================================================================================
Entertainment--1.1% 191,749 On Command Corporation (c) 2,828,298
======================================================================================================================
Gaming--0.1% 60,892 JCC Holding Company (Class A) (c) 334,906
======================================================================================================================
Wireless 10,611 Nextel Communications, Inc. (Class A) (c) 1,051,815
Communications--
Domestic Paging &
Cellular--0.4%
======================================================================================================================
Total Investments in Common Stocks
(Cost--$11,085,354)--2.9% 7,750,243
======================================================================================================================
Preferred Stocks & Warrants
======================================================================================================================
Broadcasting/Radio & 1,235 Cumulus Media, Inc., Series A, 13.75% (d) 1,346,150
Television--0.5%
======================================================================================================================
Cable--0.0% 5,747 Wireless One Inc. (Warrants) (i) 57
======================================================================================================================
Computer Services/ 3,500 Splitrock Services Inc. (Warrants) (i) 280,000
Electronics--0.1%
======================================================================================================================
Entertainment--0.1% 61,014 On Command Corporation (Warrants) (i) 244,056
======================================================================================================================
Supermarkets--0.0% 3,745 Grand Union Co. (Warrants) (i) 4,681
======================================================================================================================
Telephony--0.8% 2,108 Intermedia Communications Inc. (Convertible) (d) 2,002,600
3,500 Tele1 Europe BV (Warrants) (i) 280,000
------------
2,282,600
======================================================================================================================
Wireless 6,208 Comunicacion Celular SA (Warrants) (h)(i) 1,164
Communications--
International Paging &
Cellular--0.0%
======================================================================================================================
Total Investments in Preferred Stocks & Warrants
(Cost--$4,102,969)--1.5% 4,158,708
======================================================================================================================
</TABLE>
8 & 9
<PAGE>
Corporate High Yield Fund, Inc., November 30, 1999
SCHEDULE OF INVESTMENTS (concluded)
<TABLE>
<CAPTION>
Face
Amount Short-Term Securities Value
======================================================================================================================
<S> <C> <C> <C>
Commercial $ 263,000 General Motors Acceptance Corp., 5.75% due 12/01/1999 $ 263,000
Paper***--0.1%
======================================================================================================================
Total Short-Term Investments (Cost--$263,000)--0.1% 263,000
======================================================================================================================
Total Investments (Cost--$408,819,279)--130.1% 353,749,456
Liabilities in Excess of Other Assets--(30.1%) (81,768,688)
------------
Net Assets--100.0% $271,980,768
============
======================================================================================================================
</TABLE>
* Not Rated.
** Represents a zero coupon or step bond; the interest rate shown reflects
the effective yield at the time of purchase by the Fund.
*** Commercial Paper is traded on a discount basis; the interest rate shown
reflects the discount rate paid at the time of purchase by the Fund.
(a) Each $1,000 face amount contains one warrant of Australis Media Ltd.
(b) Each $1,000 face amount contains one warrant of Republic Technology.
(c) Non-income producing security.
(d) Represents a pay-in-kind security which may pay interest/dividends in
additional face/shares.
(e) Represents an obligation by Jazz Casino Co. LLC to pay a semi-annual
amount to the Fund through 11/15/2009. The payments are based upon varying
interest rates and the amounts, which may be paid-in-kind, are contingent
upon the earnings before income taxes, depreciation and amortization of
Jazz Casino Co. LLC on a fiscal year basis.
(f) Restricted securities as to resale. The value of the Fund's investment in
restricted securities was approximately $5,409,000, representing 2.0% of
net assets.
- --------------------------------------------------------------------------------
Acquisition
Issue Dates Cost Value
- --------------------------------------------------------------------------------
Tucson Electric & Power Co., 6/25/1993-
10.21% due 1/01/2009 7/28/1993 $4,798,574 $5,408,890
- --------------------------------------------------------------------------------
Total $4,798,574 $5,408,890
========== ==========
- --------------------------------------------------------------------------------
(g) Subject to principal paydowns.
(h) The security may be offered and sold to "qualified institutional buyers"
under Rule 144A of the Securities Act of 1933.
(i) Warrants entitle the Fund to purchase a predetermined number of shares of
Common Stock and are non-income producing. The purchase price and number
of shares are subject to adjustment under certain conditions until the
expiration date.
(j) Represents a step bond. Coupon payments are paid-in-kind, in which the
Fund receives additional face amount at an annual rate of 1.75% until May
15, 2000. Subsequently, the Fund will receive cash coupon payments at an
annual rate of 15.75% until maturity.
See Notes to Financial Statements.
STATEMENT OF ASSETS, LIABILITIES AND CAPITAL
<TABLE>
<CAPTION>
As of November 30, 1999
======================================================================================================================
<S> <C> <C> <C>
Assets: Investments, at value (identified cost--$408,819,279) ........... $353,749,456
Cash ............................................................ 560,432
Interest receivable ............................................. 8,198,536
Prepaid expenses and other assets ............................... 164,550
------------
Total assets .................................................... 362,672,974
------------
======================================================================================================================
Liabilities: Loans ........................................................... 87,500,000
Payables:
Securities purchased .......................................... $ 1,490,000
Interest on loans ............................................. 910,716
Dividends to shareholders ..................................... 559,891
Commitment fees ............................................... 17,697
Investment adviser ............................................ 9,871 2,988,175
------------
Accrued expenses ................................................ 204,031
------------
Total liabilities ............................................... 90,692,206
------------
======================================================================================================================
Net Assets: Net assets ...................................................... $271,980,768
============
======================================================================================================================
Capital: Common Stock, $.10 par value, 200,000,000 shares authorized ..... $ 2,406,221
Paid-in capital in excess of par ................................ 335,311,298
Undistributed investment income--net ............................ 3,184,281
Accumulated realized capital losses on investments--net ......... (11,142,205)
Accumulated distributions in excess of realized capital
gains on investments--net ..................................... (2,709,004)
Unrealized depreciation on investments--net ..................... (55,069,823)
------------
Total--Equivalent to $11.30 per share based on
24,062,214 shares of capital stock outstanding
(market price $9.5625) ........................................ $271,980,768
============
======================================================================================================================
</TABLE>
See Notes to Financial Statements.
10 & 11
<PAGE>
Corporate High Yield Fund, Inc., November 30, 1999
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
For the Six Months Ended November 30, 1999
======================================================================================================================
<S> <C> <C> <C>
Investment Income: Interest and discount earned .................................... $ 19,079,499
Dividends ....................................................... 249,496
Other ........................................................... 30,558
------------
Total income .................................................... 19,359,553
------------
======================================================================================================================
Expenses: Loan interest expense ........................................... $ 2,667,204
Investment advisory fees ........................................ 928,186
Borrowing costs ................................................. 147,532
Transfer agent fees ............................................. 41,412
Accounting services ............................................. 34,068
Professional fees ............................................... 29,295
Printing and shareholder reports ................................ 22,377
Directors' fees and expenses .................................... 20,677
Listing fees .................................................... 12,346
Custodian fees .................................................. 12,155
Pricing services ................................................ 6,070
Other ........................................................... 16,619
----------
Total expenses .................................................. 3,937,941
------------
Investment income--net .......................................... 15,421,612
------------
======================================================================================================================
Realized & Realized gain on investments--net ............................... 1,555,513
Unrealized Gain Change in unrealized depreciation on investments--net ........... (20,299,978)
(Loss) on ------------
Investments--Net: Net Decrease in Net Assets Resulting from Operations ............ $(3,322,853)
============
======================================================================================================================
</TABLE>
See Notes to Financial Statements.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
For the Six For the
Months Ended Year Ended
Increase (Decrease) in Net Assets: Nov. 30, 1999 May 31, 1999
===================================================================================================================
<S> <C> <C>
Operations: Investment income--net .............................. $ 15,421,612 $ 33,440,854
Realized gain (loss) on investments--net ............ 1,555,513 (14,532,211)
Change in unrealized depreciation on investments--net (20,299,978) (25,800,296)
------------- -------------
Net decrease in net assets resulting from operations (3,322,853) (6,891,653)
------------- -------------
===================================================================================================================
Dividends & Investment income--net .............................. (16,226,649) (33,542,325)
Distributions to In excess of realized gain on investments--net ...... -- (2,709,004)
Shareholders: Net decrease in net assets resulting from dividends ------------- -------------
and distributions to shareholders ................. (16,226,649) (36,251,329)
------------- -------------
===================================================================================================================
Capital Stock Value of shares issued to Common Stock shareholders
Transactions: in reinvestment of dividends and distributions .... 1,263,271 6,481,447
------------- -------------
===================================================================================================================
Net Assets: Total decrease in net assets ........................ (18,286,231) (36,661,535)
Beginning of period ................................. 290,266,999 326,928,534
------------- -------------
End of period* ...................................... $ 271,980,768 $ 290,266,999
============= =============
===================================================================================================================
*Undistributed investment income--net ............... $ 3,184,281 $ 3,989,318
============= =============
===================================================================================================================
</TABLE>
See Notes to Financial Statements.
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
For the Six Months Ended November 30, 1999
=========================================================================================================
<S> <C> <C>
Cash Provided by Net decrease in net assets resulting from operations ....... $ (3,322,853)
Operating Activities: Adjustments to reconcile net decrease in net assets resulting
from operations to net cash provided by operating activities:
Decrease in receivables .................................. 389,391
Decrease in other assets ................................. 181,004
Decrease in other liabilities ............................ (1,450,724)
Realized and unrealized loss on investments--net ......... 18,744,465
Amortization of discount ................................. (3,236,264)
-------------
Net cash provided by operating activities .................. 11,305,019
-------------
=========================================================================================================
Cash Provided by Proceeds from sales of long-term investments ............... 108,344,373
Investing Activities: Purchases of long-term investments ......................... (103,578,804)
Purchases of short-term investments ........................ (35,836,669)
Proceeds from sales and maturities of short-term investments 35,830,000
-------------
Net cash provided by investing activities .................. 4,758,900
-------------
=========================================================================================================
Cash Used for Cash receipts from borrowings .............................. 87,000,000
Financing Activities: Cash payments on borrowings ................................ (88,100,000)
Dividends paid to shareholders ............................. (14,403,487)
-------------
Net cash used for financing activities ..................... (15,503,487)
-------------
=========================================================================================================
Cash: Net increase in cash ....................................... 560,432
Cash at beginning of period ................................ --
-------------
Cash at end of period ...................................... $ 560,432
=============
=========================================================================================================
Cash Flow Cash paid for interest ..................................... $ 2,174,928
Information: =============
=========================================================================================================
Non-Cash Financing Reinvestment of dividends paid to shareholders ............. $ 1,263,271
Activities: =============
=========================================================================================================
</TABLE>
See Notes to Financial Statements.
12 & 13
<PAGE>
Corporate High Yield Fund, Inc., November 30, 1999
FINANCIAL HIGHLIGHTS
The following per share data and ratios have been derived
from information provided in the financial statements.
<TABLE>
<CAPTION>
For the
Six Months For the Year Ended
Ended May 31,+
Nov. 30, --------------------------------------------
Increase (Decrease) in Net Asset Value: 1999+ 1999 1998 1997 1996
===================================================================================================================================
<S> <C> <C> <C> <C> <C>
Per Share Net asset value, beginning of period .............. $ 12.12 $ 13.95 $ 13.74 $ 13.68 $ 13.35
Operating -------- -------- -------- -------- --------
Performance: Investment income--net ............................ .64 1.41 1.42 1.44 1.46
Realized and unrealized gain (loss) on
investments--net ................................ (.78) (1.71) .25 .08 .33
-------- -------- -------- -------- --------
Total from investment operations .................. (.14) (.30) 1.67 1.52 1.79
-------- -------- -------- -------- --------
Less dividends and distributions:
Investment income--net .......................... (.68) (1.42) (1.46) (1.46) (1.46)
In excess of realized gain on investments--net .. -- (.11) -- -- --
-------- -------- -------- -------- --------
Total dividends and distributions ................. (.68) (1.53) (1.46) (1.46) (1.46)
-------- -------- -------- -------- --------
Net asset value, end of period .................... $ 11.30 $ 12.12 $ 13.95 $ 13.74 $ 13.68
======== ======== ======== ======== ========
Market price per share, end of period ............. $ 9.5625 $12.1875 $14.1875 $ 14.125 $ 13.375
======== ======== ======== ======== ========
===================================================================================================================================
Total Investment Based on market price per share ................... (16.70%)++ (2.82%) 11.33% 17.44% 9.35%
Return:** ======== ======== ======== ======== ========
Based on net asset value per share ................ (1.01%)++ (1.71%) 12.53% 11.69% 14.15%
======== ======== ======== ======== ========
===================================================================================================================================
Ratios to Average Expenses, excluding interest expense .............. .91%* .88% .64% .66% .70%
Net Assets: ======== ======== ======== ======== ========
Expenses .......................................... 2.81%* 2.65% 1.45% 1.27% 1.62%
======== ======== ======== ======== ========
Investment income--net ............................ 11.00%* 11.22% 8.71% 9.43% 9.20%
======== ======== ======== ======== ========
===================================================================================================================================
Leverage: Amount of borrowings outstanding, end of period
(in thousands) .................................. $ 87,500 $ 88,600 $ 70,300 $ 28,000 $ 54,000
======== ======== ======== ======== ========
Average amount of borrowings outstanding
during the period (in thousands) ................ $ 92,410 $ 93,258 $ 52,080 $ 36,667 $ 49,424
======== ======== ======== ======== ========
Average amount of borrowings outstanding
per share during the period ..................... $ 3.85 $ 3.93 $ 2.26 $ 1.64 $ 2.27
======== ======== ======== ======== ========
===================================================================================================================================
Supplemental Net assets, end of period (in thousands) .......... $271,981 $290,267 $326,929 $312,909 $300,904
Data: ======== ======== ======== ======== ========
Portfolio turnover ................................ 27.64% 48.80% 55.42% 52.91% 65.68%
======== ======== ======== ======== ========
===================================================================================================================================
</TABLE>
* Annualized.
** Total investment returns based on market value, which can be significantly
greater or lesser than the net asset value, may result in substantially
different returns. Total investment returns exclude the effects of sales
charges.
+ Based on average shares outstanding.
++ Aggregate total investment return.
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
Corporate High Yield Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940 as a diversified, closed-end management investment company.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles, which may require the use of management accruals
and estimates. These unaudited financial statements reflect all adjustments,
which are, in the opinion of management, necessary to a fair statement of the
results for the interim period presented. All such adjustments are of a normal
recurring nature. The Fund determines and makes available for publication the
net asset value of its Common Stock on a weekly basis. The Fund's Common Stock
is listed on the New York Stock Exchange under the symbol COY.
(a) Valuation of investments--Portfolio securities are valued on the basis of
prices furnished by one or more pricing services which determine prices for
normal, institutional-size trading units of such securities using market
information, transactions for comparable securities and various relationships
between securities which are generally recognized by institutional traders. In
certain circumstances, portfolio securities are valued at the last sale price on
the exchange that is the primary market for such securities, or the last quoted
bid price for those securities for which the over-the-counter market is the
primary market or for listed securities in which there were no sales during the
day. The value of interest rate swaps, caps and floors is determined in
accordance with a formula and then confirmed periodically by obtaining a bank
quotation. Options written or purchased are valued at the last sale price in the
case of exchange-traded options. In the case of options traded in the
over-the-counter market, valuation is the last asked price (options written) or
the last bid price (options purchased). Obligations with remaining maturities of
sixty days or less are valued at amortized cost, which approximates market
value, unless this method no longer produces fair valuations. Rights or warrants
to acquire stock, or stock acquired pursuant to the exercise of a right or
warrant, may be valued taking into account various factors such as original cost
to the Fund, earnings and net worth of the issuer, market prices for securities
of similar issuers, assessment of the issuer's future prosperity, liquidation
value or third party transactions involving the issuer's securities. Securities
for which there exist no price quotations or valuations and all other assets
including futures contracts and related options are valued at fair value as
determined in good faith by or on behalf of the Board of Directors of the Fund.
(b) Derivative financial instruments--The Fund may engage in various portfolio
strategies to seek to increase its return by hedging its portfolio against
adverse movements in the debt markets. Losses may arise due to changes in the
value of the contract or if the counterparty does not perform under the
contract.
o Options--The Fund is authorized to write and purchase call and put options.
When the Fund writes an option, an amount equal to the premium received by the
Fund is reflected as an asset and an equivalent liability. The amount of the
liability is subsequently marked to market to reflect the current market value
of the option written.
When a security is purchased or sold through an exercise of an option, the
related premium paid (or received) is added to (or deducted from) the basis of
the security acquired or deducted from (or added to) the proceeds of the
security sold. When an option expires (or the Fund enters into a closing
transaction), the Fund realizes a gain or loss on the option to the extent of
the premiums received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
o Financial futures contracts--The Fund may purchase or sell financial futures
contracts and options on such futures contracts for the purpose of hedging the
market risk on existing securities or the intended purchase of securities.
Futures contracts are contracts for delayed delivery of securities at a
14 & 15
<PAGE>
Corporate High Yield Fund, Inc., November 30, 1999
NOTES TO FINANCIAL STATEMENTS (concluded)
specific future date and at a specific price or yield. Upon entering into a
contract, the Fund deposits and maintains as collateral such initial margin as
required by the exchange on which the transaction is effected. Pursuant to the
contract, the Fund agrees to receive from or pay to the broker an amount of cash
equal to the daily fluctuation in value of the contract. Such receipts or
payments are known as variation margin and are recorded by the Fund as
unrealized gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed.
o Interest rate transactions--The Fund is authorized to enter into interest rate
swaps and purchase or sell interest rate caps and floors. In an interest rate
swap, the Fund exchanges with another party their respective commitments to pay
or receive interest on a specified notional principal amount. The purchase of an
interest rate cap (or floor) entitles the purchaser, to the extent that a
specified index exceeds (or falls below) a predetermined interest rate, to
receive payments of interest equal to the difference between the index and the
predetermined rate on a notional principal amount from the party selling such
interest rate cap (or floor).
(c) Income taxes--It is the Fund's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no Federal income tax provision is required.
(d) Security transactions and investment income--Security transactions are
recorded on the dates the transactions are entered into (the trade dates).
Dividend income is recorded on the ex-dividend dates. Interest income (including
amortization of discount) is recognized on the accrual basis. Realized gains and
losses on security transactions are determined on the identified cost basis.
(e) Dividends and distributions--Dividends from net investment income are
declared and paid monthly. Distributions of capital gains are recorded on the
ex-dividend dates. Distributions in excess of realized capital gains are due
primarily to post-October losses.
2. Investment Advisory Agreement and Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund Asset
Management, L.P. ("FAM"). The general partner of FAM is Princeton Services, Inc.
("PSI"), an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc. ("ML &
Co."), which is the limited partner.
FAM is responsible for the management of the Fund's portfolio and provides the
necessary personnel, facilities, equipment and certain other services necessary
to the operations of the Fund. For such services the Fund pays a monthly fee at
an annual rate of .50% of the Fund's average weekly net assets plus the proceeds
of any outstanding principal borrowed.
For the six months ended November 30, 1999, the Fund paid Merrill Lynch Security
Pricing Service, an affiliate of Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("MLPF&S"), $1,426 for security price quotations to compute the net
asset value of the Fund.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or directors of the Fund are officers and/or directors of
FAM, PSI, and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities, for the six
months ended November 30, 1999 were $100,803,023 and $106,445,415, respectively.
Net realized gains for the six months ended November 30, 1999 and net unrealized
losses as of November 30, 1999 were as follows:
- --------------------------------------------------------------------------------
Realized Unrealized
Gains Losses
- --------------------------------------------------------------------------------
Long-term investments ................. $ 1,555,513 $(55,069,823)
------------ ------------
Total ................................. $ 1,555,513 $(55,069,823)
============ ============
- --------------------------------------------------------------------------------
As of November 30, 1999, net unrealized depreciation for financial reporting and
Federal income tax purposes aggregated $55,069,823, of which $8,421,506 related
to appreciated securities and $63,491,329 related to depreciated securities. The
aggregate cost of investments at November 30, 1999 for Federal income tax
purposes was $408,819,279.
4. Capital Share Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock, par value
$.10, all of which were initially classified as Common Stock. The Board of
Directors is authorized, however, to classify and reclassify any unissued shares
of capital stock without approval of the holders of Common Stock.
Shares issued and outstanding during the six months ended November 30, 1999 and
the year ended May 31, 1999 increased by 106,248 and 517,151, respectively, as a
result of dividend reinvestment.
5. Short-Term Borrowings:
On August 10, 1999, the Fund entered into a one-year credit agreement with State
Street Bank and Trust Company, Fleet National Bank and certain other
institutions party thereto. The agreement is a $150,000,000 credit facility
bearing interest at the Federal Funds Rate plus .50% and/or LIBOR plus .50%. For
the six months ended November 30, 1999, the average amount borrowed was
approximately $92,410,000 and the daily weighted average interest rate was
5.76%. For the six months ended November 30, 1999, facility and commitment fees
aggregated approximately $148,000.
6. Capital Loss Carryforward:
At May 31, 1999, the Fund had a net capital loss carryforward of approximately
$8,611,000, all of which expires in 2007. This amount will be available to
offset like amounts of any future taxable gains.
7. Subsequent Event:
On December 1, 1999, the Fund's Board of Directors declared an ordinary income
dividend to Common Stock shareholders in the amount of $.104535 per share,
payable on December 17, 1999 to shareholders of record as of December 10, 1999.
OFFICERS AND DIRECTORS
Terry K. Glenn, President and Director
Joe Grills, Director
Walter Mintz, Director
Robert S. Salomon Jr., Director
Melvin R. Seiden, Director
Stephen B. Swensrud, Director
Arthur Zeikel, Director
Vincent T. Lathbury III, Senior Vice President
Joseph T. Monagle Jr., Senior Vice President
Elizabeth M. Phillips, Vice President
Donald C. Burke, Vice President and Treasurer
William E. Zitelli, Secretary
Custodian
The Chase Manhattan Bank
4 MetroTech Center, 18th Floor
Brooklyn, NY 11245
Transfer Agent
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
NYSE Symbol
COY
16 & 17
<PAGE>
Corporate High Yield Fund, Inc., November 30, 1999
PORTFOLIO INFORMATION
<TABLE>
<CAPTION>
Percent of
As of November 30, 1999 Long-Term Investments
====================================================================================================================================
<S> <C> <C> <C>
Ten Largest Holdings
-------------------------------------------------------------------------------------------------------------
Nextlink Communications Inc. Nextlink provides local, long distance and enhanced
telephone communications services to commercial customers.
The company operates over 23 facilities-based networks
throughout the United States. 2.1%
-------------------------------------------------------------------------------------------------------------
Nextel Communications Inc. Nextel offers digital and analog wireless communications
services throughout the United States. The company's
digital service covers near one half of the total US
population and, once completed, will enable Nextel to offer
nationwide digital wireless service. Our holdings include
bonds of 100%-owned McCaw International. 2.0
-------------------------------------------------------------------------------------------------------------
Millicom International Millicom International develops and operates cellular
Cellular SA telephone systems worldwide. The company has interest in 33
cellular systems in 20 countries, primarily in emerging
markets in Asia, Latin America, Europe and Africa. 1.7
-------------------------------------------------------------------------------------------------------------
TeleWest International PLC TeleWest offers both cable TV and telephone service to
residential customers and businesses in the United Kingdom.
The company also offers internet connection services. 1.6
-------------------------------------------------------------------------------------------------------------
Lyondell Chemical Company Lyondell is a global commodity chemical company. The
company is the world's largest producer of propylene oxide
and produces a variety of derivative chemicals based on
propylene oxide. Styrene monomer and tertiary butyl alcohol
are also important products. Lyondell's chemicals have such
end uses as flexible foam for automotive seating and
furniture, antifreeze and coolants, personal care products,
coatings, adhesives, sealants, resins and solvents. 1.6
-------------------------------------------------------------------------------------------------------------
Tucson Electric & Power Co. This electric utility serves Tucson, Arizona, and
surrounding areas. Our bonds are secured lease obligation
bonds on the company's Springerville coal fired power
generation plant. 1.5
-------------------------------------------------------------------------------------------------------------
Telefonica de Argentina SA Telefonica de Argentina provides monopoly telephone service
to the southern half of Argentina, including about half the
Buenos Aires metropolitan area where nearly one third of
Argentina's population is located. 1.5
-------------------------------------------------------------------------------------------------------------
Doman Industries Limited Doman is an integrated Canadian producer of lumber and
pulp. The company grows and harvests timber and sells
lumber, including remanufactured value-added lumber. Doman
produces both dissolving sulphite pulp and NBSK pulp. Based
in British Columbia, Doman exports a significant amount of
its output. 1.4
-------------------------------------------------------------------------------------------------------------
Forest City Enterprises Inc. Forest City is a diversified real estate developer. The
company develops, acquires, owns and manages commercial and
residential real estate projects in 21 states and the
District of Columbia. 1.4
-------------------------------------------------------------------------------------------------------------
L-3 Communications The company is a supplier of secure communications systems, avionics,
telemetry, instrumentation and other communications and support
services. Customers include aerospace contractors and the
United States military and Federal agencies. 1.3
-------------------------------------------------------------------------------------------------------------
</TABLE>
Portfolio Profile
The quality ratings* of securities in the Fund as of November 30, 1999 were as
follows:
- --------------------------------------------------------------------------------
Percent of
S&P Ratings/Moody's Ratings Long-Term Investments
- --------------------------------------------------------------------------------
BBB/Baa .................................................. 2.5%
BB/Ba .................................................... 25.0
B/B ...................................................... 62.0
CCC/Caa or Lower ......................................... 5.2
NR (Not Rated) ........................................... 5.3
- --------------------------------------------------------------------------------
*In cases where bonds are rated differently by Standard & Poor's Corp. and
Moody's Investors Service, Inc., bonds are categorized according to the higher
of the two ratings.
- --------------------------------------------------------------------------------
Percent of
Foreign Holdings Long-Term Investments
- --------------------------------------------------------------------------------
Total Foreign Holdings ................................... 31.9%
Emerging Market Holdings ................................. 11.0
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Average Portfolio Maturity................................ 6.8 Years
- --------------------------------------------------------------------------------
Percent of
Five Largest Foreign Countries* Long-Term Investments
- --------------------------------------------------------------------------------
Canada ................................................... 7.2%
United Kingdom ........................................... 5.7
Argentina ................................................ 3.8
Mexico ................................................... 2.4
Brazil ................................................... 2.4
- --------------------------------------------------------------------------------
*All holdings are denominated in US dollars.
- --------------------------------------------------------------------------------
Percent of
Top Five Industries Total Assets
- --------------------------------------------------------------------------------
Telephony ................................................ 8.8%
Health Services .......................................... 7.3
Wireless Communications--
International Paging & Cellular ........................ 6.4
Transportation ........................................... 6.3
Wireless Communications--
Domestic Paging & Cellular ............................. 5.5
- --------------------------------------------------------------------------------
18 & 19
<PAGE>
This report, including the financial information herein, is transmitted to the
shareholders of Corporate High Yield Fund, Inc. for their information. It is not
a prospectus, circular or representation intended for use in the purchase of
shares of the Fund or any securities mentioned in the report. The Fund has
leveraged its Common Stock to provide Common Stock shareholders with a
potentially higher rate of return. Leverage creates risk for Common Stock
shareholders, including the likelihood of greater volatility of net asset value
and market price of Common Stock shares, and the risk that fluctuations in
short-term interest rates may reduce the Common Stock's yield. Past performance
results shown in this report should not be considered a representation of future
performance. Statements and other information herein are as dated and are
subject to change.
Corporate High
Yield Fund, Inc.
Box 9011
Princeton, NJ
08543-9011 16718--11/99
[RECYCLE LOGO] Printed on post-consumer recycled paper
