Ivy High Income Opportunties Fund

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-22800

Ivy High Income Opportunities Fund

(Exact name of registrant as specified in charter)

6300 Lamar Avenue, Overland Park, Kansas 66202

(Address of principal executive offices) (Zip code)

Wendy J. Hills

6300 Lamar Avenue

Overland Park, Kansas 66202

(Name and address of agent for service)

 

 

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

Date of fiscal year end: September 30

Date of reporting period: December 31, 2016

 

 

 

ITEM 1.    SCHEDULE OF INVESTMENTS.

SCHEDULE OF INVESTMENTS

Ivy High Income Opportunities Fund (in thousands)

    DECEMBER 31, 2016 (UNAUDITED)

 

COMMON STOCKS    Shares        Value  

Energy

 

Oil & Gas Equipment & Services – 1.0%

 

Key Energy Services, Inc. (A)

      67        $ 2,142  

Larchmont Resources LLC (A)(B)(C)

      2          560  
       

 

 

  
          2,702  
       

 

 

  

Oil & Gas Exploration & Production – 0.3%

 

Midstates Petroleum Co., Inc. (A)

      32          660  
       

 

 

  

Total Energy – 1.3%

 

        3,362  

TOTAL COMMON STOCKS – 1.3%

 

      $ 3,362  

(Cost: $2,404)

        

WARRANTS

                    

Commodity Chemicals – 0.0%

 

Foresight Energy L.P.,
expires 10–3–27 (D)

      2          —  
       

 

 

  

TOTAL WARRANTS – 0.0%

 

      $ —  

(Cost: $—)

        
CORPORATE DEBT SECURITIES    Principal            

Consumer Discretionary

        

Advertising – 0.5%

 

Acosta, Inc.,
7.750%, 10–1–22 (E)

    $ 200          168  

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

      681          705  

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

      387          403  
       

 

 

  
          1,276  
       

 

 

  

Apparel Retail – 1.3%

 

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

      2,509          2,641  

HT Intermediate Holdings Corp.,
12.000%, 5–15–19 (E)(G)

      766          781  
       

 

 

  
          3,422  
       

 

 

  

Automotive Retail – 0.7%

 

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

      315          318  

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

      424          419  

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

      218          215  

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

      919          894  
       

 

 

  
          1,846  
       

 

 

  

Broadcasting – 5.0%

 

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

      2,289          2,340  

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

      54          52  

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

      10,000          9,994  

Cumulus Media, Inc.,
7.750%, 5–1–19

      2,000          819  
       

 

 

  
          13,205  
       

 

 

  

Cable & Satellite – 22.2%

 

Altice Financing S.A.:

        

6.625%, 2–15–23 (E)

      832          855  

7.500%, 5–15–26 (E)

      1,425          1,482  

Altice S.A.:

        

7.250%, 5–15–22 (E)(H)

    EUR 152          171  

7.750%, 5–15–22 (E)(F)

    $ 13,835          14,769  

6.250%, 2–15–25 (E)(H)

    EUR 184          202  

7.625%, 2–15–25 (E)(F)

    $ 11,190          11,750  

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

      879          897  

Cablevision Systems Corp.,
5.875%, 9–15–22

      1,461          1,424  

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

      43          44  

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

      268          285  

DISH DBS Corp.:

        

6.750%, 6–1–21 (F)

      7,500          8,138  

5.875%, 7–15–22 (F)

      2,000          2,105  

5.000%, 3–15–23

      250          249  

5.875%, 11–15–24

      212          218  

7.750%, 7–1–26

      657          741  

Neptune Finco Corp.:

        

10.125%, 1–15–23 (E)

      831          960  

6.625%, 10–15–25 (E)

      394          430  

10.875%, 10–15–25 (E)

      794          945  

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

      4,194          4,283  

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

      4,586          4,540  

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

      3,584          3,700  

Wave Holdco LLC and Wave Holdco Corp.,
8.250%, 7–15–19 (E)(G)

      273          277  

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

      569          592  
       

 

 

  
          59,057  
       

 

 

  

Casinos & Gaming – 2.7%

 

Gateway Casinos & Entertainment Ltd.,
8.500%, 11–26–20 (E)(H)

      CAD1,643          1,225  

MCE Finance Ltd.,
5.000%, 2–15–21 (E)(F)

    $ 337          335  

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

      2,100          2,179  

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

      3,381          3,406  
       

 

 

  
          7,145  
       

 

 

  

Department Stores – 0.4%

 

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

      2,224          1,068  
       

 

 

  

Distributors – 0.4%

 

Pinnacle Operating Corp.,
9.000%, 11–15–20 (E)(F)

      2,618          1,152  
       

 

 

  

Homefurnishing Retail – 0.9%

 

Restoration Hardware Holdings, Inc., Convertible:

        

0.000%, 6–15–19 (E)(I)

      1,634          1,394  

0.000%, 7–15–20 (E)(I)

      1,356          1,087  
       

 

 

  
          2,481  
       

 

 

  

Hotels, Resorts & Cruise Lines – 0.3%

 

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

      800          832  
       

 

 

  

Leisure Facilities – 0.1%

 

AMC Entertainment Holdings, Inc.,
5.875%, 11–15–26 (E)

      226          231  
       

 

 

  

Movies & Entertainment – 2.3%

 

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

      1,409          1,440  

Cinemark USA, Inc.:

        

5.125%, 12–15–22 (F)

      164          169  

4.875%, 6–1–23 (F)

      1,451          1,469  

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

      523          565  

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

      2,472          2,602  
       

 

 

  
          6,245  
       

 

 

  

Publishing – 0.3%

 

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

      908          817  
       

 

 

  

Specialized Consumer Services – 1.6%

 

Nielsen Co. Luxembourg S.a.r.l. (The),
5.500%, 10–1–21 (E)(F)

      1,396          1,452  

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

      2,677          2,724  
       

 

 

  
          4,176  
       

 

 

  

Specialty Stores – 0.6%

 

Jo-Ann Stores Holdings, Inc.,
9.750%, 10–15–19 (E)(G)

      1,766          1,682  

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

      23          23  
       

 

 

  
          1,705  
       

 

 

  

Total Consumer Discretionary – 39.3%

 

        104,658  

Consumer Staples

        

Food Distributors – 1.3%

 

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

      864          870  

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

      1,000          1,030  

U.S. Foods, Inc.,
5.875%, 6–15–24 (E)

      1,312          1,355  
       

 

 

  
          3,255  
       

 

 

  

Packaged Foods & Meats – 1.9%

 

AdvancePierre Foods Holdings, Inc.,

        

5.500%, 12–15–24 (E)

      141          142  

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

        

7.750%, 10–28–20 (E)

      200          212  
 

JBS USA LLC and JBS USA Finance, Inc.:

        

5.875%, 7–15–24 (E)(F)

      1,892          1,954  

5.750%, 6–15–25 (E)

      809          819  

Post Holdings, Inc.:

        

7.750%, 3–15–24 (E)

      856          950  

8.000%, 7–15–25 (E)

      545          611  

5.000%, 8–15–26 (E)

      448          429  
       

 

 

  
          5,117  
       

 

 

  

Personal Products – 0.2%

        

Revlon Consumer Products Corp.,

        

5.750%, 2–15–21

      361          363  

Revlon Escrow Corp.,

        

6.250%, 8–1–24

      224          229  
       

 

 

  
          592  
       

 

 

  

Tobacco – 0.7%

        

Prestige Brands, Inc.,

        

5.375%, 12–15–21 (E)

      1,820          1,875  
       

 

 

  

Total Consumer Staples – 4.1%

 

        10,839  

Energy

        

Coal & Consumable Fuels – 0.8%

        

Foresight Energy LLC and Foresight Energy Finance Corp.,

        

10.000%, 8–15–21 (E)(G)(J)

      1,456          1,420  

Foresight Energy LLC and Foresight Energy Finance Corp., Convertible,

        

15.000%, 10–3–17 (G)(J)

      523          519  
       

 

 

  
          1,939  
       

 

 

  

Oil & Gas Drilling – 1.3%

        

Globe Luxembourg SCA,

        

9.625%, 5–1–18 (E)(J)

      1,143          1,129  

KCA DEUTAG UK Finance plc,

        

7.250%, 5–15–21 (E)(F)

      617          547  

Noble Holding International Ltd.,

        

7.750%, 1–15–24

      459          432  

Offshore Drilling Holding S.A.,

        

8.375%, 9–20–20 (E)(J)

      2,549          1,109  

Offshore Group Investment Ltd.,

        

7.500%, 11–1–19

      883          —  

Rowan Cos., Inc. (GTD by Rowan plc),

        

7.375%, 6–15–25

      277          282  
       

 

 

  
          3,499  
       

 

 

  

Oil & Gas Exploration & Production – 5.6%

        

Bellatrix Exploration Ltd.,

        

8.500%, 5–15–20 (E)

      1,127          1,107  

California Resources Corp.,

        

8.000%, 12–15–22 (E)

      1,838          1,636  

Clayton Williams Energy, Inc.,

        

7.750%, 4–1–19

      3,511          3,529  

Crownrock L.P.,

        

7.750%, 2–15–23 (E)

      369          399  

EnCana Corp.,

        

6.500%, 8–15–34

      512          551  

Endeavor Energy Resources L.P.:

        

7.000%, 8–15–21 (E)(F)

      2,087          2,170  

8.125%, 9–15–23 (E)

      340          363  

Gulfport Energy Corp.,

        

6.625%, 5–1–23

      112          117  

Laredo Petroleum, Inc.,

        

7.375%, 5–1–22

      2,596          2,690  

Whiting Petroleum Corp.,

        

6.500%, 10–1–18

      2,389          2,377  
       

 

 

  
          14,939  
       

 

 

  

Oil & Gas Refining & Marketing – 1.8%

        

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

        

6.125%, 10–1–24 (E)

      225          232  

PBF Holding Co. LLC and PBF Finance Corp.,

        

7.000%, 11–15–23 (E)

      926          921  

PDC Energy, Inc.,

        

6.125%, 9–15–24 (E)

      179          183  

Seven Generations Energy Ltd.:

        

8.250%, 5–15–20 (E)

      1,334          1,414  

6.750%, 5–1–23 (E)

      1,951          2,078  
       

 

 

  
          4,828  
       

 

 

  

Oil & Gas Storage & Transportation – 0.2%

        

Access Midstream Partners L.P.,

        

4.875%, 5–15–23

      547          557  
       

 

 

  

Total Energy – 9.7%

 

        25,762  

Financials

        

Consumer Finance – 2.5%

        

Creditcorp,

        

12.000%, 7–15–18 (E)(F)

      5,248          4,146  

Quicken Loans, Inc.,

        

5.750%, 5–1–25 (E)

      1,688          1,642  

Speedy Cash Intermediate Holdings Corp.,

        

10.750%, 5–15–18 (E)

      862          825  
       

 

 

  
          6,613  
       

 

 

  

Diversified Capital Markets – 0.7%

        

Patriot Merger Corp.,

        

9.000%, 7–15–21 (E)(F)

      1,858          1,960  
       

 

 

  

Investment Banking & Brokerage – 0.1%

        

E*TRADE Financial Corp.,

        

5.875%, 12–29–49

      315          312  
       

 

 

  

Other Diversified Financial Services – 2.8%

        

AAF Holdings LLC and AAF Finance Co.,

        

12.000%, 7–1–19 (E)(G)

      786          812  

Balboa Merger Sub, Inc.,

        

11.375%, 12–1–21 (E)

      237          237  

Greektown Holdings LLC and Greektown Mothership Corp.,

        

8.875%, 3–15–19 (E)(F)

      1,431          1,504  

New Cotai LLC and New Cotai Capital Corp.,

        

10.625%, 5–1–19 (E)(F)(G)

      6,369          4,777  
       

 

 

  
          7,330  
       

 

 

  

Property & Casualty Insurance – 0.1%

        

Hub International Ltd.,

        

7.875%, 10–1–21 (E)

      200          211  
       

 

 

  

Specialized Finance – 3.2%

        

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

        

5.875%, 6–15–21 (E)

      306          325  

5.450%, 6–15–23 (E)

      217          230  

7.125%, 6–15–24 (E)

      306          340  

6.020%, 6–15–26 (E)

      435          471  

Flexi-Van Leasing, Inc.,

        

7.875%, 8–15–18 (E)(F)

      2,909          2,647  

TMX Finance LLC and TitleMax Finance Corp.,

        

8.500%, 9–15–18 (E)(F)

      4,985          4,349  
       

 

 

  
          8,362  
       

 

 

  

Thrifts & Mortgage Finance – 2.8%

        

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

        

6.750%, 6–15–21 (E)(F)

      7,500          7,538  
       

 

 

  

Total Financials – 12.2%

 

        32,326  

Health Care

        

Health Care Facilities – 1.9%

        

DaVita HealthCare Partners, Inc.,

        

5.125%, 7–15–24

      138          138  

Greatbatch Ltd.,

        

9.125%, 11–1–23 (E)(F)

      1,423          1,419  

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

        

5.250%, 6–15–26

      183          189  

MPH Acquisition Holdings LLC,

        

7.125%, 6–1–24 (E)

      870          916  

Surgery Center Holdings, Inc.,

        

8.875%, 4–15–21 (E)

      278          296  

Tenet Healthcare Corp.:

        

7.500%, 1–1–22 (E)

      164          171  

8.125%, 4–1–22 (F)

      2,087          1,969  
       

 

 

  
          5,098  
       

 

 

  

Health Care Supplies – 3.7%

        

Chiron Merger Sub, Inc.,

        

12.500%, 11–1–21 (E)

      213          223  

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

        

9.625%, 10–1–21 (E)(F)

      4,256          4,501  

Universal Hospital Services, Inc.,

        

7.625%, 8–15–20 (F)

      5,152          5,100  
       

 

 

  
          9,824  
       

 

 

  

Pharmaceuticals – 1.5%

        

Concordia Healthcare Corp.:

        

9.500%, 10–21–22 (E)(F)

      2,891          1,026  

7.000%, 4–15–23 (E)

      154          49  

IMS Health, Inc.,

        

5.000%, 10–15–26 (E)

      525          526  

Jaguar Holding Co. II and Pharmaceutical Product Development LLC,

        

6.375%, 8–1–23 (E)

      1,061          1,135  

VPII Escrow Corp.,

        

7.500%, 7–15–21 (E)

      829          703  

VRX Escrow Corp.,

        

5.375%, 3–15–20 (E)

      736          622  
       

 

 

  
          4,061  
       

 

 

  

Total Health Care – 7.1%

 

        18,983  

Industrials

        

Aerospace & Defense – 1.5%

        

KLX, Inc.,

        

5.875%, 12–1–22 (E)

      2,475          2,550  

Silver II Borrower SCA and Silver II U.S. Holdings,

        

7.750%, 12–15–20 (E)(F)

      1,700          1,415  
       

 

 

  
          3,965  
       

 

 

  

Air Freight & Logistics – 0.3%

        

XPO Logistics, Inc.:

        

6.500%, 6–15–22 (E)

      577          606  

6.125%, 9–1–23 (E)

      315          329  
       

 

 

  
          935  
       

 

 

  
 

Building Products – 1.9%

      

Alcoa Nederland Holding B.V.:

      

6.750%, 9–30–24 (E)

      235        255  

7.000%, 9–30–26 (E)

      235        257  

Ply Gem Industries, Inc.,

      

6.500%, 2–1–22

      1,670        1,728  

Summit Materials LLC and Summit Materials Finance Corp.:

      

8.500%, 4–15–22

      174        192  

6.125%, 7–15–23

      2,044        2,098  

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

      

5.375%, 6–15–24 (E)

      436        437  
     

 

 

  
        4,967  
     

 

 

  

Diversified Support Services – 0.2%

      

Ritchie Bros. Auctioneers, Inc.,

      

5.375%, 1–15–25 (E)

      462        472  

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

      

5.875%, 9–15–26

      217        223  
     

 

 

  
        695  
     

 

 

  

Environmental & Facilities Services – 0.8%

      

GFL Environmental, Inc.:

      

7.875%, 4–1–20 (E)

      1,568        1,644  

9.875%, 2–1–21 (E)

      389        428  
     

 

 

  
        2,072  
     

 

 

  

Railroads – 1.2%

      

Florida East Coast Holdings Corp. and Florida East Coast Industries LLC:

      

6.750%, 5–1–19 (E)(F)

      2,462        2,548  

9.750%, 5–1–20 (E)

      607        624  
     

 

 

  
        3,172  
     

 

 

  

Security & Alarm Services – 1.0%

      

Prime Security Services Borrower LLC,

      

9.250%, 5–15–23 (E)

      2,416        2,630  
     

 

 

  

Trading Companies & Distributors – 0.3%

      

HD Supply, Inc.,

      

5.750%, 4–15–24 (E)

      754        796  
     

 

 

  

Total Industrials – 7.2%

 

      19,232  

Information Technology

      

Application Software – 1.3%

      

Ensemble S Merger Sub, Inc.,

      

9.000%, 9–30–23 (E)

      460        488  

Kronos Acquisition Holdings, Inc.,

      

9.000%, 8–15–23 (E)(F)

      3,003        2,995  
     

 

 

  
        3,483  
     

 

 

  

Communications Equipment – 1.0%

      

West Corp.,

      

5.375%, 7–15–22 (E)

      2,756        2,663  
     

 

 

  

Data Processing & Outsourced Services – 1.4%

      

Alliance Data Systems Corp.:

      

5.875%, 11–1–21 (E)

      608        617  

5.375%, 8–1–22 (E)(F)

      1,853        1,788  

Italics Merger Sub, Inc.,

      

7.125%, 7–15–23 (E)(F)

      1,396        1,330  
     

 

 

  
        3,735  
     

 

 

  

Electronic Manufacturing Services – 0.6%

      

KEMET Corp.,

      

10.500%, 5–1–18

      1,440        1,438  
     

 

 

  

IT Consulting & Other Services – 1.1%

      

NCR Escrow Corp.:

      

5.875%, 12–15–21 (F)

      1,154        1,209  

6.375%, 12–15–23 (F)

      1,575        1,693  
     

 

 

  
        2,902  
     

 

 

  

Semiconductors – 1.7%

      

Micron Technology, Inc.:

      

5.875%, 2–15–22 (F)

      1,968        2,052  

7.500%, 9–15–23 (E)

      882        977  

5.500%, 2–1–25 (F)

      1,577        1,569  
     

 

 

  
        4,598  
     

 

 

  

Technology Hardware, Storage & Peripherals – 1.2%

      

Inception Parent, Inc., Inception Merger Sub, Inc. and Rackspace Hosting, Inc.,

      

8.625%, 11–15–24 (E)

      1,809        1,915  

Western Digital Corp.:

      

7.375%, 4–1–23 (E)

      215        236  

10.500%, 4–1–24 (E)

      958        1,133  
     

 

 

  
        3,284  
     

 

 

  

Total Information Technology – 8.3%

 

      22,103  

Materials

      

Aluminum – 1.3%

      

Constellium N.V.:

      

8.000%, 1–15–23 (E)

      1,892        1,968  

5.750%, 5–15–24 (E)(F)

      260        243  

Kaiser Aluminum Corp.,

      

5.875%, 5–15–24

      173        179  

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

      

6.250%, 8–15–24 (E)

      674        714  

5.875%, 9–30–26 (E)

      446        451  
     

 

 

  
        3,555  
     

 

 

  

Construction Materials – 1.1%

      

Eagle Materials, Inc.,

      

4.500%, 8–1–26

      179        179  

Hillman Group, Inc. (The),

      

6.375%, 7–15–22 (E)(F)

      3,027        2,845  
     

 

 

  
        3,024  
     

 

 

  

Diversified Chemicals – 0.9%

      

PSPC Escrow Corp.,

      

6.500%, 2–1–22 (E)

      879        885  

PSPC Escrow II Corp.,

      

10.375%, 5–1–21 (E)

      1,366        1,513  
     

 

 

  
        2,398  
     

 

 

  

Diversified Metals & Mining – 3.9%

      

Artsonig Pty Ltd.,

      

11.500%, 4–1–19 (E)(G)

      2,583        78  

Crystal Merger Sub, Inc.,

      

7.625%, 10–15–21 (E)(F)

      459        438  

FMG Resources Pty Ltd.,

      

6.875%, 4–1–22 (E)(F)

      7,615        7,901  

Lundin Mining Corp.:

      

7.500%, 11–1–20 (E)(F)

      1,215        1,292  

7.875%, 11–1–22 (E)

      584        635  
     

 

 

  
        10,344  
     

 

 

  

Metal & Glass Containers – 1.9%

      

ARD Finance S.A.,

      

7.125%, 9–15–23 (E)

      248        245  

BakerCorp International, Inc.,

      

8.250%, 6–1–19 (F)

      5,007        4,231  

HudBay Minerals, Inc.:

      

7.250%, 1–15–23 (E)

      188        195  

7.625%, 1–15–25 (E)

      282        293  
     

 

 

  
        4,964  
     

 

 

  

Paper Packaging – 0.4%

      

Reynolds Group Issuer, Inc., Reynolds Group Issuer LLC and Reynolds Group Issuer (Luxembourg) S.A.,

      

5.125%, 7–15–23 (E)

      1,014        1,030  
     

 

 

  

Steel – 0.1%

      

U.S. Steel Corp.,

      

8.375%, 7–1–21 (E)

      304        336  
     

 

 

  

Total Materials – 9.6%

 

      25,651  

Real Estate

      

Health Care REITs – 0.1%

      

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

      

5.250%, 8–1–26

      222        217  
     

 

 

  

Industrial REITs – 1.8%

      

Aircastle Ltd.:

      

5.125%, 3–15–21 (F)

      3,185        3,392  

5.500%, 2–15–22

      803        851  

5.000%, 4–1–23

      469        479  
     

 

 

  
        4,722  
     

 

 

  

Real Estate Development – 0.2%

      

Hub Holdings LLC and Hub Holdings Finance, Inc.,

      

8.125%, 7–15–19 (E)(G)

      570        569  
     

 

 

  

Total Real Estate – 2.1%

 

      5,508  

Telecommunication Services

      

Alternative Carriers – 1.8%

      

Consolidated Communications Finance II Co.,

      

6.500%, 10–1–22

      812        806  

Level 3 Communications, Inc.,

      

5.750%, 12–1–22 (F)

      2,176        2,236  

Level 3 Escrow II, Inc.,

      

5.375%, 8–15–22

      1,411        1,457  

Zayo Group LLC and Zayo Capital, Inc.,

      

6.000%, 4–1–23

      310        322  
     

 

 

  
        4,821  
     

 

 

  

Integrated Telecommunication Services – 12.3%

      

BCP (Singapore) VI
Cayman Financing Co. Ltd.,

      

8.000%, 4–15–21 (E)(F)

      242        237  

Frontier Communications Corp.:

      

8.875%, 9–15–20 (F)

      1,341        1,428  

6.250%, 9–15–21 (F)

      10,811        10,243  

10.500%, 9–15–22

      790        831  

7.125%, 1–15–23 (F)

      195        176  

6.875%, 1–15–25 (F)

      562        476  

11.000%, 9–15–25

      1,564        1,615  

GCI, Inc.,

      

6.875%, 4–15–25 (F)

      2,870        2,913  

Sprint Corp.:

      

7.250%, 9–15–21 (F)

      11,196        11,896  

7.875%, 9–15–23 (F)

      2,735        2,920  
     

 

 

  
        32,735  
     

 

 

  

Wireless Telecommunication Service – 3.8%

      

Sable International Finance Ltd.,

      

6.875%, 8–1–22 (E)

      1,905        1,981  

Sprint Nextel Corp.:

      

9.125%, 3–1–17

      218        220  

8.375%, 8–15–17 (F)

      3,819        3,962  

9.000%, 11–15–18 (E)

      266        293  

7.000%, 8–15–20

      218        231  

11.500%, 11–15–21

      178        219  

T-Mobile USA, Inc.:

      

6.464%, 4–28–19 (F)

      728        741  

6.731%, 4–28–22 (F)

      158        165  
 

6.000%, 4–15–24

      773        815  

6.500%, 1–15–26 (F)

      1,305        1,411  
     

 

 

  
        10,038  
     

 

 

  

Total Telecommunication Services – 17.9%

 

      47,594  

TOTAL CORPORATE DEBT SECURITIES – 117.5%

 

    $ 312,656  

(Cost: $312,332)

      
LOANS (J)          

Consumer Discretionary

      

Advertising – 0.3%

      

Advantage Sales & Marketing, Inc.,

      

7.500%, 7–25–22

      955        929  
     

 

 

  

Apparel Retail – 1.9%

      

Talbots, Inc. (The):

      

5.500%, 3–19–20

      1,171        1,136  

9.500%, 3–19–21

      949        856  

True Religion Apparel, Inc.,

      

5.875%, 7–30–19

      14,572        2,973  
     

 

 

  
        4,965  
     

 

 

  

Casinos & Gaming – 0.2%

      

Gateway Casinos & Entertainment Ltd.:

      

5.250%, 11–26–19 (H)

    CAD 719        530  

5.950%, 11–26–19 (H)

      2        1  
     

 

 

  
        531  
     

 

 

  

Department Stores – 1.0%

      

Belk, Inc.,

      

5.750%, 12–10–22

    $ 3,068        2,636  
     

 

 

  

General Merchandise Stores – 1.0%

      

BJ’s Wholesale Club, Inc.,

      

8.500%, 3–31–20

      274        277  

Orchard Acquisition Co. LLC,

      

7.000%, 2–8–19

      4,531        2,356  
     

 

 

  
        2,633  
     

 

 

  

Home Furnishings – 0.8%

      

Serta Simmons Bedding LLC,

      

9.000%, 11–8–24

      2,244        2,252  
     

 

 

  

Housewares & Specialties – 0.3%

      

KIK Custom Products, Inc.,

      

6.000%, 8–26–22

      773        779  
     

 

 

  

Specialty Stores – 0.5%

      

Jo-Ann Stores, Inc.,

      

6.256%, 9–29–23

      1,221        1,229  
     

 

 

  

Total Consumer Discretionary – 6.0%

 

      15,954  

Consumer Staples

      

Food Distributors – 0.3%

 

   

Chefs’ Warehouse, Inc. (The),

      

6.750%, 6–22–22

      888        891  
     

 

 

  

Hypermarkets & Super Centers – 0.4%

 

   

GOBP Holdings, Inc.,

      

9.250%, 10–21–22

      979        978  
     

 

 

  

Packaged Foods & Meats – 0.3%

      

Shearer’s Foods LLC,

      

7.750%, 6–30–22

      748        692  
     

 

 

  

Total Consumer Staples – 1.0%

 

      2,561  

Energy

      

Coal & Consumable Fuels – 0.3%

 

   

Westmoreland Coal Co.,

      

7.500%, 12–16–20

      991        887  
     

 

 

  

Oil & Gas Drilling – 0.7%

      

KCA Deutag Alpha Ltd.,

      

6.250%, 5–16–20

      1,946        1,721  
     

 

 

  

Oil & Gas Equipment & Services – 0.6%

 

   

Larchmont Resources LLC:

      

10.000%, 8–7–20

      1,319        1,279  

5.250%, 10–27–22

      315        317  
     

 

 

  
        1,596  
     

 

 

  

Oil & Gas Exploration & Production – 1.6%

 

   

Chesapeake Energy Corp.,

      

8.500%, 8–23–21

      3,879        4,217  
     

 

 

  

Oil & Gas Storage & Transportation – 1.0%

      

Bowie Resources Holdings LLC:

      

6.750%, 8–12–20

      2,027        1,756  

11.750%, 2–16–21

      1,224        1,022  
     

 

 

  
        2,778  
     

 

 

  

Total Energy – 4.2%

 

      11,199  

Financials

      

Insurance Brokers – 0.2%

      

NFP Corp.,

      

0.000%, 12–9–23 (K)

      461        464  
     

 

 

  

Total Financials – 0.2%

 

      464  

Health Care

      

Life Sciences Tools & Services – 0.6%

      

Atrium Innovations, Inc.,

      

7.750%, 8–10–21

      1,740        1,705  
     

 

 

  

Total Health Care – 0.6%

 

      1,705  

Industrials

      

Building Products – 0.3%

      

Hampton Rubber Co. & SEI Holding Corp.,

      

9.000%, 3–27–22

      1,146        917  
     

 

 

  

Construction & Engineering – 0.2%

      

Tensar International Corp.,

      

9.500%, 7–10–22

      604        453  
     

 

 

  

Industrial Conglomerates – 0.7%

      

PAE Holding Corp.:

      

6.500%, 10–20–22

      1,802        1,811  

10.500%, 10–20–23

      225        225  
     

 

 

  
        2,036  
     

 

 

  

Industrial Machinery – 1.0%

      

Dynacast International LLC,

      

9.500%, 1–30–23

      2,663        2,596  
     

 

 

  

Total Industrials – 2.2%

 

      6,002  

Information Technology

      

Application Software – 3.3%

      

Misys plc and Magic Newco LLC,

      

12.000%, 6–12–19

      6,500        6,893  

TIBCO Software, Inc.,

      

6.500%, 12–4–20

      1,966        1,971  
     

 

 

  
        8,864  
     

 

 

  

Internet Software & Services – 0.3%

      

Ancestry.com LLC,

      

9.250%, 10–19–24

      675        689  
     

 

 

  

IT Consulting & Other Services – 0.4%

      

Triple Point Group Holdings, Inc.,

      

5.250%, 7–13–20

      1,269        1,119  
     

 

 

  

Total Information Technology – 4.0%

 

      10,672  

Materials

      

Diversified Metals & Mining – 0.2%

      

EP Minerals LLC,

      

8.500%, 8–20–21

      545        527  
     

 

 

  

Paper Packaging – 0.8%

      

FPC Holdings, Inc.,

      

9.250%, 5–27–20

      2,500        2,104  
     

 

 

  

Total Materials – 1.0%

 

      2,631  

TOTAL LOANS – 19.2%

 

    $ 51,188  

(Cost: $65,888)

      
SHORT–TERM SECURITIES                

Master Note – 0.5%

      

Toyota Motor Credit Corp.,

      

0.860%, 1–4–17 (L)

      1,257        1,257  
     

 

 

  

TOTAL SHORT–TERM SECURITIES – 0.5%

 

    $ 1,257  

(Cost: $1,257)

      

TOTAL INVESTMENT SECURITIES – 138.5%

 

    $ 368,463  

(Cost: $381,881)

      

BORROWINGS(M) – (40.9)%

 

      (108,750 ) 

CASH AND OTHER ASSETS, NET OF
LIABILITIES – 2.4%

 

      6,328  

NET ASSETS – 100.0%

 

    $ 266,041  
 

Notes to Schedule of Investments

 

(A) No dividends were paid during the preceding 12 months.
(B) Restricted security. At December 31, 2016, the Fund owned the following restricted security:

 

    

Security

   

Acquisition Date(s)

     

Shares

    Cost      Market Value  

Larchmont Resources LLC

    12–8–16      2    $ 560      $ 560  

The total value of this security represented 0.2% of net assets at December 31, 2016.

 

(C) Listed on an exchange outside the United States.

 

(D) 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, if any.

 

(E) Securities were purchased pursuant to an exemption from registration available under Rule 144A under the Securities Act of 1933 and may only be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2016 the total value of these securities amounted to $193,627 or 72.8% of net assets.

 

(F) All or a portion of securities with an aggregate value of $127,145 have been pledged as collateral on open borrowings.

 

(G) Payment-in-kind bonds.

 

(H) Principal amounts are denominated in the indicated foreign currency, where applicable (CAD - Canadian Dollar and EUR - Euro).

 

(I) Zero coupon bond.

 

(J) Variable rate security. Interest rate disclosed is that which is in effect at December 31, 2016.

 

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

 

(L) Variable rate security. Interest rate disclosed is that which is in effect at December 31, 2016. Date shown represents the date that the variable rate resets.

 

(M) Borrowings payable as a percentage of total investment securities is 29.5%.

The following forward foreign currency contracts were outstanding at December 31, 2016:

 

      Currency to be
Delivered		            Currency to be
Received		      Settlement
Date		      Counterparty      Unrealized
Appreciation		      Unrealized
Depreciation		  

Canadian Dollar

   

2,240

     

U.S. Dollar

      1,662        1–25–17        Morgan Stanley International      $ —      $ 7  

Euro

   

342

     

U.S. Dollar

      361        1–25–17        Morgan Stanley International        1        —  
                    $ 1      $ 7  

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

Accounting standards establish a framework for measuring fair value and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the factors that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

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

An individual investment’s fair value measurement is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized as follows:

 

•  

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

•  

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

•  

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

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of December 31, 2016:

 

     Level 1      Level 2      Level 3  

Assets

        

Investments in Securities

        

Common Stocks

        

Energy

   $ 2,802      $ —      $ 560  

Total Common Stocks

   $ 2,802      $ —      $ 560  

Corporate Debt Securities

     —        312,656        —  

Loans

     —        42,288        8,900  

Short-Term Securities

     —        1,257        —  

Total

   $ 2,802      $ 356,201      $ 9,460  

Forward Foreign Currency Contracts

   $ —      $ 1      $ —  

Liabilities

        

Forward Foreign Currency Contracts

   $ —      $ 7      $ —  

Payable for Borrowing

   $ —      $ 108,750      $ —  

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

 

     Common
Stocks		      Loans  

Beginning Balance 10-1-16

   $ —      $ 17,062  

Net realized gain (loss)

     —        (1 ) 

Net change in unrealized appreciation (depreciation)

     —        282  

Purchases

     560        1,984  

Sales

     —        (584 ) 

Amortization/Accretion of premium/discount

     —        4  

Transfers into Level 3 during the period

     —        2,314  

Transfers out of Level 3 during the period

     —        (12,161 ) 

Ending Balance 12-31-16

   $ 560      $ 8,900  

Net change in unrealized appreciation (depreciation) for all Level 3 investments still held as of 12-31-16

   $ —      $ 241  

Transfers from Level 2 to Level 3 occurred primarily due to the lack of observable market data due to decreased market activity or information for these securities. Transfers from Level 3 to Level 2 occurred primarily due to the increased availability of observable market data due to increased market activity or information. As shown above, transfers in and out of Level 3 represent the values as of the beginning of the reporting period. During the period ended December 31, 2016, there were no transfers between Levels 1 and 2.

Information about Level 3 fair value measurements:

 

    

Fair Value at

12-31-16

      Valuation Technique(s)      Unobservable Input(s)

Assets

        
Common Stocks   $ 560        Broker      Broker quotes
Loans     8,900        Third-party vendor pricing service      Broker quotes

The following acronyms are used throughout this schedule:

GTD = Guaranteed

REIT = Real Estate Investment Trust

For Federal income tax purposes, cost of investments owned at December 31, 2016 and the related unrealized appreciation (depreciation) were as follows:

 

Cost

   $ 381,881  
 

 

 

  

Gross unrealized appreciation

     15,631  

Gross unrealized depreciation

     (29,049 ) 
 

 

 

  

Net unrealized depreciation

   $ (13,418 ) 

ITEM 2.    CONTROLS AND PROCEDURES.

 

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

 

(b) There were no significant changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940, as amended) that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

ITEM 3.    EXHIBITS.

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

Attached hereto as Exhibit 99.CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Ivy High Income Opportunities Fund
(Registrant)
By        /s/ Wendy J. Hills
  Wendy J. Hills, Vice President and Secretary

Date: February 27, 2017

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

 

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

Date: February 27, 2017

 

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

Date: February 27, 2017