Prospect Street Income Shares Inc - Quarterly Schedule of Portfolio Holdings of Registered Management Investment Company (N-Q)
28 Mayo 2008 - 8:43AM
Edgar (US Regulatory)
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
811-02365
Prospect Street
®
Income Shares Inc.
(Exact name of registrant as specified in charter)
NexBank Tower
13455 Noel Road, Suite 800
Dallas, Texas 75240
(Address of principal executive offices) (Zip code)
James D. Dondero
Highland Capital Management, L.P.
NexBank
Tower
13455 Noel Road, Suite 800
Dallas, Texas 75240
(Name and address of agent for service)
Registrant's telephone number, including area code:
(877) 665-1287
Date of fiscal year end:
December 31
Date of reporting period:
March 31, 2008
Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
Item 1. Schedule of Investments.
The Schedule(s) of Investments is attached herewith.
PROSPECT
STREET INCOME SHARES INC.
Schedule of Investments (unaudited)
As of March 31, 2008
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Ratings
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Principal
Amount ($)
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Description
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Moody’s
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Standard &
Poor’s
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Value
($)
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Senior Loans - 13.91% (a) (b)
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Aerospace and Defense - 0.66%
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495,000
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US Airways Group, Inc., Term Loan, 5.63%,
03/23/2014
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B2
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B+
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359,261
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Broadcasting and Entertainment - 1.64%
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1,000,000
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Bresnan
Communications, LLC, Additional Term Loan B First
Lien, 5.93%, 06/30/2013
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B2
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BB-
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897,500
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Buildings and Real Estate - 5.03%
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1,980,229
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Pacific Clarion, LLC, Term Loan, 15.00%,
01/23/2009 (c)
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NR
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NR
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1,947,621
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Realogy Corp.
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783,513
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Initial Term B Loan, 7.51%, 10/10/2013
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Ba3
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BB-
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631,566
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211,477
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Synthetic Letter of Credit, 2.99%,
10/10/2013
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Ba3
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BB-
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169,825
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2,749,012
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Cargo Transport - 1.06%
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SIRVA Worldwide, Inc.
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55,576
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Revolver DIP, 9.62%, 03/31/2009 (d)
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B2
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NR
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55,576
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138,940
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Term Loan DIP, 9.62%, 06/30/2008
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B2
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NR
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65,997
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986,290
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Tranche B Term Loan, 8.18%, 12/01/2010
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B2
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NR
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461,091
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582,664
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Diversified Media - 1.23%
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992,500
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Tribune Co.,
Initial Tranche B Advance, 5.54%, 06/04/2014
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B2
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B
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671,178
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Electronics - 0.23%
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149,244
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Freescale
Semiconductor, Inc., Term Loan, 7.33%, 11/29/2013
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Ba1
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BB
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126,526
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Retail - 0.75%
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493,530
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Burlington
Coat Factory Warehouse Corp., Term Loan, 7.32%,
05/28/2013
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B2
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B-
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413,025
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Utilities - 3.31%
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1,990,000
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Texas
Competitive Electric Holdings Co., LLC, Initial Tranche B-3
Term Loan, 8.40%, 10/10/2014
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Ba3
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B+
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1,809,845
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Total Senior Loans (cost $8,979,713)
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7,609,011
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Corporate Notes & Bonds - 125.78% (a)
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Aerospace and Defense - 0.23%
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3,000,000
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Delta Air Lines, Inc., 8.30%, 12/15/2029
(e) (f)
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NR
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NR
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97,500
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1,000,000
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Northwest Airlines, Inc., 8.88%, 12/30/2027
(e) (f)
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NR
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NR
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26,250
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123,750
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Automobile - 4.94%
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3,000,000
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American Tire Distributors Holdings, Inc.,
11.08%,
04/01/2012 (g)
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Caa1
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CCC+
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2,700,000
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Broadcasting and Entertainment - 6.81%
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2,000,000
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Liberty Media Corp., 7.88%, 07/15/2009
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Ba2
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BB+
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2,016,946
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1,500,000
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Time Warner Entertainment Co., LP, 10.15%,
05/01/2012
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Baa1
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BBB+
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1,710,882
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3,727,828
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1
PROSPECT STREET INCOME SHARES INC.
Schedule of Investments (unaudited) (continued)
As of March 31,
2008
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Ratings
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Principal
Amount ($)
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Description
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Moody’s
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Standard &
Poor’s
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Value
($)
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Corporate Notes & Bonds (continued)
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Buildings and Real Estate - 6.96%
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2,750,000
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Black & Decker, 5.75%, 11/15/2016
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Baa2
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BBB
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2,649,499
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1,000,000
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SUSA Partnership, LP, 7.45%, 07/01/2018
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Aa1
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AAA
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1,159,355
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3,808,854
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Cable and Other Pay Television Services -
2.73%
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500,000
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CCH I LLC, 11.00%, 10/01/2015
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Caa2
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CCC
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350,000
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1,000,000
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Comcast Cable Holdings, 9.80%, 02/01/2012
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NR
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BBB+
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1,141,506
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1,491,506
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Cargo Transport - 0.13%
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250,000
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Motor Coach Industries International, Inc.,
11.25%, 05/01/2009
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C
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CC
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68,750
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Chemicals, Plastics and Rubber - 13.70%
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2,000,000
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Albemarle Corp., 5.10%, 02/01/2015
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Baa3
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BBB
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1,980,970
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2,500,000
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Clorox Co., 4.20%, 01/15/2010
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A3
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BBB+
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2,509,775
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1,000,000
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Georgia Gulf Corp., 9.50%, 10/15/2014 (f)
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B2
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CCC+
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777,500
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2,000,000
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Potash Corp. of Saskatchewan, Inc., 7.75%,
05/31/2011
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Baa1
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BBB+
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2,225,760
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7,494,005
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Containers, Packaging and Glass - 7.38%
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4,750,000
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Solo Cup Co., 8.50%, 02/15/2014 (f)
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Caa2
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CCC-
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4,037,500
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Environmental Services - 3.98%
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2,000,000
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Republic Services, Inc., 6.75%, 08/15/2011
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Baa1
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NR
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2,176,848
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Finance - 20.11%
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3,500,000
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Allied Capital Corp., 6.00%, 04/01/2012
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Baa2
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BBB+
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3,542,570
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2,000,000
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BankAmerica Institutional, Series A, 8.07%,
12/31/2026 (h)
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Aa3
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A-
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2,066,556
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1,500,000
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Penhall International, Corp., 12.00%,
08/01/2014 (h)
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B3
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CCC+
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1,275,000
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3,750,000
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Unilever Capital Corp., 7.13%, 11/01/2010
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A1
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A+
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4,114,114
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10,998,240
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Food, Beverage and Tobacco - 8.17%
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3,750,000
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Kellogg Co., Series B, 6.60%, 04/01/2011
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A3
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BBB+
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4,043,944
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500,000
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Land O’ Lakes Capital Trust I, 7.45%,
03/15/2028 (h)
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B1
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B
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425,000
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4,468,944
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Healthcare, Education and Childcare - 7.14%
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2,194,712
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Argatroban Royalty Sub, LLC, 18.50%,
09/21/2014
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NR
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NR
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2,205,686
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1,417,000
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Eszopiclone Royalty Sub LLC, 12.00%,
06/30/2014
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NR
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NR
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1,445,340
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250,000
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Teva Pharmaceutical Finance LLC, 5.55%,
02/01/2016
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Baa2
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BBB
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252,110
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3,903,136
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Home and Office Furnishings, Housewares,
and Durable Consumer - 1.13%
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250,000
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Masonite Corp., 11.00%, 04/06/2015
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NR
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BB-
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173,750
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530,000
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Spectrum Brands, Inc., PIK, 11.50%,
10/02/2013 (f) (g)
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Caa3
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CCC-
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442,550
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616,300
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2
PROSPECT STREET INCOME SHARES INC.
Schedule of Investments (unaudited) (continued)
As of March 31,
2008
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|
|
|
|
|
|
|
|
|
|
|
|
|
Ratings
|
|
|
|
|
|
|
|
|
|
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|
|
Principal
Amount ($)
|
|
Description
|
Moody’s
|
|
Standard &
Poor’s
|
|
Value
($)
|
|
|
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|
Corporate
Notes & Bonds (continued)
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|
Information
Technology - 4.27%
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2,500,000
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Charys
Holding Co., Inc., 8.75%, 02/16/2012 (e) (h)
|
NR
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NR
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1,250,000
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1,500,000
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MagnaChip
Semiconductor, 6.05%, 12/15/2011 (g)
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B2
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B
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1,087,500
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2,337,500
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Leisure, Amusement, Motion Pictures, Entertainment - 8.06%
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1,500,000
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Blockbuster,
Inc., 9.00%, 09/01/2012 (f)
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Caa2
|
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CCC
|
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1,230,000
|
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|
1,531,000
|
|
Six Flags,
Inc.Convertible, 4.50%, 05/15/2015
|
Caa2
|
|
CCC-
|
|
822,912
|
|
|
4,500,000
|
|
Tropicana
Entertainment LLC, 9.63%, 12/15/2014 (f)
|
Ca
|
|
CC
|
|
2,356,875
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4,409,787
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Oil and Gas - 5.61%
|
|
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|
2,000,000
|
|
Dominion
Resources, Inc., Series D, 5.00%, 03/15/2013
|
Baa2
|
|
BBB
|
|
2,044,508
|
|
|
1,225,000
|
|
Energy XXI
Gulf Coast, Inc., 10.00%, 06/15/2013
|
Caa2
|
|
CCC
|
|
1,022,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,067,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Telecommunications - 9.00%
|
|
|
|
|
|
|
|
1,750,000
|
|
Cricket
Communications, Inc., 9.38%, 11/01/2014
|
Caa1
|
|
B-
|
|
1,666,875
|
|
|
500,000
|
|
Digicel
Group, Ltd., PIK, 9.13%, 01/15/2015 (h)
|
Caa2
|
|
NR
|
|
413,750
|
|
|
1,000,000
|
|
Grande
Communications Holdings, Inc., 14.00%, 04/01/2011
|
Caa1
|
|
B-
|
|
1,010,000
|
|
|
2,085,000
|
|
ICO North
America, 8.50%, 08/15/2009
|
NR
|
|
NR
|
|
1,834,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,925,425
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utilities - 15.43%
|
|
|
|
|
|
|
|
4,000,000
|
|
Consolidated
Edison Co. of New York, 4.70%, 06/15/2009
|
A1
|
|
A-
|
|
4,060,404
|
|
|
2,000,000
|
|
Kiowa Power
Partners LLC, 5.74%, 03/30/2021 (h)
|
Baa3
|
|
BBB-
|
|
1,976,504
|
|
|
500,000
|
|
Southern
Power Co., Series D, 4.88%, 07/15/2015
|
Baa1
|
|
BBB+
|
|
480,397
|
|
|
1,829,260
|
|
Tenaska
Virginia Partners LP, 6.12%, 03/30/2024 (h)
|
NR
|
|
NR
|
|
1,921,775
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,439,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Corporate Notes & Bonds (cost $73,993,869)
|
|
|
|
|
68,794,836
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset-Backed Securities - 11.07% (a) (g) (h)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,000,000
|
|
ACA CLO,
Ltd., Series 2006-2A, Class B, 4.61%, 01/20/2021
|
A2
|
|
A
|
|
2,734,375
|
|
|
1,000,000
|
|
Goldman
Sachs Asset Management CLO, PLC, Series 2007-1A, Class D,
5.99%, 08/01/2022
|
Baa2
|
|
BBB
|
|
746,000
|
|
|
1,000,000
|
|
GSC Partners
CDO Fund, Ltd., Series 2007-8A, Class C, 5.47%, 04/17/2021
|
Baa2
|
|
BBB
|
|
560,500
|
|
|
1,000,000
|
|
Primus CLO,
Ltd., Series 2007-2A, Class D, 6.66%, 07/15/2021
|
Baa2
|
|
BBB
|
|
695,700
|
|
|
1,000,000
|
|
Rampart CLO,
Ltd., Series 2006-1A, Class C, 5.40%, 04/18/2021
|
Baa2
|
|
BBB
|
|
647,900
|
|
|
1,000,000
|
|
St. James
River CLO, Ltd., Series 2007-1A, Class E, 7.24%, 06/11/2021
|
Ba2
|
|
BB
|
|
671,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Asset-Backed Securities (cost $6,939,060)
|
|
|
|
|
6,055,875
|
|
|
|
|
|
|
|
|
|
|
|
3
PROSPECT STREET INCOME SHARES INC.
Schedule of Investments (unaudited) (continued)
As of March 31, 2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratings
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
Amount ($)
|
|
Description
|
Moody’s
|
|
Standard &
Poor’s
|
|
Value
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Claims - 0.12% (a)
|
|
|
|
|
|
|
|
|
|
|
|
|
Aerospace and Defense - 0.12%
|
|
|
|
|
|
|
|
|
|
|
Northwest
Airlines, Inc.
|
|
|
|
|
|
|
|
|
400,000
|
|
ALPA Trade Claim, 08/21/2013
|
NR
|
|
NR
|
|
|
13,248
|
|
|
421,500
|
|
IAM Trade Claim, 08/21/2013
|
NR
|
|
NR
|
|
|
13,960
|
|
|
468,300
|
|
Retiree Claim, 08/21/2013
|
NR
|
|
NR
|
|
|
15,510
|
|
|
710,200
|
|
Flight Attendant Claim, 08/21/2013
|
NR
|
|
NR
|
|
|
23,522
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Claims (cost $431,682)
|
|
|
|
|
|
66,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Stock - 0.51% (a) (i)
|
|
|
|
|
|
|
|
|
31,012
|
|
Northwest
Airlines, Inc.
|
|
|
|
|
|
278,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Common Stocks (cost $476,079)
|
|
|
|
|
|
278,798
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stocks - 0.00% (a) (i)
|
|
|
|
|
|
|
|
|
10,000
|
|
Adelphia
Communications Corp., Series B
|
|
|
|
|
|
0
|
|
|
1,000,000
|
|
Adelphia
Recovery Trust
|
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Preferred Stocks (cost $935,000)
|
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants - 0.00% (a) (i)
|
|
|
|
|
|
|
|
|
1,000
|
|
Grande
Communications, 04/01/2011
|
|
|
|
|
|
10
|
|
|
1,000
|
|
XM Satellite
Radio, Inc., 03/15/2010
|
|
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Warrants (cost $140,010)
|
|
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments - 151.39% (cost $91,895,413) (j)
|
|
|
|
|
|
82,804,770
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Assets & Liabilities, Net - 3.46%
|
|
|
|
|
|
1,890,986
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred Stock - (54.85)%
|
|
|
|
|
|
(30,000,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Assets Applicable to Common Stock - 100.00%
|
|
|
|
|
$
|
54,695,756
|
|
|
|
|
|
|
|
|
|
|
|
|
4
|
|
|
PROSPECT STREET INCOME SHARES INC.
|
|
Schedule
of Investments (unaudited) (continued)
|
|
As of
March 31, 2008
|
|
|
|
|
(a)
|
Percentages
are based on net assets applicable to common stock.
|
|
|
|
|
(b)
|
Senior loans
in which Prospect Street Income Shares Inc. (the “Fund”), invests generally
pay interest at rates which are periodically determined by reference to a
base lending rate plus a premium. (Unless otherwise identified by footnote
(g), all senior loans carry a variable rate interest). These base lending
rates are generally (i) the Prime Rate offered by one or more major United
States banks, (ii) the lending rate offered by one or more European banks
such as the London Interbank Offered Rate (“LIBOR”) or (iii) the Certificate
of Deposit rate. Rate shown represents the weighted average rate at March 31,
2008. Senior loans, while exempt from registration under the Securities Act
of 1933 (the “1933 Act”), contain certain restrictions on resale and cannot
be sold publicly. Senior secured floating rate loans often require
prepayments from excess cash flow or permit the borrower to repay at its
election. The degree to which borrowers repay, whether as a contractual
requirement or at their election, cannot be predicted with accuracy. As a
result, the actual remaining maturity may be substantially less than the
stated maturity shown.
|
|
|
|
|
(c)
|
Represents
fair value as determined by the Fund’s investment adviser, in good faith,
pursuant to the policies and procedures approved by the Fund’s Board of
Directors (the “Board”). Securities with a total aggregate market value of
$1,947,621 or 3.56% of net assets, were valued under fair value as of March
31, 2008.
|
|
|
|
|
(d)
|
Senior loan
asset has an additional unfunded loan commitment. As of March 31, 2008, the
Fund had an unfunded loan commitment, SIRVA Worldwide, Inc., of $126,115,
which could be extended at the option of the Borrower, pursuant to the loan
agreement.
|
|
|
|
|
(e)
|
The issuer
is in default of certain debt covenants. Income is not being accrued.
|
|
|
|
|
(f)
|
Securities
(or a portion of securites) on loan. As of March 31, 2008, the market value
of securities loaned was $8,968,175. The loaned securities were secured with
cash collateral of $9,922,300.
|
|
|
|
|
(g)
|
Variable
rate asset. The interest rate shown reflects the rate in effect at March 31,
2008.
|
|
|
|
|
(h)
|
Securities
exempt from registration under Rule 144A of the 1933 Act. These securities
may only be resold, in transactions exempt from registration, to qualified
institutional buyers. At March 31, 2008, these securities amounted $15,384,460
or 28.13% of net assets.
|
|
|
|
|
(i)
|
Non-income
producing security.
|
|
|
|
|
(j)
|
Cost basis
for U.S. federal income tax purposes is identical to book basis. Unrealized
appreciation and depreciation on investments are as folllows:
|
|
|
|
|
|
|
|
|
|
Gross
unrealized appreciation
|
|
$
|
1,645,761
|
|
|
|
Gross
unrealized depreciation
|
|
|
(10,736,404
|
)
|
|
|
|
|
|
|
|
|
|
Net
unrealized depreciation
|
|
$
|
(9,090,643
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CDO
|
Collateralized
Debt Obligation
|
|
CLO
|
Collateralized
Loan Obligation
|
|
DIP
|
Debtor-in-Possession
|
|
NR
|
Not Rated
|
|
PIK
|
Payment-in-Kind
|
Security Valuation:
Investments
for which listed market quotations are readily available are stated at market
value, which is determined by using the last reported sale price or, if no
sales are reported, as in the case of some securities traded over-the-counter,
the last reported bid price. Short-term investments having remaining maturities
of 60 days or less are stated at amortized cost, which approximates market
value.
Other
investments, which comprise the major portion of the Fund’s portfolio holdings,
are primarily non-investment grade corporate debt securities, for which market
quotations are not readily available due to a thinly traded market with a
limited number of market makers. These investments are stated at fair value on
the basis of subjective valuations furnished by an independent pricing service
or broker dealers, subject to review and adjustment by Highland Capital
Management, L.P. (the “Investment Adviser”) based upon quotations obtained from
market makers. The independent pricing service determines value based primarily
on quotations from dealers and brokers, market transactions, accessing data
from quotation services, offering sheets obtained from dealers and various
relationships between securities. The independent pricing service utilizes the
last sales price based on odd-lot trades, if available. If such price is not
available, the price furnished is based on round-lot or institutional size
trades. For securities in which there is no independent price from a pricing service
or from round-lot or institutional size trades, they are fair value priced in
good faith by the Investment Adviser.
For more
information with regart to significant accounting policies, see the most recent
annual report filed with the Securities and Exchange Commission.
5
|
|
|
PROSPECT STREET INCOME SHARES INC.
|
|
Schedule
of Investments (unaudited) (continued)
|
|
As of
March 31, 2008
|
Adoption of Statement of Financial Accounting
Standards No. 157 “Fair Value Measurement” (“FAS 157”):
In September 2006,
the Financial Accounting Standards Board (“FASB”) issued FAS 157, “Fair Value
Measurement,” which is effective for financial statements issued for fiscal
years beginning after November 15, 2007. FAS 157 defines how fair value should
be determined for financial reporting purposes, establishes a framework for
measuring fair value under GAAP, and requires additional disclosures about the
use of fair value measurements, but is not expected to result in any changes to
the fair value measurements of the investments. FAS 157 requires companies to
provide expanded information about the assets and liabilities measured at fair
value and the potential effect of these fair valuations on net assets for the
reportable periods as contained in the Fund’s periodic filings.
The Fund has
adopted FAS 157 as of January 1, 2008. The Fund has performed an analysis of
all existing investments and derivative instruments to determine the
significance and character of all inputs to their fair value determination.
Based on this assessment, the adoption of FAS 157 did not have any material
effect on the Fund’s net asset value. However, the adoption of FAS 157 does
require the Fund to provide additional disclosures about the inputs used to
develop the measurements and the effect of certain measurements The three
levels of the fair value hierarchy established under FAS 157 are described
below:
•
Level 1
— Quoted unadjusted prices for
identical instruments in active markets to which the Fund has access at the
date of measurement;
•
Level 2
— Quoted prices for
similar instruments in active markets; quoted prices for identical or similar
instruments in markets that are not active; and model-derived valuations in
which all significant inputs and significant value drivers are observable in
active markets. Level 2 inputs are those in markets for which there are few
transactions, the prices are not current, little public information exists or
instances where prices vary substantially over time or among brokered market makers;
and
•
Level 3
— Model derived
valuations in which one or more significant inputs or significant value drivers
are unobservable. Unobservable inputs are those inputs that reflect the Fund’s
own assumptions that market participants would use to price the asset or
liability based on the best available information.
The inputs or
methodology used for valuing securities are not necessarily an indication of
the risk associated with investing in those securities. A summary of the inputs
used to value the Fund’s assets as of March 31, 2008 as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in Securities
(Market Value)
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio Investments
|
|
$
|
82,804,770
|
|
$
|
278,798
|
|
$
|
76,918,241
|
|
$
|
5,607,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
82,804,770
|
|
$
|
278,798
|
|
$
|
76,918,241
|
|
$
|
5,607,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Fund did
not have any liabilities that were measured at fair value on a recurring basis
at March 31, 2008.
The following
table presents our assets measured at fair value on a recurring basis using
significant unobservable inputs (Level 3) at December 31, 2007 and at March 31,
2008.
|
|
|
|
|
|
|
Assets at
Fair Value using unobservable inputs (Level 3)
|
|
Portfolio Investments
|
|
|
|
|
|
|
Balance as
of December 31, 2007
|
|
$
|
1,032,510
|
|
|
Transfers in/(out) of Level 3
|
|
|
—
|
|
|
Net amortization/(accretion) of
premium/(discount)
|
|
|
11,892
|
|
|
Net realized gains/(losses)
|
|
|
—
|
|
|
Net unrealized gains/(losses)
|
|
|
(34,392
|
)
|
|
Net purchases and sales
|
|
|
4,597,721
|
|
|
|
|
|
|
|
|
Balance as
of March 31, 2008
|
|
$
|
5,607,731
|
|
|
|
|
|
|
|
The $34,392 of
net unrealized losses presented in the table above relate to investments that
are still held at March 31, 2008.
6
Item 2. Controls and Procedures.
|
|
(a)
|
The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d-15(b)).
|
|
|
(b)
|
There were no changes in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
|
Item 3. Exhibits.
Certifications pursuant to Rule 30a-2(a) under the 1940 Act and Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.
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.
|
(Registrant)
|
Prospect
Street
®
Income Shares Inc.
|
|
By
(Signature and Title)*
|
/s/
James D. Dondero
|
|
|
James D. Dondero, President
|
|
|
(principal executive officer)
|
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
(Signature and Title)*
|
/s/
James D. Dondero
|
|
|
James D. Dondero, President
|
|
|
(principal executive officer)
|
|
By
(Signature and Title)*
|
/s/
M. Jason Blackburn
|
|
|
M. Jason Blackburn, Secretary
and Treasurer
|
|
|
(principal financial officer)
|
*
Print the name and title of each signing officer under his or her signature.
Prospect Street Income Shs I (NYSE:CNN)
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