abrdn Income Credit Strategies Fund (NYSE: ACP) trails its HY index
Filing Impact
Filing Sentiment
Form Type
N-CSR
Rhea-AI Filing Summary
abrdn Income Credit Strategies Fund (ACP) reported a 12‑month total return of 5.81% based on net asset value (NAV) and 0.68% based on market price, versus 8.22% for the ICE BofAML Global High Yield Constrained Index for the year ended October 31, 2025.
NAV ended at $5.89 and the market price at $5.57, a 5.43% discount. Distributions to common shareholders totaled $0.9525 per share, implying a 17.10% market‑price distribution rate and 16.17% on NAV, funded by ordinary income and return of capital. Net investment income was $63.8 million, with a net operating expense ratio of 3.94% (1.97% excluding interest expense).
The Fund uses significant leverage: a $260 million revolving credit facility outstanding at year‑end and $40 million of 5.25% Series A Perpetual Preferred Shares, plus a private issuance of $100 million of Series A Mandatorily Redeemable Preferred Shares on December 18, 2025. Leverage added 1.58 percentage points to unlevered NAV performance but increases risk. The portfolio is concentrated in below‑investment‑grade credit, with most holdings rated B or BB and a 2.8‑year effective duration.
Positive
- None.
Negative
- None.
Insights
ACP delivered positive but benchmark-lagging returns, with high distributions supported by leverage and below-investment-grade credit exposure.
The Fund generated a 5.81% NAV return versus 8.22% for its global high yield benchmark for the year ended October 31, 2025, indicating underperformance despite a favorable environment for high yield bonds. On a market basis, the 0.68% return and a year-end 5.43% discount to NAV show investor demand was weaker than for the underlying portfolio. The adviser attributes 1.58 percentage points of performance uplift to the use of leverage.
ACP employs a leveraged capital structure built on a $260 million revolving credit facility, $40 million in 5.25% Series A Perpetual Preferred Shares, and a new $100 million private Series A Mandatorily Redeemable Preferred Shares issuance. These structures enhance income generation but also magnify losses and impose asset coverage covenants and priority claims on assets and cash flows. Forward currency hedges reduced currency risk but detracted about 1.4% from performance over the period.
The Fund maintains a high distribution policy, paying $0.9525 per share over the year, with payouts comprising both ordinary income and return of capital. With a net expense ratio of 3.94% (1.97% excluding interest expense) and a portfolio heavily tilted to BB and B rated bonds, sustainability of the double‑digit distribution rate depends on credit conditions, leverage costs, and realized returns going forward, as described in the report.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
| Investment Company Act file number: | 811-22485 |
| Exact name of registrant as specified in charter: | |
| Address of principal executive offices: | 1900 Market Street, Suite 200 |
| Philadelphia, PA 19103 | |
| Name and address of agent for service: | Sharon Ferrari |
| abrdn Inc. | |
| 1900 Market Street Suite 200 | |
| Philadelphia, PA 19103 | |
| Registrant’s telephone number, including area code: | 1-800-522-5465 |
| Date of fiscal year end: | October 31 |
| Date of reporting period: |
Item 1. Reports to Stockholders.
(a)
abrdn Income Credit Strategies Fund (ACP)
Annual Report
October 31, 2025
aberdeeninvestments.com
Letter to Shareholders (unaudited)
{foots1}
| 1 | Past performance is no guarantee of future results. Investment returns and principal value will fluctuate and shares, when sold, may be worth more or less than original cost. Current performance may be lower or higher than the performance quoted. Net asset value return data includes investment management fees, custodial charges and administrative fees (such as Trustee and legal fees) and assumes the reinvestment of all distributions. |
{foots1}
| 2 | Assuming the reinvestment of dividends and distributions. |
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| 3 | The Fund’s total return is based on the reported NAV for each financial reporting period end and may differ from what is reported on the Financial Highlights due to financial statement rounding or adjustments. |
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| 4 | The ICE BofAML Global High Yield Constrained (Hedged USD) Index tracks the performance of U.S. dollar-, Canadian dollar-, British pound- and euro-denominated below-investment-grade corporate debt publicly issued in the major domestic or eurobond markets. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index. |
| abrdn Income Credit Strategies Fund | 1 |
Letter to Shareholders (unaudited) (continued)
| 2 | abrdn Income Credit Strategies Fund |
Letter to Shareholders (unaudited) (concluded)
Investor Relations Information
As part of Aberdeen's commitment to shareholders, we invite you to visit the Fund on the web at www.aberdeenacp.com. Here, you can view monthly fact sheets, quarterly commentary, distribution and performance information, as well as other Fund literature. Enroll in Aberdeen's email services to receive content related to your fund. In addition, you will receive monthly factsheets based on your preferences. Sign up today at www.aberdeenacp.com.
Contact Us:
| • | Visit: www.aberdeenacp.com |
| • | Email: Investor.Relations@aberdeenplc.com; or |
| • | Call: 1-800-522-5465 (toll free in the U.S.). |
Yours sincerely,
/s/ Alan Goodson
Alan Goodson
President
Alan Goodson
President
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All amounts are U.S. Dollars unless otherwise stated.
| abrdn Income Credit Strategies Fund | 3 |
Report of the Investment Adviser (unaudited)
{foots1}
| 1 | Bonds that are viewed as having a higher risk of default. Credit rating agencies such as S&P Global Ratings, Fitch Ratings and Moody’s Investors Service assess the borrower’s ability to repay its debt. Bonds rated below BBB– by S&P and Fitch, or below Baa3 by Moody’s, are generally considered high-yield bonds. |
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| 2 | If the price of an asset, fund, or market moves significantly over a short period of time, it is said to be ‘volatile’ or to have ‘high volatility.’ If the price remains relatively stable, it is said to have ‘low volatility.’ Volatility can be used as a measure of risk, indicating the potential for large price fluctuations. |
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| 3 | Bonds that are issued by companies to raise money. |
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| 4 | The difference in the expected total return (combining interest payments and changes in price) between bonds with the same maturity but different levels of risk, reflecting the likelihood of repayment by the issuer. |
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| 5 | The income investors receive from holding a security or other asset. |
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| 6 | When the yields or prices of assets move within a defined range rather than rising or falling significantly. |
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| 7 | Measures taken by a central bank, such as lowering interest rates or expanding asset holdings, to make borrowing cheaper, increase economic growth and prevent low inflation or deflation (falling prices). |
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| 8 | When a government or company sells new bonds to investors to raise money. |
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| 9 | Financing provided by lenders that are not traditional banks and is arranged outside public debt markets; these are privately negotiated arrangements. |
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| 10 | When a central bank signals a preference for loosening monetary policy to support economic activity and/or address low inflation. |
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| 11 | S&P Global Ratings, Fitch Ratings and Moody’s Investors Service are independent, unaffiliated research companies that rate fixed income securities on the basis of risk and the borrower’s ability to make interest payments. S&P and Fitch assign ratings ranging from AAA (reliable and stable) to D (high risk) to communicate the agency’s opinion of relative level of credit risk. Moody’s credit ratings range from Aaa to C, with Aaa being the highest quality and C the lowest quality. |
{foots1}
| 12 | Credit quality – S&P Global Ratings’ credit ratings express the agency’s opinion about the ability and willingness of an issuer, such as a corporation or state or city government, to meet its financial obligations in full and on time. Typically, ratings are expressed as letter grades that range, for example, from AAA to D to communicate the agency’s opinion of relative level of credit risk. Ratings from AA to CCC may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. |
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| 13 | A key measure of the value of a company, fund or trust – the total value of assets less liabilities, divided by the number of shares. |
| 4 | abrdn Income Credit Strategies Fund |
Report of the Investment Adviser (unaudited) (continued)
{foots1}
| 14 | The ICE BofAML Global High Yield Constrained Index is designed to represent the performance of eligible corporate debt issuers classified as below investment grade. These issuers are located in countries with a foreign currency long-term debt rating of investment-grade. Indexes are unmanaged and have been provided for comparison purposes only. No fees or expenses are reflected. You cannot invest directly in an index. Index performance is not an indication of the performance of the Fund itself. For complete fund performance, please visit www.aberdeenacp.com |
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| 15 | The price at which an asset is bought or sold in the market at a given time. |
{foots1}
| 16 | The return of a fund or portfolio calculated without the effect of debt. NAV is the total value of assets minus liabilities, divided by the number of shares. |
{foots1}
| 17 | The process of replacing existing debt with new debt. |
{foots1}
| 18 | The dates when the original amount borrowed must be repaid. |
{foots1}
| 19 | Reviewing a company’s financial statements, business model and relevant economic factors to assess its underlying financial condition and long-term prospects. |
{foots1}
| 20 | A condition that could support growth, revenue or profits. |
{foots1}
| 21 | When new securities are created and sold to investors for the first time by the company or government issuing them. |
{foots1}
| 22 | When investors trade securities that have already been issued in the primary market. |
{foots1}
| 23 | The total return an investor can expect from a bond, combining the interest it pays and any gain or loss based on the price paid for it. |
{foots1}
| 24 | The interest rate stated on a bond when it’s issued. Typically, coupons are paid semi-annually. |
{foots1}
| 25 | Usually refers to a fund being exposed by more than 100% of its net asset value to assets or markets; typically resulting from the use of debt or derivatives. |
{foots1}
| 26 | A credit line that lets borrowers draw funds as needed up to a set limit. Any amount repaid becomes available to borrow again. |
{foots1}
| 27 | An agreement between two parties to buy or sell a specific currency or asset at a predetermined price on a fixed date in the future. |
{foots1}
| 28 | A financial contract whose value is based on an underlying asset. |
| abrdn Income Credit Strategies Fund | 5 |
Report of the Investment Adviser (unaudited) (continued)
{foots1}
| 29 | The risk of financial losses arising from fluctuations in exchange rates, which can affect the value of assets, liabilities, or transactions denominated in foreign currencies. |
{foots1}
| 30 | To reduce risk by taking an offsetting position in a related asset. |
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| 31 | Movements in an asset’s price and volume over a period, which are used to analyze how an asset may perform in the future. |
{foots1}
| 32 | A disruption of normal government operations in the U.S. that occurs when Congress does not approve funding for those functions. |
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| 33 | The annual income of an asset such as a bond shown as a percentage of its current market price. |
{foots1}
| 34 | A fall in an asset’s price that is usually temporary. |
{foots1}
| 35 | A holding or exposure within a portfolio that carries significant potential for price variation, either upward or downward. |
{foots1}
| 36 | The range of possible outcomes for investments by comparing how they have performed in the past and how differently they could perform in the future. |
| 6 | abrdn Income Credit Strategies Fund |
Report of the Investment Adviser (unaudited) (concluded)
| abrdn Income Credit Strategies Fund | 7 |
Total Investment Return (unaudited)
The following table summarizes the average annual Fund performance compared to the Fund’s primary benchmark for the 1-year, 3-year, 5-year and 10-year periods ended October 31, 2025.
| 1 Year | 3 Years | 5 Years | 10 Years | |
| Net Asset Value (NAV) | 5.81% | 13.65% | 4.53% | 4.39% |
| Market Price | 0.68% | 13.50% | 5.47% | 5.17% |
| ICE BofAML Global High Yield Constrained (Hedged USD) Index | 8.22% | 11.02% | 5.12% | 5.76% |
Performance of a $10,000 Investment (as of October 31, 2025)
This graph shows the change in value of a hypothetical investment of $10,000 in the Fund for the periods indicated. For comparison, the same investment is shown in the indicated index.
abrdn Investments Limited and abrdn Inc. assumed responsibility for the management of the Fund as investment adviser and sub-adviser, respectively, on December 1, 2017. Performance prior to this date reflects the performance of an unaffiliated investment adviser. The performance above reflects fee waivers and/or expense reimbursements made by the Fund’s current and/or former investment adviser. Absent such waivers and/or reimbursements, the Fund’s returns would be lower. Additionally, abrdn Inc. entered into an agreement with the Fund to limit investor relations services fees. This agreement aligns with the term of the advisory agreement and may not be terminated prior to the end of the current term of the advisory agreement. See Note 3 in the Notes to Financial Statements.
Returns represent past performance. Total investment return at NAV is based on changes in the NAV of Fund shares and assumes reinvestment of dividends and distributions, if any, at market prices pursuant to the dividend reinvestment program sponsored by the Fund’s transfer agent. All return data at NAV includes fees charged to the Fund, which are listed in the Fund’s Statement of Operations under “Expenses.” Total investment return at market value is based on changes in the market price at which the Fund’s shares traded on the NYSE during the period and assumes reinvestment of dividends and distributions, if any, at market prices pursuant to the dividend reinvestment program sponsored by the Fund’s transfer agent. The Fund’s total investment return is based on the reported NAV as of the financial reporting period end date of October 31, 2025. Because the Fund’s shares trade in the stock market based on investor demand, the Fund may trade at a price higher or lower than its NAV. Therefore, returns are calculated based on both market price and NAV. Past performance is no guarantee of future results. The performance information provided does not reflect the deduction of taxes that a shareholder would pay on distributions received from the Fund or the sale of Fund shares. The current performance of the Fund may be lower or higher than the figures shown. The Fund’s yield, return, market price and NAV will fluctuate. Performance information current to the most recent month-end is available at www.aberdeenacp.com or by calling 800-522-5465.
The gross operating expense ratio excluding fee waivers based on the fiscal year ended October 31, 2025 was 4.04%. The net operating expense ratio net of fee waivers based on the fiscal year ended October 31, 2025 was 3.94%. The net operating expense ratio, net of fee waivers and excluding interest expense based on the fiscal year ended October 31, 2025, was 1.97%.
| 8 | abrdn Income Credit Strategies Fund |
Portfolio Composition (as a percentage of net assets) (unaudited)
As of October 31, 2025
Quality of Investments(1)(2)
As of October 31, 2025, 0.0% of the Fund’s investments were invested in securities where either the issue or the issuer was rated “A” or better by S&P Global Ratings ("S&P"), Moody's Investors Service, Inc. ("Moody's") or Fitch Ratings, Inc. ("Fitch") or, if unrated, was judged to be of equivalent quality by abrdn Investments Limited (the "Adviser"). The following table shows the ratings of securities held by the Fund as of October 31, 2025, compared with April 30, 2025 and October 31, 2024:
| Date | AAA/Aaa % | A % | BBB/Baa % | BB/Ba % | B % | B or below % | NR % |
| October 31, 2025 | 0.0 | 0.0 | 0.0 | 19.8 | 64.3 | 12.8 | 3.1 |
| April 30, 2025 | 0.0 | 0.0 | 2.4 | 16.1 | 61.5 | 19.0 | 1.0 |
| October 31, 2024 | 0.1 | 0.1 | 0.2 | 13.2 | 59.6 | 23.3 | 3.5 |
The following chart summarizes the composition of the Fund’s portfolio by geographic classification.
| Date | Europe % | United States % | United Kingdom % | Other % |
| October 31, 2025 | 31.8 | 28.4 | 28.0 | 11.8 |
| April 30, 2025 | 32.3 | 31.5 | 23.3 | 12.9 |
| October 31, 2024 | 33.4 | 30.5 | 23.8 | 12.3 |
Maturity Composition(2)
The average maturity of the Fund’s total investments was 5.0 years as of October 31, 2025, compared with 5.0 years as of April 30, 2025, and 4.9 years as of October 31, 2024. The following table shows the maturity composition of the Fund’s investments as of October 31, 2025, compared with April 30, 2025 and October 31, 2024:
| Date | 0 to 5 Years % | 5 to 10 Years % | 10 Years & Over % |
| October 31, 2025 | 74.5 | 22.6 | 2.9 |
| April 30, 2025 | 75.0 | 22.3 | 2.7 |
| October 31, 2024 | 83.7 | 12.5 | 3.8 |
Effective Duration
As of October 31, 2025, the effective duration* of the Fund was 2.8 years.
| * | Effective duration is a measure of how sensitive bond prices are to changes in interest rates, taking into account any call or put features in the bond. |
| (1) | For financial reporting purposes, credit quality ratings shown above reflect the lowest rating assigned by either S&P, Moody’s or Fitch if ratings differ. For purposes of complying with the Fund's investment policies, the Fund may utilize the highest rating assigned by either S&P, Moody's or Fitch, if ratings differ (see Additional Information Regarding the Fund - Investment Objectives, Strategies and Policies). These rating agencies are independent, nationally recognized statistical rating organizations and are widely used. Investment grade ratings are credit ratings of BBB/Baa or higher. Below investment grade ratings are credit ratings of BB/Ba or lower. Investments designated NR are not rated by these rating agencies. Unrated investments do not necessarily indicate low credit quality. Credit quality ratings are subject to change. The Investment Manager evaluates the credit quality of unrated investments based upon, but not limited to, credit ratings for similar investments. |
| (2) | % reflected in below table do not reflect exposure to derivatives. |
| abrdn Income Credit Strategies Fund | 9 |
Portfolio of Investments
As of October 31, 2025
| 10 | abrdn Income Credit Strategies Fund |
Portfolio of Investments (continued)
As of October 31, 2025
| abrdn Income Credit Strategies Fund | 11 |
Portfolio of Investments (continued)
As of October 31, 2025
| 12 | abrdn Income Credit Strategies Fund |
Portfolio of Investments (continued)
As of October 31, 2025
| ADR | American Depositary Receipt |
| AG | Assured Guaranty Inc. |
| ETF | Exchange-Traded Fund |
| EUR | Euro Currency |
| FRN | Floating Rate Note |
| GBP | British Pound Sterling |
| HKD | Hong Kong Dollar |
| PIK | Payment-In-Kind |
| PLC | Public Limited Company |
| USD | U.S. Dollar |
| VRN | Variable Rate Note |
| abrdn Income Credit Strategies Fund | 13 |
Portfolio of Investments (concluded)
As of October 31, 2025
| As of October 31, 2025, the Fund held the following forward foreign currency contracts: |
| Purchase Contracts Settlement Date* | Counterparty | Currency Purchased | Amount Purchased | Currency Sold | Amount Sold | Fair Value | Unrealized Appreciation/ (Depreciation) | |
| British Pound/United States Dollar | ||||||||
| 11/13/2025 | Standard Chartered Bank | GBP | 896,669 | USD | 1,189,737 | $1,177,977 | $(11,760) | |
| 11/13/2025 | UBS AG | GBP | 5,489,063 | USD | 7,311,993 | 7,211,123 | (100,870) | |
| Euro/United States Dollar | ||||||||
| 11/10/2025 | Goldman Sachs & Co. | EUR | 3,145,000 | USD | 3,629,955 | 3,626,308 | (3,647) | |
| 11/13/2025 | Citibank N.A. | EUR | 3,207,639 | USD | 3,722,776 | 3,699,158 | (23,618) | |
| 11/13/2025 | HSBC Bank PLC | EUR | 9,094,996 | USD | 10,563,953 | 10,488,660 | (75,293) | |
| 11/13/2025 | Morgan Stanley & Co. | EUR | 740,414 | USD | 860,487 | 853,871 | (6,616) | |
| 11/13/2025 | Royal Bank of Canada | EUR | 2,405,217 | USD | 2,802,932 | 2,773,779 | (29,153) | |
| 11/13/2025 | Standard Chartered Bank | EUR | 9,344,518 | USD | 10,849,819 | 10,776,417 | (73,402) | |
| 11/13/2025 | UBS AG | EUR | 620,252 | USD | 721,659 | 715,296 | (6,363) | |
| Hong Kong Dollar/United States Dollar | ||||||||
| 11/13/2025 | Deutsche Bank AG | HKD | 121,691 | USD | 15,670 | 15,663 | (7) | |
| 11/13/2025 | Goldman Sachs & Co. | HKD | 56,438 | USD | 7,263 | 7,264 | 1 | |
| 11/13/2025 | HSBC Bank PLC | HKD | 540,578 | USD | 69,535 | 69,579 | 44 | |
| 11/13/2025 | HSBC Bank PLC | HKD | 264,023 | USD | 33,986 | 33,984 | (2) | |
| 11/13/2025 | Royal Bank of Canada | HKD | 144,402 | USD | 18,586 | 18,586 | – | |
| 11/13/2025 | Standard Chartered Bank | HKD | 38,591 | USD | 4,970 | 4,967 | (3) | |
| Total | $41,472,632 | $(330,689) | ||||||
| Sale Contracts Settlement Date* | Counterparty | Currency Purchased | Amount Purchased | Currency Sold | Amount Sold | Fair Value | Unrealized Appreciation/ (Depreciation) | |
| United States Dollar/British Pound | ||||||||
| 11/13/2025 | Citibank N.A. | USD | 1,356,476 | GBP | 1,021,180 | $1,341,550 | $14,926 | |
| 11/13/2025 | HSBC Bank PLC | USD | 951,652 | GBP | 712,859 | 936,501 | 15,151 | |
| 11/13/2025 | Morgan Stanley & Co. | USD | 672,641 | GBP | 504,926 | 663,334 | 9,307 | |
| 11/13/2025 | Royal Bank of Canada | USD | 6,339,211 | GBP | 4,720,824 | 6,201,867 | 137,344 | |
| 11/13/2025 | Standard Chartered Bank | USD | 3,096,400 | GBP | 2,324,916 | 3,054,302 | 42,098 | |
| 11/13/2025 | UBS AG | USD | 212,819,023 | GBP | 158,626,973 | 208,392,309 | 4,426,714 | |
| United States Dollar/Euro | ||||||||
| 11/13/2025 | Citibank N.A. | USD | 4,327,884 | EUR | 3,744,636 | 4,318,442 | 9,442 | |
| 11/13/2025 | Deutsche Bank AG | USD | 258,114,750 | EUR | 221,565,960 | 255,517,414 | 2,597,336 | |
| 11/13/2025 | Goldman Sachs & Co. | USD | 12,249,610 | EUR | 10,504,000 | 12,113,571 | 136,039 | |
| United States Dollar/Hong Kong Dollar | ||||||||
| 11/13/2025 | HSBC Bank PLC | USD | 45,159 | HKD | 350,817 | 45,154 | 5 | |
| 11/13/2025 | HSBC Bank PLC | USD | 456,917 | HKD | 3,553,248 | 457,352 | (435) | |
| 11/13/2025 | Morgan Stanley & Co. | USD | 34,706 | HKD | 269,653 | 34,708 | (2) | |
| 11/13/2025 | Standard Chartered Bank | USD | 4,049 | HKD | 31,471 | 4,051 | (2) | |
| Total | $493,080,555 | $7,387,923 | ||||||
| Unrealized appreciation on forward foreign currency exchange contracts | $7,388,407 | |||||||
| Unrealized depreciation on forward foreign currency exchange contracts | $(331,173) | |||||||
| * | Certain contracts with different trade dates and like characteristics have been shown net. |
See accompanying Notes to Financial Statements.
| 14 | abrdn Income Credit Strategies Fund |
Statement of Assets and Liabilities
As of October 31, 2025
| Assets | |
| Investments, at value (cost $1,025,004,125) | $ 993,969,257 |
| Short-term investment, at value (cost $26,816,297) | 26,816,297 |
| Foreign currency, at value (cost $688,689) | 688,197 |
| Cash | 224 |
| Receivable for investments sold | 5,815,503 |
| Interest and dividends receivable | 25,883,303 |
| Unrealized appreciation on forward foreign currency exchange contracts | 7,388,407 |
| Prepaid expenses in connection with the shelf registration (Note 5) | 125,125 |
| Prepaid expenses in connection with Revolving Credit Facility (Note 8) | 3,142 |
| Prepaid expenses | 63,697 |
| Total assets | 1,060,753,152 |
| Liabilities | |
| Revolving Credit Facility payable | 260,000,000 |
| Payable for investments purchased | 18,551,347 |
| Investment advisory fees payable (Note 3) | 1,936,852 |
| Unrealized depreciation on forward foreign currency exchange contracts | 331,173 |
| Administration fees payable (Note 3) | 218,828 |
| Dividend payable on Perpetual preferred shares | 181,002 |
| Investor relations fees payable (Note 3) | 57,758 |
| Trustee fees payable | 42,696 |
| Other accrued expenses | 686,078 |
| Total liabilities | 282,005,734 |
| Cumulative Preferred Shares, $0.001 par value | |
| Series A Perpetual Preferred Shares (5.25%, $25.00 liquidation value per share, 1,600,000 shares outstanding) (Note 8) |
40,000,000 |
| Net Assets Applicable to Common Shareholders | $738,747,418 |
| Composition of Net Assets Attributable to Common Shareholders | |
| Common stock (par value $0.001 per share) (Note 5) | $ 125,471 |
| Paid-in capital in excess of par | 1,187,937,988 |
| Accumulated loss | (449,316,041) |
| Net Assets | $738,747,418 |
| Net asset value per share based on |
$ |
See accompanying Notes to Financial Statements.
| abrdn Income Credit Strategies Fund | 15 |
Statement of Operations
For the Year Ended October 31, 2025
| Net Investment Income | |
| Investment Income: | |
| Interest and amortization/accretion of discount and premium and other income | $ 94,516,450 |
| Total investment income | 94,516,450 |
| Expenses: | |
| Investment advisory fee (Note 3) | 13,385,725 |
| Administration fee (Note 3) | 1,320,858 |
| Trustees' fees and expenses | 330,393 |
| Reports to shareholders and proxy solicitation | 171,695 |
| Legal fees and expenses | 154,258 |
| Investor relations fees and expenses (Note 3) | 152,531 |
| Independent auditors’ fees and tax expenses | 129,094 |
| Custodian’s fees and expenses | 85,065 |
| Transfer agent’s fees and expenses | 32,224 |
| Miscellaneous | 282,449 |
| Total operating expenses, excluding interest expense | 16,044,292 |
| Interest expense and commitment fee on credit facility | 15,379,366 |
| Total operating expenses before reimbursed/waived expenses | 31,423,658 |
| Investment advisor waiver | (753,922) |
| Net expenses | 30,669,736 |
| Net Investment Income | 63,846,714 |
| Net Realized/Unrealized Gain/(Loss): | |
| Net realized gain/(loss) from: | |
| Investments (Note 2j) | 2,276,775 |
| Forward foreign currency exchange contracts | (10,846,348) |
| Foreign currency transactions | (874,043) |
| (9,443,616) | |
| Net change in unrealized appreciation/depreciation on: | |
| Investments (Note 2j) | (14,863,113) |
| Forward foreign currency exchange contracts | 808,011 |
| Foreign currency translation | 207,201 |
| (13,847,901) | |
| Net realized and unrealized gain from investments, forward foreign currency exchange and foreign currencies | (23,291,517) |
| Change in Net Assets Resulting from Operations | $40,555,197 |
| Total distributions to Perpetual preferred shareholders | (2,100,000) |
| Net Increase in Net Assets Attributable to Common Shareholders Resulting from Operations | $38,455,197 |
See accompanying Notes to Financial Statements.
| 16 | abrdn Income Credit Strategies Fund |
Statements of Changes in Net Assets
| For the Year Ended October 31, 2025 |
For the Year Ended October 31, 2024 |
|
| Increase/(Decrease) in Net Assets: | ||
| Operations: | ||
| Net investment income | $63,846,714 | $39,648,053 |
| Net realized loss from investments, forward foreign currency exchange contracts and foreign currency transactions | (9,443,616) | (20,028,392) |
| Net change in unrealized appreciation/depreciation investments, forward foreign currency exchange and foreign currency translations | (13,847,901) | 58,293,855 |
| Net increase in net assets applicable to common shareholders resulting from operations | 40,555,197 | 77,913,516 |
| Distributions to Preferred Shareholders from: | ||
| Distributable earnings | (2,100,000) | (2,105,833) |
| Net decrease in net assets from distributions to preferred shareholders | (2,100,000) | (2,105,833) |
| Net decrease in net assets attributable to common shareholders resulting from operations | 38,455,197 | 75,807,683 |
| Distributions to Common Shareholders from: | ||
| Distributable earnings | (62,338,165) | (37,208,284) |
| Return of capital | (57,172,656) | (45,277,611) |
| Net decrease in net assets applicable to common shareholders from distributions | (119,510,821) | (82,485,895) |
| Proceeds from shares issued from the reorganization resulting in the issuance of 0 and 73,330,068 shares of common stock, respectively (Note 14) | – | 486,432,247 |
| Reinvestment of dividends resulting in the issuance of 0 and 30,660 shares of common stock, respectively | – | 204,792 |
| Change in net assets from capital transactions | – | 486,637,039 |
| Change in net assets applicable to common shareholders | (81,055,624) | 479,958,827 |
| Net Assets: | ||
| Beginning of year | 819,803,042 | 339,844,215 |
| End of year | $738,747,418 | $819,803,042 |
Amounts listed as “–” are $0 or round to $0.
See accompanying Notes to Financial Statements.
| abrdn Income Credit Strategies Fund | 17 |
Statement of Cash Flows
For the Year Ended October 31, 2025
| Cash flows from operating activities: | |
| Net increase/(decrease) in net assets resulting from operations | $ 40,555,197 |
| Adjustments to reconcile net increase in net assets resulting from operations to net cash provided by operating activities: |
|
| Investments purchased | (912,883,157) |
| Investments sold and principal repayments | 937,851,876 |
| Net change in short-term investments, excluding foreign government bonds | 35,824,963 |
| Net amortization/accretion of premium/(discount) | (6,048,690) |
| Net payment-in-kind interest income | (4,196,744) |
| Increase in interest, dividends and other receivables | (4,449,150) |
| Net change in unrealized appreciation on forward foreign currency exchange contracts | (808,011) |
| Increase in prepaid expenses | (86,863) |
| Increase in accrued investment advisory fee payable | 872,665 |
| Increase in other accrued expenses | 447,482 |
| Net change in unrealized depreciation of investments | 14,863,113 |
| Net change in unrealized appreciation on foreign currency translation | (207,201) |
| Net realized gain on investments transactions | (2,276,775) |
| Net cash provided by operating activities | 99,458,705 |
| Cash flows from financing activities: | |
| Borrowings on Revolving Credit Facility | 20,000,000 |
| Distributions paid to shareholders | (121,610,821) |
| Net cash used in financing activities | (101,610,821) |
| Effect of exchange rate on cash | 44,467 |
| Net change in cash | (2,107,649) |
| Unrestricted and restricted cash and foreign currency, beginning of year | 2,796,070 |
| Unrestricted and restricted cash and foreign currency, end of year | $688,421 |
| Supplemental disclosure of cash flow information: | |
| Cash paid for interest and fees on borrowing | $15,379,366 |
See accompanying Notes to Financial Statements.
| 18 | abrdn Income Credit Strategies Fund |
Statement of Cash Flows (concluded)
For the Year Ended October 31, 2025
| Reconciliation of unrestricted and restricted cash to the statement of assets and liabilities | |
| Year Ended October 31, 2025 |
|
| Cash | $ 224 |
| Foreign currency, at value | 688,197 |
| $688,421 |
See accompanying Notes to Financial Statements.
| abrdn Income Credit Strategies Fund | 19 |
Financial Highlights
| For the Fiscal Years Ended October 31, | |||||
| 2025 | 2024 | 2023 | 2022 | 2021 | |
| PER SHARE OPERATING PERFORMANCE: | |||||
| Net asset value per common share, beginning of year | $ |
$ |
$ |
$ |
$ |
| Net investment income(a) | 0.51 | 0.56 | 0.57 | 0.87 | 0.98 |
| Net realized and unrealized gains/(losses) on investments, forward foreign currency exchange contracts and foreign currency transactions | (0.18) | 0.68 | 0.47 | (3.35) | 1.11 |
| Total from investment operations applicable to common shareholders | 0.33 | 1.24 | 1.04 | (2.48) | 2.09 |
| Distributions to preferred shareholders from: | |||||
| Net investment income | (0.02) | (0.03) | (0.05) | (0.09) | (0.05) |
| Net increase/(decrease) in net assets attributable to common shareholders resulting from operations | 0.31 | 1.21 | 0.99 | (2.57) | 2.04 |
| Distributions to common shareholders from: | |||||
| Net investment income | (0.49) | (0.54) | (0.72) | (1.20) | (1.13) |
| Return of capital | (0.46) | (0.66) | (0.48) | – | (0.07) |
| Total distributions | ( |
( |
( |
( |
( |
| Capital Share Transactions: | |||||
| Offering costs for preferred shares charged to paid-in-capital | – | – | – | – | (0.11) |
| Impact of shelf offering | – | – | 0.01 | 0.04 | – |
| Dilutive effect of rights offer (Note 5) | – | – | – | – | (0.43) |
| Total capital share transactions | – | – | 0.01 | 0.04 | (0.54) |
| Net asset value per common share, end of year | $ |
$ |
$ |
$ |
$ |
| Market price, end of year | $ |
$ |
$ |
$ |
$ |
| Total Investment Return Based on(b): | |||||
| Market price | 0.68% | 34.41% | 8.05% | (34.92%) | 37.13% |
| Net asset value | 5.81% | 19.89%(c) | 15.54%(c) | (25.76%)(c) | 14.69% |
| Ratio to Average Net Assets Applicable to Common Shareholders/Supplementary Data: | |||||
| Net assets including liquidation value of preferred shares, end of year(000 omitted) | $778,747 | $859,803 | $379,844 | $206,650 | $283,077 |
| Net assets applicable to common shareholders, end of year (000 omitted) | $738,747 | $819,803 | $339,844 | $166,650 | $243,077 |
| Average net assets applicable to common shareholders (000 omitted) | $778,091 | $480,689 | $294,262 | $206,720 | $218,990 |
| Gross operating expenses, excluding fee waivers | 4.04% | 4.44% | 4.80% | 3.95% | 3.01% |
| Net operating expenses, net of fee waivers | 3.94% | 4.28% | 4.56% | 3.70% | 2.86% |
| Net operating expenses, net of fee waivers/recoupment, excluding interest expense, commitment fee and loan servicing fees | 1.97% | 2.04% | 2.26% | 2.48% | 2.24% |
| Net Investment income | 8.21% | 8.25% | 8.25% | 10.10% | 8.75% |
| Portfolio turnover | 84% | 76%(d) | 83% | 66% | 63% |
| Senior securities: | |||||
| Revolving Credit Facility outstanding (000 omitted) | $ |
$ |
$ |
$ |
$ |
See accompanying Notes to Financial Statements.
| 20 | abrdn Income Credit Strategies Fund |
Financial Highlights (concluded)
| For the Fiscal Years Ended October 31, | |||||
| 2025 | 2024 | 2023 | 2022 | 2021 | |
| Asset coverage per $1,000 of Revolving Credit Facility outstanding at year end(e) | $ |
$ |
$ |
$ |
$ |
| Total Series A Perpetual Preferred Shares outstanding (000 omitted) | $40,000 | $40,000 | $40,000 | $40,000 | $40,000 |
| Asset coverage per $1,000 on total leverage at year end(f) | $3,462 | $3,928 | $3,344 | $2,302 | $2,538 |
| Asset coverage per share of Series A Perpetual Preferred Shares at year end(g) | $649.22 | $687.38 | $303.03 | $184.16 | $250.67 |
| Liquidating Preference Per Unit of Series A Perpetual Preferred Shares | $ |
$ |
$ |
$ |
$ |
| Average Market Value Per Unit of Series A Perpetual Preferred Shares(h) | $ |
$ |
$ |
$ |
$ |
| (a) | Based on average shares outstanding. |
| (b) | Total investment return based on market value is calculated assuming that shares of the Fund’s common stock were purchased at the closing market price as of the beginning of the period, dividends, capital gains and other distributions were reinvested as provided for in the Fund’s dividend reinvestment plan and then sold at the closing market price per share on the last day of the period. The computation does not reflect any sales commission investors may incur in purchasing or selling shares of the Fund. The total investment return based on the net asset value is similarly computed except that the Fund’s net asset value is substituted for the closing market value. |
| (c) | The total return shown above includes the impact of financial statement rounding of the NAV per share and/or financial statement adjustments. |
| (d) | The portfolio turnover calculation excludes $347,438,325 and $516,168,819 of proceeds received and cost of investments related to rebalancing the portfolio after the fund reorganizations which occurred on September 20, 2024. |
| (e) | Asset coverage per $1,000 on senior securities is calculated by dividing net assets plus the amount of any borrowings, including Series A Perpetual Preferred Shares, for investment purposes by the amount of any senior securities, which includes the revolving credit facility and then multiplying by $1,000. |
| (f) | The asset coverage per $1,000 on total leverage is calculated as the Fund's total assets, less all liabilities and indebtedness not represented by the Fund's senior securities or the a liquidation preference of preferred shares, divided by secured senior securities representing indebtedness plus the aggregate liquidation preference of preferred shares and then multiplying by $1,000. |
| (g) | Asset coverage per share of Series A Perpetual Preferred Shares is calculated by subtracting the fund's total liabilities (not including senior securities or the liquidation preference of preferred shares) from the fund's total assets and dividing by shares of outstanding preferred stock (based on a per share liquidation preference of $25.00). |
| (h) | Represents the average of the daily closing market price per share as reported on the NYSE during the respective period. |
Amounts listed as “–” are $0 or round to $0.
See accompanying Notes to Financial Statements.
| abrdn Income Credit Strategies Fund | 21 |
Notes to Financial Statements
October 31, 2025
October 31, 2025
| 22 | abrdn Income Credit Strategies Fund |
Notes to Financial Statements (continued)
October 31, 2025
October 31, 2025
| abrdn Income Credit Strategies Fund | 23 |
Notes to Financial Statements (continued)
October 31, 2025
October 31, 2025
A summary of standard inputs is listed below:
| Security Type | Standard Inputs |
| Debt and other fixed-income securities | Reported trade data, broker-dealer price quotations, benchmark yields, issuer spreads on comparable securities, credit quality, yield, and maturity. |
| Forward foreign currency contracts | Forward exchange rate quotations. |
The following is a summary of the inputs used as of October 31, 2025 in valuing the Fund's investments and other financial instruments at fair value. The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Please refer to the Portfolio of Investments for a detailed breakout of the security types:
| Investments, at Value | Level 1 – Quoted Prices |
Level 2 – Other Significant Observable Inputs |
Level 3 – Significant Unobservable Inputs |
Total |
| Assets | ||||
| Investments in Securities | ||||
| Bank Loans | $– | $16,761,167 | $– | $16,761,167 |
| Common Stocks | 688,219 | 367,687 | 760,546 | 1,816,452 |
| Corporate Bonds | – | 934,999,895 | 14,441,834 | 949,441,729 |
| Exchange-Traded Funds | 10,664,565 | – | – | 10,664,565 |
| Government Bonds | – | 15,285,344 | – | 15,285,344 |
| Short-Term Investment | 26,816,297 | – | – | 26,816,297 |
| Total Investments | $38,169,081 | $967,414,093 | $15,202,380 | $1,020,785,554 |
| Other Financial Instruments | ||||
| Foreign Currency Exchange Contracts | $– | $7,388,407 | $– | $7,388,407 |
| Total Investment Assets | $38,169,081 | $974,802,500 | $15,202,380 | $1,028,173,961 |
| Liabilities | ||||
| Other Financial Instruments | ||||
| Foreign Currency Exchange Contracts | $– | $(331,173) | $– | $(331,173) |
| Total Investment Liabilities | $– | $(331,173) | $– | $(331,173) |
Amounts listed as “–” are $0 or round to $0.
| 24 | abrdn Income Credit Strategies Fund |
Notes to Financial Statements (continued)
October 31, 2025
October 31, 2025
| Rollforward of Level 3 Fair Value Measurements For the Year Ended October 31, 2025 |
|||||||
| Investments in Securities |
Balance as of October 31, 2024 |
Accrued Discounts (Premiums) |
Net Realized Gain (Loss) and Change in Unrealized Appreciation/ Depreciation |
Net Purchases |
Net Sales |
Balance as of October 31, 2025 |
Change in Unrealized Appreciation/ Depreciation from Investments Held at October 31, 2025 |
| Corporate Bonds | |||||||
| United Kingdom | $6,200,923 | $(677) | $69,312 | $7,164,597 | $(6,134,533) | $7,299,622 | $67,380 |
| United States | 2,663,170 | 14,061 | (1,420,328) | 5,914,530 | (29,221) | 7,142,212 | (1,420,279) |
| Common Stocks | |||||||
| Australia | - | - | - | - | - | - | - |
| France | - | - | (3,477) | 200,495 | - | 197,018 | (3,477) |
| United States | 5,621,821 | - | (1,560,332) | 139,959 | (3,637,920) | 563,528 | (458,542) |
| Preferred Stocks | |||||||
| United States | 318,675 | - | - | - | (318,675) | - | - |
| Total | $14,804,589 | $13,384 | $(2,914,825) | $13,419,581 | $(10,120,349) | $15,202,380 | $(1,814,918) |
Amounts listed as “–” are $0 or round to $0.
For the fiscal year ended October 31, 2025, there were no significant changes to the fair valuation methodologies.
| Description | Fair Value at October 31, 2025 |
Valuation Technique (s) | Unobservable Inputs | Range | Weighted Average |
Relationship Between Fair Value and Input; if Input value increases then Fair Value: |
| Common Stocks | $423,568 | Market Approach | NAV Liquidation | N/A | N/A | Increases |
| $117,950 | Market Approach | Probability of events | 50.00% | 50.00% | Increases | |
| $22,010 | Market Approach | Transaction Cost | N/A | N/A | Increases | |
| Corporate Bonds | $13,098,604 | Income approach | Discount Rate | 7.67% - 13.20% | 10.75% | Decreases |
| $1,343,230 | Market Approach | NAV Liquidation | N/A | N/A | Increases | |
| Total | $15,005,362 |
Amounts listed as “–” are $0 or round to $0.
| abrdn Income Credit Strategies Fund | 25 |
Notes to Financial Statements (continued)
October 31, 2025
October 31, 2025
| 26 | abrdn Income Credit Strategies Fund |
Notes to Financial Statements (continued)
October 31, 2025
October 31, 2025
Summary of Derivative Instruments:
The Fund may use derivatives for various purposes as noted above.
| Risk Exposure Category | ||
| Foreign Currency Contracts |
Total | |
| Assets: | ||
| Unrealized appreciation on: | ||
| Forward Foreign Currency Exchange Contracts | $7,388,407 | $7,388,407 |
| Total | $7,388,407 | $7,388,407 |
| Liabilities: | ||
| Unrealized depreciation on: | ||
| Forward Foreign Currency Exchange Contracts | $331,173 | $331,173 |
| Total | $331,173 | $331,173 |
The Fund has transactions that may be subject to enforceable master netting agreements. A reconciliation of the gross amounts on the Statement of Assets and Liabilities as of October 31, 2025 to the net amounts by broker and derivative type, including any collateral received or pledged, is included in the following tables:
| Gross Amounts Not Offset in the Statement of Assets and Liabilities |
Gross Amounts Not Offset in the Statement of Assets and Liabilities |
|||||||
| Gross Amounts of Assets Presented in Statement of Assets and Liabilities |
Financial Instruments |
Collateral Received(1) |
Net Amount(2) |
Gross Amounts of Liabilities Presented in Statement of Assets and Liabilities |
Financial Instruments |
Collateral Pledged(1) |
Net Amount(2) |
|
| Description | Assets | Liabilities | ||||||
| Foreign Currency Exchange Contracts(3) | ||||||||
| Citibank N.A. | $24,368 | $(23,618) | $– | $750 | $23,618 | $(23,618) | $– | $– |
| Deutsche Bank AG | 2,597,336 | (7) | – | 2,597,329 | 7 | (7) | – | – |
| Goldman Sachs & Co. | 136,040 | (3,647) | – | 132,393 | 3,647 | (3,647) | – | – |
| HSBC Bank PLC | 15,200 | (15,200) | – | – | 75,730 | (15,200) | – | 60,530 |
| Morgan Stanley & Co. | 9,307 | (6,618) | – | 2,689 | 6,618 | (6,618) | – | – |
| Royal Bank of Canada | 137,344 | (29,153) | – | 108,191 | 29,153 | (29,153) | – | – |
| Standard Chartered Bank | 42,098 | (42,098) | – | – | 85,167 | (42,098) | – | 43,069 |
| UBS AG | 4,426,714 | (107,233) | – | 4,319,481 | 107,233 | (107,233) | – | – |
Amounts listed as “–” are $0 or round to $0.
| (1) | In some instances, the actual collateral received and/or pledged may be more than the amount shown here due to overcollateralization. |
| (2) | Net amounts represent the net receivables/(payable) that would be due from/to the counterparty in the event of default. Exposure from financial derivative instruments can only be netted across transactions governed under the same master netting agreement with the same legal entity. |
| (3) | Includes financial instrument which are not subject to a master netting arrangement across funds, or another similar arrangement. |
| abrdn Income Credit Strategies Fund | 27 |
Notes to Financial Statements (continued)
October 31, 2025
October 31, 2025
The effect of derivative instruments on the Statement of Operations for the fiscal year ended October 31, 2025:
| Risk Exposure Category | ||
| Foreign Currency Contracts |
Total | |
| Realized Gain/(Loss) on Derivatives Recognized as a Result of Operations: |
||
| Forward Foreign Currency Exchange Contracts | $(10,846,348) | $(10,846,348) |
| Total | $(10,846,348) | $(10,846,348) |
| Net Change in Unrealized Appreciation/Depreciation on Derivatives Recognized as a Result of Operations: |
||
| Forward Foreign Currency Exchange Contracts | $808,011 | $808,011 |
| Total | $808,011 | $808,011 |
| 28 | abrdn Income Credit Strategies Fund |
Notes to Financial Statements (continued)
October 31, 2025
October 31, 2025
| abrdn Income Credit Strategies Fund | 29 |
Notes to Financial Statements (continued)
October 31, 2025
October 31, 2025
| 30 | abrdn Income Credit Strategies Fund |
Notes to Financial Statements (continued)
October 31, 2025
October 31, 2025
| abrdn Income Credit Strategies Fund | 31 |
Notes to Financial Statements (continued)
October 31, 2025
October 31, 2025
| 32 | abrdn Income Credit Strategies Fund |
Notes to Financial Statements (continued)
October 31, 2025
October 31, 2025
| abrdn Income Credit Strategies Fund | 33 |
Notes to Financial Statements (continued)
October 31, 2025
October 31, 2025
11. Tax Information
The U.S. federal income tax basis of the Fund's investments (including derivatives, if applicable) and the net unrealized depreciation as of October 31, 2025, were as follows:
| Tax Cost of Securities |
Unrealized Appreciation |
Unrealized Depreciation |
Net Unrealized Appreciation/ (Depreciation) |
| $1,059,470,124 | $34,792,525 | $(66,419,861) | $(31,627,336) |
The tax character of distributions paid during the fiscal years ended October 31, 2025 and October 31, 2024 was as follows:
| October 31, 2025 | October 31, 2024 | |||
| Common | Preferred | Common | Preferred | |
| Distributions paid from: | ||||
| Ordinary Income | $62,338,165 | $2,100,000 | $37,208,284 | $2,105,833 |
| Net long-term capital gains | — | — | — | — |
| Tax return of capital | 57,172,656 | — | 45,277,611 | — |
| Total tax character of distributions | $119,510,821 | $2,100,000 | $82,485,895 | $2,105,833 |
Amounts listed as “–” are $0 or round to $0.
| 34 | abrdn Income Credit Strategies Fund |
Notes to Financial Statements (continued)
October 31, 2025
October 31, 2025
As of October 31, 2025, the components of accumulated earnings on a tax basis were as follows:
| Undistributed Ordinary Income | $- |
| Undistributed Long-Term Capital Gains | - |
| Total undistributed earnings | $- |
| Accumulated Capital and Other Losses | $(398,611) |
| Capital loss carryforward | $(390,895,119)* |
| Other currency gains | - |
| Other Temporary Differences | (25,925,419) |
| Unrealized Appreciation/(Depreciation) | (32,096,892)** |
| Total accumulated earnings/(losses) – net | $(449,316,041) |
Amounts listed as “–” are $0 or round to $0.
| * | On October 31, 2025, the Fund had a net capital loss carryforward of $(390,895,119) which will be available to offset like amounts of any future taxable gains. The Fund is permitted to carry forward capital losses for an unlimited period and capital losses that are carried forward will retain their character as either short-term or long-term capital losses. The breakdown of capital loss carryforwards are as follows: |
| Amounts | Expires |
| $70,176,100 | Unlimited (Short—Term) |
| 320,719,019 | Unlimited (Long—Term) |
| abrdn Income Credit Strategies Fund | 35 |
Notes to Financial Statements (continued)
October 31, 2025
October 31, 2025
14. Fund Reorganizations
Effective July 19, 2024, the Fund acquired all of the assets and assumed all of the liabilities of the First Trust High Income Long/Short Fund ("FSD") pursuant a plan of reorganization approved by the Board on October 20, 2023 (the “FSD Reorganization”).
The reorganization was accomplished by a tax-free exchange as follows:
33,291,015 shares of FSD, fair valued at $418,092,109 for 63,035,894 shares of the Fund.
The investment portfolio and cash of FSD, with a fair value of $412,325,321 and identified cost of $417,015,762 were the principal assets acquired by the Fund. For financial reporting purposes, assets received and shares issued by the Fund were recorded at value; however, the cost basis of the investments received from FSD was carried forward to align ongoing reporting of the Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes. The Fund acquired capital loss carryovers of $118,928,693 which is subject to loss limitations from FSD. Immediately prior to the FSD Reorganization, the investment portfolio and cash of the Fund was $527,960,137.
The chart below shows a summary of net assets and shares outstanding, before and after the FSD Reorganization.
| Shares Outstanding |
Net Assets | Net Asset Value Per Share |
Net Unrealized Appreciation (Depreciation) |
Accumulated Net Realized Gain/(Loss)* |
|
| Before Reorganization | |||||
| First Trust High Income Long/Short Fund | 33,291,015 | $418,092,109 | $12.56 | $(4,690,441) | $(144,622,290) |
| abrdn Income Credit Strategies Fund | 52,140,610 | 345,826,270 | 6.63 | (20,799,568) | (222,571,414) |
| Total | $763,918,379 | $(25,490,009) | $(367,193,704) |
| Shares Outstanding |
Net Assets | Net Asset Value Per Share |
Net Unrealized Appreciation (Depreciation) |
Accumulated Net Realized Gain/(Loss)* |
|
| After Reorganization | |||||
| abrdn Income Credit Strategies Fund | 115,176,540 | $763,918,379 | $6.63 | $(25,490,009) | $(367,193,704) |
* Accumulated Net Realized Gain/(Loss) are historical gains and losses that were recorded to the Fund.
Effective September 20, 2024, the Fund acquired all of the assets and assumed all of the liabilities of the First Trust/abrdn Global Opportunity Income Fund ("FAM") pursuant to a plan of reorganization approved by the Board on October 20, 2023 (the “FAM Reorganization”).
The reorganization was accomplished by a tax-free exchange as follows:
10,143,247 shares of FAM, fair valued at $68,340,138 for 10,294,174 shares of the Fund.
The investment portfolio and cash of the FAM, with a fair value of $67,483,662 and identified cost of $66,996,323 were the principal assets acquired by the Fund. For financial reporting purposes, assets received and shares issued by the Fund were recorded at value; however, the cost basis of the investments received from FAM was carried forward to align ongoing reporting of the Fund’s realized and unrealized gains and losses with amounts distributable to shareholders for tax purposes. The Fund acquired capital loss carryovers of $34,453,576 which is subject to loss limitations from FAM. Immediately prior to the merger, the investment portfolio and cash of the Fund was $1,078,195,903.
The chart below shows a summary of net assets and shares outstanding, before and after the FAM Reorganization.
| Shares Outstanding |
Net Assets | Net Asset Value Per Share |
Net Unrealized Appreciation (Depreciation) |
Accumulated Net Realized Gain/(Loss)* |
|
| Before Reorganization | |||||
| First Trust/abrdn Global Opportunity Income Fund | 10,143,247 | $68,340,138 | $6.74 | $487,339 | $(36,366,536) |
| abrdn Income Credit Strategies Fund | 115,176,504 | 764,624,263 | 6.64 | 3,701,263 | (237,955,444) |
| Total | $832,964,401 | $4,188,602 | $(274,321,980) |
| 36 | abrdn Income Credit Strategies Fund |
Notes to Financial Statements (concluded)
October 31, 2025
October 31, 2025
| Shares Outstanding |
Net Assets | Net Asset Value Per Share |
Net Unrealized Appreciation (Depreciation) |
Accumulated Net Realized Gain/(Loss)* |
|
| After Reorganization | |||||
| abrdn Income Credit Strategies Fund | 125,470,709 | $832,964,401 | $6.64 | $4,188,602 | $(274,321,980) |
* Accumulated Net Realized Gain/(Loss) are historical gains and losses that were recorded to the Fund.
| abrdn Income Credit Strategies Fund | 37 |
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Trustees
abrdn Income Credit Strategies Fund:
abrdn Income Credit Strategies Fund:
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of abrdn Income Credit Strategies Fund (the Fund), including the portfolio of investments, as of October 31, 2025, the related statements of operations and cash flows for the year then ended, the statements of changes in net assets for each of the years in the two-year period then ended, and the related notes (collectively, the financial statements) and the financial highlights for each of the years in the five-year period then ended. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of October 31, 2025, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the years in the two-year period then ended, and the financial highlights for each of the years in the five-year period then ended, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Such procedures also included confirmation of securities owned as of October 31, 2025, by correspondence with the custodian, transfer agents, agent banks, underlying portfolio companies, and brokers; when replies were not received from brokers, agent banks, or underlying portfolio companies, we performed other auditing procedures. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. We believe that our audits provide a reasonable basis for our opinion.
We have served as the auditor of one or more abrdn investment companies since 2009.
Columbus, Ohio
December 26, 2025
December 26, 2025
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Federal Tax Information: Dividends and Distributions (Unaudited)
Certain information for the Fund is required to be provided to shareholders based on the Fund’s income and distributions for the taxable year ended December 31, 2025. In February 2026, shareholders will receive Form 1099-DIV. Shareholders are advised to check with their tax advisors for information on the treatment of these amounts on their individual tax returns.
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Supplemental Information (Unaudited)
Results of Annual Meeting of Shareholders
The Annual Meeting of Shareholders was held on May 28, 2025. The description of the proposal and number of shares voted at the meeting are as follows:
To elect two Class II Trustees to the Board of Trustees:
| Votes For | Votes Against/ Withheld | |
| Christian Pittard | 97,703,889 | 3,629,154 |
| Nancy Yao | 96,050,216 | 5,282,827 |
To elect one Preferred Share Trustee to the Board of Trustees:
| Votes For | Votes Against/ Withheld | |
| Nancy Yao | 822,078 | 136,949 |
Summary of Board Considerations in Approving the Investment Advisory and Sub-Advisory Agreements
At a regularly scheduled meeting (the “Meeting”) of the Board of Trustees (the “Board”) of abrdn Income Credit Strategies Fund (the “Fund”) held on June 10, 2025, the Board, including those Trustees (the “Independent Trustees”) who are not “interested persons” (as that term is defined in the Investment Company Act of 1940 (the “1940 Act”)) of the Fund, approved the continuation of the investment advisory agreement (the “Advisory Agreement”) between abrdn Investments Limited (the “Investment Adviser”) and the Fund, and of the investment sub-advisory agreement (the “Sub-Advisory Agreement” and, together with the Advisory Agreement, the “Advisory Agreements”) among the Fund, the Investment Adviser and abrdn Inc. (the “Sub-Adviser,” together with the Investment Adviser, the “Advisers”). In connection with their consideration of whether to approve the continuation of the Advisory Agreements, the Board members received and reviewed a variety of information provided by the Advisers relating to the Fund, the Advisory Agreements and the Advisers. The information provided to the Board members included (but was not limited to): comparative performance, fee and expense information (as well as information on the limitations of such comparable data) of a peer group of funds based on the Fund’s Morningstar category (the “Peer Funds”) as selected by Institutional Shareholder Services Inc. (“ISS”), an independent third-party provider of investment company data and other performance information. The Peer Funds presented for fee and expense data comparison consisted of a sub-set of the funds in the Fund’s Morningstar Category as determined independently by ISS, and the Peer Funds presented for the performance data comparison consisted of the Fund’s Morningstar category, as determined by ISS. The Board also received information regarding relevant benchmark indices and information regarding the nature, extent and quality of services provided by the Advisers under the Advisory Agreements.
The materials provided to the Board generally included, among other items: (i) information on the investment performance of the Fund, the performance of the Peer Funds, comparable funds, if any, and the Fund’s performance benchmark; (ii) reports prepared by the Advisers in response to requests submitted by the Independent Trustees’ independent legal counsel on behalf of such Trustees; (iii) information on the Fund’s management fee and other expenses, including information comparing the Fund’s expenses to the Peer Funds, comparable funds, if any, and information about applicable fee “breakpoints” in the Fund’s fee structure and expense limitations, if any; (iv) information regarding the Investment Adviser’s revenues and costs of providing services to the funds and any compensation paid to affiliates of the Investment Adviser; and (v) a memorandum from the Independent Trustees’ independent legal counsel on the responsibilities of the Board in considering the approval of the investment advisory and investment sub-advisory arrangements under the 1940 Act and Delaware law.
The Independent Trustees met with representatives of the Advisers and separately in executive session with independent legal counsel on June 10, 2025 to discuss the continuation of the Advisory Agreements. The Independent Trustees also met with representatives of the Advisers and separately in executive session with independent legal counsel on May 30, 2025 to discuss the materials provided to the Board by the Advisers in response to a request for information sent to them by the Independent Trustees’ independent legal counsel.
In evaluating whether to renew the Advisory Agreements for the Fund, the Board considered numerous factors, including: (i) the nature, extent and quality of services provided to the Fund by the Advisers under the Advisory Agreements; (ii) the costs of services provided to the Fund and the profits realized by the Investment Adviser (and its affiliates) from its relationship with the Fund; (iii) the Fund’s total expense ratio as well as the management fees paid by the Fund pursuant to the Advisory Agreements relative to the total expense ratios of and the management fees charged to the Peer Funds and comparable accounts, if any; (iv) the investment performance of the Fund relative to that of its benchmark index as well as the performance of the Peer Funds and comparable funds, if any; (v) any additional benefits (such as soft dollars, if any) received by the Advisers or their affiliates; (vi) the extent to which economies of scale are being realized by shareholders and will be realized as the Fund’s assets increase; (vii)
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Supplemental Information (Unaudited) (continued)
the Advisers’ compliance programs; and (viii) any other considerations deemed relevant by the Board. The Independent Trustees also discussed the Advisory Agreements in an executive session with independent legal counsel at which no representatives of the Advisers were present. No single factor reviewed by the Board was identified as the principal factor in determining whether to renew the Advisory Agreements, and individual Trustees may have given different weight to various factors.
The discussion immediately below outlines in greater detail certain of the materials and information presented to the Board by the Advisers in connection with the Board’s consideration and approval of the continuation of the Advisory Agreements, and the conclusions made by the Board at the Meeting when determining to renew the Advisory Agreements.
The Nature, Extent and Quality of Services Provided to the Fund Under the Advisory Agreements
The Trustees considered the nature, extent and quality of services provided by the Advisers to the Fund. They reviewed information about the resources dedicated to the Fund by the Advisers and their affiliates. Among other things, the Board reviewed and discussed the background and experience of the Advisers’ senior management personnel who serviced the Fund and the qualifications, background and responsibilities of the portfolio managers primarily responsible for providing day-to-day portfolio management services for the Fund. The Trustees also considered the financial condition of the Advisers and the Advisers’ ability to provide quality service to the Fund. Management representatives reported to the Board and responded to questions on, among other things, the Advisers’ business plans and any current or proposed organizational changes. The Trustees also took into account the Advisers’ experience as asset managers and information regarding the Advisers’ compliance with applicable laws and Securities and Exchange Commission (“SEC”) and other regulatory agency inquiries or audits of the Fund, the Advisers’ and/or their affiliates. The Board considered reports from the Advisers on their risk management processes. The Board noted that it received information on a regular basis from the Fund’s Chief Compliance Officer regarding the Advisers’ compliance policies and procedures and information concerning the Advisers’ brokerage policies and practices. The Trustees also noted that the Advisers had provided information and periodic reporting, including updates on their management of the Fund and the quality of their performance and had discussed these matters with the Trustees at meetings held regularly throughout the preceding year.
Based on the totality of the information considered, the Board concluded that the nature, extent and quality of the Advisers’ services provided to the Fund were of a high quality, and that the Advisers have provided and could reasonably be expected to continue to provide these services on an ongoing basis based on their experience, operations and resources.
The Costs of Services Provided and Profits Realized by the Advisers and their Affiliates from their Relationships with the Fund
The Board reviewed information compiled by ISS that compared the Fund’s effective annual management fee rate with the fees paid by its Peer Funds. The Board reviewed with management the effective annual management fee paid by the Fund to the Investment Adviser for investment management services. The Board considered the Fund’s management fee structure, including information from management about the fees charged by the Investment Adviser to other clients investing primarily in an asset class similar to that of the Fund. The Board reviewed and considered additional information about the Advisers’ fees, including the amount of the management fees retained by the Investment Adviser after payment of the sub-advisory fees. The Board considered that the compensation paid to the Sub-Adviser was paid by the Investment Adviser, and, accordingly, that the retention of the Sub-Adviser did not increase the fees or expenses otherwise incurred by the Fund’s shareholders. The Board considered the fee comparisons in light of the differences in resources and costs required to manage the different types of accounts. In evaluating the Fund’s management fees, the Board took into account the regulatory regimes, fund structure, level of services, complexity and quality of the investment management of the Fund.
In addition to the foregoing, the Board considered the Fund’s fees and expenses relative to the fees and expenses of the Peer Funds, as well as information on the limitations of such comparable data given differences between the Fund and the Peer Funds presented. This information showed that the Fund’s net management fee and total net expenses, exclusive of investment-related expenses, were above the median of the Peer Funds. The Board also reviewed the profitability of the investment advisory relationship with the Fund to the Advisers. The Board concluded that the Fund’s fees and expenses, as well as the Adviser’s profitability, were reasonable in light of the nature, extent and quality of services provided.
Investment Performance of the Fund
The Board received and reviewed with the Fund’s management, among other performance data, information that compared the Fund’s return over various time periods to those of comparable investment companies and discussed this information and other related performance data with management. The Board received and considered information comparing the Fund’s performance to the performance of the Fund’s Peer Funds, including information on the limitations of such comparable data given differences between the Fund and the Peer Funds presented.
In addition, the Board received and reviewed information regarding the Fund’s total return on a gross and net basis and relative to the Fund’s benchmark. The Trustees considered management’s discussion of the factors contributing to differences in performance between the Fund, its Peer Funds, other abrdn strategies, as applicable, and the Fund’s benchmark, including (but not limited to) differences in the investment strategies, restrictions and risks of the Peer Funds which limited comparability and distinguishing features of the Fund relative to the benchmark and other abrdn strategies. Additionally, the Board considered information about the Fund’s discount/premium ranking relative to its Peer Funds and the
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Supplemental Information (Unaudited) (concluded)
Advisers’ discussion of the Fund’s performance. The Trustees noted that the Fund underperformed its benchmark and the average of the Peer Funds for the 1-, 3- and 10-year periods ended March 31, 2025, but outperformed its benchmark and the average of the Peer Funds for the 5-year period ended March 31, 2025. The Board considered the Advisers’ discussion of Fund performance and the Advisers’ efforts to improve performance, among other factors, in determining to continue the Advisory Agreements. The Board also noted the limited comparability of certain of the Peer Funds presented given their varying investment objectives and policies..
Direct and Indirect Benefits
The Board then considered whether or the extent to which the Advisers derive any direct, ancillary or indirect benefits, such as reputational benefits, that could accrue to the Advisers from the Fund’s operations as a result of the Advisers’ relationship with the Fund. The Board recognized the services provided to the Fund by affiliates of the Investment Adviser and the related compensation paid by the Fund for those services. Based on the totality of the information considered, the Board concluded that any benefits accruing to the Advisers by virtue of their relationship with the Fund appeared to be reasonable.
Economies of Scale
The Board next considered management’s discussion of the Fund’s management fee structure and determined that the management fee structure was reasonable. The Board based its determination on various factors, including how the Fund’s management fee compared relative to the Peer Funds. The Board also considered that the Fund had an expense limitation agreement in place until September 20, 2025, pursuant to which the Investment Adviser agreed to waive a portion of its advisory fee and/or reimburse certain expenses as a means of limiting the Fund’s total annual operating expenses. The Board noted that Management proposed a new expense limitation agreement for the Fund through June 30, 2026. The Board concluded that the economies of scale shared with the Fund were reasonable.
* * *
Based on the Board’s deliberations and its evaluations of the information described above and other factors and information the Trustees deemed relevant in the exercise of their individual reasonable business judgment, the Board, including the Independent Trustees, with the assistance of fund counsel and independent legal counsel to the Independent Trustees, unanimously determined that the fees charged pursuant to the Advisory Agreements were fair and reasonable and approved the continuation of the Advisory Agreements.
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Additional Information Regarding the Fund (Unaudited)
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Additional Information Regarding the Fund (Unaudited) (continued)
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Additional Information Regarding the Fund (Unaudited) (continued)
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Additional Information Regarding the Fund (Unaudited) (continued)
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Additional Information Regarding the Fund (Unaudited) (continued)
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Additional Information Regarding the Fund (Unaudited) (continued)
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Additional Information Regarding the Fund (Unaudited) (continued)
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Additional Information Regarding the Fund (Unaudited) (continued)
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Additional Information Regarding the Fund (Unaudited) (continued)
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Additional Information Regarding the Fund (Unaudited) (continued)
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Additional Information Regarding the Fund (Unaudited) (continued)
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Additional Information Regarding the Fund (Unaudited) (continued)
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Additional Information Regarding the Fund (Unaudited) (continued)
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Additional Information Regarding the Fund (Unaudited) (continued)
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Additional Information Regarding the Fund (Unaudited) (concluded)
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Dividend Reinvestment and Optional Cash Purchase Plan (Unaudited)
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Dividend Reinvestment and Optional Cash Purchase Plan (Unaudited) (concluded)
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Management of the Fund (Unaudited)
As of October 31, 2025
The names, years of birth and business addresses of the Board Members and officers of the Fund as of October 31, 2025, their principal occupations during at least the past five years, the number of portfolios each Board Member oversees and other directorships they hold are provided in the tables below. Board Members that are deemed “interested persons” (as that term is defined in Section 2(a)(19) of the Investment Company Act of 1940, as amended) of the Fund or the Fund's Advisers are included in the table below under the heading “Interested Board Members.” Board Members who are not interested persons, as described above, are referred to in the table below under the heading “Independent Board Members.” abrdn Inc., its parent company Aberdeen Group plc, and its advisory affiliates are collectively referred to as “Aberdeen” in the tables below.
| Name, Address and Year of Birth | Position(s) Held with the Fund | Term of Office and Length of Time Served | Principal Occupation(s) During at Least the Past Five Years | Number of Registered Investment Companies ("Registrants") consisting of Investment Portfolios ("Portfolios") in Fund Complex* Overseen by Board Members | Other Directorships Held by Board Member** |
| Interested Board Member | |||||
| Christian Pittard*** c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1973 | Class II Trustee; Vice President | Term expires 2028; Trustee since 2024 | Mr. Pittard is Head of Closed End Funds for Aberdeen and is responsible for the US and UK businesses. Aberdeen is currently the 5th largest listed Closed-End Fund manager in the world. He is also Managing Director of Corporate Finance, having done a significant number of closed end fund transactions in the US and UK since joining abrdn in 1999. Previously, he was Head of the Americas and the North American Funds business for Aberdeen based in the US. | 12 Registrants consisting of 12 Portfolios | None. |
| Independent Board Members | |||||
| P. Gerald Malone c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1950 | Chair of the Board; Class III Trustee | Term expires 2026; Trustee since 2017 | Mr. Malone is a lawyer of over 40 years standing. Currently, he is an adviser to KeifeRX, a US healthcare company developing a novel neurotherapy treatment. He is also Chairman of a number of the open and closed end funds in the abrdn Fund Complex. He previously served as a non-executive director of U.S. healthcare companies, Medality LLC until 2023 and Bionik Laboratories Corp. (2018 – July 2022). Mr. Malone was previously a Member of Parliament in the U.K. from 1983 to 1997 and served as Minister of State for Health in the U.K. government from 1994 to 1997. | 9 Registrants consisting of 25 Portfolios | None. |
| abrdn Income Credit Strategies Fund | 75 |
Management of the Fund (Unaudited) (continued)
As of October 31, 2025
| Name, Address and Year of Birth | Position(s) Held with the Fund | Term of Office and Length of Time Served | Principal Occupation(s) During at Least the Past Five Years | Number of Registered Investment Companies ("Registrants") consisting of Investment Portfolios ("Portfolios") in Fund Complex* Overseen by Board Members | Other Directorships Held by Board Member** |
| Rahn K. Porter c/o abrdn Inc. 875 Third Ave 4th Floor, Suite 403 New York, NY 10022 Year of Birth: 1954 | Class III Trustee | Term expires 2026; Trustee since 2025 | Mr. Porter is the Principal of RPSS Enterprises, a consulting and advisory firm, a role he has held since 2019. From 2013 to 2021, he served as the Chief Financial and Administrative Officer of The Colorado Health Foundation. Mr. Porter served as an independent director at Centurylink Investment Management Company from 2011 to 2024. Previously, he held senior financial leadership positions as CFO at Telenet and Nupremis, and as Treasurer at Qwest Communications and MediaOne Group. He has also served as a board member and audit chair for BlackRidge Financial Inc. and Community First Bancshares, Inc. | 7 Registrants consisting of 23 Portfolios | Director of CenturyLink Investment Management Company from 2006-2024, Director of BlackRidge Financial Inc. from 2004 to 2019. |
| Todd Reit c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1968 | Class I Trustee | Term expires 2027; Trustee since 2025 | Mr. Reit is a Managing Member of Cross Brook Partners LLC, a real estate investment and management company since 2017. Mr. Reit is also Director and Financial Officer of Shelter Our Soldiers, a charity to support military veterans, since 2016. Mr. Reit was formerly a Managing Director and Global Head of Asset Management Investment Banking for UBS AG, where he was responsible for overseeing all the bank’s asset management client relationships globally, including all corporate security transactions, mergers and acquisitions. Mr. Reit retired from UBS in 2017 after an over 25-year career at the company and its predecessor company, PaineWebber Incorporated (merged with UBS AG in 2000). | 10 Registrants consisting of 10 Portfolios | None. |
| 76 | abrdn Income Credit Strategies Fund |
Management of the Fund (Unaudited) (continued)
As of October 31, 2025
| Name, Address and Year of Birth | Position(s) Held with the Fund | Term of Office and Length of Time Served | Principal Occupation(s) During at Least the Past Five Years | Number of Registered Investment Companies ("Registrants") consisting of Investment Portfolios ("Portfolios") in Fund Complex* Overseen by Board Members | Other Directorships Held by Board Member** |
| John Sievwright c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1955 | Class I Trustee | Term expires 2027; Trustee since 2017 | Mr. Sievwright is the Chairman of Burford Capital Ltd since May 2024 and a Director since 2020 (provider of legal finance, complex strategies, post- settlement finance and asset management services and products, Revolut Limited, a UK-based digital banking firm since August 2021, and Chairman of Buyside Trading Solutions Limited, an unlisted company, since its formation in July 2022. Previously he was a Non-Executive Director for the following UK companies: FirstGroup plc, ICAP plc and NEX Group plc (2017-2018) (financial). | 6 Registrants consisting of 8 Portfolios | Non-Executive Director of Burford Capital Ltd (provider of legal finance, complex strategies, post-settlement finance and asset management services and products) since May 2020. |
| Randolph Takian c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1974 | Class III Trustee and Preferred Shares Trustee | Term expires 2026; Trustee since 2010 | Mr. Takian is the co-Founder and President of CCS Partners, a structured and asset-based credit investment manager. He was previously Head of Bankingand Lending for Global Wealth and Investment Management at Bank of America from 2019 to 2023. Previously, he was at Avenue Capital Group from 2010 to 2019. | 1 Registrant consisting of 1 Portfolio | None. |
| abrdn Income Credit Strategies Fund | 77 |
Management of the Fund (Unaudited) (continued)
As of October 31, 2025
| Name, Address and Year of Birth | Position(s) Held with the Fund | Term of Office and Length of Time Served | Principal Occupation(s) During at Least the Past Five Years | Number of Registered Investment Companies ("Registrants") consisting of Investment Portfolios ("Portfolios") in Fund Complex* Overseen by Board Members | Other Directorships Held by Board Member** |
| Nancy Yao c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1972 | Class II Trustee and Preferred Shares Trustee | Term expires 2028; Trustee since 2019 | Ms. Yao has over 25 years of Asia, finance, and governance experience in for profit and non-profit organizations, including Goldman Sachs, CFRA, and the Yale-China Association. She is an assistant professor adjunct at Yale University where she teaches financial accounting and governance. Ms. Yao is a board member of the National Committee on U.S.-China Relations and a member of the Council on Foreign Relations. She also serves as an assistant dean at the David Geffen School of Drama at Yale. She received her MBA from the Yale School of Management and her AB in Diplomacy and World Affairs at Occidental College. | 8 Registrants consisting of 8 Portfolios | None. |
| * | As of the date of this report, the Fund Complex has a total of 17 Registrants with each Board member serving on the Boards of the number of Registrants listed. Each Registrant in the Fund Complex has one Portfolio except for two Registrants that are open-end funds, abrdn Funds and abrdn ETFs, which each have multiple Portfolios. The Registrants in the Fund Complex are as follows: abrdn Asia-Pacific Income Fund, Inc., abrdn Global Income Fund, Inc., abrdn Australia Equity Fund, Inc., abrdn Emerging Markets Equity Income Fund, Inc., The India Fund, Inc., abrdn Income Credit Strategies Fund, abrdn Global Dynamic Dividend Fund, abrdn Global Premier Properties Fund, abrdn Total Dynamic Dividend Fund, abrdn Global Infrastructure Income Fund, abrdn National Municipal Income Fund, abrdn Healthcare Investors, abrdn Life Sciences Investors, abrdn Healthcare Opportunities Fund, abrdn World Healthcare Fund, abrdn Funds (17 Portfolios), and abrdn ETFs (2 Portfolios). |
| ** | Current directorships (excluding Fund Complex) as of the date of this report held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “1934 Act”) or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
| *** | Mr. Pittard is deemed to be an interested person because of his affiliation with the Fund’s investment adviser. |
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Management of the Fund (Unaudited) (continued)
As of October 31, 2025
Officers of the Fund
| Name, Address and Year of Birth | Position(s) Held with the Fund | Term of Office* and Length of Time Served | Principal Occupation(s) During at Least the Past Five Years |
| Sharon Ferrari** c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1977 | Treasurer and Chief Financial Officer | Treasurer and Chief Financial Officer Since 2023; Fund Officer Since 2017 | Currently, Director, Product Management for Aberdeen. Ms. Ferrari joined Aberdeen as a Senior Fund Administrator in 2008. |
| Katie Gebauer** c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1986 | Chief Compliance Officer and Vice-President - Compliance | Chief Compliance Officer Since 2025; Fund Officer Since 2023 | Currently, Ms. Gebauer is Head of US Registered Fund Compliance. She serves as the Chief Compliance Officer for Aberdeen's US closed end funds, open end funds and ETFs. Ms. Gebauer joined Aberdeen in 2014. |
| Alan Goodson** c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1974 | President | Since 2017 | Currently, Executive Director and Head of Product & Client Solutions – Americas for Aberdeen, overseeing Product Management & Governance, Product Development and Client Solutions for registered and unregistered investment companies in the U.S., Brazil and Canada. Mr. Goodson is Director and Vice President of Aberdeen and joined Aberdeen in 2000. |
| Heather Hasson** c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1982 | Vice President | Since 2022 | Currently, Senior Product Development Manager. Previously, Senior Product Solutions and Implementation Manager, Product Governance US for Aberdeen. Ms. Hasson joined the company in November 2006. |
| Robert Hepp** c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1986 | Vice President | Since 2022 | Currently, Senior Product Governance Manager – US for Aberdeen. Mr. Hepp joined Aberdeen as a Senior Paralegal in 2016. |
| Matt Kence** c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1974 | Vice President | Since 2022 | Currently, Investment Director and is a Portfolio Manager on the abrdn Income Credit Strategies Fund and the Global High Yield strategies at abrdn. He is also a member of the North American Fixed Income Leadership team. He joined the company in 2010 from Gannet Welsh & Kotler where he was a Vice President, Credit. Previously, he also worked for MFS Investment Management as a high yield analyst. |
| Megan Kennedy** c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1974 | Vice President and Secretary | Since 2017 | Currently, Senior Director, Product Governance for Aberdeen. Ms. Kennedy joined Aberdeen in 2005. |
| Andrew Kim** c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1983 | Vice President | Since 2022 | Currently, Senior Product Governance Manager – Attorney for Aberdeen. Mr. Kim joined Aberdeen as a Product Manager in 2013. |
| Steven Logan** c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1968 | Vice President | Since 2024 | Currently, Head of European High Yield and Global Loans and a portfolio manager on the abrdn Income Credit Strategies Fund and Global High Yield strategies at abrdn. Mr. Logan has analyzed and managed credit investments for over 30 years having previously worked at The Sumitomo Trust & Banking Co. Ltd, Standard Life Investments, Scottish Widows Investment Partnership, Aberdeen Asset Management and PGIM Fixed Income. |
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Management of the Fund (Unaudited) (concluded)
As of October 31, 2025
| Name, Address and Year of Birth | Position(s) Held with the Fund | Term of Office* and Length of Time Served | Principal Occupation(s) During at Least the Past Five Years |
| Michael Marsico** c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1980 | Vice President | Since 2022 | Currently, Senior Product Manager – US for Aberdeen. Mr. Marsico joined Aberdeen as a Fund Administrator in 2014. |
| Kolotioloma Silue** c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1977 | Vice President | Since 2024 | Currently, Senior Product Manager for Aberdeen. Mr. Silue joined Aberdeen in October 2023 from Tekla Capital Management where he was employed as a Senior Manager of Fund Administration. |
| Lucia Sitar** c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1971 | Vice President | Since 2017 | Currently, Vice President and U.S. Counsel - Head of Product Governance for Aberdeen. Previously, Ms. Sitar was Head of Product Governance and Management and Managing U.S. Counsel for Aberdeen. She joined Aberdeen as U.S. Counsel in 2007. |
| Michael Taggart** c/o abrdn Inc. 1900 Market Street Suite 200 Philadelphia, PA 19103 Year of Birth: 1970 | Vice President | Since 2023 | Currently, Head of Closed-End Fund Investor Relations at Aberdeen. since 2023. Prior to that, he was Vice President of Investment Research and Operations at Relative Value Partners, LLC from June 2022. Prior to that, he was self-employed after having left Nuveen in November 2020, where he had served as Vice President of Closed-End Fund Product Strategy since November 2013. |
| George Westervelt** c/o abrdn Asia Limited 21 Church Street #01-01 Capital Square Two Singapore 049480 Year of Birth: 1981 | Vice President | Since 2024 | Currently, Head of Global High Yield and Head of US High Yield Research. He is one of the Portfolio Managers on the team that manages the Global High Yield strategies and is also a member of the North American Fixed Income Leadership team. He joined abrdn in 2009 as a Credit Analyst and joined the portfolio management group in 2011. Prior to joining Aberdeen, he worked at MFS Investment Management in Boston and Citigroup in New York. |
| * | Officers hold their positions with the Fund until a successor has been duly elected and qualifies. Officers are elected annually at a meeting of the Fund Board. |
| ** | Each officer may hold officer position(s) in one or more other funds which are part of the Fund Complex. |
Further information about the Fund's Board Members and Officers is available in the Fund's Statement of Additional Information, which can be obtained without charge by calling (800) 522-5465.
| 80 | abrdn Income Credit Strategies Fund |
Additional Information (unaudited)
Summary of Fund Expenses
The following table shows Fund expenses as a percentage of net assets attributable to common shares of beneficial interest with no par value (“Common Shares”). The expenses shown in the table and related footnotes, along with the example, are based on the Fund’s capital structure as of October 31, 2025. As of October 31, 2025, the Fund had $300,000,000 of leverage outstanding through bank borrowings and Preferred Shares which represented 28.9% of the Managed Assets as of October 31, 2025. On December 18, 2025, the Fund closed a private offering of 4,000,000 shares of Series A Mandatorily Redeemable Preferred Shares due in 2030 ("Series A MRPS"), with a liquidation value of $100,000,000. A portion of the net proceeds from the Series A MRPS were used to refinance the Fund's existing credit facility. The expenses shown in the table under “Other expenses” , “Interest expenses on bank borrowings,” "Dividends on Preferred Shares", “Total annual expenses” and “Total annual expenses after expense reimbursement” are based on the Fund’s capital structure as of December 18, 2025, restated to reflect current fees. Actual expenses may be greater or less than those shown below.
| Common Shareholder transaction expenses | |
| Sales load ( |
|
| Offering expenses ( |
|
| Dividend Reinvestment and Optional Cash Purchase Plan fees (per share for open-market purchases of Common Shares)(3) | |
| Fee for Open Market Purchases of Common Shares | $ |
| Fee for Optional Shares Purchases | $ |
| Sales of Shares Held in a Dividend Reinvestment Account | $ and $ |
| Annual expenses (as a percentage of net assets attributable to Common Shares) |
|
| Advisory fee(4) | |
| Interest expenses on bank borrowings(5) | |
| Dividends on Preferred Shares(6) | |
| Other expenses(7) | |
| Total annual expenses | |
| Less: expense reimbursement(8) | ( |
| Total annual expenses after expense reimbursement |
(1) If Common Shares or Preferred Shares are sold to or through underwriters, a prospectus or prospectus supplement will set forth any applicable sales load and the estimated offering expenses borne by the Fund.
(2) Offering expenses payable by the Fund will be deducted from the proceeds, before expenses, to the Fund.
(3) Shareholders who participate in the Fund's Dividend Reinvestment and Optional Cash Purchase Plan (the “Plan”) may be subject to fees on certain transactions. The Plan Agent's (as defined under "Dividend Reinvestment and Optional Cash Purchase Plan" in the Fund’s Prospectus) fees for the handling of the reinvestment of dividends will be paid by the Fund; however, participating shareholders will pay a $0.02 per share fee incurred in connection with open-market purchases in connection with the reinvestment of dividends, capital gains distributions and voluntary cash payments made by the participant, which will be deducted from the value of the dividend. For optional share purchases, shareholders will also be charged a $2.50 fee for automatic debits from a checking/savings account, a $5.00 one-time fee for online bank debit and/or $5.00 for check. Shareholders will be subject to $0.12 per share fee and either a $10.00 fee (for batch orders) or $25.00 fee (for market orders) for sales of shares held in a dividend reinvestment account. Per share fees include any applicable brokerage commissions the Plan agent is required to pay. For more details about the Plan, see "Dividend Reinvestment and Optional Cash Purchase Plan" in the Fund’s Prospectus.
(4) The Adviser receives a monthly fee at an annual rate of 1.25% of the Fund’s average daily Managed Assets. The advisory fee percentage calculation assumes the use of leverage by the Fund as discussed in note (5) and (6). To derive the annual advisory fee as a percentage of the Fund’s net assets (which are the Fund’s total assets less all of the Fund’s liabilities including the liquidation preference on the Preferred Shares), the Fund’s average Managed Assets for the current fiscal year ended October 31, 2025 were multiplied by the annual advisory fee rate and then divided by the Fund’s average net assets for the same period.
| abrdn Income Credit Strategies Fund | 81 |
Additional Information (unaudited) (continued)
(5) The percentage in the table has been restated to reflect current fees and is based on total borrowings of $180,000,000 (the balance outstanding under the Fund’s Credit Facility as of December 18, 2025, representing approximately 17.2% of the Fund’s Managed Assets) and an average interest rate during the fiscal year ended October 31, 2025 of 5.91%. There can be no assurances that the Fund will be able to obtain such level of borrowing (or to maintain its current level of borrowing), that the terms under which the Fund borrows will not change, or that the Fund’s use of leverage will be profitable. The Fund currently intends during the next twelve months to maintain a similar proportionate amount of borrowings but may increase such amount to 33 1/3% of the average daily value of the Fund’s total assets.
(6) Based on 1,600,000 shares of Series A Perpetual Preferred Shares outstanding as of October 31, 2025 with an aggregate liquidation preference of $40 million and an annual dividend rate equal to 5.250% of such liquidation preference and 4,000,000 Mandatorily Redeemable Preferred Shares outstanding as of December 18, 2025, with an aggregate liquidation preference of $100 million and an annual dividend rate equal to 5.525% of such liquidation preference. The costs associated with the Preferred Shares are borne entirely by Common Shareholders. This item has been restated to reflect current fees.
(7) "Other Expenses" are based on estimated amounts for the current fiscal year.
(8) The Adviser has contractually agreed to reimburse the Fund so that total other expenses (excluding interest, taxes, brokerage fees, short sale dividend and interest expenses, compensation of the Fund’s Independent Trustees and non-routine expenses) (as a percentage of net assets attributable to Common Shares of the Fund) are limited to 0.25% of the average daily net assets of the Fund on an annualized basis. Following approval of the Independent Trustees, on November 1, 2025, the Adviser and the Fund agreed to amend and restate the contractual limitation, such that compensation of the Fund’s Independent Trustees is excluded from the expense limitation effective for the fiscal year beginning November 1, 2025. Accordingly, the expense information in the table has been restated to reflect current fees. This contractual limitation may not be terminated before October 31, 2026 without the approval of the Independent Trustees. The Fund may repay any such reimbursement from the Adviser, within three years of the reimbursement, provided that the following requirements are met: the reimbursements do not cause the Fund to exceed the lesser of the applicable expense limitation in the contract at the time the fees were limited or expenses are paid or the applicable expense limitation in effect at the time the expenses are being recouped by the Adviser. Because interest expenses and investment related expenses are not subject to the reimbursement agreement, interest expenses and investment related expenses are included in the “Total annual expenses after expense reimbursement” line item.
Example
The following example illustrates the expenses you would pay on a $1,000 investment in Common Shares assuming that (i) all dividends and other distributions are reinvested at NAV (ii) the percentage amounts listed under “Total annual expenses” and "Total annual expenses after expense reimbursement" above remain the same in the years shown and (iii) a 5% annual portfolio total return.*
| 1 Year | 3 Years | 5 Years | 10 Years |
| $ |
$ |
$ |
$ |
* The example does not include sales load or estimated offering costs. In connection with an offering of Common Shares, the applicable Prospectus Supplement will set forth an Example including sales load and estimated offering costs. The example should not be considered a representation of future expenses or rate of return and actual Fund expenses may be greater or less than those shown. The example assumes that (i) all dividends and other distributions are reinvested at NAV, and (ii) the percentage amounts listed under “Total annual expenses” and "Total annual expenses after expense reimbursement" above remain the same in the years shown. The expense reimbursement agreement for the Fund, described in footnote (8) to the fee table above, is reflected in the figures listed in the above expense example for the current duration of the
| 82 | abrdn Income Credit Strategies Fund |
Additional Information (unaudited) (continued)
agreement only. The Fund’s actual rate of return may be greater or less than the hypothetical 5% return shown in the examples. For more complete descriptions of certain of the Fund's costs and expenses, see “Management of the Fund --Advisory Agreements” in the Fund's Prospectus.
Senior Securities
The following table sets forth information about the Fund’s outstanding senior securities as of the end of each of the Fund’s last ten fiscal years. The Fund’s senior securities during this time period are comprised of borrowings which constitutes a “senior security” as defined in the 1940 Act. Audited information regarding the Fund's senior securities is incorporated by reference from the Fund's Financial Highlights included elsewhere in this Annual Report.
| Fiscal Year Ended October 31, |
Title of Security | Total Principal Amount Outstanding |
Aggregate Liquidation Preference |
Liquidation Preference Per Share |
Asset Coverage Per $1,000 of Principal Amoount |
Asset Coverage Per share of Series A Perpetual Preferred Shares at year end (3) |
Average Market Value per unit(4) |
| 2025 | $ |
-- | - |
$ |
-- | - |
|
| 2025 | $ |
$40,000,000 | $ |
$ |
$649.22 | $ |
|
| 2024 | $ |
-- | - |
$ |
-- | - |
|
| 2024 | $ |
$40,000,000 | $ |
$ |
$687.38 | $ |
|
| 2023 | $ |
-- | - |
$ |
-- | - |
|
| 2023 | $ |
$40,000,000 | $ |
$ |
$303.03 | $ |
|
| 2022 | $ |
-- | - |
$ |
-- | - |
|
| 2022 | $ |
$40,000,000 | $ |
$ |
$184.16 | $ |
|
| 2021 | $ |
-- | - |
$ |
-- | - |
|
| 2021 | $ |
$40,000,000 | $ |
$ |
$250.67 | $ |
|
| 2020 | $ |
-- | - |
$ |
-- | - |
|
| 2019 | $ |
-- | - |
$ |
-- | - |
|
| 2018 | $ |
-- | - |
$ |
-- | - |
|
| 2017 | $ |
-- | - |
$ |
-- | - |
|
| 2016 | $ |
-- | - |
$ |
-- | - |
| abrdn Income Credit Strategies Fund | 83 |
Additional Information (unaudited) (concluded)
(1) Asset coverage per $1,000 on senior securities is calculated by dividing net assets plus the amount of any borrowings, including Preferred Shares,for investment purposes by the amount of any senior securities, which includes the revolving credit facility and then multiplying by $1,000.
(2) The asset coverage per $1,000 on total leverage is calculated as the Fund's total assets, less all liabilities and indebtedness not represented by the Fund's senior securities or the a liquidation preference of preferred shares, divided by secured senior securities representing indebtedness plus the aggregate liquidation preference of preferred shares and then multiplying by $1,000.
(3) Asset coverage per share of Series A Perpetual Preferred Shares is calculated by subtracting the fund's total liabilities (not including senior securities or the liquidation preference of preferred shares) from the fund's total assets and dividing by shares of outstanding preferred stock (based on a per share liquidation preference of $25.00).
(4) Represents the average of the daily closing market price per share as reported on the NYSE during the respective period.
Net Asset Value and Market Price Information
Net Asset Value
The Fund’s currently outstanding Common Shares are listed on the NYSE. The Common Shares commenced trading on the NYSE on January 27, 2011.
The Common Shares have traded both at a premium and at a discount to the Fund’s NAV per Common Share. Although the Common Shares recently have traded at a premium to NAV, there can be no assurance that this will continue after an offering of Common Shares or that the Common Shares will not trade at a discount in the future. Shares of closed-end investment companies frequently trade at a discount to NAV. The Fund’s NAV will be reduced immediately following an offering of Common Shares due to the costs of such offering, which will be borne entirely by the Fund. The sale of Common Shares by the Fund (or the perception that such sales may occur) may have an adverse effect on prices of Common Shares in the secondary market. An increase in the number of Common Shares available may result in downward pressure on the market price for Common Shares.
The Fund cannot predict whether its Common Shares will trade in the future at a premium to or discount from NAV, or the level of any premium or discount.
Market Price Information
The Fund’s Common Shares are publicly held and are listed and traded on the NYSE (trading symbol “ACP”). The following table sets forth for the fiscal quarters indicated the highest and lowest daily prices during the applicable quarter at the close of market on the NYSE per Common Share along with (i) the highest and lowest closing NAV and (ii) the highest and lowest premium or discount from NAV represented by such prices at the close of the market on the NYSE.
| NYSE Market Price(1) | NAV at NYSE Market Price(1) |
Market Premium/(Discount) to NAV on Date of NYSE Market Price(1) |
||||
| Quarter Ended (2) | High | Low | High | Low | High | Low |
| October 31, 2025 | $ |
$ |
$ |
$ |
- |
- |
| July 31, 2025 | $ |
$ |
$ |
$ |
- |
- |
| April 30, 2025 | $ |
$ |
$ |
$ |
- |
- |
| January 31, 2025 | $ |
$ |
$ |
$ |
- |
- |
| October 31, 2024 | $ |
$ |
$ |
$ |
- |
- |
| July 31, 2024 | $ |
$ |
$ |
$ |
- |
|
| April 30, 2024 | $ |
$ |
$ |
$ |
- |
- |
| January 31, 2024 | $ |
$ |
$ |
$ |
- |
- |
(1) Source: Bloomberg L.P.
(2) Data presented are with respect to a short period of time and are not indicative of future performance.
On December 22, 2025 the Fund’s NAV was $5.82 and the last reported sale price of a Common Share on the NYSE was $5.43 , representing a discount to NAV of 6.70 %.
| 84 | abrdn Income Credit Strategies Fund |
Corporate Information
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940, as amended, that the Fund may purchase, from time to time, shares of its common stock in the open market.
Shares of abrdn Income Credit Strategies Fund are traded on the NYSE under the symbol “ACP.” Information about the Fund’s net asset value and market price is available at www.aberdeenacp.com.
This report, including the financial information herein, is transmitted to the shareholders of abrdn Income Credit Strategies Fund for their general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person. Past performance is no guarantee of future results.
ACP-ANNUAL
| (b) | Not applicable. |
Item 2. Code of Ethics.
| (a) | As of October 31, 2025, abrdn Income Credit Strategies Fund (the “Fund” or the “Registrant”) had adopted a Code of Ethics that applies to the Registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the Registrant or a third party (the “Code of Ethics”). |
| (b) | Definitional. |
| (c) | There have been no amendments, during the period covered by this report, to a provision of the Code of Ethics. |
| (d) | During the period covered by this report, there were no waivers to the provisions of the Code of Ethics. |
| (e) | Not applicable. |
| (f) | A copy of the Code of Ethics has been filed as an exhibit to this Form N-CSR. |
Item 3. Audit Committee Financial Expert.
The Registrant's Board of Trustees has determined that John Sievwright, a member of the Board of Trustees’ Audit Committee, possesses the attributes, and has acquired such attributes through means, identified in instruction 2 of Item 3 to Form N-CSR to qualify as an “audit committee financial expert,” and has designated Mr. Sievwright as the Audit Committee’s financial expert. Mr. Sievwright is considered to be an “independent” trustee, as such term is defined in paragraph (a)(2) of Item 3 to Form N-CSR.
Item 4. Principal Accountant Fees and Services.
(a) – (d) Below is a table reflecting the fee information requested in Items 4(a) through (d):
| Fiscal Year Ended | (a) Audit Fees1 | (b) Audit-Related Fees2 | (c) Tax Fees3 | (d) All Other Fees4 | ||||||||||||
| October 31, 2025 | $ | 99,600 | $ | 0 | $ | 0 | $ | 0 | ||||||||
| Percentage approved pursuant to pre-approval exception5 | 0 | % | 0 | % | 0 | % | 0 | % | ||||||||
| October 31, 2024 | $ | 122,900 | $ | 0 | $ | 0 | $ | 0 | ||||||||
| Percentage approved pursuant to pre-approval exception5 | 0 | % | 0 | % | 0 | % | 0 | % | ||||||||
1 “Audit Fees” are the aggregate fees billed for professional services for the audit of the Fund’s annual financial statements and services provided in connection with statutory and regulatory filings or engagements.
2 “Audit Related Fees” are the aggregate fees billed for assurance and related services reasonably related to the performance of the audit or review of financial statements that are not reported under “Audit Fees”. These fees include offerings related to the Fund’s common shares.
3 “Tax Fees” are the aggregate fees billed for professional services for tax advice, tax compliance, and tax planning. These fees include: federal and state income tax returns, review of excise tax distribution calculations and federal excise tax return.
4 “All Other Fees” are the aggregate fees billed for products and services other than “Audit Fees”, “Audit-Related Fees” and “Tax Fees”.
5 Pre-approval exception under Rule 2-01 of Regulation S-X. The pre-approval exception for services provided directly to the Fund waives the pre-approval requirement for services other than audit, review or attest services if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid by the Fund to its accountant during the fiscal year in which the services are provided; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee’s attention, and the Committee (or its delegate) approves the services before the audit is completed.
| (e)(1) | The Registrant’s Audit Committee (the “Committee”) has adopted a Charter that provides that the Committee shall annually select, retain or terminate, and recommend to the Independent Trustees for their ratification, the selection, retention or termination, the Registrant’s independent auditor and, in connection therewith, to evaluate the terms of the engagement (including compensation of the independent auditor) and the qualifications and independence of the independent auditor, including whether the independent auditor provides any consulting, auditing or tax services to the Registrant’s investment adviser (the “Adviser”) or any sub-adviser, and to receive the independent auditor’s specific representations as to their independence, delineating all relationships that may affect the independent auditor’s independence, including the disclosures required by PCAOB Rule 3526 or any other applicable auditing standard. PCAOB Rule 3526 requires that, at least annually, the auditor: (1) disclose to the Committee in writing all relationships between the auditor and its related entities and the Registrant and its related entities that in the auditor’s professional judgment may reasonably be thought to bear on independence; (2) confirm in the letter that, in its professional judgment, it is independent of the Registrant within the meaning of the Securities Acts administered by the SEC; and (3) discuss the auditor’s independence with the audit committee. The Committee is responsible for actively engaging in a dialogue with the independent auditor with respect to any disclosed relationships or services that may impact the objectivity and independence of the independent auditor and for taking, or recommending that the full Board take, appropriate action to oversee the independence of the independent auditor. The Committee Charter also provides that the Committee shall review in advance, and consider approval of, any and all proposals by Management or the Adviser that the Registrant, the Adviser or their affiliated persons, employ the independent auditor to render “permissible non-audit services” to the Registrant and to consider whether such services are consistent with the independent auditor’s independence. “Permissible non-audit services” include any professional services, including tax services, provided to the Registrant by the independent auditor, other than those provided to the Registrant in connection with an audit or a review of the financial statements of the Registrant. Permissible non-audit services may not include: (i) bookkeeping or other services related to the accounting records or financial statements of the Registrant; (ii) financial information systems design and implementation; (iii) appraisal or valuation services, fairness opinions or contribution-in-kind reports; (iv) actuarial services; (v) internal audit outsourcing services; (vi) management functions or human resources; (vii) broker or dealer, investment adviser or investment banking services; (viii) legal services and expert services unrelated to the audit; and (ix) any other service the PCAOB determines, by regulation, is impermissible. Pre-approval by the Committee of any permissible non-audit services is not required so long as: (i) the aggregate amount of all such permissible non-audit services provided to the Registrant constitutes not more than 5% of the total amount of revenues paid by the Registrant to its auditor during the fiscal year in which the permissible non-audit services are provided; (ii) the permissible non-audit services were not recognized by the Registrant at the time of the engagement to be non-audit services; and (iii) such services are promptly brought to the attention of the Committee and approved by the Committee or its Delegate(s) prior to the completion of the audit. The Committee may delegate to one or more of its members (“Delegates”) authority to pre-approve permissible non-audit services to be provided to the Registrant. Any pre-approval determination of a Delegate shall be presented to the full Committee at its next meeting. Any pre-approval determination of a Delegate shall be presented to the full Committee at its next meeting. Pursuant to this authority, the Registrant’s Committee delegates to the Committee Chair, subject to subsequent ratification by the full Committee, up to a maximum amount of $25,000, which includes any professional services, including tax services, provided to the Registrant by its independent registered public accounting firm other than those provided to the Registrant in connection with an audit or a review of the financial statements of the Registrant. The Committee shall communicate any pre-approval made by it or a Delegate to the Adviser, who will ensure that the appropriate disclosure is made in the Registrant’s periodic reports required by Section 30 of the Investment Company Act of 1940, as amended, and other documents as required under the federal securities laws. |
| (e)(2) | None of the services described in each of paragraphs (b) through (d) of this Item involved a waiver of the pre-approval requirement by the Audit Committee pursuant to Rule 2-01 (c)(7)(i)(C) of Regulation S-X. |
| (f) | Not applicable. |
| (g) | Non-Audit Fees |
| The following table shows the amount of fees that KPMG LLP billed during the Fund’s last two fiscal years for non-audit services to the Registrant, and to the Adviser, and any entity controlling, controlled by or under common control with the Adviser that provides ongoing services to the Fund (“Affiliated Fund Service Provider”): |
| Fiscal Year Ended | Total Non-Audit Fees Billed to Fund | Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (engagements related directly to the operations and financial reporting of the Fund) | Total Non-Audit Fees billed to Adviser and Affiliated Fund Service Providers (all other engagements) | Total | |||||||||||||
| October 31, 2025 | $ | 0 | $ | 0 | $ | 1,253,744 | $ | 1,253,744 | |||||||||
| October 31, 2024 | $ | 0 | $ | 0 | $ | 629,124 | $ | 629,124 | |||||||||
“Non-Audit Fees billed to Fund” for both fiscal years represent “Tax Fees” and “All Other Fees” billed to Fund in their respective amounts from the previous table.
| (h) | Not applicable. |
| (i) | Not applicable. |
| (j) | Not applicable. |
Item 5. Audit Committee of Listed Registrants.
| (a) | The Registrant has a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (15 U.S.C. 78c(a)(58)(A)). |
As of the fiscal year ended October 31, 2025, the Audit Committee members were:
Nancy Yao
P. Gerald Malone
John Sievwright
Randolph Takian
| (b) | Not applicable. |
Item 6. Investments.
(a) Included as part of the Report to Shareholders filed under Item 1 of this Form N-CSR.
(b) Not applicable.
Item 7. Financial Statements and Financial Highlights for Open-End Management Investment Companies.
Not applicable.
Item 8. Changes in and Disagreements with Accountants for Open-End Management Investment Companies.
Not applicable.
Item 9. Proxy Disclosures for Open-End Management Investment Companies.
Not applicable.
Item 10. Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.
Not applicable.
Item 11. Statement Regarding Basis for Approval of Investment Advisory Contract.
Included as part of the Report to Stockholders filed under Item 1 of this Form N-CSR.
Item 12. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Pursuant to the Registrant's Proxy Voting Policy and Procedures, the Registrant has delegated responsibility for its proxy voting to its Adviser, provided that the Registrant's Board of Trustees has the opportunity to periodically review the Adviser's proxy voting policies and material amendments thereto.
The proxy voting policies of the Registrant are included herewith as Exhibit (c) and policies of the Adviser are included as Exhibit (d).
Item 13. Portfolio Managers of Closed-End Management Investment Companies.
(a)(1) PORTFOLIO MANAGER BIOGRAPHIES
The Fund is managed by Aberdeen’s Global High Yield team which also draws on the expertise of Aberdeen’s Global Loans, US High Yield and European High Yield teams. As of the date of filing this report, the members of the team having the most significant responsibility for day-to-day management of the Fund are listed below.
| Individual & Position |
Past Business Experience | Served on Fund Since |
|
Steven Logan Head of European High Yield and Global Loans |
Steven Logan is Head of European High Yield and Global Loans and a portfolio manager on the abrdn Income Credit Strategies Fund and Global High Yield strategies at Aberdeen. Steven has analysed and managed credit investments for over 30 years having previously worked at The Sumitomo Trust & Banking Co. Ltd, Standard Life Investments, Scottish Widows Investment Partnership, Aberdeen Asset Management and PGIM Fixed Income. Steven has a BA (Hons) in Banking and Finance from Birmingham City University. | 2024 (and previously, from 2017 to 2020) |
| Matthew Kence Investment Director – US High Yield and Global High Yield |
Matthew Kence is an Investment Director and is a Portfolio Manager on the abrdn Income Credit Strategies Fund and the Global High Yield strategies at Aberdeen. He is also a member of the North American Fixed Income Leadership team. Matt joined the company in 2010 from Gannet Welsh & Kotler where he was a Vice President, Credit. Previously, Matt also worked for MFS Investment Management as a high yield analyst. Matt graduated with a BS Mechanical Engineering from Ohio University and received his MBA from the Haas School of Business at the University of California, Berkeley. | 2017 |
| George Westervelt Head of Global High Yield and Head of US High Yield Research |
George Westervelt is Head of Global High Yield and Head of US High Yield Research. George is one of the Portfolio Managers on the team that manages the Global High Yield strategies and is also a member of the North American Fixed Income Leadership team. He joined Aberdeen in 2009 as a Credit Analyst and joined the portfolio management group in 2011. Prior to joining Aberdeen, George worked at MFS Investment Management in Boston and Citigroup in New York. He earned a BA in English from the University of Vermont and is a CFA Charterholder. | 2022 |
(a)(2) OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGERS.
The following chart summarizes information regarding other accounts for which each portfolio manager has day-to-day management responsibilities. Accounts are grouped into the following three categories: (1) registered investment companies; (2) other pooled investment vehicles; and (3) other accounts. To the extent that any of these accounts pay advisory fees that are based on account performance (“performance-based fees”), information on those accounts is provided separately. The figures in the chart below for the category of “registered investment companies” include the Fund. The “Other Accounts Managed” represents the accounts managed by the teams of which the portfolio manager is a member. The information in the table below is as of October 31, 2025.
| Name of Portfolio Manager | Type of Accounts | Other Accounts Managed | Total Assets ($M) | Number of Accounts Managed for Which Advisory Fee is Based on Performance | Total Assets for Which Advisory Fee is Based on Performance ($M) | |||||||||||
| Steven Logan1 | Registered Investment Companies | 1 | $ | 1,033.19 | 0 | $ | 0 | |||||||||
| Pooled Investment Vehicles | 2 | $ | 638.62 | 0 | $ | 0 | ||||||||||
| Other Accounts | 1 | $ | 231.11 | 0 | $ | 0 | ||||||||||
| Matthew Kence2 | Registered Investment Companies | 3 | $ | 1,132.86 | 0 | $ | 0 | |||||||||
| Pooled Investment Vehicles | 4 | $ | 1683.63 | 0 | $ | 0 | ||||||||||
| Other Accounts | 1 | $ | 231.11 | 0 | $ | 0 | ||||||||||
| George Westervelt3 | Registered Investment Companies | 3 | $ | 1,169.38 | 0 | $ | 0 | |||||||||
| Pooled Investment Vehicles | 4 | $ | 1683.63 | 0 | $ | 0 | ||||||||||
| Other Accounts | 1 | $ | 231.11 | 0 | $ | 0 | ||||||||||
1 Includes accounts managed by the Euro High Yield and Global Loans teams, of which the portfolio manager is a member.
2 Includes accounts managed by the Global High Yield, US Global Credit, Euro High Yield and Global Loans teams, of which the portfolio manager is a member.
3 Includes the abrdn Global Income Fund, Inc., a Registered Investment Company for which George Westervelt also serves as portfolio manager, as well as accounts managed by the Global High Yield, US Global Credit, Euro High Yield and Global Loans teams, of which the portfolio manager is a member.
POTENTIAL CONFLICTS OF INTEREST
The Adviser and its affiliates (collectively referred to herein as “Aberdeen”) serve as investment advisers for multiple clients, including the Registrant and other investment companies registered under the 1940 Act and private funds (such clients are also referred to below as “accounts”). The portfolio managers’ management of “other accounts” may give rise to potential conflicts of interest in connection with their management of the Registrant’s investments, on the one hand, and the investments of the other accounts, on the other. The other accounts may have the same investment objective as the Registrant. Therefore, a potential conflict of interest may arise as a result of the identical investment objectives, whereby the portfolio manager could favor one account over another. However, the Adviser believes that these risks are mitigated by the fact that: (i) accounts with like investment strategies managed by a particular portfolio manager are generally managed in a similar fashion, subject to exceptions to account for particular investment restrictions or policies applicable only to certain accounts, differences in cash flows and account sizes, and similar factors; and (ii) portfolio manager personal trading is monitored to avoid potential conflicts. In addition, the Adviser has adopted trade allocation procedures that require equitable allocation of trade orders for a particular security among participating accounts.
In some cases, another account managed by the same portfolio manager may compensate Aberdeen based on the performance-based fees with qualified clients. The existence of such a performance-based fee may create additional conflicts of interest for the portfolio manager in the allocation of management time, resources and investment opportunities.
Another potential conflict could include instances in which securities considered as investments for the Registrant also may be appropriate for other investment accounts managed by the Adviser or its affiliates. Whenever decisions are made to buy or sell securities for the Registrant and one or more of the other accounts simultaneously, the Adviser may aggregate the purchases and sales of the securities and will allocate the securities transactions in a manner that it believes to be equitable under the circumstances. As a result of the allocations, there may be instances where the Registrant will not participate in a transaction that is allocated among other accounts. While these aggregation and allocation policies could have a detrimental effect on the price or amount of the securities available to the Registrant from time to time, it is the opinion of the Adviser that the benefits from the policies outweigh any disadvantage that may arise from exposure to simultaneous transactions. The Registrant has adopted policies that are designed to eliminate or minimize conflicts of interest, although there is no guarantee that procedures adopted under such policies will detect each and every situation in which a conflict arises.
With respect to non-discretionary model delivery accounts (including UMA accounts) and discretionary SMA accounts, abrdn Inc. will utilize a third party service provider to deliver model portfolio recommendations and model changes to the Sponsors. abrdn Inc. seeks to treat clients fairly and equitably over time, by delivering model changes to our service provider and investment instructions for our other discretionary accounts to our trading desk, simultaneously or approximately at the same time. The service provider will then deliver the model changes to each Sponsor on a when-traded, randomized full rotation schedule. All Sponsors will be included in the rotation schedule, including SMA and UMA.
UMA Sponsors will be responsible for determining how and whether to implement the model portfolio or model changes and implementation of any client specific investment restrictions. The Sponsors are solely responsible for determining the suitability of the model portfolio for each model delivery client, executing trades and seeking best execution for such clients.
As it relates to SMA accounts, abrdn Inc. will be responsible for managing the account on the basis of each client’s financial situation and objectives, the day to day investment decisions, best execution, accepting or rejecting client specific investment restrictions and performance. The SMA Sponsors will collect suitability information and will provide a summary questionnaire for our review and approval or rejection. For dual contract SMAs, abrdn Inc. will collect a suitability assessment from the client, along with the Sponsor suitability assessment. Our third party service provider will monitor client specific investment restrictions on a day to day basis. For SMA accounts, model trades will be traded by the Sponsor or may be executed through a “step-out transaction,”- or traded away- from the client’s Sponsor if doing so is consistent with Aberdeen’s obligation to obtain best execution. When placing trades through Sponsor Firms (instead of stepping them out), we will generally aggregate orders where it is possible and in the client’s best interests. In the event we are not comfortable that a Sponsor can obtain best execution for a specific security and trading away is infeasible, we may exclude the security from the model.
Trading costs are not covered by the Wrap Program fee and may result in additional costs to the client. In some instances, step-out trades are executed without any additional commission, mark-up, or mark-down, but in many instances, the executing broker-dealer may impose a commission or a mark-up or mark-down on the trade. Typically, the executing broker will embed the added costs into the price of the trade execution, making it difficult to determine and disclose the exact added cost to clients. In this instance, these additional trading costs will be reflected in the price received for the security, not as a separate commission, on trade confirmations or on account statements. In determining best execution for SMA accounts, abrdn Inc. takes into consideration that the client will not pay additional trading costs or commission if executing with the Sponsor.
While UMA accounts are invested in the same strategies as and may perform similarly to SMA accounts, there are expected to be performance differences between them. There will be performance dispersions between UMAs and other types of accounts because Aberdeen does not have discretion over trading and there may be client specific restrictions for SMA accounts.
Aberdeen may have already commenced trading for its discretionary client accounts before the model delivery accounts have executed Aberdeen’s recommendations. In this event, trades placed by the model delivery clients may be subject to price movements, particularly with large orders or where securities are thinly traded, that may result in model delivery clients receiving less favorable prices than our discretionary clients. Aberdeen has no discretion over transactions executed by model delivery clients and is unable to control the market impact of those transactions.
Timing delays or other operational factors associated with the implementation of trades may result in non-discretionary and model delivery clients receiving materially different prices relative to other client accounts. In addition, the constitution and weights of stocks within model portfolios may not always be exactly aligned with similar discretionary accounts. This may create performance dispersions within accounts with the same or similar investment mandate.
(a)(3)
DESCRIPTION OF COMPENSATION STRUCTURE
Aberdeen’s remuneration policies are designed to support its business strategy as a leading international asset manager. The objective is to attract, retain and reward talented individuals for the delivery of sustained, superior returns for Aberdeen’s clients and shareholders. Aberdeen operates in a highly competitive international employment market, and aims to maintain its strong track record of success in developing and retaining talent.
Aberdeen’s policy is to recognize corporate and individual achievements each year through an appropriate annual bonus scheme. The bonus is a single, fully discretionary variable pay award. The aggregate value of awards in any year is dependent on the group’s overall performance and profitability. Consideration is also given to the levels of bonuses paid in the market. Individual awards, which are payable to all members of staff, are determined by a rigorous assessment of achievement against defined objectives.
The variable pay award is composed of a mixture of cash and a deferred award, the portion of which varies based on the size of the award. Deferred awards are by default Aberdeen Group plc shares, with an option to put up to 50% of the deferred award into funds managed by Aberdeen. Overall compensation packages are designed to be competitive relative to the investment management industry. The information below is as of October 31, 2025.
Base Salary
Aberdeen’s policy is to pay a fair salary commensurate with the individual’s role, responsibilities and experience, and having regard to the market rates being offered for similar roles in the asset management sector and other comparable companies. Any increase is generally to reflect inflation and is applied in a manner consistent with other Aberdeen employees; any other increases must be justified by reference to promotion or changes in responsibilities.
Annual Bonus
The Remuneration Committee determines the key performance indicators that will be applied in considering the overall size of the bonus pool. In line with practices amongst other asset management companies, individual bonuses are not subject to an absolute cap. However, the aggregate size of the bonus pool is dependent on the group’s overall performance and profitability. Consideration is also given to the levels of bonuses paid in the market. Individual awards are determined by a rigorous assessment of achievement against defined objectives, and are reviewed and approved by the Remuneration Committee.
Aberdeen has a deferral policy which is intended to assist in the retention of talent and to create additional alignment of executives’ interests with Aberdeen’s sustained performance and, in respect of the deferral into funds managed by Aberdeen, to align the interest of portfolio managers with our clients.
Staff performance is reviewed formally at least once a year. The review process evaluates the various aspects that the individual has contributed to Aberdeen, and specifically, in the case of portfolio managers, to the relevant investment team. Discretionary bonuses are based on client service, asset growth and the performance of the respective portfolio manager. Overall participation in team meetings, generation of original research ideas and contribution to presenting the team externally are also evaluated.
In the calculation of a portfolio management team’s bonus, Aberdeen takes into consideration investment matters (which include the performance of funds, adherence to the company investment process, and quality of company meetings) as well as more subjective issues such as team participation and effectiveness at client presentations through key performance indicator scorecards. To the extent performance is factored in, such performance is not judged against any specific benchmark and is evaluated over the period of a year - January to December. The pre- or after-tax performance of an individual account is not considered in the determination of a portfolio manager’s discretionary bonus; rather the review process evaluates the overall performance of the team for all of the accounts the team manages.
Portfolio manager performance on investment matters is judged over all of the accounts the portfolio manager contributes to and is documented in the appraisal process. A combination of the team’s and individual’s performance is considered and evaluated.
Although performance is not a substantial portion of a portfolio manager’s compensation, Aberdeen also recognizes that fund performance can often be driven by factors outside one’s control, such as (irrational) markets, and as such pays attention to the effort by portfolio managers to ensure integrity of our core process by sticking to disciplines and processes set, regardless of momentum and ‘hot’ themes. Short-terming is thus discouraged and trading-oriented managers will thus find it difficult to thrive in the Aberdeen environment. Additionally, if any of the aforementioned undue risks were to be taken by a portfolio manager, such trend would be identified via Aberdeen’s dynamic compliance monitoring system.
In rendering investment management services, the Adviser may use the resources of additional investment adviser subsidiaries of Aberdeen Group plc. These affiliates have entered into a memorandum of understanding (“MOU”) pursuant to which investment professionals from each affiliate may render portfolio management, research or trading services to Aberdeen clients. Each investment professional who renders portfolio management, research or trading services under a MOU or personnel sharing arrangement (“Participating Affiliate”) must comply with the provisions of the Advisers Act, the 1940 Act, the Securities Act of 1933, the Exchange Act, and the Employee Retirement Income Security Act of 1974, and the laws of states or countries in which the Adviser does business or has clients. No remuneration is paid by the Fund with respect to the MOU/personnel sharing arrangements.
(a)(4)
| Dollar Range of Equity Securities in the Registrant Beneficially Owned by the Portfolio Manager as of October 31, 2025 |
||
| Steven Logan | None | |
| Matthew Kence | None | |
| George Westervelt | None | |
(b) Not applicable.
Item 14. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
| Period | (a) Total No. of Shares Purchased (1) |
(b) Average Price Paid per Share |
(c) Total No. of Shares Purchased as Part of Publicly Announced Plans or Programs |
(d) Maximum No. of Shares that May Yet Be Purchased Under the Plans or Programs |
||||||||||||
| Month #1 (Nov. 1, 2024 – Nov. 30, 2024) | — | — | — | 1,307,407 | ||||||||||||
| Month #2 (Dec. 1, 2025– Dec. 31, 2024) | — | — | — | 1,307,407 | ||||||||||||
| Month #3 (Jan. 1, 2025 – Jan. 31, 2025) | — | — | — | 1,307,407 | ||||||||||||
| Month #4 (Feb. 1, 2025 – Feb. 28, 2025) | — | — | — | 1,307,407 | ||||||||||||
| Month #5 (Mar. 1, 2025 – Mar. 31, 2025) | — | — | — | 1,307,407 | ||||||||||||
| Month #6 (Apr. 1, 2025 – Apr. 30, 2025) | — | — | — | 1,307,407 | ||||||||||||
| Month #7 (May 1, 2025 – May 31, 2025) | — | — | — | 1,307,407 | ||||||||||||
| Month #8 (June 1, 2025 – June 30, 2025) | — | — | — | 1,307,407 | ||||||||||||
| Month #9 (Jul. 1, 2025 – Jul. 31, 2025) | — | — | — | 1,307,407 | ||||||||||||
| Month #10 (Aug. 1, 2025 – Aug. 31, 2025) | — | — | — | 1,307,407 | ||||||||||||
| Month #11 (Sep. 1, 2025 – Sep. 30, 2025) | — | — | — | 1,307,407 | ||||||||||||
| Month #12 (Oct. 1, 2025 – Oct. 31, 2025) | — | — | — | 1,307,407 | ||||||||||||
| Total | ||||||||||||||||
| (1) | On June 12, 2018, the Fund’s Board approved an open market share repurchase program (the “Program”). Under the terms of the Program, the Fund is permitted to repurchase, in the open market, up to 10% of its outstanding shares of common stock as of June 12, 2018. The Program allows the Fund to purchase, in the open market, its outstanding common shares, with the amount and timing of any repurchase determined at the discretion of the Fund's investment adviser. Such purchases may be made opportunistically at certain discounts to NAV per share in the reasonable judgment of management based on historical discount levels and current market conditions. On a quarterly basis, the Fund’s Board will receive information on any transactions made pursuant to this Program during the prior quarter. If shares are repurchased, the Fund reports repurchase activity on the Fund's website on a monthly basis. For the fiscal year ended October 31, 2025, the Fund did not repurchase any shares through the Program. |
Item 15. Submission of Matters to a Vote of Security Holders.
During the period ended October 31, 2025, there were no material changes to the procedures by which shareholders may recommend nominees to the Registrant’s Board of Trustees.
Item 16. 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 (the “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 the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or 240.15d15(b)). |
| (b) | There were no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d))) that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting. |
Item 17. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies
Not applicable.
Item 18. Recovery of Erroneously Awarded Compensation.
Not applicable.
Item 19. Exhibits.
| (a)(1) | Code of Ethics of the Registrant for the period covered by this report as required pursuant to Item 2 of this Form N-CSR. |
| (a)(2) | Any policy required by the listing standards adopted pursuant to Rule 10D-1 under the Exchange Act (17 CFR 240.10D-1) by the registered national securities exchange or registered national securities association upon which the registrant’s securities are listed. Not applicable. |
| (a)(3) | The certifications of the registrant as required by Rule 30a-2(a) under the Act are exhibits to this Form N-CSR. |
| (a)(4) | Any written solicitation to purchase securities under Rule 23c-1 under the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable. |
| (a)(5) | Change in Registrant’s independent public accountant. Not applicable. |
| (b) | The certifications of the registrant as required by Rule 30a-2(b) under the Act are exhibits to this Form N-CSR. |
| (c) | Proxy Voting Policy of Registrant |
| (d) | Proxy Voting Policies and Procedures of Adviser. |
| (e) | Consent of Independent Registered Public Accounting Firm. |
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.
abrdn Income Credit Strategies Fund
| By: | /s/ Alan Goodson | |
| Alan Goodson, | ||
| Principal Executive Officer of | ||
| abrdn Income Credit Strategies Fund | ||
| Date: January 8, 2026 | ||
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/ Alan Goodson | |
| Alan Goodson, | ||
| Principal Executive Officer of | ||
| abrdn Income Credit Strategies Fund | ||
| Date: January 8, 2026 | ||
| By: | /s/ Sharon Ferrari | |
| Sharon Ferrari, | ||
| Principal Financial Officer of | ||
| abrdn Income Credit Strategies Fund | ||
| Date: January 8, 2026 | ||
FAQ
How did abrdn Income Credit Strategies Fund (ACP) perform in the year ended October 31, 2025?
The Fund returned 5.81% on a net asset value (NAV) basis and 0.68% on a market-price basis for the 12 months ended October 31, 2025. Its benchmark, the ICE BofAML Global High Yield Constrained (Hedged USD) Index, returned 8.22% over the same period.
What were ACP’s NAV, market price, and discount at October 31, 2025?
As of October 31, 2025, ACP’s NAV was $5.89 and its closing market price was $5.57, representing a 5.43% discount of the market price to NAV.
What distributions did ACP pay and what were the distribution rates in fiscal 2025?
Distributions to common shareholders totaled $0.9525 per share for the fiscal year. Based on the $5.57 market price at October 31, 2025, the distribution rate was 17.10%, and based on the $5.89 NAV it was 16.17%. Distributions consisted of ordinary income and return of capital.
How much leverage does ACP use, and what are the key leverage instruments?
At October 31, 2025, ACP had $260 million outstanding on its senior secured revolving credit facility and $40 million of 5.25% Series A Perpetual Preferred Shares. On December 18, 2025, it also closed a private offering of 4,000,000 shares of Series A Mandatorily Redeemable Preferred Shares due 2030 with a $100 million liquidation value.
What are ACP’s expense ratios for the fiscal year ended October 31, 2025?
The Fund’s gross operating expense ratio was 4.04%. The net operating expense ratio after fee waivers was 3.94%, and the net expense ratio excluding interest expense was 1.97% based on average net assets attributable to common shareholders.
What is the credit quality profile of ACP’s portfolio as of October 31, 2025?
As of October 31, 2025, 0.0% of investments were rated A or better, and 0.0% were rated BBB/Baa. The portfolio was concentrated in BB/Ba (19.8%), B (64.3%), B or below (12.8%), and NR (3.1%), based on the lowest rating from S&P, Moody’s, or Fitch, or adviser assessment for unrated securities.
How did ACP’s distribution policy and leverage affect results in 2025?
The Fund states its policy is to provide a stable monthly distribution funded by current income, realized gains, and, if needed, paid-in capital. For the year, the unlevered NAV return was 4.23%, while the reported NAV return was 5.81%, indicating that the use of leverage added 1.58 percentage points to performance over the period.
abrdn Income Credit Strategies Fund
NYSE:ACP
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Dec 18, 2025
ABRDN INCOME CREDIT STRATEGIES FUND (ACP) ANNOUNCES ISSUANCE OF SERIES A MANDATORILY REDEEMABLE PREFERRED SHARES
Dec 9, 2025
ABRDN INCOME CREDIT STRATEGIES FUND 5.25% SERIES A PERPETUAL PREFERRED SHARES DECLARE QUARTERLY DIVIDEND