High-yield CIF fund (NYSE: CIF) posts 8.75% return with 9.5% payout
Filing Impact
Filing Sentiment
Form Type
N-CSR
Rhea-AI Filing Summary
MFS Intermediate High Income Fund, a closed-end high-yield bond fund listed as CIF, reports a 8.75% total return at net asset value and 8.96% at market price for the year ended November 30, 2025, modestly ahead of its Bloomberg U.S. Corporate High-Yield 2% Issuer Capped Index benchmark at 7.55%.
The portfolio is concentrated in below-investment-grade corporate bonds, with major exposure to midstream energy, financial institutions, independent energy producers, cable TV, and electric utilities. Average duration is 4.1 years and average effective maturity is 3.7 years. The fund employs bank leverage equal to 31.24% of total assets at an estimated 4.92% interest cost, which amplified returns over the period but also adds risk.
The fund follows a managed distribution policy, targeting an annual rate of 9.50% of average monthly NAV, paid monthly. For the year, distributions included $2,058,403 of ordinary income and $1,076,512 of return of capital, which can reduce asset base and potentially increase the expense ratio over time. Net assets at period end were $33,018,406, and cash plus equivalents were negative after accounting for borrowing used to finance investments.
Positive
- None.
Negative
- None.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-05567
MFS INTERMEDIATE HIGH INCOME FUND
(Exact name of registrant as specified in charter)
111 Huntington Avenue, Boston, Massachusetts 02199 (Address of principal executive offices) (Zip code)
Christopher R. Bohane
Massachusetts Financial Services Company
111Huntington Avenue Boston, Massachusetts 02199
(Name and address of agents for service)
Registrant’s telephone number, including area code: (617) 954-5000
Date of fiscal year end: November 30
Date of reporting period: November 30, 2025
ITEM 1. REPORTS TO STOCKHOLDERS.
Item 1(a):
Annual Report
November 30, 2025
MFS® Intermediate High
Income Fund
CIH-ANN
MANAGED DISTRIBUTION POLICY DISCLOSURE
The MFS Intermediate High Income Fund’s (the fund) Board of Trustees adopted a managed distribution policy. The fund seeks to pay monthly distributions based on
an annual rate of 9.50% of the fund’s average monthly net asset value. The primary purpose of the managed distribution policy is to provide shareholders with a constant,
but not guaranteed, fixed rate of distribution each month. You should not draw any
conclusions about the fund’s investment performance from the amount of the current distribution or from the terms of the fund’s managed distribution policy. The Board may amend or terminate the managed distribution policy at any time without prior notice
to fund shareholders. The amendment or termination of the managed distribution policy
could have an adverse effect on the market price of the fund’s shares.
With each distribution, the fund will issue a notice to shareholders and an accompanying press release which will provide detailed information regarding the amount and composition of the distribution and other related information. The amounts and sources of distributions reported in the notice to shareholders are only
estimates and are not being provided for tax reporting purposes. The actual amounts
and sources of the amounts for tax reporting purposes will depend upon the fund’s investment experience during its fiscal year and may be subject to changes based on
tax regulations. The fund will send you a Form 1099-DIV for the calendar year that
will tell you how to report these distributions for federal income tax purposes. Please
refer to “Tax Matters and Distributions” under Note 2 of the Notes to Financial Statements for information regarding the tax character of the fund’s distributions.
Under a managed distribution policy the fund may at times distribute more than its
net investment income and net realized capital gains; therefore, a portion of your distribution may result in a return of capital. A return of capital may occur, for
example, when some or all of the money that you invested in the fund is paid back to you. Any
such returns of capital will decrease the fund’s total assets and, therefore, could have the effect of increasing the fund’s expense ratio. In addition, in order to make the level of distributions called for under its managed distribution policy, the fund may have
to sell portfolio securities at a less than opportune time. A return of capital does
not necessarily reflect the fund’s investment performance and should not be confused with ‘yield’ or ‘income’. The fund’s total return in relation to changes in net asset value is presented in the Financial Highlights.
MFS® Intermediate High
Income Fund
Income Fund
New York Stock Exchange Symbol: CIF
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Portfolio composition
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1
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Management review
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3
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Performance summary
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6
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Investment objective, principal investment strategies and principal risks
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8
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Effects of leverage
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19
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Portfolio managers’ profiles
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20
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Dividend reinvestment and cash purchase plan
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21
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Portfolio of investments
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22
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Statement of assets and liabilities
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36
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Statement of operations
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37
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Statements of changes in net assets
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38
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Statement of cash flows
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39
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Financial highlights
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40
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Notes to financial statements
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42
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Report of independent registered public accounting firm
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53
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Results of shareholder meeting
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55
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Trustees and officers
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56
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Board review of investment advisory agreement
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61
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Proxy voting policies and information
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65
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Quarterly portfolio disclosure
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65
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Further information
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65
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Information about fund contracts and legal claims
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65
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Federal tax information
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65
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MFS® privacy notice
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66
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Contact information
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back cover
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NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE
Portfolio Composition
Portfolio structure (i)
Top five industries (i)
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Midstream
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9.4%
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Financial Institutions
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8.8%
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Energy - Independent
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6.3%
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Cable TV
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6.1%
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Utilities - Electric Power
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5.5%
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Composition including fixed income credit quality (a)(i)
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BB
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67.8%
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B
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58.5%
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CCC
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17.1%
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CC
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0.3%
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Non-Fixed Income
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0.1%
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Cash & Cash Equivalents
(Less Liabilities) (b)
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(43.8)%
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Other (o)
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0.0%
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Portfolio facts
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Average Duration (d)
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4.1
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Average Effective Maturity (m)
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3.7 yrs.
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(a)
For all securities other than those specifically described below, ratings are assigned
to
underlying securities utilizing ratings from Moody’s, Fitch, and Standard & Poor’s rating
agencies and applying the following hierarchy: If all three agencies provide a rating,
the middle rating (after dropping the highest and lowest ratings) is assigned; if two
of the three agencies rate a security, the lower of the two is assigned. If none of the 3 rating
agencies above assign a rating, but the security is rated by DBRS Morningstar, then the DBRS
Morningstar rating is assigned. If none of the 4 rating agencies listed above rate
the security, but the security is rated by the Kroll Bond Rating Agency (KBRA), then the KBRA rating
is assigned. Ratings are shown in the S&P and Fitch scale (e.g., AAA). Securities rated
BBB or
higher are considered investment grade. All ratings are subject to change. Not Rated includes fixed income securities and fixed income derivatives that have not been rated by any
rating
agency. Non-Fixed Income includes equity securities (including convertible bonds and equity
derivatives), ETFs and Options on ETFs, and/or commodity-linked derivatives. The fund may or may not have held all of these instruments on this date. The fund is not rated by
these agencies.
1
Portfolio Composition - continued
(b)
Cash & Cash Equivalents (Less Liabilities) includes any cash, investments in money
market
funds, short-term securities, and other assets less liabilities. Liabilities include
the value of
outstanding borrowings made by the fund for leverage transactions. Cash & Cash Equivalents
(Less Liabilities) is negative due to these borrowings. Please see the Statement of
Assets and
Liabilities for additional information related to the fund’s cash position and other assets and
liabilities. Please see Note 6 in the Notes to Financial Statements for more information
on the fund's outstanding borrowings.
(d)
Duration is a measure of how much a bond’s price is likely to fluctuate with general changes
in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely
to lose about
5.00% of its value due to the interest rate move. The Average Duration calculation
reflects the
impact of the equivalent exposure of derivative positions, if any.
(i)
For purposes of this presentation, the components include the value of securities,
and reflect
the impact of the equivalent exposure of derivative positions, if any. These amounts
may be
negative from time to time. Equivalent exposure is a calculated amount that translates
the
derivative position into a reasonable approximation of the amount of the underlying
asset that
the portfolio would have to hold at a given point in time to have the same price sensitivity
that results from the portfolio’s ownership of the derivative contract. When dealing with
derivatives, equivalent exposure is a more representative measure of the potential
impact of a
position on portfolio performance than value. The bond component will include any
accrued
interest amounts.
(m)
In determining each instrument’s effective maturity for purposes of calculating the fund’s
dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening
feature (such as a put, pre-refunding or prepayment) will cause the instrument to
be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.
(o)
Less than 0.1%.
Where the fund holds convertible bonds, they are treated as part of the equity portion
of the portfolio.
Other includes equivalent exposure from currency derivatives and/or any offsets to
derivative positions and may be negative.
Percentages are based on net assets as of November 30, 2025.
The portfolio is actively managed and current holdings may be different.
2
Management Review
Summary of Results
For the twelve months ended November 30, 2025, shares of the MFS Intermediate High Income Fund (fund) provided a total return of 8.75%, at net asset value, and
a total return of 8.96%, at market value. This compares with a return of 7.55% for the
fund’s benchmark, the Bloomberg U.S. Corporate High-Yield 2% Issuer Capped Index.
The performance commentary below is based on the net asset value performance of the fund, which reflects the performance of the underlying pool of assets held by
the fund. The total return at market value represents the return earned by owners of the
shares of the fund, which are traded publicly on the exchange.
Market Environment
Over the past year, investors embraced a pro-growth US policy mix, easier global monetary policy and generally moderating inflation. At the same time, the buildout
of infrastructure related to artificial intelligence has accelerated rapidly, boosting
markets in the US and in Asian countries that contribute to the AI supply chain. While uncertainty surrounding US trade policy has added to volatility, progress toward trade
deals with many of the US’s largest trading partners has helped soothe investors’ nerves. However, trade tensions with China remained high and are a source of ongoing
volatility.
With rare exceptions, such as Japan, which has been slowly normalizing extremely low
interest rates, central banks around the world have been lowering interest rates over
the past year. The US Federal Reserve lowered interest rates in September and October.
The European Central Bank halted its cutting cycle after reaching its 2% inflation
target. While rates at the short end of most yield curves have fallen, curves have
generally steepened as inflation stays above target in nearly all economies and investors
take heed of elevated debt and fiscal deficit levels in the US, parts of Europe and
Japan.
The geopolitical backdrop has improved modestly, with European nations and Japan committing larger percentages of their gross domestic product to defense and Israel
and Hamas agreeing to a ceasefire, although there has been little progress toward
an end to the war in Ukraine. Despite that ongoing conflict, oil markets remained well
supplied, and at the end of the period, prices fell to their lowest levels since before
the war began.
In fixed income markets, global bond yields peaked in mid-January, then gradually
declined, ending the reporting period lower than at the start of the period, while
experiencing waves of volatility in between. Credit spreads remained tight and near
historical lows, despite a brief widening in April and May due to tariff concerns.
US bond market volatility, as measured by the Merrill Lynch Option Volatility Estimate
(MOVE) Index, ended near session lows after rising around the time of the US presidential election and the start of the trade war.
3
Management Review - continued
Factors Affecting Performance
Relative to the Bloomberg U.S. Corporate High-Yield 2% Issuer Capped Index, the fund’s yield curve(y) positioning and longer duration(d) stance supported performance as interest rates generally declined throughout the reporting period. From a quality
perspective, bond selection within the “CCC”, “BB” and “B” rated(r) securities also benefited relative returns, particularly within the basic industry, capital goods
and consumer cyclicals industries.
Conversely, weak security selection and an overweight allocation to the communications industry held back relative performance. An overweight allocation to
both the basic industry and energy industries further weighed on relative results.
The fund employs leverage that has been created through the use of loan agreements
with a bank. To the extent that investments are purchased through the use of leverage,
the fund’s net asset value will increase or decrease at a greater rate than a comparable unleveraged fund. During the reporting period, the fund’s use of leverage benefited relative performance.
The fund has a managed distribution policy, the primary purpose of which is to provide
shareholders with a constant, but not guaranteed, fixed rate of distribution each
month. This policy had no material impact on the fund's investment strategies during
its most recent fiscal year. The level of distributions paid by the fund pursuant
to its managed distribution policy may cause the fund's net asset value (NAV) per share to
decline more so than if the policy were not in place, including if distributions are
in excess of fund returns. However, the adviser believes the policy may benefit the fund’s market price and premium/discount to the fund’s NAV. For the twelve months ended November 30, 2025, the tax character of dividends paid pursuant to the managed distribution policy includes an ordinary income distribution of $2,058,403 and a tax
return of capital distribution of $1,076,512. See “Managed Distribution Policy Disclosure” in the inside cover page of this Annual Report for additional details regarding the policy and related implications for the fund and shareholders.
Respectfully,
Portfolio Manager(s)
David Cole and Michael Skatrud
David Cole and Michael Skatrud
(d)
Duration is a measure of how much a bond’s price is likely to fluctuate with general changes
in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely
to lose about
5.00% of its value.
(r)
Securities rated “BBB”, “Baa”, or higher are considered investment grade; securities rated
“BB”, “Ba”, or below are considered non-investment grade. Ratings are assigned to
underlying securities utilizing ratings from Moody's, Fitch, and Standard & Poor's
and applying
the following hierarchy: If all three agencies provide a rating, the middle rating
(after dropping the highest and lowest ratings) is assigned; if two of the three agencies rate a security,
the lower of the two is assigned. If none of the 3 rating agencies above assign a rating,
but the security is rated by DBRS Morningstar, then the DBRS Morningstar rating is assigned.
If none
4
Management Review - continued
of the 4 rating agencies listed above rate the security, but the security is rated
by the Kroll Bond Rating Agency (KBRA), then the KBRA rating is assigned. Ratings are shown in
the S&P and Fitch scale (e.g., AAA). For securities that are not rated by any of the rating
agencies, the security is considered Not Rated.
(y)
A yield curve graphically depicts the yields of different maturity bonds of the same
credit
quality and type; a normal yield curve is upward sloping, with short-term rates lower
than
long-term rates.
The views expressed in this report are those of the portfolio manager(s) only through
the end of the period of the report as stated on the cover and do not necessarily reflect the
views of MFS or any other person in the MFS organization. These views are subject to change at any
time based on market or other conditions, and MFS disclaims any responsibility to update such views.
These views may not be relied upon as investment advice or an indication of trading intent
on behalf of any MFS portfolio. References to specific securities are not recommendations of such
securities, and may not be representative of any MFS portfolio’s current or future investments.
5
Performance Summary THROUGH 11/30/25
The following chart illustrates the fund’s historical performance in comparison to its benchmark(s). Performance results reflect the percentage change in net asset value
and market value, including reinvestment of fund distributions. Benchmarks are unmanaged and may not be invested in directly. Benchmark returns do not reflect commissions or expenses. (See Notes to Performance Summary.)
Performance data shown represents past performance and is no guarantee of future results. Investment return and principal value fluctuate so your shares, when sold, may be worth more or less than the original cost; current performance may be lower or higher than quoted. The performance shown does not reflect the deduction of taxes, if any, that a shareholder would pay on fund distributions or the sale of fund shares.
Growth of a Hypothetical $10,000 Investment
Average Annual Total Returns through 11/30/25
|
Market Value (r)
|
7/21/1988
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8.96%
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2.71%
|
7.14%
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Net Asset Value (r)
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7/21/1988
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8.75%
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3.86%
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6.12%
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Comparative benchmark(s)
|
|
|
|
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Bloomberg U.S. Corporate High-Yield 2% Issuer Capped
Index (f)
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7.55%
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4.78%
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6.19%
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(f)
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Source: FactSet Research Systems Inc.
|
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(r)
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Includes reinvestment of all distributions. Market value references New York Stock
Exchange
Price.
|
Benchmark Definition(s)
Bloomberg U.S. Corporate High-Yield 2% Issuer Capped Index(a) – a component of the Bloomberg U.S. Corporate High-Yield Index, which measures performance of non-investment grade, fixed rate debt. The index limits the maximum exposure to any
one issuer to 2%.
6
Performance Summary - continued
It is not possible to invest directly in an index.
(a)
Source: Bloomberg Index Services Limited. BLOOMBERG® is a trademark and service mark of
Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). Bloomberg or Bloomberg's
licensors own all proprietary rights in the Bloomberg Indices. Bloomberg neither approves
or
endorses this material, or guarantees the accuracy or completeness of any information
herein,
or makes any warranty, express or implied, as to the results to be obtained therefrom
and, to
the maximum extent allowed by law, neither shall have any liability or responsibility
for injury
or damages arising in connection therewith.
Notes to Performance Summary
The fund’s shares may trade at a discount or premium to net asset value. When fund shares trade at a premium, buyers pay more than the net asset value of the underlying
fund shares, and shares purchased at a premium would receive less than the amount
paid for them in the event of the fund’s concurrent liquidation.
The fund's target annual distribution rate is calculated based on an annual rate of
9.50% of the fund's average monthly net asset value, not a fixed share price, and
the fund's distribution amount will fluctuate with changes in the fund's average monthly
net assets.
Performance results based on net asset value per share do not include adjustments
made for financial reporting purposes in accordance with U.S. generally accepted accounting principles and may differ from amounts reported in the Financial Highlights.
From time to time the fund may receive proceeds from litigation settlements, without
which performance would be lower.
In accordance with Section 23(c) of the Investment Company Act of 1940, the fund hereby
gives notice that it may from time to time repurchase shares of the fund in the open market
at the option of the Board of Trustees and on such terms as the Trustees shall determine.
7
Investment Objective, Principal Investment Strategies and
Principal Risks
Investment Objective
The fund’s investment objective is to seek high current income, but may also consider capital appreciation. The fund’s objective may be changed without shareholder approval.
Principal Investment Strategies
MFS normally invests at least 80% of the fund’s net assets, including borrowings for investment purposes, in high income debt instruments. High income debt instruments
are debt instruments that are below investment grade quality. Below investment grade
quality debt instruments are debt instruments rated BB+ or lower by S&P or Fitch,
or Ba1 or lower by Moody’s, or comparably rated by another Nationally Recognized Statistical Rating Organization (“NRSRO”). In determining the credit quality of debt instruments, MFS will use the following methodology: if three NRSROs have assigned
a rating to a debt instrument, MFS will use the middle rating; if two NRSROs have assigned a rating to a debt instrument, MFS will use the lower rating; if only one
NRSRO has assigned a rating to a debt instrument, MFS will use that rating; rating;
if none of the three NSROs above assign a rating, but the security is rated by Dominion
Bond Rating Service Limited (“DBRS”), then the then the DBRS rating is assigned. If none of the four rating agencies listed above rate the security, but the security
is rated by the Kroll Bond Rating Agency (KBRA), then the KBRA rating is assigned. A debt instrument will be considered unrated if none of these NRSROs have assigned a rating.
In cases where a rating for an individual security is not available, MFS may assign
a rating to the security based on the methodology referenced above with respect to the
issuer of such security.
MFS may invest the fund’s assets in other types of debt instruments and equity securities.
MFS may invest up to 100% of the fund’s assets in below investment grade quality debt instruments.
MFS may invest the fund’s assets in foreign securities.
MFS normally invests the fund's assets across different industries and sectors, but
MFS may invest a significant percentage of the fund's assets in issuers in a single
industry or sector.
The fund’s dollar-weighted average effective maturity will normally be between three and ten years. In determining an instrument’s effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a call, put, pre-refunding, prepayment or redemption provision, or an adjustable coupon) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the
instrument’s stated maturity.
The fund seeks to make a monthly distribution at an annual fixed rate of 9.50% of
the fund’s average monthly net asset value.
8
Investment Objective, Principal Investment Strategies and Principal Risks - continued
While MFS may use derivatives for any investment purpose, to the extent MFS uses derivatives, MFS expects to use derivatives primarily to increase or decrease exposure
to a particular market, segment of the market, or security, to increase or decrease interest
rate exposure, or as alternatives to direct investments.
MFS uses an active bottom-up investment approach to buying and selling investments
for the fund. Investments are selected primarily based on fundamental analysis of
individual issuers and/or instruments in light of the issuer’s financial condition and market, economic, political, and regulatory conditions. Factors considered for debt
instruments may include the instrument’s credit quality, collateral characteristics, and indenture provisions, and the issuer’s management ability, capital structure, leverage, and ability to meet its current obligations. Factors considered for equity securities
may include analysis of an issuer’s earnings, cash flows, competitive position, and management ability. MFS may also consider environmental, social, and governance (ESG) factors in its fundamental investment analysis where MFS believes such factors
could materially impact the economic value of an issuer or instrument. ESG factors
considered may include, but are not limited to, climate change, resource depletion,
an issuer's governance structure and practices, data protection and privacy issues, and
diversity and labor practices. Quantitative screening tools that systematically evaluate
the structure of a debt instrument and its features or the valuation, price and earnings
momentum, earnings quality, and other factors of the issuer of an equity security
may also be considered.
The fund may use leverage by borrowing up to 33 1/3% of the fund’s assets, including borrowings for investment purposes, and investing the proceeds pursuant to its investment strategies. If approved by the fund’s Board of Trustees, the fund may use leverage by other methods.
Principal Investment Types
The principal investment types in which the fund may invest are:
Debt Instruments: Debt instruments represent obligations of corporations, governments, and other entities to repay money borrowed, or other instruments believed to have debt-like characteristics. The issuer or borrower usually pays a
fixed, variable, or floating rate of interest, and must repay the amount borrowed, usually
at the maturity of the instrument. Debt instruments generally trade in the over-the-counter market and can be less liquid than other types of investments, particularly during adverse market and economic conditions. During certain market
conditions, debt instruments in some or many segments of the debt market can trade
at a negative interest rate (i.e., the price to purchase the debt instrument is more
than the present value of expected interest payments and principal due at the maturity
of the instrument). Some debt instruments, such as zero coupon bonds or payment-in-kind bonds, do not pay current interest. Other debt instruments, such as
certain mortgage-backed securities and other securitized instruments, make periodic
payments of interest and/or principal. Some debt instruments are partially or fully
secured by collateral supporting the payment of interest and principal.
Corporate Debt Instruments: Corporate debt instruments are debt instruments issued by corporations or similar entities.
9
Investment Objective, Principal Investment Strategies and Principal Risks - continued
U.S. Government Securities: U.S. Government securities are debt instruments issued or guaranteed as to the payment of principal and interest by the U.S. Treasury, by
an agency or instrumentality of the U.S. Government, or by a U.S. Government-sponsored
entity, including mortgage-backed securities and other types of securitized instruments
issued or guaranteed by such entities. Certain U.S. Government securities are not
supported as to the payment of principal and interest by the full faith and credit
of the U.S. Treasury or the ability to borrow from the U.S. Treasury. Some U.S. Government
securities are supported as to the payment of principal and interest only by the credit
of the entity issuing or guaranteeing the security.
Foreign Government Securities: Foreign government securities are debt instruments issued, guaranteed, or supported, as to the payment of principal and interest, by
foreign governments, foreign government agencies, foreign semi-governmental entities
or supranational entities, or debt instruments issued by entities organized and operated
for the purpose of restructuring outstanding foreign government securities. Foreign
government securities may not be supported as to the payment of principal and interest by the full faith and credit of the foreign government.
Floating Rate Loans: Floating rate loans are debt instruments issued by companies or other entities with interest rates that reset periodically (typically daily, monthly,
quarterly, or semiannually), based on a base lending rate such as the Secured Overnight
Financing Rate (SOFR), plus a premium. Floating rate loans are typically structured
and administered by a third party that acts as agent for the lenders participating in
the floating rate loan. Floating rate loans can be acquired directly through the agent,
by assignment from a third party holder of the loan, or as a participation interest in
a third party holder’s portion of the loan. Senior floating rate loans are secured by specific collateral of the borrower, and are senior to most other securities of the borrower
(e.g., common stocks or other debt instruments) in the event of bankruptcy. Floating rate
loans can be subject to restrictions on resale and can be less liquid than other types
of securities.
Equity Securities: Equity securities represent an ownership interest, or the right to acquire an ownership interest, in a company or other issuer. Different types of equity
securities provide different voting and dividend rights and priorities in the event
of bankruptcy of the issuer. Equity securities include common stocks, preferred stocks,
securities convertible into stocks, equity interests in real estate investment trusts,
and depositary receipts for such securities.
Derivatives: Derivatives are financial contracts whose value is based on the value of one or more underlying indicators or the difference between underlying indicators.
Underlying indicators may include a security or other financial instrument, asset,
currency, interest rate, credit rating, commodity, volatility measure, or index. Derivatives
involve a counterparty to the transaction. Derivatives include futures, forward contracts, options, swaps, and certain complex structured securities.
Principal Risks
The share price of the fund will change daily based on changes in market, economic,
industry, political, regulatory, geopolitical, environmental, public health, and other
conditions. As with any mutual fund, the fund may not achieve its objective and/or
you could lose money on your investment in the fund. An investment in the fund is not
a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance
10
Investment Objective, Principal Investment Strategies and Principal Risks - continued
Corporation or any other governmental agency. The significance of any specific risk
to an investment in the fund will vary over time depending on the composition of the
fund's portfolio, market conditions, and other factors. You should read all of the
risk information below carefully, because any one or more of these risks may result in
losses to the fund.
The principal risks of investing in the fund are:
Investment Selection Risk: MFS' investment analysis and its selection of investments may not produce the intended results and/or can lead to an investment focus that results in the fund underperforming other funds with similar investment strategies
and/or underperforming the markets in which the fund invests. In addition, to the
extent MFS considers quantitative tools in managing the fund, such tools may not work
as expected or produce the intended results. In addition, MFS or the fund's other
service providers may experience disruptions or operating errors that could negatively
impact the fund.
Debt Market Risk: Debt markets can be volatile and can decline significantly in response to changes in, or investor perceptions of, issuer, market, economic, industry,
political, regulatory, geopolitical, environmental, public health, and other conditions.
These conditions can affect a single instrument, issuer, or borrower, a particular
type of instrument, issuer, or borrower, a segment of the debt markets, or debt markets generally. Certain changes or events, such as political, social, or economic developments, including increasing and negative interest rates or the U.S. government's inability at times to agree on a long-term budget and deficit reduction
plan (which has in the past resulted and may in the future result in a government
shutdown); market closures and/or trading halts; government or regulatory actions,
including sanctions, the imposition of tariffs or other protectionist actions and
changes in fiscal, monetary, or tax policies; rapid technological developments or widespread
adoption of new technologies (such as artificial intelligence); natural disasters;
outbreaks of pandemic and epidemic diseases; terrorist attacks; war; and other geopolitical changes or events can have a dramatic adverse effect on debt markets
and may lead to periods of high volatility and reduced liquidity in a debt market or a
segment of a debt market.
Interest Rate Risk: The price of a debt instrument typically changes in response to interest rate changes. Interest rates can change in response to the supply and demand
for credit, government and/or central bank monetary policy and action, inflation rates,
and other factors. In general, the price of a debt instrument falls when interest
rates rise and rises when interest rates fall. Inflationary price movements may cause fixed
income securities markets to experience heightened levels of interest rate volatility
and liquidity risk. Potential future changes in government and/or central bank monetary
policy and action may also affect the level of interest rates. Monetary policy measures
have in the past, and may in the future, exacerbate risks associated with rising interest
rates. Interest rate risk is generally greater for fixed-rate instruments than floating-rate
instruments and for instruments with longer maturities or durations, or that do not
pay current interest. In addition, short-term and long-term interest rates, and interest
rates in different countries, do not necessarily move in the same direction or by the same
amount. An instrument’s reaction to interest rate changes depends on the timing of its interest and principal payments and the current interest rate for each of those time
periods. The price of an instrument trading at a negative interest rate responds to
11
Investment Objective, Principal Investment Strategies and Principal Risks - continued
interest rate changes like other debt instruments; however, an instrument purchased
at a negative interest rate is expected to produce a negative return if held to maturity.
Fluctuations in the market price of fixed-rate instruments held by the fund may not
affect interest income derived from those instruments, but may nonetheless affect
the fund's share price, especially if an instrument has a longer maturity or duration
and is therefore more sensitive to changes in interest rates.
Credit Risk: The price of a debt instrument depends, in part, on the issuer's or borrower's credit quality or ability to pay principal and interest when due. The price
of a debt instrument is likely to fall if an issuer or borrower defaults on its obligation
to pay principal or interest, if the instrument's credit rating is downgraded by a credit
rating agency, or based on other changes in, or perceptions of, the financial condition
of the issuer or borrower. Debt instruments may be more susceptible to downgrades
or defaults during economic downturns or similar periods of economic stress, which in
turn could negatively affect the market value and liquidity of a debt instrument.
For certain types of instruments, including derivatives, the price of the instrument depends
in part on the credit quality of the counterparty to the transaction. For other types
of debt instruments, including mortgage-backed securities and other securitized instruments, the price of the debt instrument also depends on the credit quality and
adequacy of the underlying assets or collateral as well as whether there is a security
interest in the underlying assets or collateral. Enforcing rights, if any, against
the underlying assets or collateral may be difficult.
Below investment grade quality debt instruments can involve a substantially greater
risk of default or can already be in default, and their values can decline significantly
over short periods of time. Below investment grade quality debt instruments are regarded
as having predominantly speculative characteristics with respect to capacity to pay interest
and principal. Below investment grade quality debt instruments tend to be more sensitive to adverse news about the issuer, or the market or economy in general, than
higher quality debt instruments. The market for below investment grade quality debt
instruments can be less liquid, especially during periods of recession or general
market decline.
Foreign Risk: Investments in securities of foreign issuers, securities of companies with significant foreign exposure, and foreign currencies can involve additional risks
relating to market, economic, industry, political, regulatory, geopolitical, environmental,
public health, and other conditions. Political, social, diplomatic, and economic developments,
U.S. and foreign government action, or the threat thereof, such as the imposition
of currency or capital blockages, controls, or tariffs, economic and trade sanctions
or embargoes, security trading suspensions, entering or exiting trade or other intergovernmental agreements, or the expropriation or nationalization of assets in
a particular country, can cause dramatic declines in certain or all securities with
exposure to that country and other countries. Sanctions, or the threat of sanctions, may cause
volatility in regional and global markets and may negatively impact the performance
of various sectors and industries, as well as companies in other countries, which could
have a negative effect on the performance of the fund. In the event of nationalization,
expropriation, confiscation or other government action, intervention, or restriction,
the fund could lose its entire investment in a particular foreign issuer or country. Civil
unrest, geopolitical tensions, armed conflicts, wars, and acts of terrorism are other
potential risks that could adversely affect an investment in a foreign security or
in foreign markets or issuers generally. Economies and financial markets are
12
Investment Objective, Principal Investment Strategies and Principal Risks - continued
interconnected, which increases the likelihood that conditions in one country or region
can adversely impact issuers in different countries and regions. Less stringent regulatory, accounting, auditing, and disclosure requirements for issuers and markets
are more common in certain foreign countries. Enforcing legal rights can be difficult,
costly, and slow in certain foreign countries and with respect to certain types of
investments, and can be particularly difficult against foreign governments. Changes
in currency exchange rates can significantly impact the financial condition of a company
or other issuer with exposure to multiple countries as well as affect the U.S. dollar
value of foreign currency investments and investments denominated in foreign currencies.
Additional risks of foreign investments include trading, settlement, custodial, and
other operational risks, and withholding and other taxes. These factors can make foreign
investments, especially those tied economically to countries with developing economies, more volatile and less liquid than U.S. investments. In addition, foreign
markets can react differently to market, economic, industry, political, regulatory,
geopolitical, environmental, public health, and other conditions than the U.S. market.
Investments in foreign issuers through depositary receipts generally involve risks
applicable to other types of foreign investments. Investments in depositary receipts
may be less liquid and more volatile than the underlying securities in their primary trading
market.
Focus Risk: Issuers in a single industry, sector, country, or region can react similarly to market, currency, political, economic, regulatory, geopolitical, environmental, public
health, and other conditions. These conditions include business environment changes;
economic factors such as fiscal, monetary, and tax policies; inflation and unemployment rates; and government and regulatory changes. The fund's performance will be affected by the conditions in the industries, sectors, countries,
and regions to which the fund is exposed. Furthermore, investments in particular industries, sectors, countries, or regions may be more volatile than the broader market
as a whole.
Prepayment/Extension Risk: Many types of debt instruments, including mortgage-backed securities, securitized instruments, certain corporate debt instruments, and municipal housing bonds, and certain derivatives, are subject to
the risk of prepayment and/or extension. Prepayment occurs when unscheduled payments of principal are made or the instrument is called or redeemed prior to an instrument’s maturity. When interest rates decline, the instrument is called, or for other reasons,
these debt instruments may be repaid more quickly than expected. As a result, the
holder of the debt instrument may not be able to reinvest the proceeds at the same
interest rate or on the same terms, reducing the potential for gain. When interest
rates increase or for other reasons, these debt instruments may be repaid more slowly than
expected, increasing the potential for loss. In addition, prepayment rates are difficult
to predict and the potential impact of prepayment on the price of a debt instrument depends on the terms of the instrument.
Equity Market Risk: Equity markets are volatile and can decline significantly in response to changes in, or investor perceptions of, issuer, market, economic, industry,
political, regulatory, geopolitical, environmental, public health, and other conditions.
These conditions can affect a single issuer or type of security, issuers within a
broad market sector, industry or geographic region, or the equity markets in general. Different parts of the market and different types of securities can react differently
to these conditions. For example, the stocks of growth companies can react differently
13
Investment Objective, Principal Investment Strategies and Principal Risks - continued
from the stocks of value companies, and the stocks of large cap companies can react
differently from the stocks of small cap companies. Certain changes or events, such
as political, social, or economic developments, including political elections, increasing
or negative interest rates or the U.S. government's inability at times to agree on a
long-term budget and deficit reduction plan (which has in the past resulted and may
in the future result in a government shutdown); market closures and/or trading halts;
government or regulatory actions, including sanctions, the imposition of tariffs or
other protectionist actions and changes in fiscal, monetary, or tax policies; rapid technological
developments or widespread adoption of emerging technologies (such as artificial intelligence); natural disasters; outbreaks of pandemic and epidemic diseases; terrorist
attacks; war; and other geopolitical changes or events, can have a dramatic adverse
effect on equity markets and may lead to periods of high volatility in an equity market
or a segment of an equity market.
Company Risk: Changes in the financial condition of a company or other issuer, changes in specific market, economic, industry, political, regulatory, geopolitical,
environmental, public health, and other conditions that affect a particular type of
investment or issuer, and changes in general market, economic, political, regulatory,
geopolitical, environmental, public health, and other conditions can adversely affect
the prices of investments. The value of an investment held by the fund may decline due
to factors directly related to the issuer, such as competitive pressures, rapid technological
developments or widespread adoption of emerging technologies (such as artificial intelligence) impacting the issuer’s competitive position and making products and/or services obsolete, cybersecurity incidents, financial leverage, historical and/or
prospective earnings, management performance, labor and supply shortages, investor
perceptions, and other factors. The prices of securities of smaller, less well-known
issuers can be more volatile than the prices of securities of larger issuers or the
market in general.
Managed Distribution Plan Risk: The fund may not be able to maintain a monthly distribution at an annual fixed rate of up to 9.50% of the fund’s average monthly net asset value due to many factors, including but not limited to, changes in market returns, fluctuations in market interest rates, and other factors. If income from
the fund’s investments is less than the amount needed to make a monthly distribution, the fund may distribute a return of capital to pay the distribution. In certain cases,
the fund may sell portfolio investments at less opportune times in order to pay such distribution. Distributions that are treated as tax return of capital will have the
effect of reducing the fund’s assets and could increase the fund’s expense ratio. If a portion of the fund’s distributions represents returns of capital over extended periods, the fund’s assets may be reduced over time to levels where the fund is no longer viable and might
be liquidated. Please see “Managed Distribution Policy Disclosure” in this report for additional information regarding the plan.
Market Discount/Premium Risk: The market price of shares of the fund will be based on factors such as the supply and demand for shares in the market and general market,
economic, industry, political or regulatory conditions. Whether shareholders will
realize gains or losses upon the sale of shares of the fund will depend on the market price
of shares at the time of the sale, not on the fund’s net asset value. The market price may be lower or higher than the fund’s net asset value. Shares of closed-end funds frequently trade at a discount to their net asset value.
14
Investment Objective, Principal Investment Strategies and Principal Risks - continued
Leveraging Risk: If the fund utilizes investment leverage, there can be no assurance that such a leveraging strategy will be successful during any period in which it is
employed. The use of leverage is a speculative investment technique that results in
greater volatility in the fund’s net asset value. To the extent that investments are purchased with the proceeds from the borrowings from a bank, the issuance of preferred shares, or the creation of tender option bonds, the fund’s net asset value will increase or decrease at a greater rate than a comparable unleveraged fund. If the
investment income or gains earned from the investments purchased with the proceeds
from the borrowings from a bank, the issuance of preferred shares, or the creation
of tender option bonds, fails to cover the expenses of leveraging, the fund’s net asset value is likely to decrease more quickly than if the fund was not leveraged. In addition,
the fund’s distributions could be reduced. The fund is currently required under the Investment Company Act of 1940 (“1940 Act”) to maintain asset coverage of at least 200% on outstanding preferred shares and at least 300% on outstanding indebtedness; however, the fund may be required to abide by asset coverage or other
requirements that are more stringent than those imposed by the 1940 Act. The fund
may be required to sell a portion of its investments at a time when it may be disadvantageous to do so in order to redeem preferred shares or to reduce outstanding
indebtedness to comply with asset coverage or other restrictions including those imposed by the 1940 Act, any applicable loan agreement, any applicable offering documents for preferred shares issued by the fund, and the rating agencies that rate
the preferred shares. The fund may be prohibited from declaring and paying common
share dividends and distributions if the fund fails to satisfy the 1940 Act’s asset coverage requirements or other agreed upon asset coverage requirements. In these situations, the fund may choose to repurchase or redeem any outstanding leverage to
the extent necessary in order to maintain compliance with such asset coverage requirements. The expenses of leveraging are paid by the holders of common shares.
Borrowings from a bank or preferred shares may have a stated maturity. If this leverage
is not extended prior to maturity or replaced with the same or a different form of
leverage, distributions to common shareholders may be decreased.
Certain transactions and investment strategies can result in leverage. Because movements in a fund’s share price generally correlate over time with the fund’s net asset value, the market price of a leveraged fund will also tend to be more volatile
than that of a comparable unleveraged fund. The costs of an offering of preferred shares
and/or borrowing program would be borne by shareholders.
Under the terms of any loan agreement or of a purchase agreement between the fund
and the investor in the preferred shares, as the case may be, the fund may be required
to, among other things, limit its ability to pay dividends and distributions on common
shares in certain circumstances, incur additional debts, engage in certain transactions,
and pledge some or all of its assets at an inopportune time. Such agreements could
limit the fund’s ability to pursue its investment strategies. The terms of any loan agreement or purchase agreement could be more or less restrictive than those described.
Derivatives Risk: Derivatives can be highly volatile and involve risks in addition to, and potentially greater than, the risks of the underlying indicator(s). Gains or losses
from derivatives can be substantially greater than the derivatives’ original cost and can sometimes be unlimited. Derivatives can involve leverage. Derivatives can be complex
instruments and can involve analysis and processing that differs from that required
for
15
Investment Objective, Principal Investment Strategies and Principal Risks - continued
other investment types used by the fund. If the value of a derivative does not change
as expected relative to the value of the market or other indicator to which the derivative
is intended to provide exposure, the derivative may not have the effect intended. Derivatives can also reduce the opportunity for gains or result in losses by offsetting
positive returns in other investments. Derivatives can be less liquid than other types
of investments.
Counterparty and Third Party Risk: Transactions involving a counterparty other than the issuer of the instrument, including clearing organizations, or a third party responsible for servicing the instrument or effecting the transaction, are subject
to the credit risk of the counterparty or third party, and to the counterparty’s or third party’s ability or willingness to perform in accordance with the terms of the transaction.
If a counterparty or third party fails to meet its contractual obligations, goes bankrupt,
or otherwise experiences a business interruption, the fund could miss investment opportunities, lose value on its investments, or otherwise hold investments it would
prefer to sell, resulting in losses for the fund.
Liquidity Risk: Certain investments and types of investments are subject to restrictions on resale, may trade in the over-the-counter market, or may not have an active trading
market due to adverse market, economic, industry, political, regulatory, geopolitical,
environmental, public health, and other conditions, including trading halts, sanctions,
or wars. Investors trying to sell large quantities of a particular investment or type
of investment, or lack of market makers or other buyers for a particular investment or
type of investment may also adversely affect liquidity. At times, all or a significant
portion of a market may not have an active trading market. Without an active trading
market, it may be difficult to value, and it may not be possible to sell, these investments and the fund could miss other investment opportunities and hold investments it would prefer to sell, resulting in losses for the fund. In addition,
the fund may have to sell certain of these investments at prices or times that are not
advantageous in order to meet redemptions or other cash needs, which could result
in dilution of remaining investors' interests in the fund. The prices of illiquid securities
may be more volatile than more liquid investments.
Anti-Takeover Provisions Risk: The fund’s declaration of trust includes provisions that could limit the ability of other persons or entities to acquire control of the fund,
to convert the fund to an open-end fund, or to change the composition of the fund’s Board of Trustees. These provisions could reduce the opportunities for shareholders
to sell their shares at a premium over the then-current market price.
Other Investment Strategies and Risks
Active and Frequent Trading: MFS may engage in active and frequent trading in pursuing the fund's principal investment strategies. Frequent trading may increase
transaction costs, which can reduce the fund's return. Frequent trading can also increase the possibility of capital gain and ordinary distributions. Frequent trading
can also result in the realization of a higher percentage of short-term capital gains
and a lower percentage of long-term capital gains as compared to a fund that trades less
frequently. Because short-term capital gains are distributed as ordinary income,
this would generally increase your tax liability unless you hold your shares through a
tax-advantaged or tax-exempt vehicle.
16
Investment Objective, Principal Investment Strategies and Principal Risks - continued
Operational and Cybersecurity Risk: The fund and its service providers, and your ability to transact in fund shares, may be negatively impacted due to operational
matters arising from, among other issues, human errors, systems and technology disruptions or failures, fraudulent activities, or cybersecurity incidents. Operational
issues and cybersecurity incidents may cause the fund or its service providers, as
well as securities trading venues and other market participants, to suffer data corruption
and/or lose operational functionality, and could, among other things, impair the ability
to calculate the fund's net asset value per share, impede trading of portfolio securities,
and result in the theft, misuse, and/or improper release of confidential information
relating to the fund or its shareholders. Such operational issues and cybersecurity
incidents may result in losses to the fund and its shareholders. Because technology
is frequently changing, new ways to carry out cyberattacks continue to develop. In addition, the rapid development and increasingly widespread use of new technologies,
including machine learning technology and generative models could exacerbate these
risks. Therefore, there is a chance that certain risks have not been identified or
prepared for, or that an attack may not be detected, which puts limitations on the
ability of the fund and its service providers to plan for or respond to a cyberattack.
Information relating to the Fund’s investments is delivered electronically, which can give rise to a number of risks, including, but not limited to, the risks that such communications may not be secure and may contain computer viruses or other defects,
may not be accurately replicated on other systems, or may be intercepted, deleted
or interfered with, without the knowledge of the sender or the intended recipient. Furthermore, geopolitical tensions could increase the scale and sophistication of
deliberate cybersecurity attacks, particularly those from nation-states or from entities
with nation-state backing.
Temporary Defensive Strategy: In response to adverse market, economic, industry, political, or other conditions, MFS may depart from the fund’s principal investment strategies by temporarily investing for defensive purposes. When MFS invests defensively, different factors could affect the fund’s performance and the fund may not achieve its investment objective. In addition, the defensive strategy may not work
as intended.
Investment Restrictions
The Fund has adopted the following policies which cannot be changed without the approval of a “majority of its outstanding voting securities” as such term is defined by the 1940 Act. Under the 1940 Act, the vote of a “majority of its outstanding voting securities” means the vote of the lesser of (i) 67% or more of the voting securities present at a meeting at which holders of voting securities representing more than
50% of the outstanding voting securities are present or represented by proxy, or (ii)
more than 50% of the outstanding voting securities. Except for fundamental investment restriction (1), these investment restrictions are adhered to at the time of purchase
or utilization of assets; a subsequent change in circumstances will not be considered
to result in a violation of policy.
The Fund may not:
(1)
borrow money except to the extent not prohibited by the 1940 Act and exemptive
orders granted under such Act.
17
Investment Objective, Principal Investment Strategies and Principal Risks - continued
(2)
underwrite securities issued by other persons, except that all or any portion of the
assets of the Fund may be invested in one or more investment companies, to the
extent not prohibited by the 1940 Act and exemptive orders granted under such
Act, and except insofar as the Fund may technically be deemed an underwriter
under the Securities Act of 1933, as amended, in selling a portfolio security.
(3)
issue any senior securities except to the extent not prohibited by the 1940 Act and
exemptive orders granted under such Act. For purposes of this restriction, collateral
arrangements with respect to any type of swap, option, Forward Contracts and
Futures Contracts and collateral arrangements with respect to initial and variation
margin are not deemed to be the issuance of a senior security.
(4)
make loans except to the extent not prohibited by the 1940 Act and exemptive
orders granted under such Act.
(5)
purchase or sell real estate (excluding securities secured by real estate or interests
therein and securities of companies, such as real estate investment trusts, which
deal in real estate or interests therein), interests in oil, gas or mineral leases,
commodities or commodity contracts (excluding currencies and any type of option,
Futures Contracts and Forward Contracts or other derivative instruments whose
value is related to commodities or other commodity contracts) in the ordinary
course of its business. The Fund reserves the freedom of action to hold and to sell
real estate, mineral leases, commodities or commodity contracts (including
currencies and any type of option, Futures Contracts and Forward Contracts)
acquired as a result of the ownership of securities.
(6)
purchase any securities of an issuer in a particular industry if as a result 25% or
more of its total assets (taken at market value at the time of purchase) would be
invested in securities of issuers whose principal business activities are in the same
industry.
For purposes of fundamental investment restriction (6), investments in securities
issued or guaranteed by the U.S. Government or its agencies or instrumentalities and tax-exempt obligations issued or guaranteed by a U.S. territory or possession, a state
or local government, or a political subdivision of any of the foregoing, are not considered
an investment in any particular industry.
For purposes of fundamental investment restriction (6), investments in other investment
companies are not considered an investment in any particular industry and portfolio
securities held by an underlying fund in which the Fund may invest are not considered
to be securities purchased by the Fund.
For purposes of fundamental investment restriction (6), MFS uses a customized set
of industry groups for classifying securities based on classifications developed by third
party providers.
18
Effects of Leverage
The following table is furnished in response to requirements of the Securities and
Exchange Commission (the “SEC”). It is designed to, among other things, illustrate the effects of leverage through the use of senior securities, as that term is defined
under Section 18 of the Investment Company Act of 1940 (the “1940 Act”), on fund total return, assuming investment portfolio total returns (consisting of income and changes
in the value of investments held in a fund’s portfolio) of –10%, –5%, 0%, 5% and 10%. The table below assumes the fund’s continued use of line of credit borrowings (“leverage”), as applicable, as of November 30, 2025, as a percentage of total assets (including assets attributable to such leverage), the estimated annual effective interest
expense rate payable by the fund on such line of credit borrowings (based on market
conditions as of November 30, 2025), and the annual return that the fund’s portfolio would need to experience (net of expenses) in order to cover such costs. The information below does not reflect the fund’s possible use of certain other forms of economic leverage through the use of other instruments or transactions not considered
to be senior securities under the 1940 Act, if any.
The assumed investment portfolio returns in the table below are hypothetical figures
and are not necessarily indicative of the investment portfolio returns experienced
or expected to be experienced by the fund. Your actual returns may be greater or less
than those appearing below. In addition, actual borrowing expenses associated with
line of credit borrowings used by the fund may vary frequently and may be significantly
higher or lower than the rate used for the example below.
|
Line of Credit Borrowings as a Percentage of Total Assets (Including Assets Attributable
to
Leverage)
|
31.24%
|
||||
|
Estimated Annual Effective Rate of Interest Expense on Line of Credit Borrowings
|
4.92%
|
||||
|
Annual Return Fund Portfolio Must Experience (net of expenses) to Cover Estimated
Annual
Effective Interest Expense on Line of Credit Borrowings
|
1.54%
|
||||
|
Assumed Return on Portfolio (Net of Expenses)
|
-10.00%
|
-5.00%
|
0.00%
|
5.00%
|
10.00%
|
|
Corresponding Return to Shareholder
|
-16.78%
|
-9.50%
|
-2.23%
|
5.04%
|
12.31%
|
The table reflects hypothetical performance of the fund’s portfolio and not the actual performance of the fund’s shares, the value of which is determined by market forces and other factors.
Should the fund elect to add additional leverage to its portfolio, any benefits of
such additional leverage cannot be fully achieved until the proceeds resulting from the
use of such leverage have been received by the fund and invested in accordance with the
fund’s investment objectives and policies. The fund’s willingness to use additional leverage, and the extent to which leverage is used at any time, will depend on many
factors.
19
Portfolio Managers' Profiles
|
Portfolio Manager
|
Primary Role
|
Since
|
Title and Five Year History
|
|
David Cole
|
Portfolio Manager
|
2007
|
Investment Officer of MFS; employed
in the investment management area
of MFS since 2004.
|
|
Michael Skatrud
|
Portfolio Manager
|
2018
|
Investment Officer of MFS; employed
in the investment management area
of MFS since 2013.
|
20
Dividend Reinvestment And Cash Purchase Plan
The fund offers a Dividend Reinvestment and Cash Purchase Plan (the “Plan”) that allows common shareholders to reinvest either all of the distributions paid by the
fund or only the long-term capital gains. Generally, purchases are made at the market price
unless that price exceeds the net asset value (the shares are trading at a premium).
If the shares are trading at a premium, the fund will issue shares at a price of either
the net asset value or 95% of the market price, whichever is greater. You can also buy
shares on a quarterly basis in any amount $100 and over. Computershare Trust Company, N.A. (the Transfer Agent for the fund) (the “Plan Agent”) will purchase shares under the Plan on the 15th of January, April, July, and October or shortly
thereafter. You may obtain a copy of the Plan by contacting the Plan Agent at 1-800-637-2304 any business day from 9 a.m. to 5 p.m. Eastern time or by visiting
the Plan Agent's Web site at www.computershare.com/investor.
If shares are registered in your own name, new shareholders will automatically participate in the Plan, unless you have indicated that you do not wish to participate.
If your shares are in the name of a brokerage firm, bank, or other nominee, you can ask
the firm or nominee to participate in the Plan on your behalf. If the nominee does
not offer the Plan, you may wish to request that your shares be re-registered in your
own name so that you can participate. There is no service charge to reinvest distributions,
nor are there brokerage charges for shares issued directly by the fund. However, when
shares are bought on the New York Stock Exchange or otherwise on the open market,
each participant pays a pro rata share of the transaction expenses, including commissions. The tax status of dividends and capital gain distributions does not change
whether received in cash or reinvested in additional shares – the automatic reinvestment of distributions does not relieve you of any income tax that may be payable (or required to be withheld) on the distributions.
If your shares are held directly with the Plan Agent, you may withdraw from the Plan
at any time by contacting the Plan Agent. Please have available the name of the fund
and your account number. For certain types of registrations, such as corporate accounts,
instructions must be submitted in writing. Please call for additional details. When
you withdraw from the Plan, you can receive the value of the reinvested shares in one
of three ways: your full shares will be held in your account, the Plan Agent will sell
your shares and send the proceeds to you, or you may transfer your full shares to your
investment professional who can hold or sell them. Additionally, the Plan Agent will
sell your fractional shares and send the proceeds to you.
If you have any questions, contact the Plan Agent by calling 1-800-637-2304, visit
the Plan Agent’s Web site at www.computershare.com/investor, or by writing to the Plan Agent at P.O. Box 43078, Providence, RI 02940-3078.
21
Portfolio of Investments
11/30/25
The Portfolio of Investments is a complete list of all securities owned by your fund.
It is categorized by broad-based asset classes.
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – 141.4%
|
||||
|
Aerospace & Defense – 4.4%
|
||||
|
Axon Enterprise, Inc., 6.125%, 3/15/2030 (n)
|
|
$
|
173,000
|
$178,323
|
|
Axon Enterprise, Inc., 6.25%, 3/15/2033 (n)
|
|
|
55,000
|
57,103
|
|
Bombardier, Inc., 7.5%, 2/01/2029 (n)
|
|
|
56,000
|
58,443
|
|
Bombardier, Inc., 8.75%, 11/15/2030 (n)
|
|
|
29,000
|
31,308
|
|
Bombardier, Inc., 7.25%, 7/01/2031 (n)
|
|
|
88,000
|
93,735
|
|
Bombardier, Inc., 7%, 6/01/2032 (n)
|
|
|
53,000
|
55,843
|
|
Bombardier, Inc., 6.75%, 6/15/2033 (n)
|
|
|
114,000
|
120,224
|
|
TransDigm, Inc., 6.75%, 8/15/2028 (n)
|
|
|
108,000
|
110,208
|
|
TransDigm, Inc., 4.625%, 1/15/2029
|
|
|
151,000
|
149,143
|
|
TransDigm, Inc., 6.375%, 3/01/2029 (n)
|
|
|
82,000
|
84,457
|
|
TransDigm, Inc., 6.875%, 12/15/2030 (n)
|
|
|
234,000
|
243,941
|
|
TransDigm, Inc., 6.375%, 5/31/2033 (n)
|
|
|
274,000
|
280,849
|
|
|
|
|
|
$1,463,577
|
|
Automotive – 5.2%
|
||||
|
Allison Transmission, Inc., 3.75%, 1/30/2031 (n)
|
|
$
|
262,000
|
$244,338
|
|
Allison Transmission, Inc., 5.875%, 12/01/2033 (n)
|
|
|
28,000
|
28,255
|
|
American Axle & Manufacturing, Inc., 6.375%, 10/15/2032 (n)
|
|
|
69,000
|
69,423
|
|
American Axle & Manufacturing, Inc., 7.75%, 10/15/2033 (n)
|
|
|
123,000
|
124,223
|
|
Clarios Global LP/Clarios US Finance Co., 6.75%, 2/15/2030 (n)
|
|
|
92,000
|
95,632
|
|
Clarios Global LP/Clarios US Finance Co., 4.75%, 6/15/2031 (n)
|
|
EUR
|
100,000
|
118,141
|
|
Clarios Global LP/Clarios US Finance Co., 6.75%, 9/15/2032 (n)
|
|
$
|
42,000
|
43,200
|
|
Dealer Tire LLC/DT Issuer LLC, 8%, 2/01/2028 (n)
|
|
|
135,000
|
133,720
|
|
Dornoch Debt Merger Sub, Inc., 6.625%, 10/15/2029 (n)
|
|
|
161,000
|
135,541
|
|
Forvia SE, 6.75%, 9/15/2033 (n)
|
|
|
200,000
|
203,605
|
|
J.B. Poindexter & Co., Inc., 8.75%, 12/15/2031 (n)
|
|
|
109,000
|
113,657
|
|
New Flyer Holdings, Inc., 9.25%, 7/01/2030 (n)
|
|
|
126,000
|
134,948
|
|
Nissan Motor Acceptance Co. LLC, 5.625%, 9/29/2028 (n)
|
|
|
70,000
|
69,822
|
|
Real Hero Merger Sub 2, Inc., 6.25%, 2/01/2029 (n)
|
|
|
125,000
|
55,504
|
|
Wabash National Corp., 4.5%, 10/15/2028 (n)
|
|
|
158,000
|
144,624
|
|
|
|
|
|
$1,714,633
|
|
Broadcasting – 4.1%
|
||||
|
Banijay Group S.A.S., 8.125%, 5/01/2029 (n)
|
|
$
|
200,000
|
$208,226
|
|
Dotdash Meredith, Inc., 7.625%, 6/15/2032 (n)
|
|
|
126,000
|
114,116
|
|
Gray Media, Inc., 9.625%, 7/15/2032 (n)
|
|
|
111,000
|
115,041
|
|
Gray Media, Inc., 7.25%, 8/15/2033 (n)
|
|
|
83,000
|
83,144
|
|
Midas OpCo Holdings LLC, 5.625%, 8/15/2029 (n)
|
|
|
165,000
|
160,338
|
|
Scripps Escrow II, Inc., 3.875%, 1/15/2029 (n)
|
|
|
63,000
|
58,629
|
|
Sinclair Television Group, Inc., 8.125%, 2/15/2033 (n)
|
|
|
152,000
|
158,349
|
22
Portfolio of Investments – continued
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – continued
|
||||
|
Broadcasting – continued
|
||||
|
Univision Communications, Inc., 8%, 8/15/2028 (n)
|
|
$
|
85,000
|
$87,718
|
|
Univision Communications, Inc., 8.5%, 7/31/2031 (n)
|
|
|
187,000
|
193,451
|
|
Versant Media Group, Inc., 7.25%, 1/30/2031 (n)
|
|
|
56,000
|
57,534
|
|
WarnerMedia Holdings, Inc., 5.05%, 3/15/2042
|
|
|
150,000
|
119,980
|
|
|
|
|
|
$1,356,526
|
|
Brokerage & Asset Managers – 2.5%
|
||||
|
Aretec Escrow Issuer 2, Inc., 10%, 8/15/2030 (n)
|
|
$
|
101,000
|
$109,591
|
|
Aretec Escrow Issuer, Inc., 7.5%, 4/01/2029 (n)
|
|
|
39,000
|
39,206
|
|
Hightower Holding LLC, 6.75%, 4/15/2029 (n)
|
|
|
107,000
|
107,109
|
|
Hightower Holding LLC, 9.125%, 1/31/2030 (n)
|
|
|
66,000
|
70,150
|
|
Jane Street Group/JSG Finance, Inc., 6.125%, 11/01/2032 (n)
|
|
|
333,000
|
338,756
|
|
Osaic Holdings, Inc., 6.75%, 8/01/2032 (n)
|
|
|
26,000
|
26,928
|
|
Osaic Holdings, Inc., 8%, 8/01/2033 (n)
|
|
|
134,000
|
137,998
|
|
|
|
|
|
$829,738
|
|
Building – 4.7%
|
||||
|
AmeriTex Holdco Intermediate LLC, 7.625%, 8/15/2033 (n)
|
|
$
|
151,000
|
$158,640
|
|
Builders FirstSource, Inc., 6.75%, 5/15/2035 (n)
|
|
|
85,000
|
89,649
|
|
Cornerstone Building Brands, Inc., 6.125%, 1/15/2029 (n)
|
|
|
125,000
|
62,539
|
|
Cornerstone Building Brands, Inc., 9.5%, 8/15/2029 (n)
|
|
|
65,000
|
52,192
|
|
Knife River Corp., 7.75%, 5/01/2031 (n)
|
|
|
107,000
|
112,535
|
|
LBM Acquisition LLC, 6.25%, 1/15/2029 (n)
|
|
|
84,000
|
75,140
|
|
LBM Acquisition LLC, 9.5%, 6/15/2031 (n)
|
|
|
126,000
|
129,871
|
|
Miter Brands Acquisition Holdco, Inc., 6.75%, 4/01/2032 (n)
|
|
|
47,000
|
48,013
|
|
MIWD Holdco II LLC/MIWD Finance Co., 5.5%, 2/01/2030 (n)
|
|
|
140,000
|
132,205
|
|
New Enterprise Stone & Lime Co., Inc., 9.75%, 7/15/2028 (n)
|
|
|
56,000
|
56,056
|
|
Patrick Industries, Inc., 6.375%, 11/01/2032 (n)
|
|
|
214,000
|
219,176
|
|
Quikrete Holdings, Inc., 6.375%, 3/01/2032 (n)
|
|
|
280,000
|
290,751
|
|
White Cap Supply Holding Co., 7.375%, 11/15/2030 (n)
|
|
|
137,000
|
139,729
|
|
|
|
|
|
$1,566,496
|
|
Business Services – 4.4%
|
||||
|
ams-OSRAM AG, 10.5%, 3/30/2029
|
|
EUR
|
100,000
|
$122,403
|
|
athenahealth, Inc., 6.5%, 2/15/2030 (n)
|
|
$
|
159,000
|
157,910
|
|
CACI International, Inc., 6.375%, 6/15/2033 (n)
|
|
|
170,000
|
177,226
|
|
ION Platform Finance US, Inc., 7.875%, 9/30/2032 (n)
|
|
|
200,000
|
190,563
|
|
Iron Mountain, Inc., 5.25%, 3/15/2028 (n)
|
|
|
132,000
|
131,767
|
|
Iron Mountain, Inc., 5.625%, 7/15/2032 (n)
|
|
|
178,000
|
176,987
|
|
Iron Mountain, Inc., 6.25%, 1/15/2033 (n)
|
|
|
130,000
|
132,923
|
|
Shift4 Payments LLC/Shift4 Payments Finance Sub, Inc.,
6.75%, 8/15/2032 (n)
|
|
|
135,000
|
140,321
|
23
Portfolio of Investments – continued
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – continued
|
||||
|
Business Services – continued
|
||||
|
Wulf Compute LLC, 7.75%, 10/15/2030 (n)
|
|
$
|
205,000
|
$211,954
|
|
|
|
|
|
$1,442,054
|
|
Cable TV – 6.0%
|
||||
|
Cable One, Inc., 4%, 11/15/2030 (n)
|
|
$
|
112,000
|
$89,090
|
|
CCO Holdings LLC/CCO Holdings Capital Corp., 4.75%, 3/01/2030 (n)
|
|
|
482,000
|
459,094
|
|
CCO Holdings LLC/CCO Holdings Capital Corp., 4.5%, 8/15/2030 (n)
|
|
|
299,000
|
279,772
|
|
CSC Holdings LLC, 5.375%, 2/01/2028 (n)
|
|
|
200,000
|
144,964
|
|
DIRECTV Financing LLC, 8.875%, 2/01/2030 (n)
|
|
|
65,000
|
64,532
|
|
DIRECTV Holdings LLC/DIRECTV Financing Co., Inc.,
10%, 2/15/2031 (n)
|
|
|
44,000
|
43,707
|
|
DISH DBS Corp., 5.125%, 6/01/2029
|
|
|
143,000
|
121,031
|
|
DISH Network Corp., 11.75%, 11/15/2027 (n)
|
|
|
118,000
|
123,217
|
|
EchoStar Corp., 10.75%, 11/30/2029
|
|
|
146,824
|
161,873
|
|
EchoStar Corp., 6.75% (6.75% Cash or 6.75% PIK) to 5/30/2027,
6.75% Cash to 11/30/2030 (p)
|
|
|
125,247
|
130,074
|
|
Virgin Media Finance PLC, 5%, 7/15/2030 (n)
|
|
|
200,000
|
177,005
|
|
Ziggo Bond Finance B.V., 5.125%, 2/28/2030 (n)
|
|
|
200,000
|
179,517
|
|
|
|
|
|
$1,973,876
|
|
Chemicals – 4.0%
|
||||
|
Cerdia Finanz GmbH, 9.375%, 10/03/2031 (n)
|
|
$
|
200,000
|
$206,446
|
|
Chemours Co., 4.625%, 11/15/2029 (n)
|
|
|
182,000
|
162,580
|
|
Consolidated Energy Finance S.A., 5.625%, 10/15/2028 (n)
|
|
|
150,000
|
104,100
|
|
Maxam Prill S.à r.l., 6%, 7/15/2030 (n)
|
|
EUR
|
145,000
|
170,800
|
|
Qnity Electronics, Inc., 5.75%, 8/15/2032 (n)
|
|
$
|
124,000
|
127,264
|
|
Qnity Electronics, Inc., 6.25%, 8/15/2033 (n)
|
|
|
54,000
|
55,962
|
|
SCIH Salt Holdings, Inc., 6.625%, 5/01/2029 (n)
|
|
|
186,000
|
186,800
|
|
SNF Group SACA, 3.375%, 3/15/2030 (n)
|
|
|
250,000
|
232,842
|
|
Tronox, Inc., 4.625%, 3/15/2029 (n)
|
|
|
41,000
|
26,484
|
|
Tronox, Inc., 9.125%, 9/30/2030 (n)
|
|
|
55,000
|
51,857
|
|
|
|
|
|
$1,325,135
|
|
Computer Software – 3.0%
|
||||
|
Amentum Escrow Corp., 7.25%, 8/01/2032 (n)
|
|
$
|
189,000
|
$198,385
|
|
Cloud Software Group, Inc., 9%, 9/30/2029 (n)
|
|
|
41,000
|
42,293
|
|
Cloud Software Group, Inc., 8.25%, 6/30/2032 (n)
|
|
|
186,000
|
195,932
|
|
Cloud Software Group, Inc., 6.625%, 8/15/2033 (n)
|
|
|
111,000
|
110,804
|
|
Fair Isaac Corp., 6%, 5/15/2033 (n)
|
|
|
214,000
|
219,960
|
|
Neptune Bidco U.S., Inc., 9.29%, 4/15/2029 (n)
|
|
|
172,000
|
171,216
|
|
Neptune Bidco U.S., Inc., 10.375%, 5/15/2031 (n)
|
|
|
54,000
|
54,596
|
|
|
|
|
|
$993,186
|
24
Portfolio of Investments – continued
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – continued
|
||||
|
Computer Software - Systems – 1.7%
|
||||
|
Sabre GLBL, Inc., 10.75%, 11/15/2029 (n)
|
|
$
|
49,000
|
$43,122
|
|
Sabre GLBL, Inc., 11.125%, 7/15/2030 (n)
|
|
|
42,000
|
36,327
|
|
SS&C Technologies Holdings, Inc., 5.5%, 9/30/2027 (n)
|
|
|
175,000
|
174,972
|
|
SS&C Technologies Holdings, Inc., 6.5%, 6/01/2032 (n)
|
|
|
49,000
|
50,994
|
|
Virtusa Corp., 7.125%, 12/15/2028 (n)
|
|
|
94,000
|
90,366
|
|
Zebra Technologies Corp., “A”, 6.5%, 6/01/2032 (n)
|
|
|
175,000
|
181,437
|
|
|
|
|
|
$577,218
|
|
Conglomerates – 2.2%
|
||||
|
Amsted Industries, Inc., 6.375%, 3/15/2033 (n)
|
|
$
|
109,000
|
$112,768
|
|
Emerald Debt Merger, 6.625%, 12/15/2030 (n)
|
|
|
157,000
|
162,707
|
|
Gates Corp., 6.875%, 7/01/2029 (n)
|
|
|
114,000
|
118,802
|
|
Husky Injection Molding Systems Ltd., 9%, 2/15/2029 (n)
|
|
|
142,000
|
149,455
|
|
SPX Flow, Inc., 8.75%, 4/01/2030 (n)
|
|
|
170,000
|
174,725
|
|
|
|
|
|
$718,457
|
|
Construction – 1.7%
|
||||
|
Empire Communities Corp., 9.75%, 5/01/2029 (n)
|
|
$
|
165,000
|
$165,825
|
|
Mattamy Group Corp., 5.25%, 12/15/2027 (n)
|
|
|
63,000
|
62,960
|
|
Mattamy Group Corp., 4.625%, 3/01/2030 (n)
|
|
|
86,000
|
83,434
|
|
New Home Co., 8.5%, 11/01/2030 (n)
|
|
|
118,000
|
121,543
|
|
Weekley Homes LLC/Weekley Finance Corp., 4.875%, 9/15/2028 (n)
|
|
|
122,000
|
120,047
|
|
|
|
|
|
$553,809
|
|
Consumer Products – 4.6%
|
||||
|
Acushnet Co., 5.625%, 12/01/2033 (n)
|
|
$
|
144,000
|
$145,119
|
|
Amer Sports Co., 6.75%, 2/16/2031 (n)
|
|
|
135,000
|
140,738
|
|
CD&R Smokey Buyer, Inc./Radio Systems Corp., 9.5%, 10/15/2029 (n)
|
|
|
125,000
|
84,599
|
|
Champ Acquisition Corp., 8.375%, 12/01/2031 (n)
|
|
|
131,000
|
139,334
|
|
Energizer Holdings, Inc., 4.375%, 3/31/2029 (n)
|
|
|
115,000
|
109,406
|
|
Energizer Holdings, Inc., 6%, 9/15/2033 (n)
|
|
|
82,000
|
77,406
|
|
MajorDrive Holdings IV LLC, 6.375%, 6/01/2029 (n)
|
|
|
62,000
|
42,160
|
|
Newell Brands, Inc., 6.375%, 5/15/2030
|
|
|
157,000
|
150,873
|
|
Newell Brands, Inc., 6.625%, 5/15/2032
|
|
|
87,000
|
81,923
|
|
Opal Bidco S.A.S., 5.5%, 3/31/2032 (n)
|
|
EUR
|
100,000
|
119,915
|
|
Perrigo Finance Unlimited Co., 6.125%, 9/30/2032
|
|
$
|
194,000
|
189,401
|
|
Prestige Consumer Healthcare, Inc., 5.125%, 1/15/2028 (n)
|
|
|
124,000
|
123,889
|
|
Prestige Consumer Healthcare, Inc., 3.75%, 4/01/2031 (n)
|
|
|
140,000
|
130,457
|
|
|
|
|
|
$1,535,220
|
25
Portfolio of Investments – continued
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – continued
|
||||
|
Consumer Services – 4.4%
|
||||
|
Allied Universal Holdco LLC, 6.875%, 6/15/2030 (n)
|
|
$
|
71,000
|
$73,385
|
|
Allied Universal Holdco LLC, 7.875%, 2/15/2031 (n)
|
|
|
132,000
|
138,977
|
|
Anywhere Real Estate Group LLC/Realogy Co-Issuer Corp.,
9.75%, 4/15/2030 (n)
|
|
|
55,000
|
59,750
|
|
Arches Buyer, Inc., 6.125%, 12/01/2028 (n)
|
|
|
171,000
|
167,371
|
|
Garda World Security Corp., 6.5%, 1/15/2031 (n)
|
|
|
70,000
|
71,867
|
|
Garda World Security Corp., 8.375%, 11/15/2032 (n)
|
|
|
171,000
|
175,314
|
|
Raven Acquisition Holdings LLC, 6.875%, 11/15/2031 (n)
|
|
|
186,000
|
191,206
|
|
Realogy Group LLC/Realogy Co-Issuer Corp., 5.25%, 4/15/2030 (n)
|
|
|
119,000
|
110,910
|
|
Service Corp. International, 5.75%, 10/15/2032
|
|
|
276,000
|
281,634
|
|
TriNet Group, Inc., 3.5%, 3/01/2029 (n)
|
|
|
130,000
|
122,668
|
|
TriNet Group, Inc., 7.125%, 8/15/2031 (n)
|
|
|
51,000
|
52,779
|
|
|
|
|
|
$1,445,861
|
|
Containers – 1.4%
|
||||
|
Ball Corp., 6%, 6/15/2029
|
|
$
|
106,000
|
$109,096
|
|
Ball Corp., 2.875%, 8/15/2030
|
|
|
226,000
|
208,387
|
|
Clydesdale Acquisition Holdings, Inc., 8.75%, 4/15/2030 (n)
|
|
|
134,000
|
134,210
|
|
|
|
|
|
$451,693
|
|
Electronics – 0.4%
|
||||
|
Diebold Nixdorf, Inc., 7.75%, 3/31/2030 (n)
|
|
$
|
115,000
|
$122,098
|
|
Energy - Independent – 6.2%
|
||||
|
Baytex Energy Corp., 8.5%, 4/30/2030 (n)
|
|
$
|
123,000
|
$129,732
|
|
Chord Energy Corp., 6%, 10/01/2030 (n)
|
|
|
42,000
|
42,348
|
|
Chord Energy Corp., 6.75%, 3/15/2033 (n)
|
|
|
147,000
|
151,741
|
|
Civitas Resources, Inc., 8.375%, 7/01/2028 (n)
|
|
|
32,000
|
33,003
|
|
Civitas Resources, Inc., 8.625%, 11/01/2030 (n)
|
|
|
52,000
|
54,473
|
|
Civitas Resources, Inc., 8.75%, 7/01/2031 (n)
|
|
|
117,000
|
121,837
|
|
CNX Resources Corp., 7.25%, 3/01/2032 (n)
|
|
|
155,000
|
161,641
|
|
Comstock Resources, Inc., 6.75%, 3/01/2029 (n)
|
|
|
217,000
|
217,658
|
|
Gulfport Energy Corp., 6.75%, 9/01/2029 (n)
|
|
|
176,000
|
181,684
|
|
Kraken Oil & Gas Partners LLC, 7.625%, 8/15/2029 (n)
|
|
|
100,000
|
98,991
|
|
Magnolia Oil & Gas Operating LLC/Magnolia Oil & Gas Finance Corp.,
6.875%, 12/01/2032 (n)
|
|
|
184,000
|
189,105
|
|
Matador Resources Co., 6.875%, 4/15/2028 (n)
|
|
|
110,000
|
112,670
|
|
Matador Resources Co., 6.5%, 4/15/2032 (n)
|
|
|
54,000
|
54,841
|
|
Permian Resources Operating LLC, 5.875%, 7/01/2029 (n)
|
|
|
113,000
|
113,365
|
|
Permian Resources Operating LLC, 7%, 1/15/2032 (n)
|
|
|
113,000
|
117,670
|
|
Permian Resources Operating LLC, 6.25%, 2/01/2033 (n)
|
|
|
41,000
|
42,022
|
|
Vital Energy, Inc., 7.875%, 4/15/2032 (n)
|
|
|
107,000
|
103,695
|
|
Wildfire Intermediate Holdings LLC, 7.5%, 10/15/2029 (n)
|
|
|
114,000
|
115,079
|
|
|
|
|
|
$2,041,555
|
26
Portfolio of Investments – continued
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – continued
|
||||
|
Entertainment – 3.7%
|
||||
|
Kingpin Intermediate Holdings LLC, 7.25%, 10/15/2032 (n)
|
|
$
|
139,000
|
$128,872
|
|
Life Time, Inc., 6%, 11/15/2031 (n)
|
|
|
180,000
|
183,561
|
|
Lindblad Expeditions Holdings, Inc., 7%, 9/15/2030 (n)
|
|
|
123,000
|
126,147
|
|
NCL Corp. Ltd., 6.25%, 3/01/2030 (n)
|
|
|
177,000
|
178,922
|
|
NCL Corp. Ltd., 6.75%, 2/01/2032 (n)
|
|
|
70,000
|
71,043
|
|
Six Flags Entertainment Corp., 6.625%, 5/01/2032 (n)
|
|
|
231,000
|
230,436
|
|
Viking Cruises Ltd. Co., 5.875%, 10/15/2033 (n)
|
|
|
117,000
|
118,897
|
|
Viking Ocean Cruises Ship VII Ltd., 5.625%, 2/15/2029 (n)
|
|
|
174,000
|
174,048
|
|
|
|
|
|
$1,211,926
|
|
Financial Institutions – 10.4%
|
||||
|
Azorra Finance Ltd., 7.75%, 4/15/2030 (n)
|
|
$
|
217,000
|
$229,071
|
|
Azorra Finance Ltd., 7.25%, 1/15/2031 (n)
|
|
|
58,000
|
60,541
|
|
Bread Financial Holdings, Inc., 6.75%, 5/15/2031 (n)
|
|
|
136,000
|
138,840
|
|
Credit Acceptance Corp., 9.25%, 12/15/2028 (n)
|
|
|
69,000
|
72,408
|
|
Credit Acceptance Corp., 6.625%, 3/15/2030 (n)
|
|
|
117,000
|
116,149
|
|
CrossCountry Intermediate HoldCo LLC, 6.5%, 10/01/2030 (n)
|
|
|
96,000
|
97,219
|
|
CrossCountry Intermediate HoldCo LLC, 6.75%, 12/01/2032 (n)
|
|
|
56,000
|
56,624
|
|
Freedom Mortgage Holdings LLC, 9.25%, 2/01/2029 (n)
|
|
|
131,000
|
137,337
|
|
Freedom Mortgage Holdings LLC, 9.125%, 5/15/2031 (n)
|
|
|
53,000
|
56,711
|
|
FTAI Aviation Ltd., 5.5%, 5/01/2028 (n)
|
|
|
170,000
|
170,660
|
|
FTAI Aviation Ltd., 7.875%, 12/01/2030 (n)
|
|
|
106,000
|
112,853
|
|
Global Aircraft Leasing Co. Ltd., 8.75%, 9/01/2027 (n)
|
|
|
137,000
|
141,690
|
|
goeasy Ltd., 6.875%, 2/15/2031 (n)
|
|
|
95,000
|
89,638
|
|
Icahn Enterprises LP/Icahn Enterprises Finance Corp.,
9.75%, 1/15/2029
|
|
|
138,000
|
139,029
|
|
Icahn Enterprises LP/Ichan Enterprises Finance Corp.,
10%, 11/15/2029 (n)
|
|
|
57,000
|
57,321
|
|
Jefferson Capital Holdings LLC, 8.25%, 5/15/2030 (n)
|
|
|
169,000
|
176,799
|
|
LFS TopCo LLC, 8.75%, 7/15/2030 (n)
|
|
|
142,000
|
138,838
|
|
OneMain Finance Corp., 6.625%, 5/15/2029
|
|
|
145,000
|
150,042
|
|
OneMain Finance Corp., 5.375%, 11/15/2029
|
|
|
120,000
|
119,608
|
|
OneMain Finance Corp., 7.5%, 5/15/2031
|
|
|
84,000
|
88,245
|
|
PennyMac Financial Services, Inc., 6.875%, 2/15/2033 (n)
|
|
|
327,000
|
340,360
|
|
Phoenix Aviation Capital, 9.25%, 7/15/2030 (n)
|
|
|
100,000
|
106,381
|
|
Rocket Cos., Inc., 6.5%, 8/01/2029 (n)
|
|
|
121,000
|
125,512
|
|
Rocket Cos., Inc., 6.125%, 8/01/2030 (n)
|
|
|
97,000
|
100,692
|
|
Rocket Cos., Inc., 6.375%, 8/01/2033 (n)
|
|
|
116,000
|
121,471
|
|
Rocket Cos., Inc., 4%, 10/15/2033 (n)
|
|
|
46,000
|
42,619
|
|
TrueNoord Capital DAC, 8.75%, 3/01/2030 (n)
|
|
|
109,000
|
114,025
|
|
Walker & Dunlop, Inc., 6.625%, 4/01/2033 (n)
|
|
|
130,000
|
133,619
|
|
|
|
|
|
$3,434,302
|
27
Portfolio of Investments – continued
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – continued
|
||||
|
Food & Beverages – 3.9%
|
||||
|
Fiesta Purchaser, Inc., 7.875%, 3/01/2031 (n)
|
|
$
|
77,000
|
$80,997
|
|
Fiesta Purchaser, Inc., 9.625%, 9/15/2032 (n)
|
|
|
91,000
|
97,460
|
|
Performance Food Group Co., 5.5%, 10/15/2027 (n)
|
|
|
131,000
|
130,992
|
|
Performance Food Group Co., 6.125%, 9/15/2032 (n)
|
|
|
98,000
|
100,821
|
|
Post Holdings, Inc., 4.625%, 4/15/2030 (n)
|
|
|
255,000
|
248,374
|
|
Post Holdings, Inc., 6.25%, 10/15/2034 (n)
|
|
|
107,000
|
108,674
|
|
Primo Water Holdings, Inc./Triton Water Holdings,
4.375%, 4/30/2029 (n)
|
|
|
104,000
|
100,860
|
|
U.S. Foods Holding Corp., 4.75%, 2/15/2029 (n)
|
|
|
234,000
|
232,910
|
|
U.S. Foods Holding Corp., 5.75%, 4/15/2033 (n)
|
|
|
62,000
|
63,116
|
|
Viking Baked Goods Acquisition Corp., 8.625%, 11/01/2031 (n)
|
|
|
120,000
|
121,244
|
|
|
|
|
|
$1,285,448
|
|
Forest & Paper Products – 0.4%
|
||||
|
Veritiv Operating Co., 10.5%, 11/30/2030 (n)
|
|
$
|
132,000
|
$141,865
|
|
Gaming & Lodging – 5.2%
|
||||
|
CDI Escrow Issuer, Inc., 5.75%, 4/01/2030 (n)
|
|
$
|
307,000
|
$309,377
|
|
Hilton Domestic Operating Co., Inc., 4.875%, 1/15/2030
|
|
|
297,000
|
297,650
|
|
Hilton Domestic Operating Co., Inc., 3.625%, 2/15/2032 (n)
|
|
|
143,000
|
132,888
|
|
Hilton Domestic Operating Co., Inc., 5.875%, 3/15/2033 (n)
|
|
|
68,000
|
70,118
|
|
Rivers Enterprise Lender LLC, 6.25%, 10/15/2030 (n)
|
|
|
109,000
|
110,658
|
|
Wyndham Hotels & Resorts, Inc., 4.375%, 8/15/2028 (n)
|
|
|
198,000
|
194,864
|
|
Wynn Macau Ltd., 5.625%, 8/26/2028 (n)
|
|
|
200,000
|
198,789
|
|
Wynn Macau Ltd., 6.75%, 2/15/2034 (n)
|
|
|
200,000
|
199,959
|
|
Wynn Resorts Finance LLC/Wynn Resorts Capital Corp.,
5.125%, 10/01/2029 (n)
|
|
|
149,000
|
149,748
|
|
Wynn Resorts Finance LLC/Wynn Resorts Capital Corp.,
7.125%, 2/15/2031 (n)
|
|
|
36,000
|
38,892
|
|
|
|
|
|
$1,702,943
|
|
Industrial – 1.8%
|
||||
|
AECOM, 6%, 8/01/2033 (n)
|
|
$
|
209,000
|
$214,840
|
|
APi Escrow Corp., 4.75%, 10/15/2029 (n)
|
|
|
255,000
|
250,572
|
|
Brundage-Bone Concrete Pumping Holdings, Inc., 7.5%, 2/01/2032 (n)
|
|
|
112,000
|
113,473
|
|
|
|
|
|
$578,885
|
|
Insurance - Health – 0.5%
|
||||
|
Molina Healthcare, Inc., 6.5%, 2/15/2031 (n)
|
|
$
|
177,000
|
$180,808
|
|
Insurance - Property & Casualty – 4.9%
|
||||
|
Acrisure LLC/Acrisure Finance, Inc., 7.5%, 11/06/2030 (n)
|
|
$
|
45,000
|
$46,727
|
|
Acrisure LLC/Acrisure Finance, Inc., 6.75%, 7/01/2032 (n)
|
|
|
186,000
|
190,516
|
|
Alliant Holdings Intermediate LLC/Alliant Holdings Co-Issuer,
5.875%, 11/01/2029 (n)
|
|
|
76,000
|
75,103
|
28
Portfolio of Investments – continued
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – continued
|
||||
|
Insurance - Property & Casualty – continued
|
||||
|
Alliant Holdings Intermediate LLC/Alliant Holdings Co-Issuer,
7%, 1/15/2031 (n)
|
|
$
|
121,000
|
$125,718
|
|
Alliant Holdings Intermediate LLC/Alliant Holdings Co-Issuer,
6.5%, 10/01/2031 (n)
|
|
|
109,000
|
112,130
|
|
AmWINS Group Benefits, Inc., 6.375%, 2/15/2029 (n)
|
|
|
73,000
|
75,017
|
|
AmWINS Group Benefits, Inc., 4.875%, 6/30/2029 (n)
|
|
|
56,000
|
54,618
|
|
Amynta Agency Borrower, Inc., 7.5%, 7/15/2033 (n)
|
|
|
137,000
|
140,158
|
|
Baldwin Insurance Group Holdings LLC, 7.125%, 5/15/2031 (n)
|
|
|
187,000
|
194,125
|
|
Hub International Ltd., 5.625%, 12/01/2029 (n)
|
|
|
46,000
|
46,000
|
|
Hub International Ltd., 7.25%, 6/15/2030 (n)
|
|
|
171,000
|
179,171
|
|
Hub International Ltd., 7.375%, 1/31/2032 (n)
|
|
|
84,000
|
87,402
|
|
Panther Escrow Issuer, 7.125%, 6/01/2031 (n)
|
|
|
271,000
|
280,218
|
|
|
|
|
|
$1,606,903
|
|
Interactive Media Services – 0.7%
|
||||
|
Snap, Inc., 6.875%, 3/01/2033 (n)
|
|
$
|
177,000
|
$182,334
|
|
Snap, Inc., 6.875%, 3/15/2034 (n)
|
|
|
42,000
|
42,932
|
|
|
|
|
|
$225,266
|
|
Machinery & Tools – 1.3%
|
||||
|
Manitowoc Co., Inc., 9.25%, 10/01/2031 (n)
|
|
$
|
116,000
|
$123,252
|
|
Ritchie Bros Holdings, Inc., 7.75%, 3/15/2031 (n)
|
|
|
281,000
|
294,514
|
|
|
|
|
|
$417,766
|
|
Medical & Health Technology & Services – 5.4%
|
||||
|
Acadia Healthcare Co., Inc., 7.375%, 3/15/2033 (n)
|
|
$
|
140,000
|
$142,670
|
|
Bausch & Lomb Escrow Corp., 8.375%, 10/01/2028 (n)
|
|
|
124,000
|
129,270
|
|
CHS/Community Health Systems, Inc., 6.125%, 4/01/2030 (n)
|
|
|
86,000
|
71,459
|
|
CHS/Community Health Systems, Inc., 5.25%, 5/15/2030 (n)
|
|
|
336,000
|
317,418
|
|
Concentra, Inc., 6.875%, 7/15/2032 (n)
|
|
|
141,000
|
147,624
|
|
Encompass Health Corp., 4.75%, 2/01/2030
|
|
|
181,000
|
180,334
|
|
Encompass Health Corp., 4.625%, 4/01/2031
|
|
|
58,000
|
57,195
|
|
Fortrea Holdings, Inc., 7.5%, 7/01/2030 (n)
|
|
|
35,000
|
35,133
|
|
IQVIA, Inc., 6.5%, 5/15/2030 (n)
|
|
|
200,000
|
208,073
|
|
IQVIA, Inc., 6.25%, 6/01/2032 (n)
|
|
|
131,000
|
137,021
|
|
Prime Healthcare Services, Inc., 9.375%, 9/01/2029 (n)
|
|
|
109,000
|
115,562
|
|
Surgery Center Holdings, Inc., 7.25%, 4/15/2032 (n)
|
|
|
123,000
|
126,225
|
|
U.S. Acute Care Solutions LLC, 9.75%, 5/15/2029 (n)
|
|
|
105,000
|
106,667
|
|
|
|
|
|
$1,774,651
|
|
Medical Equipment – 1.8%
|
||||
|
Insulet Corp., 6.5%, 4/01/2033 (n)
|
|
$
|
169,000
|
$176,513
|
|
Medline Borrower LP, 3.875%, 4/01/2029 (n)
|
|
|
73,000
|
70,865
|
|
Medline Borrower LP, 5.25%, 10/01/2029 (n)
|
|
|
190,000
|
190,444
|
29
Portfolio of Investments – continued
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – continued
|
||||
|
Medical Equipment – continued
|
||||
|
Medline Borrower LP/Medline Co-Issuer, Inc., 6.25%, 4/01/2029 (n)
|
|
$
|
153,000
|
$158,251
|
|
|
|
|
|
$596,073
|
|
Metals & Mining – 3.2%
|
||||
|
Baffinland Iron Mines Corp./Baffinland Iron Mines LP,
8.75%, 7/15/2026 (n)
|
|
$
|
155,000
|
$135,869
|
|
FMG Resources Ltd., 4.375%, 4/01/2031 (n)
|
|
|
242,000
|
233,431
|
|
Mineral Resources Ltd., 9.25%, 10/01/2028 (n)
|
|
|
197,000
|
206,849
|
|
Mineral Resources Ltd., 7%, 4/01/2031 (n)
|
|
|
42,000
|
43,654
|
|
Novelis, Inc., 4.75%, 1/30/2030 (n)
|
|
|
170,000
|
163,557
|
|
Novelis, Inc., 6.875%, 1/30/2030 (n)
|
|
|
89,000
|
92,223
|
|
Petra Diamonds US$ Treasury PLC, 9.75%, 3/08/2030 (z)
|
|
|
76,107
|
44,486
|
|
Taseko Mines Ltd., 8.25%, 5/01/2030 (n)
|
|
|
142,000
|
150,585
|
|
|
|
|
|
$1,070,654
|
|
Midstream – 9.2%
|
||||
|
Buckeye Partners LP, 6.75%, 2/01/2030 (n)
|
|
$
|
114,000
|
$119,399
|
|
Buckeye Partners LP, 5.85%, 11/15/2043
|
|
|
48,000
|
45,422
|
|
Delek Logistics Partners LP/Delek Logistics Corp.,
8.625%, 3/15/2029 (n)
|
|
|
181,000
|
189,716
|
|
Delek Logistics Partners LP/Delek Logistics Corp.,
7.375%, 6/30/2033 (n)
|
|
|
76,000
|
77,860
|
|
Genesis Energy LP/Genesis Energy Finance Corp., 8.25%, 1/15/2029
|
|
|
214,000
|
223,516
|
|
NuStar Logistics LP, 6.375%, 10/01/2030
|
|
|
167,000
|
174,946
|
|
Prairie Acquiror LP, 9%, 8/01/2029 (n)
|
|
|
129,000
|
133,342
|
|
Rockies Express Pipeline LLC, 6.75%, 3/15/2033 (n)
|
|
|
75,000
|
78,689
|
|
Rockies Express Pipeline LLC, 6.875%, 4/15/2040 (n)
|
|
|
146,000
|
151,781
|
|
Sunoco LP, 4.625%, 5/01/2030 (n)
|
|
|
173,000
|
168,647
|
|
Sunoco LP, 7.25%, 5/01/2032 (n)
|
|
|
200,000
|
211,071
|
|
Sunoco LP, 6.625%, 8/15/2032 (n)
|
|
|
68,000
|
70,103
|
|
Tallgrass Energy Partners LP, 5.5%, 1/15/2028 (n)
|
|
|
232,000
|
231,868
|
|
Tallgrass Energy Partners LP, 7.375%, 2/15/2029 (n)
|
|
|
66,000
|
68,483
|
|
Tallgrass Energy Partners LP, 6.75%, 3/15/2034 (n)
|
|
|
35,000
|
35,041
|
|
TransMontaigne Partners LLC, 8.5%, 6/15/2030 (n)
|
|
|
99,000
|
101,224
|
|
Venture Global LNG, Inc., 8.125%, 6/01/2028 (n)
|
|
|
128,000
|
131,107
|
|
Venture Global LNG, Inc., 9.5%, 2/01/2029 (n)
|
|
|
160,000
|
168,746
|
|
Venture Global LNG, Inc., 8.375%, 6/01/2031 (n)
|
|
|
167,000
|
167,412
|
|
Venture Global LNG, Inc., 9% to 9/30/2029, FLR (CMT - 5yr. + 5.44%)
to 3/30/2173 (n)
|
|
|
178,000
|
151,529
|
|
Venture Global Plaquemines LNG LLC, 7.5%, 5/01/2033 (n)
|
|
|
50,000
|
54,484
|
|
Venture Global Plaquemines LNG LLC, 6.5%, 1/15/2034 (n)
|
|
|
132,000
|
136,528
|
|
Venture Global Plaquemines LNG LLC, 6.75%, 1/15/2036 (n)
|
|
|
132,000
|
138,355
|
|
|
|
|
|
$3,029,269
|
30
Portfolio of Investments – continued
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – continued
|
||||
|
Network & Telecom – 1.7%
|
||||
|
Frontier Communications Holdings LLC, 6.75%, 5/01/2029 (n)
|
|
$
|
145,000
|
$146,360
|
|
Iliad Holding S.A.S., 5.375%, 4/15/2030 (n)
|
|
EUR
|
100,000
|
119,569
|
|
Iliad Holding S.A.S., 6.875%, 4/15/2031 (n)
|
|
|
100,000
|
123,855
|
|
Iliad Holding S.A.S., 6.875%, 4/15/2031
|
|
|
100,000
|
123,855
|
|
Windstream Services LLC/Windstream Escrow, 8.25%, 10/01/2031 (n)
|
|
$
|
57,000
|
59,180
|
|
|
|
|
|
$572,819
|
|
Oil Services – 1.6%
|
||||
|
Nabors Industries, Inc., 8.875%, 8/15/2031 (n)
|
|
$
|
168,000
|
$164,052
|
|
U.S.A. Compression Partners LP/Finance Co., 7.125%, 3/15/2029 (n)
|
|
|
210,000
|
218,287
|
|
Valaris Ltd., 8.375%, 4/30/2030 (n)
|
|
|
132,000
|
137,711
|
|
|
|
|
|
$520,050
|
|
Pharmaceuticals – 2.1%
|
||||
|
1261229 B.C. Ltd., 10%, 4/15/2032 (n)
|
|
$
|
200,000
|
$206,763
|
|
Bausch Health Co., Inc., 4.875%, 6/01/2028 (n)
|
|
|
110,000
|
99,550
|
|
Bausch Health Co., Inc., 5.25%, 1/30/2030 (n)
|
|
|
62,000
|
45,570
|
|
Genmab A.S., 6.25%, 12/15/2032 (n)
|
|
|
200,000
|
205,646
|
|
Grifols S.A., 7.125%, 5/01/2030
|
|
EUR
|
100,000
|
121,811
|
|
|
|
|
|
$679,340
|
|
Pollution Control – 1.4%
|
||||
|
Clean Harbors, Inc., 5.75%, 10/15/2033 (n)
|
|
$
|
164,000
|
$167,619
|
|
GFL Environmental, Inc., 4%, 8/01/2028 (n)
|
|
|
138,000
|
135,298
|
|
GFL Environmental, Inc., 6.75%, 1/15/2031 (n)
|
|
|
73,000
|
76,637
|
|
Wrangler Holdco Corp., 6.625%, 4/01/2032 (n)
|
|
|
74,000
|
77,666
|
|
|
|
|
|
$457,220
|
|
Precious Metals & Minerals – 1.2%
|
||||
|
Eldorado Gold Corp., 6.25%, 9/01/2029 (n)
|
|
$
|
171,000
|
$171,855
|
|
IAMGOLD Corp., 5.75%, 10/15/2028 (n)
|
|
|
116,000
|
116,264
|
|
New Gold, Inc., 6.875%, 4/01/2032 (n)
|
|
|
115,000
|
122,306
|
|
|
|
|
|
$410,425
|
|
Printing & Publishing – 0.4%
|
||||
|
Graham Holdings Co., 5.625%, 12/01/2033 (n)
|
|
$
|
139,000
|
$139,163
|
|
Real Estate - Healthcare – 0.5%
|
||||
|
MPT Operating Partnership LP/MPT Finance Corp., REIT,
8.5%, 2/15/2032 (n)
|
|
$
|
102,000
|
$107,792
|
|
MPT Operating Partnership LP/MPT Financial Corp., REIT,
4.625%, 8/01/2029
|
|
|
62,000
|
52,214
|
|
|
|
|
|
$160,006
|
31
Portfolio of Investments – continued
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – continued
|
||||
|
Real Estate - Other – 2.5%
|
||||
|
Park Intermediate Holdings LLC, 4.875%, 5/15/2029 (n)
|
|
$
|
146,000
|
$141,720
|
|
RHP Hotel Properties LP/RHP Finance Corp., 7.25%, 7/15/2028 (n)
|
|
|
236,000
|
243,469
|
|
RHP Hotel Properties LP/RHP Finance Corp., 6.5%, 4/01/2032 (n)
|
|
|
27,000
|
27,983
|
|
Starwood Property Trust, Inc., 5.75%, 1/15/2031 (n)
|
|
|
219,000
|
222,580
|
|
XHR LP, REIT, 4.875%, 6/01/2029 (n)
|
|
|
177,000
|
173,867
|
|
|
|
|
|
$809,619
|
|
Restaurants – 1.7%
|
||||
|
1011778 B.C. ULC/New Red Finance, Inc., 6.125%, 6/15/2029 (n)
|
|
$
|
180,000
|
$185,582
|
|
1011778 B.C. ULC/New Red Finance, Inc., 5.625%, 9/15/2029 (n)
|
|
|
101,000
|
102,921
|
|
1011778 B.C. ULC/New Red Finance, Inc., 4%, 10/15/2030 (n)
|
|
|
132,000
|
125,781
|
|
Fertitta Entertainment LLC, 6.75%, 1/15/2030 (n)
|
|
|
171,000
|
159,482
|
|
|
|
|
|
$573,766
|
|
Retailers – 2.2%
|
||||
|
Beach Acquisition Bidco LLC, 10% (10% Cash or 10.75%
PIK), 7/15/2033 (n)(p)
|
|
$
|
200,000
|
$216,429
|
|
Macy’s Retail Holdings LLC, 5.875%, 3/15/2030 (n)
|
|
|
10,000
|
10,024
|
|
Macy's Retail Holdings LLC, 7.375%, 8/01/2033 (n)
|
|
|
139,000
|
146,252
|
|
Mavis Tire Express Services Corp., 6.5%, 5/15/2029 (n)
|
|
|
116,000
|
115,007
|
|
Maxeda DIY Holding B.V., 5.875%, 10/01/2026
|
|
EUR
|
100,000
|
100,279
|
|
Penske Automotive Group Co., 3.75%, 6/15/2029
|
|
$
|
159,000
|
153,730
|
|
|
|
|
|
$741,721
|
|
Specialty Stores – 1.5%
|
||||
|
Carvana Co., 9%, 6/01/2031 (n)
|
|
$
|
288,915
|
$324,934
|
|
Michael Cos., Inc., 5.25%, 5/01/2028 (n)
|
|
|
74,000
|
69,728
|
|
Michael Cos., Inc., 7.875%, 5/01/2029 (n)
|
|
|
103,000
|
93,499
|
|
|
|
|
|
$488,161
|
|
Supermarkets – 1.7%
|
||||
|
Albertsons Cos. LLC/Safeway, Inc., 5.5%, 3/31/2031 (n)
|
|
$
|
54,000
|
$54,738
|
|
Albertsons Cos. LLC/Safeway, Inc., 6.25%, 3/15/2033 (n)
|
|
|
305,000
|
315,831
|
|
KeHE Distributors LLC/KeHE Finance Corp., 9%, 2/15/2029 (n)
|
|
|
196,000
|
204,767
|
|
|
|
|
|
$575,336
|
|
Telecommunications - Wireless – 1.6%
|
||||
|
Altice France S.A., 9.5%, 11/01/2029 (n)
|
|
$
|
154,020
|
$158,073
|
|
Altice France S.A., 6.5%, 4/15/2032 (n)
|
|
|
154,020
|
149,850
|
|
Zegona Finance PLC, 8.625%, 7/15/2029 (n)
|
|
|
200,000
|
211,877
|
|
|
|
|
|
$519,800
|
32
Portfolio of Investments – continued
|
Issuer
|
|
|
Shares/Par
|
Value ($)
|
|
Bonds – continued
|
||||
|
Telephone Services – 1.4%
|
||||
|
Level 3 Financing, Inc., 3.875%, 10/15/2030 (n)
|
|
$
|
108,479
|
$97,064
|
|
Level 3 Financing, Inc., 6.875%, 6/30/2033 (n)
|
|
|
74,334
|
75,701
|
|
Level 3 Financing, Inc., 7%, 3/31/2034 (n)
|
|
|
70,248
|
71,951
|
|
Uniti Group/CSL Capital Co., 6.5%, 2/15/2029 (n)
|
|
|
143,000
|
135,730
|
|
Uniti Group/CSL Capital Co., 8.625%, 6/15/2032 (n)
|
|
|
102,000
|
97,805
|
|
|
|
|
|
$478,251
|
|
Tobacco – 0.6%
|
||||
|
Turning Point Brands, Inc., 7.625%, 3/15/2032 (n)
|
|
$
|
175,000
|
$186,429
|
|
Transportation - Services – 0.6%
|
||||
|
Avis Budget Finance PLC, 7.25%, 7/31/2030 (n)
|
|
EUR
|
178,000
|
$213,116
|
|
Utilities - Electric Power – 5.4%
|
||||
|
Calpine Corp., 4.5%, 2/15/2028 (n)
|
|
$
|
90,000
|
$89,819
|
|
Clearway Energy Operating LLC, 3.75%, 2/15/2031 (n)
|
|
|
184,000
|
171,444
|
|
Hawaiian Electric Co., Inc., 6%, 10/01/2033 (n)
|
|
|
120,000
|
121,504
|
|
NRG Energy, Inc., 5.75%, 1/15/2034 (n)
|
|
|
143,000
|
144,146
|
|
NRG Energy, Inc., 6%, 1/15/2036 (n)
|
|
|
209,000
|
212,259
|
|
PG&E Corp., 5.25%, 7/01/2030
|
|
|
250,000
|
247,621
|
|
PG&E Corp., 7.375% to 3/15/2030, FLR (CMT - 5yr. + 3.883%)
to 3/15/2055
|
|
|
71,000
|
73,404
|
|
Talen Energy Supply LLC, 6.25%, 2/01/2034 (n)
|
|
|
123,000
|
125,328
|
|
Talen Energy Supply LLC, 6.5%, 2/01/2036 (n)
|
|
|
68,000
|
70,304
|
|
TerraForm Global Operating LLC, 6.125%, 3/01/2026 (n)
|
|
|
44,000
|
43,589
|
|
TerraForm Power Operating LLC, 5%, 1/31/2028 (n)
|
|
|
162,000
|
161,717
|
|
TerraForm Power Operating LLC, 4.75%, 1/15/2030 (n)
|
|
|
38,000
|
36,531
|
|
XPLR Infrastructure Operating Partners LP, 4.5%, 9/15/2027 (n)
|
|
|
90,000
|
88,423
|
|
XPLR Infrastructure Operating Partners LP, 7.25%, 1/15/2029 (n)
|
|
|
130,000
|
133,228
|
|
XPLR Infrastructure Operating Partners LP, 8.375%, 1/15/2031 (n)
|
|
|
40,000
|
41,917
|
|
XPLR Infrastructure Operating Partners LP, 8.625%, 3/15/2033 (n)
|
|
|
33,000
|
34,504
|
|
|
|
|
|
$1,795,738
|
|
Total Bonds (Identified Cost, $46,043,201)
|
|
$46,688,851
|
||
|
Common Stocks – 0.1%
|
||||
|
Oil Services – 0.1%
|
|
|||
|
LTRI Holdings LP (a)(u) (Identified Cost, $39,470)
|
|
200
|
$37,328
|
|
33
Portfolio of Investments – continued
|
Issuer
|
Strike
Price
|
First
Exercise
|
Shares/Par
|
Value ($)
|
|
Warrants – 0.0%
|
|
|
|
|
|
Other Banks & Diversified Financials – 0.0%
|
||||
|
Avation Capital S.A. (1 share for 1 warrant,
Expiration 10/31/26) (a) (Identified Cost, $0)
|
GBP 1.14
|
N/A
|
3,500
|
$1,368
|
|
|
|
|
|
|
|
Mutual Funds (h) – 2.5%
|
||||
|
Money Market Funds – 2.5%
|
|
|||
|
MFS Institutional Money Market Portfolio, 4.01% (v) (Identified Cost,
$817,995)
|
|
|
818,011
|
$818,174
|
|
|
||||
|
|
||||
|
Other Assets, Less Liabilities – (44.0)%
|
|
(14,527,315
)
|
||
|
Net Assets – 100.0%
|
$33,018,406
|
|||
|
(a)
|
Non-income producing security.
|
|
(h)
|
An affiliated issuer, which may be considered one in which the fund owns 5% or more
of the
outstanding voting securities, or a company which is under common control. At period
end, the
aggregate values of the fund's investments in affiliated issuers and in unaffiliated
issuers were
$818,174 and $46,727,547, respectively.
|
|
(n)
|
Securities exempt from registration under Rule 144A of the Securities Act of 1933.
These
securities may be sold in the ordinary course of business in transactions exempt from
registration,
normally to qualified institutional buyers. At period end, the aggregate value of
these securities
was $42,469,646, representing 128.6% of net assets.
|
|
(p)
|
Payment-in-kind (PIK) security for which interest income may be received in additional
securities
and/or cash.
|
|
(u)
|
The security was valued using significant unobservable inputs and is considered level
3 under the
fair value hierarchy. For further information about the fund’s level 3 holdings, please see Note 2 in
the Notes to Financial Statements.
|
|
(v)
|
Affiliated issuer that is available only to investment companies managed by MFS. The
rate quoted
for the MFS Institutional Money Market Portfolio is the annualized seven-day yield
of the fund at
period end.
|
|
(z)
|
Restricted securities are not registered under the Securities Act of 1933 and are
subject to legal
restrictions on resale. These securities generally may be resold in transactions exempt
from
registration or to the public if the securities are subsequently registered. Disposal
of these
securities may involve time-consuming negotiations and prompt sale at an acceptable
price may
be difficult. The fund holds the following restricted securities:
|
|
Restricted Securities
|
Acquisition
Date
|
Cost
|
Value
|
|
Petra Diamonds US$ Treasury PLC, 9.75%, 3/08/2030
|
7/21/21-7/26/21
|
$76,734
|
$44,486
|
|
% of Net assets
|
|
|
0.1%
|
34
Portfolio of Investments – continued
|
The following abbreviations are used in this report and are defined:
|
|
|
CMT
|
Constant Maturity Treasury
|
|
FLR
|
Floating Rate. Interest rate resets periodically based on the parenthetically disclosed
reference rate plus a spread (if any). The period-end rate reported may not be the
current rate. All reference rates are USD unless otherwise noted.
|
|
REIT
|
Real Estate Investment Trust
|
|
Abbreviations indicate amounts shown in currencies other than the U.S. dollar. All
amounts are
stated in U.S. dollars unless otherwise indicated. A list of abbreviations is shown
below:
|
|
|
EUR
|
Euro
|
|
GBP
|
British Pound
|
Derivative Contracts at 11/30/25
|
Forward Foreign Currency Exchange Contracts
|
||||||
|
Currency
Purchased
|
Currency
Sold
|
Counterparty
|
Settlement
Date
|
Unrealized
Appreciation
(Depreciation)
|
||
|
Asset Derivatives
|
||||||
|
USD
|
1,387,014
|
EUR
|
1,188,941
|
Barclays Bank PLC
|
1/16/2026
|
$4,083
|
See Notes to Financial Statements
35
Financial Statements
Statement of Assets and Liabilities
At 11/30/25
This statement represents your fund’s balance sheet, which details the assets and liabilities comprising the total value of the fund.
|
Assets
|
|
|
Investments in unaffiliated issuers, at value (identified cost, $46,082,671)
|
$46,727,547
|
|
Investments in affiliated issuers, at value (identified cost, $817,995)
|
818,174
|
|
Receivables for
|
|
|
Forward foreign currency exchange contracts
|
4,083
|
|
Investments sold
|
29,919
|
|
Interest
|
774,148
|
|
Receivable from investment adviser
|
6,255
|
|
Other assets
|
2,016
|
|
Total assets
|
$48,362,142
|
|
Liabilities
|
|
|
Notes payable
|
$15,000,000
|
|
Payables for
|
|
|
Distributions
|
18,692
|
|
Investments purchased
|
200,000
|
|
Payable to affiliates
|
|
|
Administrative services fee
|
238
|
|
Transfer agent and dividend disbursing costs
|
618
|
|
Payable for independent Trustees' compensation
|
9
|
|
Accrued interest expense
|
6,145
|
|
Accrued expenses and other liabilities
|
118,034
|
|
Total liabilities
|
$15,343,736
|
|
Net assets
|
$33,018,406
|
|
Net assets consist of
|
|
|
Paid-in capital
|
$42,358,896
|
|
Total distributable earnings (loss)
|
(9,340,490
)
|
|
Net assets
|
$33,018,406
|
|
Shares of beneficial interest outstanding (unlimited number of shares authorized)
|
17,901,986
|
|
Net asset value per share (net assets of $33,018,406 / 17,901,986 shares of beneficial
interest outstanding)
|
$1.84
|
See Notes to Financial Statements
36
Financial Statements
Statement of Operations
Year ended 11/30/25
This statement describes how much your fund earned in investment income and accrued
in expenses. It also describes any gains and/or losses generated by fund operations.
|
Net investment income (loss)
|
|
|
Income
|
|
|
Interest
|
$3,242,953
|
|
Dividends from affiliated issuers
|
50,613
|
|
Dividends from unaffiliated issuers
|
10,655
|
|
Total investment income
|
$3,304,221
|
|
Expenses
|
|
|
Management fee
|
$248,447
|
|
Transfer agent and dividend disbursing costs
|
15,575
|
|
Administrative services fee
|
17,500
|
|
Independent Trustees' compensation
|
7,417
|
|
Stock exchange fee
|
23,741
|
|
Custodian fee
|
14,097
|
|
Shareholder communications
|
52,802
|
|
Audit and tax fees
|
105,064
|
|
Legal fees
|
939
|
|
Interest expense and fees
|
808,979
|
|
Miscellaneous
|
43,264
|
|
Total expenses
|
$1,337,825
|
|
Reduction of expenses by investment adviser
|
(87,260
)
|
|
Net expenses
|
$1,250,565
|
|
Net investment income (loss)
|
$2,053,656
|
|
Realized and unrealized gain (loss)
|
|
|
Realized gain (loss) (identified cost basis)
|
|
|
Unaffiliated issuers
|
$(241,884
)
|
|
Affiliated issuers
|
(101
)
|
|
Forward foreign currency exchange contracts
|
(27,853
)
|
|
Foreign currency
|
2,092
|
|
Net realized gain (loss)
|
$(267,746
)
|
|
Change in unrealized appreciation or depreciation
|
|
|
Unaffiliated issuers
|
$824,696
|
|
Affiliated issuers
|
124
|
|
Forward foreign currency exchange contracts
|
(24,981
)
|
|
Translation of assets and liabilities in foreign currencies
|
(393
)
|
|
Net unrealized gain (loss)
|
$799,446
|
|
Net realized and unrealized gain (loss)
|
$531,700
|
|
Change in net assets from operations
|
$2,585,356
|
See Notes to Financial Statements
37
Financial Statements
Statements of Changes in Net Assets
These statements describe the increases and/or decreases in net assets resulting from
operations, any distributions, and any shareholder transactions.
|
|
Year ended
|
|
|
|
11/30/25
|
11/30/24
|
|
Change in net assets
|
|
|
|
From operations
|
|
|
|
Net investment income (loss)
|
$2,053,656
|
$1,867,588
|
|
Net realized gain (loss)
|
(267,746
)
|
(792,005
)
|
|
Net unrealized gain (loss)
|
799,446
|
3,107,833
|
|
Change in net assets from operations
|
$2,585,356
|
$4,183,416
|
|
Distributions to shareholders
|
$(2,058,403
)
|
$(1,870,641
)
|
|
Tax return of capital distributions to shareholders
|
$(1,076,512
)
|
$(1,327,359
)
|
|
Change in net assets from fund share transactions
|
$(163,570
)
|
$(865,747
)
|
|
Total change in net assets
|
$(713,129
)
|
$119,669
|
|
Net assets
|
|
|
|
At beginning of period
|
33,731,535
|
33,611,866
|
|
At end of period
|
$33,018,406
|
$33,731,535
|
See Notes to Financial Statements
38
Financial Statements
Statement of Cash Flows
Year ended 11/30/25
This statement provides a summary of cash flows from investment activity for the fund.
|
Cash flows from operating activities:
|
|
|
Change in net assets from operations
|
$2,585,356
|
|
Adjustments to reconcile change in net assets from operations to net
cash provided by operating activities:
|
|
|
Purchase of investment securities
|
(24,918,091
)
|
|
Proceeds from disposition of investment securities
|
26,621,166
|
|
Purchase of short-term investments, net
|
(218,913
)
|
|
Realized gain/loss on investments
|
241,884
|
|
Unrealized appreciation/depreciation on investments
|
(824,820
)
|
|
Unrealized appreciation/depreciation on foreign currency contracts
|
24,981
|
|
Net amortization/accretion of income
|
(181,038
)
|
|
Increase in interest receivable
|
(33,053
)
|
|
Increase in accrued expenses and other liabilities
|
3,313
|
|
Increase in receivable from investment adviser
|
(5,470
)
|
|
Increase in other assets
|
(9
)
|
|
Increase in interest payable
|
1,501
|
|
Net cash provided by operating activities
|
$3,296,807
|
|
Cash flows from financing activities:
|
|
|
Distributions paid in cash
|
$(3,133,237
)
|
|
Repurchase of shares of beneficial interest
|
(163,570
)
|
|
Net cash used by financing activities
|
$(3,296,807
)
|
|
Cash and restricted cash:
|
|
|
Beginning of period
|
$—
|
|
End of period
|
$—
|
Supplemental disclosure of cash flow information:
Cash paid during the year ended November 30, 2025 for interest was $807,478.
See Notes to Financial Statements
39
Financial Statements
Financial Highlights
The financial highlights table is intended to help you understand the fund's financial
performance for the past 5 years. Certain information reflects financial results for
a single fund share. The total returns in the table represent the rate that an investor
would have earned (or lost) on an investment in the fund share class (assuming reinvestment of all distributions) held for the entire period.
|
|
Year ended
|
||||
|
|
11/30/25
|
11/30/24
|
11/30/23
|
11/30/22
|
11/30/21
|
|
Net asset value, beginning of period
|
$1.87
|
$1.82
|
$1.83
|
$2.32
|
$2.47
|
|
Income (loss) from investment operations
|
|||||
|
Net investment income (loss) (d)
|
$0.11
|
$0.10
|
$0.09
|
$0.11
|
$0.13
|
|
Net realized and unrealized gain (loss)
|
0.03
|
0.13
|
0.06
|
(0.40
)
|
(0.05
)
|
|
Total from investment operations
|
$0.14
|
$0.23
|
$0.15
|
$(0.29
)
|
$0.08
|
|
Less distributions declared to shareholders
|
|||||
|
From net investment income
|
$(0.11
)
|
$(0.11
)
|
$(0.09
)
|
$(0.12
)
|
$(0.14
)
|
|
From tax return of capital
|
(0.06
)
|
(0.07
)
|
(0.08
)
|
(0.08
)
|
(0.09
)
|
|
Total distributions declared to shareholders
|
$(0.17
)
|
$(0.18
)
|
$(0.17
)
|
$(0.20
)
|
$(0.23
)
|
|
Net increase from repurchase of capital shares
|
$0.00
(w)
|
$0.00
(w)
|
$0.01
|
$—
|
$—
|
|
Net asset value, end of period (x)
|
$1.84
|
$1.87
|
$1.82
|
$1.83
|
$2.32
|
|
Market value, end of period
|
$1.74
|
$1.77
|
$1.64
|
$1.83
|
$2.97
|
|
Total return at market value (%)
|
8.96
|
19.09
|
(0.77
)
|
(32.19
)
|
30.89
|
|
Total return at net asset value (%) (j)(r)(s)(x)
|
8.75
|
13.70
|
10.13
|
(13.19
)
|
2.25
|
|
Ratios (%) (to average net assets)
and Supplemental data:
|
|||||
|
Expenses before expense reductions
|
4.06
|
4.27
|
4.03
|
2.53
|
1.84
|
|
Expenses after expense reductions
|
3.79
|
4.18
|
3.95
|
2.23
|
1.65
|
|
Net investment income (loss)
|
6.23
|
5.53
|
5.20
|
5.54
|
5.27
|
|
Portfolio turnover rate
|
51
|
59
|
44
|
31
|
65
|
|
Net assets at end of period (000 omitted)
|
$33,018
|
$33,732
|
$33,612
|
$35,545
|
$44,943
|
|
Supplemental Ratios (%):
|
|||||
|
Ratios of expenses to average net assets after
expense reductions and excluding interest
expense and fees
|
1.34
|
1.34
|
1.34
|
1.34
|
1.34
|
|
Senior Securities:
|
|||||
|
Total notes payable outstanding (000 omitted)
|
$15,000
|
$15,000
|
$15,000
|
$16,000
|
$18,500
|
|
Asset coverage per $1,000 of indebtedness (k)
|
$3,201
|
$3,249
|
$3,241
|
$3,222
|
$3,429
|
See Notes to Financial Statements
40
Financial Highlights – continued
|
(d)
|
Per share data is based on average shares outstanding.
|
|
(j)
|
Total return at net asset value is calculated using the net asset value of the fund,
not the
publicly traded price and therefore may be different than the total return at market
value.
|
|
(k)
|
Calculated by subtracting the fund's total liabilities (not including notes payable)
from the
fund's total assets and dividing this number by the notes payable outstanding and
then
multiplying by 1,000.
|
|
(r)
|
Certain expenses have been reduced without which performance would have been lower.
|
|
(s)
|
From time to time the fund may receive proceeds from litigation settlements, without
which
performance would be lower.
|
|
(w)
|
Per share amount was less than $0.01.
|
|
(x)
|
The net asset values and total returns at net asset value have been calculated on
net assets
which include adjustments made in accordance with U.S. generally accepted accounting
principles required at period end for financial reporting purposes.
|
See Notes to Financial Statements
41
Notes to Financial Statements
(1) Business and Organization
MFS Intermediate High Income Fund (the fund) is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended, as a diversified closed-end management investment company.
The fund is an investment company and accordingly follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB)
Accounting Standards Codification Topic 946 Financial Services - Investment Companies.
(2) Significant Accounting Policies
General — The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure
of contingent assets and liabilities at the date of the financial statements and the
reported amounts of increases and decreases in net assets from operations during the reporting
period. Actual results could differ from those estimates. In the preparation of these
financial statements, management has evaluated subsequent events occurring after the
date of the fund’s Statement of Assets and Liabilities through the date that the financial statements were issued. The fund invests in high-yield securities rated below investment grade. Investments in below investment grade quality securities can involve
a substantially greater risk of default or can already be in default, and their values
can decline significantly. Below investment grade quality securities tend to be more sensitive
to adverse news about the issuer, or the market or economy in general, than higher
quality debt instruments. The fund invests in foreign securities. Investments in foreign securities are vulnerable to the effects of changes in the relative values of the
local currency and the U.S. dollar and to the effects of changes in each country’s market, economic, industrial, political, regulatory, geopolitical, environmental, public health,
and other conditions.
Operating Segments — In this reporting period, the fund adopted FASB Accounting Standards Update 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures (“ASU 2023-07”). Adoption of the new standard impacted financial statement disclosures only and did not affect the fund’s financial position or the results of its operations. An operating segment is a component of
a public entity that engages in business activities from which it may recognize revenues
and incur expenses, has operating results that are regularly reviewed by the entity’s chief operating decision maker (CODM) in making resource allocation decisions and
assessing segment performance, and for which discrete financial information is available. The fund represents a single operating segment and the Chairman’s Committee of the fund's adviser acts as the segment’s CODM. The fund’s total returns, expense ratios, and changes in net assets which are used by the CODM to assess segment performance and to make resource allocation decisions to the segment are consistent with that presented within the fund’s financial statements.
Balance Sheet Offsetting — The fund's accounting policy with respect to balance sheet offsetting is that, absent an event of default by the counterparty or a termination
of the agreement, the International Swaps and Derivatives Association (ISDA) Master
Agreement, or similar agreement, does not result in an offset of reported amounts
of financial assets and financial liabilities in the Statement of Assets and Liabilities
across transactions between the fund and the applicable counterparty. The fund's right to
42
Notes to Financial Statements - continued
setoff may be restricted or prohibited by the bankruptcy or insolvency laws of the
particular jurisdiction to which a specific master netting agreement counterparty
is subject. Balance sheet offsetting disclosures, to the extent applicable to the fund,
have been included in the fund’s Significant Accounting Policies note under the captions for each of the fund’s in-scope financial instruments and transactions.
Investment Valuations — Subject to its oversight, the fund's Board of Trustees has delegated primary responsibility for determining or causing to be determined the value
of the fund’s investments to MFS as the fund's adviser, pursuant to the fund’s valuation policy and procedures which have been adopted by the adviser and approved by the Board. In accordance with Rule 2a-5 under the Investment Company Act of 1940, the
Board of Trustees designated the adviser as the “valuation designee” of the fund. If the adviser, as valuation designee, determines that reliable market quotations are not
readily available for an investment, the investment is valued at fair value as determined
in good faith by the adviser in accordance with the adviser’s fair valuation policy and procedures.
Under the fund's valuation policy and procedures, equity securities, including restricted
equity securities, are generally valued at the last sale or official closing price
on their primary market or exchange as provided by a third-party pricing service. Equity securities, for which there were no sales reported that day, are generally valued
at the last quoted daily bid quotation on their primary market or exchange as provided by
a third-party pricing service. Debt instruments and floating rate loans, including restricted debt instruments, are generally valued at an evaluated or composite bid as provided
by a third-party pricing service. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Exchange-traded options are generally valued at the last sale or official closing
price on their primary exchange as provided by a third-party pricing service. Exchange-traded
options for which there were no sales reported that day are generally valued at the
last daily bid quotation on their primary exchange as provided by a third-party pricing
service. For put options, the position may be valued at the last daily ask quotation
if there are no trades reported during the day. Options not traded on an exchange are
generally valued at a broker/dealer bid quotation. Foreign currency options are generally valued at valuations provided by a third-party pricing service. Forward foreign currency exchange contracts are generally valued at the mean of bid and asked prices
for the time period interpolated from rates provided by a third-party pricing service
for proximate time periods. Open-end investment companies are generally valued at net asset value per share. Funds traded on a recognized securities exchange (such as Exchange Traded Funds or Closed End Funds) are generally valued at the official closing
price on their primary market or exchange as provided by a third-party pricing service.
If no sales are reported that day for these funds, generally they will be valued at the
last quoted daily bid quotation on their primary market or exchange as provided by a third-party pricing service. The values of foreign securities and other assets and liabilities expressed in foreign currencies are converted to U.S. dollars using the
mean of bid and asked prices for rates provided by a third-party pricing service.
Under the fund’s valuation policy and procedures, market quotations are not considered to be readily available for debt instruments, floating rate loans, and
many types of derivatives. These investments are generally valued at fair value based on
information from third-party pricing services or otherwise determined by the adviser
in accordance with the adviser’s fair valuation policy and procedures. Securities and other assets generally valued on the basis of information from a third-party pricing service
43
Notes to Financial Statements - continued
may also be valued at a broker/dealer bid quotation. In determining values, third-party
pricing services can utilize both transaction data and market information such as
yield, quality, coupon rate, maturity, type of issue, trading characteristics, spreads and
other market data. Pricing services generally value debt instruments assuming orderly transactions of institutional round lot sizes, but a fund may hold or transact in
such securities in smaller, odd lot sizes. In instances where a fund holds an odd lot size
position in a debt instrument, such position will typically be valued using the pricing
agent’s institutional round lot price for the debt instrument. Odd lots may trade at lower prices than institutional round lots, and the fund may receive different prices
when it sells odd lot positions than it would receive for sales of institutional round
lot positions. An investment may also be valued at fair value if the adviser determines
that the investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally traded (such as foreign exchange or market) and prior to the determination of the fund’s net asset value, or after the halt of trading of a specific security where trading does not
resume prior to the close of the exchange or market on which the security is principally
traded. The adviser generally relies on third-party pricing services or other information
(such as the correlation with price movements of similar securities in the same or other markets;
the type, cost and investment characteristics of the security; the business and financial
condition of the issuer; and trading and other market data) to assist in determining
whether to fair value and at what value to fair value an investment. The value of
an investment for purposes of calculating the fund’s net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the
value of an investment used to determine the fund’s net asset value may differ from quoted or published prices for the same investment. There can be no assurance that
the fund could obtain the fair value assigned to an investment if it were to sell
the investment at the same time at which the fund determines its net asset value per share.
Various inputs are used in determining the value of the fund's assets or liabilities.
These inputs are categorized into three broad levels. In certain cases, the inputs used
to measure fair value may fall into different levels of the fair value hierarchy. In
such cases, an investment's level within the fair value hierarchy is based on the lowest level
of input that is significant to the fair value measurement. The fund's assessment of
the significance of a particular input to the fair value measurement in its entirety requires
judgment, and considers factors specific to the investment. Level 1 includes unadjusted
quoted prices in active markets for identical assets or liabilities. Level 2 includes
other significant observable market-based inputs (including quoted prices for similar securities, interest rates, prepayment speed, and credit risk). Level 3 includes significant
unobservable inputs, which may include the adviser's own assumptions in determining
the fair value of investments. Other financial instruments are derivative instruments,
such as forward foreign currency exchange contracts. The following is a summary of
the levels used as of November 30, 2025 in valuing the fund's assets and liabilities:
44
Notes to Financial Statements - continued
|
Financial Instruments
|
Level 1
|
Level 2
|
Level 3
|
Total
|
|
Equity Securities:
|
|
|
|
|
|
United States
|
$—
|
$—
|
$37,328
|
$37,328
|
|
United Kingdom
|
—
|
1,368
|
—
|
1,368
|
|
U.S. Corporate Bonds
|
—
|
39,269,517
|
—
|
39,269,517
|
|
Foreign Bonds
|
—
|
7,419,334
|
—
|
7,419,334
|
|
Investment Companies
|
818,174
|
—
|
—
|
818,174
|
|
Total
|
$818,174
|
$46,690,219
|
$37,328
|
$47,545,721
|
|
Other Financial Instruments
|
|
|
|
|
|
Forward Foreign Currency Exchange
Contracts – Assets
|
$—
|
$4,083
|
$—
|
$4,083
|
For further information regarding security characteristics, see the Portfolio of Investments.
The following is a reconciliation of level 3 assets for which significant unobservable
inputs were used to determine fair value. The table presents the activity of level
3 securities held at the beginning and the end of the period.
|
|
Equity
Securities
|
|
Balance as of 11/30/24
|
$45,514
|
|
Change in unrealized appreciation or depreciation
|
24,344
|
|
Partial liquidation proceeds
|
(32,530
)
|
|
Balance as of 11/30/25
|
$37,328
|
The net change in unrealized appreciation or depreciation from investments held as
level 3 at November 30, 2025 is $24,344. At November 30, 2025, the fund held one level 3 security.
Foreign Currency Translation — Purchases and sales of foreign investments, income, and expenses are converted into U.S. dollars based upon currency exchange rates prevailing on the respective dates of such transactions or on the reporting date for
foreign denominated receivables and payables. Gains and losses attributable to foreign
currency exchange rates on sales of securities are recorded for financial statement
purposes as net realized gains and losses on investments. Gains and losses attributable
to foreign exchange rate movements on receivables, payables, income and expenses are recorded for financial statement purposes as foreign currency transaction gains
and losses. That portion of both realized and unrealized gains and losses on investments
that results from fluctuations in foreign currency exchange rates is not separately
disclosed.
Derivatives — The fund uses derivatives primarily to increase or decrease exposure to a particular market or segment of the market, or security, to increase or decrease
interest rate exposure, or as alternatives to direct investments. Derivatives are
used for hedging or non-hedging purposes. While hedging can reduce or eliminate losses, it
can also reduce or eliminate gains. When the fund uses derivatives as an investment to
increase market exposure, or for hedging purposes, gains and losses from derivative
instruments may be substantially greater than the derivative’s original cost.
45
Notes to Financial Statements - continued
The derivative instruments used by the fund during the period were purchased options
and forward foreign currency exchange contracts. Depending on the type of derivative,
a fund may exit a derivative position by entering into an offsetting transaction with
a counterparty or exchange, negotiating an agreement with the derivative counterparty,
or novating the position to a third party. The fund's period end derivatives, as presented in the Portfolio of Investments and the associated Derivative Contract tables,
generally are indicative of the volume of its derivative activity during the period.
The following table presents, by major type of derivative contract, the fair value,
on a gross basis, of the asset and liability components of derivatives held by the fund
at November 30, 2025 as reported in the Statement of Assets and Liabilities:
|
|
|
Fair Value
|
|
Risk
|
Derivative Contracts
|
Asset Derivatives
|
|
Foreign Exchange
|
Forward Foreign Currency Exchange
Contracts
|
$4,083
|
The following table presents, by major type of derivative contract, the realized gain
(loss) on derivatives held by the fund for the year ended November 30, 2025 as reported in the Statement of Operations:
|
Risk
|
Forward Foreign
Currency
Exchange
Contracts
|
Unaffiliated Issuers
(Purchased
Options)
|
|
Foreign
Exchange
|
$(27,853
)
|
$—
|
|
Equity
|
—
|
(35,795
)
|
|
Total
|
$(27,853
)
|
$(35,795
)
|
The following table presents, by major type of derivative contract, the change in
unrealized appreciation or depreciation on derivatives held by the fund for the year
ended November 30, 2025 as reported in the Statement of Operations:
|
Risk
|
Forward Foreign
Currency
Exchange
Contracts
|
Unaffiliated Issuers
(Purchased
Options)
|
|
Foreign
Exchange
|
$(24,981
)
|
$—
|
|
Equity
|
—
|
35,745
|
|
Total
|
$(24,981
)
|
$35,745
|
Derivative counterparty credit risk is managed through formal evaluation of the creditworthiness of all potential counterparties. On certain, but not all, uncleared
derivatives, the fund attempts to reduce its exposure to counterparty credit risk
whenever possible by entering into an ISDA Master Agreement on a bilateral basis.
The ISDA Master Agreement gives each party to the agreement the right to terminate all
transactions traded under such agreement if there is a specified deterioration in
the credit quality of the other party. Upon an event of default or a termination of the
ISDA Master Agreement, the non-defaulting party has the right to close out all transactions
traded under such agreement and to net amounts owed under each agreement to one net amount payable by one party to the other. This right to close out and net payments
46
Notes to Financial Statements - continued
across all transactions traded under the ISDA Master Agreement could result in a reduction of the fund's credit risk to such counterparty equal to any amounts payable
by the fund under the applicable transactions, if any.
Collateral and margin requirements differ by type of derivative. For exchange-traded
and cleared derivatives (e.g., futures contracts, cleared swaps, and exchange-traded
options), margin requirements are set by the exchange or clearing broker and the clearing house and collateral, in the form of cash or securities, is posted by the
fund directly with the exchange or clearing broker. Collateral terms are counterparty agreement specific for uncleared derivatives (e.g., forward foreign currency exchange
contracts, uncleared swap agreements, and uncleared options). Collateral, in the form
of cash and securities, is held in segregated accounts with the fund's custodian in
connection with these agreements. For derivatives traded under an ISDA Master Agreement, which contains a credit support annex, the collateral requirements are
netted across all transactions traded under such counterparty-specific agreement and
an amount is posted from one party to the other to collateralize such obligations.
Cash that has been segregated or delivered to cover the fund's collateral or margin obligations under derivative contracts, if any, will be reported separately in the
Statement of Assets and Liabilities as restricted cash for uncleared derivatives and/or
deposits with brokers for exchange-traded or cleared derivatives. Securities pledged
as collateral or margin for the same purpose, if any, are noted in the Portfolio of Investments. The fund may be required to make payments of interest on uncovered collateral or margin obligations with the broker. Any such payments are included in
“Interest expense and fees” in the Statement of Operations.
Purchased Options — The fund purchased put options for a premium. Purchased put options entitle the holder to sell a specified number of shares or units of a particular
security, currency or index at a specified price at a specified date or within a specified
period of time. Purchasing put options may hedge against an anticipated decline in
the value of portfolio securities or currency or decrease the fund's exposure to an underlying instrument.
The premium paid is initially recorded as an investment in the Statement of Assets
and Liabilities. That investment is subsequently marked-to-market daily with the difference
between the premium paid and the market value of the purchased option being recorded as unrealized appreciation or depreciation. Premiums paid for purchased put
options which have expired are treated as realized losses on investments in the Statement of Operations. Upon the exercise or closing of a purchased put option, the
premium paid is offset against the proceeds on the sale of the underlying security
or financial instrument in order to determine the realized gain or loss on investments.
Whether or not the option is exercised, the fund's maximum risk of loss from purchasing an option is the amount of premium paid. All option contracts involve
credit risk if the counterparty to the option contract fails to perform. For uncleared
options, this risk is mitigated in cases where there is an ISDA Master Agreement between the fund and the counterparty providing for netting as described above and,
where applicable, by the posting of collateral by the counterparty to the fund to
cover the fund’s exposure to the counterparty under such ISDA Master Agreement.
Forward Foreign Currency Exchange Contracts — The fund entered into forward foreign currency exchange contracts for the purchase or sale of a specific foreign
currency at a fixed price on a future date. These contracts may be used to hedge the
fund’s currency risk or for non-hedging purposes. For hedging purposes, the fund may
47
Notes to Financial Statements - continued
enter into contracts to deliver or receive foreign currency that the fund will receive
from or use in its normal investment activities. The fund may also use contracts to hedge
against declines in the value of foreign currency denominated securities due to unfavorable exchange rate movements. For non-hedging purposes, the fund may enter
into contracts with the intent of changing the relative exposure of the fund’s portfolio of securities to different currencies to take advantage of anticipated exchange rate
changes.
Forward foreign currency exchange contracts are adjusted by the daily exchange rate
of the underlying currency and any unrealized gains or losses are recorded as a receivable
or payable for forward foreign currency exchange contracts until the contract settlement date. On contract settlement date, any gain or loss on the contract is
recorded as realized gains or losses on forward foreign currency exchange contracts.
Risks may arise upon entering into these contracts from unanticipated movements in
the value of the contract and from the potential inability of counterparties to meet
the terms of their contracts. Generally, the fund’s maximum risk due to counterparty credit risk is the unrealized gain on the contract due to the use of Continuous Linked Settlement, a multicurrency cash settlement system for the centralized settlement
of foreign transactions. This risk is mitigated in cases where there is an ISDA Master
Agreement between the fund and the counterparty providing for netting as described
above and, where applicable, by the posting of collateral by the counterparty to the
fund to cover the fund’s exposure to the counterparty under such ISDA Master Agreement.
Statement of Cash Flows — Information on financial transactions which have been settled through the receipt or disbursement of cash or restricted cash is presented
in the Statement of Cash Flows. Cash as presented in the fund's Statement of Assets and
Liabilities includes cash on hand at the fund's custodian bank and does not include
any short-term investments. Restricted cash is presented in the fund's Statement of Assets
and Liabilities as restricted cash for uncleared derivatives and/or deposits with
brokers for cleared derivatives and represents cash that has been segregated or delivered
to cover the fund's collateral or margin obligations under derivative contracts.
Indemnifications — Under the fund's organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of
the performance of their duties to the fund. Additionally, in the normal course of business,
the fund enters into agreements with service providers that may contain indemnification clauses. The fund's maximum exposure under these agreements is unknown as this would involve future claims that may be made against the fund that
have not yet occurred.
Investment Transactions and Income — Interest income is recorded on the accrual basis. All premium and discount is amortized or accreted for financial statement purposes in accordance with U.S. generally accepted accounting principles. Dividends received in cash are recorded on the ex-dividend date. Certain dividends from foreign
securities will be recorded when the fund is informed of the dividend if such information is obtained subsequent to the ex-dividend date. Dividend and interest
payments received in additional securities are recorded on the ex-dividend or ex-interest
date in an amount equal to the value of the security on such date.
48
Notes to Financial Statements - continued
The fund may receive proceeds from litigation settlements. Any proceeds received from
litigation involving portfolio holdings are reflected in the Statement of Operations
in realized gain/loss if the security has been disposed of by the fund or in unrealized
gain/loss if the security is still held by the fund. Any other proceeds from litigation
not related to portfolio holdings are reflected as other income in the Statement of Operations.
Investment transactions are recorded on the trade date. In determining the net gain
or loss on securities sold, the cost of securities is determined on the identified cost
basis.
Tax Matters and Distributions — The fund intends to qualify as a regulated investment company, as defined under Subchapter M of the Internal Revenue Code, and to distribute all of its taxable income, including realized capital gains. As
a result, no provision for federal income tax is required. The fund’s federal tax returns, when filed, will remain subject to examination by the Internal Revenue Service for generally a
three year period. Management has analyzed the fund’s tax positions taken on federal and state tax returns for all open tax years and does not believe that there are any
uncertain tax positions that require recognition of a tax liability. Foreign taxes,
if any, have been accrued by the fund in the accompanying financial statements in accordance
with the applicable foreign tax law. Foreign income taxes may be withheld by certain
countries in which the fund invests. Additionally, capital gains realized by the fund
on securities issued in or by certain foreign countries may be subject to capital gains
tax imposed by those countries.
Distributions to shareholders are recorded on the ex-dividend date. The fund employs
a managed distribution policy whereby the fund seeks to pay monthly distributions based
on an annual rate of 9.50% of the fund’s average monthly net asset value. As a result, distributions may exceed actual earnings which may result in a tax return of capital.
Distributions in any year may include a substantial return of capital component. Please
refer to the Financial Highlights for distributions of tax returns of capital made
during the prior five years. Income and capital gain distributions are determined in accordance
with income tax regulations, which may differ from U.S. generally accepted accounting
principles. Certain capital accounts in the financial statements are periodically
adjusted for permanent differences in order to reflect their tax character. These adjustments
have no impact on net assets or net asset value per share. Temporary differences which
arise from recognizing certain items of income, expense, gain or loss in different
periods for financial statement and tax purposes will reverse at some time in the
future.
Book/tax differences primarily relate to amortization of premium and accretion of
discount of debt securities.
The tax character of distributions declared to shareholders for the last two fiscal
years is as follows:
|
|
Year ended
11/30/25
|
Year ended
11/30/24
|
|
Ordinary income (including
any short-term capital gains)
|
$2,058,403
|
$1,870,641
|
|
Tax return of capital (b)
|
1,076,512
|
1,327,359
|
|
Total distributions
|
$3,134,915
|
$3,198,000
|
|
(b)
|
Distributions in excess of tax basis earnings and profits are reported in the financial
statements
as a tax return of capital.
|
49
Notes to Financial Statements - continued
The federal tax cost and the tax basis components of distributable earnings were as
follows:
|
As of 11/30/25
|
|
|
Cost of investments
|
$46,671,404
|
|
Gross appreciation
|
1,519,743
|
|
Gross depreciation
|
(641,343)
|
|
Net unrealized appreciation (depreciation)
|
$878,400
|
|
Capital loss carryforwards
|
(10,200,157)
|
|
Other temporary differences
|
(18,733)
|
|
Total distributable earnings (loss)
|
$(9,340,490)
|
As of November 30, 2025, the fund had capital loss carryforwards available to offset
future realized gains. These net capital losses may be carried forward indefinitely
and their character is retained as short-term and/or long-term losses. Such losses are
characterized as follows:
|
Short-Term
|
$(561,691
)
|
|
Long-Term
|
(9,638,466
)
|
|
Total
|
$(10,200,157
)
|
(3) Transactions with Affiliates
Investment Adviser — The fund has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to the fund. The management fee is computed daily and paid monthly at an annual rate of 0.65% of the fund’s average daily net assets. The fund pays the adviser a monthly fee equal to 20% of the fund’s leverage income after deducting the expenses of leveraging (“net leverage income”); provided, however, if the fund’s net leverage income is less than zero, MFS will reduce its management fee by an amount
equivalent to the percentage indicated of the fund’s net leverage income. The management fee incurred for the year ended November 30, 2025 was equivalent to an
annual effective rate of 0.75% of the fund's average daily net assets.
The investment adviser has agreed in writing to pay a portion of the fund’s total annual operating expenses, excluding interest, taxes, extraordinary expenses, brokerage and
transaction costs, certain tax reclaim recovery expenses (including contingency fees
and closing agreement expenses), and investment-related expenses, such that total fund
operating expenses do not exceed 1.34% annually of the fund’s average daily net assets. This written agreement will continue until modified by the fund’s Board of Trustees, but such agreement will continue at least until November 30, 2027. For the
year ended November 30, 2025, this reduction amounted to $87,260, which is included in the reduction of total expenses in the Statement of Operations.
Transfer Agent — The fund engages Computershare Trust Company, N.A. (“Computershare”) as the sole transfer agent for the fund. MFS Service Center, Inc. (MFSC) monitors and supervises the activities of Computershare for an agreed upon
fee approved by the Board of Trustees. For the year ended November 30, 2025, fees paid
to MFSC amounted to $3,329.
Administrator — MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to the fund. Under an administrative
services agreement, the fund reimburses MFS the costs incurred to provide these
50
Notes to Financial Statements - continued
services. The fund is charged an annual fixed amount of $17,500 plus a fee based on
average daily net assets. The administrative services fee is computed daily and paid
monthly. The administrative services fee incurred for the year ended November 30,
2025 was equivalent to an annual effective rate of 0.0531% of the fund's average daily net assets.
Trustees’ and Officers’ Compensation — The fund pays compensation to independent Trustees in the form of a retainer, attendance fees, and additional compensation to Board and Committee chairpersons. Independent Trustees’ compensation is accrued daily and paid subsequent to each Trustee Board meeting. The
fund does not pay compensation directly to Trustees or officers of the fund who are
also officers of the investment adviser, all of whom receive remuneration from MFS
for their services to the fund. Certain officers and Trustees of the fund are officers
or directors of MFS and MFSC.
Other — The fund invests in the MFS Institutional Money Market Portfolio which is managed by MFS and seeks current income consistent with preservation of capital and
liquidity. This money market fund does not pay a management fee to MFS but does incur investment and operating costs.
(4) Portfolio Securities
For the year ended November 30, 2025, purchases and sales of investments, other than
short-term obligations, aggregated $23,962,431 and $25,559,968, respectively.
(5) Shares of Beneficial Interest
The fund's Declaration of Trust permits the Trustees to issue an unlimited number
of full and fractional shares of beneficial interest. The Trustees have authorized the
repurchase by the fund of up to 10% annually of its own shares of beneficial interest. The fund repurchased 102,100 shares of beneficial interest during the year ended November 30, 2025 at an average price per share of $1.60 and a weighted average discount of 8.28% per share. The fund repurchased 506,945 shares of beneficial interest during the year ended November 30, 2024 at an average price per share of
$1.71 and a weighted average discount of 7.85% per share. Transactions in fund shares were as follows:
|
|
Year ended
11/30/25
|
Year ended
11/30/24
|
||
|
|
Shares
|
Amount
|
Shares
|
Amount
|
|
Capital shares repurchased
|
(102,100
)
|
$(163,570
)
|
(506,945
)
|
$(865,747
)
|
(6) Loan Agreement
The fund has a credit agreement with a bank for a revolving secured line of credit
that can be drawn upon up to $17,000,000. At November 30, 2025, the fund had outstanding borrowings under this agreement in the amount of $15,000,000, which are secured by a lien on the fund’s assets. The loan’s carrying value in the fund’s Statement of Assets and Liabilities approximates its fair value. The loan value as
of the reporting date is considered level 2 under the fair value hierarchy. The credit agreement
has no explicit maturity date but may be terminated with appropriate notice by either
party. Borrowings under the agreement can be made for liquidity or leverage purposes.
Interest is charged at a rate per annum equal to the one-month term SOFR (Secured
Overnight Financing Rate) plus 0.10% plus an agreed upon spread, or at the option
of
51
Notes to Financial Statements - continued
the borrower, an alternate base rate plus an agreed upon spread. The fund incurred
interest expense of $806,443 during the period, which is included in “Interest expense and fees” in the Statement of Operations. The fund may also be charged a commitment fee based on the average daily unused portion of the line of credit. The
fund paid a commitment fee of $2,536 during the period, which is included in “Interest expense and fees” in the Statement of Operations. For the year ended November 30, 2025, the average loan balance was $15,000,000 at a weighted average annual interest rate of 5.38%. The fund is subject to certain covenants including, but not limited to, requirements with respect to asset coverage, portfolio
diversification and liquidity.
(7) Investments in Affiliated Issuers
An affiliated issuer may be considered one in which the fund owns 5% or more of the
outstanding voting securities, or a company which is under common control. The following were affiliated issuers for the year ended November 30, 2025:
|
Affiliated Issuers
|
Beginning
Value
|
Purchases
|
Sales
Proceeds
|
Realized
Gain
(Loss)
|
Change in
Unrealized
Appreciation or
Depreciation
|
Ending
Value
|
|
MFS Institutional Money
Market Portfolio
|
$599,137
|
$12,434,503
|
$12,215,489
|
$(101
)
|
$124
|
$818,174
|
|
Affiliated Issuers
|
Dividend
Income
|
Capital Gain
Distributions
|
|
MFS Institutional Money Market Portfolio
|
$50,613
|
$—
|
(8) Subsequent Event
On December 10, 2025, the Board of Trustees of the fund approved a proposal to reorganize the fund into MFS Multimarket Income Trust (“MMT”) (the “Reorganization”), subject to the approval of the fund’s shareholders. MMT’s Board of Trustees also approved a proposal to appoint abrdn Inc. (“Aberdeen”) as MMT’s new investment adviser and nominated five new trustees to form a new board for MMT (the
“Aberdeen Proposals”); both proposals are subject to the approval of MMT’s shareholders and the satisfaction of certain other conditions agreed to between MFS and Aberdeen. In the event that the fund’s shareholders approve the Reorganization, but MMT’s shareholders do not approve the Aberdeen Proposals, the Reorganization may proceed with MFS remaining MMT’s investment adviser and MMT’s current Board of Trustees remaining in place.
The anticipated date of the special meeting of shareholders to vote on the above proposals is March 11, 2026. Shareholders of the fund as of close of business on December 11, 2025, will receive proxy materials providing further details on the proposals and instructions on how to vote their shares.
For more information about this Reorganization, please see the press release issued
by MFS on December 11, 2025 available on www.mfs.com.
52
Report of Independent Registered Public
Accounting Firm
To the Shareholders and the Board of Trustees of MFS Intermediate High Income Fund
Opinion on the Financial Statements
We have audited the accompanying statement of assets and liabilities of MFS Intermediate High Income Fund (the “Fund”), including the portfolio of investments, as of November 30, 2025, and the related statements of operations and
cash flows for the year then ended, the statements of changes in net assets for each
of the two years in the period then ended, the financial highlights for each of the five
years in the period then ended and the related notes (collectively referred to as
the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund at November 30, 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 two years in the period then ended and its financial highlights
for each of the five years in the period then ended, in conformity with U.S. generally
accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements 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 are free of material misstatement, whether
due to error or fraud. The Fund is not required to have, nor were we engaged to perform,
an audit of the Fund’s internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting
but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
53
Report of Independent Registered Public Accounting Firm – continued
Our audits included performing procedures to assess the risks of material misstatement
of the financial statements, 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. Our procedures included confirmation of securities owned as of November 30, 2025, by correspondence with the custodian, brokers and others; when replies were not received
from brokers and others, 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.
We believe that our audits provide a reasonable basis for our opinion.
/s/ Ernst & Young LLP
We have served as the auditor of one or more MFS investment companies since 1993.
Boston, Massachusetts
January 14, 2026
January 14, 2026
54
Results of Shareholder Meeting (unaudited)
At the annual meeting of shareholders of MFS Intermediate High Income Fund, which
was held on October 2, 2025, the following action was taken:
Item 1: To elect the following individuals as Trustees:
|
|
Number of Shares
|
|
|
Nominee
|
For
|
Against/Withheld
|
|
Maureen R. Goldfarb
|
10,176,972.173
|
483,448.513
|
|
Maryanne L. Roepke
|
10,167,283.173
|
493,137.513
|
|
Paula E. Smith
|
10,176,667.173
|
483,753.513
|
|
Laurie J. Thomsen
|
10,183,733.173
|
476,687.513
|
55
Trustees and Officers — Identification
and Background
The Trustees and Officers of the Trust, as of January 1, 2026, are listed below, together
with their principal occupations during the past five years. (Their titles may have
varied during that period.) The address of each Trustee and Officer is 111 Huntington Avenue,
Boston, Massachusetts 02199-7618.
|
Name, Age
|
Position(s)
Held with
Fund
|
Trustee/
Officer
Since(h)
|
Term
Expiring
|
Number
of MFS
Funds
overseen
by the
Trustee
|
Principal
Occupations
During
the Past
Five Years
|
Other
Directorships
During
the Past
Five Years (j)
|
|
INTERESTED TRUSTEE
|
|
|
|
|
|
|
|
Michael W. Roberge (k)
(age 59)
|
Trustee
|
January
2021
|
2026
|
142
|
Massachusetts Financial
Services Company,
Chairman (since January
2021); Chief Executive
Officer (until 2024);
Director; Chairman of the
Board (since January
2022)
|
N/A
|
|
INDEPENDENT TRUSTEES
|
|
|
|
|
|
|
|
John P. Kavanaugh
(age 71)
|
Trustee and
Chair of
Trustees
|
January
2009
|
2026
|
142
|
Private investor
|
N/A
|
|
Steven E. Buller
(age 74)
|
Trustee
|
February
2014
|
2026
|
142
|
Private investor
|
N/A
|
|
John A. Caroselli
(age 71)
|
Trustee
|
March
2017
|
2027
|
142
|
Private investor; JC Global
Advisors, LLC
(management consulting),
President (since 2015)
|
N/A
|
|
Maureen R. Goldfarb
(age 70)
|
Trustee
|
January
2009
|
2028
|
142
|
Private investor
|
N/A
|
|
Peter D. Jones
(age 70)
|
Trustee
|
January
2019
|
2026
|
142
|
Private investor
|
N/A
|
|
James W. Kilman, Jr.
(age 64)
|
Trustee
|
January
2019
|
2027
|
142
|
Burford Capital Limited
(finance and investment
management), Senior
Advisor (since 2021),
Chief Financial Officer
(2019 - 2021); KielStrand
Capital LLC (family office),
Chief Executive Officer
(since 2016)
|
N/A
|
56
Trustees and Officers - continued
|
Name, Age
|
Position(s)
Held with
Fund
|
Trustee/
Officer
Since(h)
|
Term
Expiring
|
Number
of MFS
Funds
overseen
by the
Trustee
|
Principal
Occupations
During
the Past
Five Years
|
Other
Directorships
During
the Past
Five Years (j)
|
|
Clarence Otis, Jr.
(age 69)
|
Trustee
|
March
2017
|
2027
|
142
|
Private investor
|
VF Corporation,
Director; Verizon
Communications,
Inc., Director; The
Travelers
Companies,
Director
|
|
Maryanne L. Roepke
(age 69)
|
Trustee
|
May 2014
|
2028
|
142
|
Private investor
|
N/A
|
|
Paula E. Smith
(age 62)
|
Trustee
|
January
2025
|
2028
|
142
|
PricewaterhouseCoopers
LLP (accounting), Partner
(until June 2023)
|
N/A
|
|
Darrell A. Williams
(age 66)
|
Trustee
|
January
2025
|
2026
|
142
|
DuSable Group, LLC
(financial advisory and
consulting services),
Founder & Managing
Member (since June
2023), Loop Capital LLC
(investment banking,
brokerage and advisory
services), Managing
Director (2020 – March
2023)
|
N/A
|
|
Name, Age
|
Position(s)
Held with
Fund
|
Trustee/
Officer
Since(h)
|
Term
Expiring
|
Number
of MFS
Funds for
which
the
Person is
an
Officer
|
Principal
Occupations
During
the Past
Five Years
|
|
OFFICERS
|
|
|
|
|
|
|
William T. Allen (k)
(age 58)
|
Deputy
Assistant
Treasurer
|
April 2024
|
N/A
|
142
|
Massachusetts Financial Services
Company, Vice President
|
|
Brian Balasco (k)
(age 48)
|
Assistant
Treasurer
|
April 2024
|
N/A
|
142
|
Massachusetts Financial Services
Company, Vice President
|
|
Christopher R. Bohane (k)
(age 51)
|
Assistant
Secretary
and
Assistant
Clerk
|
July 2005
|
N/A
|
142
|
Massachusetts Financial Services
Company, Senior Vice President and
Deputy General Counsel
|
|
James L. Byrne (k)
(age 49)
|
Assistant
Treasurer
|
April 2024
|
N/A
|
142
|
Massachusetts Financial Services
Company, Vice President
|
57
Trustees and Officers - continued
|
Name, Age
|
Position(s)
Held with
Fund
|
Trustee/
Officer
Since(h)
|
Term
Expiring
|
Number
of MFS
Funds for
which
the
Person is
an
Officer
|
Principal
Occupations
During
the Past
Five Years
|
|
John W. Clark, Jr. (k)
(age 58)
|
Deputy
Treasurer
|
April 2017
|
N/A
|
142
|
Massachusetts Financial Services
Company, Vice President
|
|
David L. DiLorenzo (k)
(age 57)
|
President
|
July 2005
|
N/A
|
142
|
Massachusetts Financial Services
Company, Senior Vice President
|
|
Heidi W. Hardin (k)
(age 58)
|
Secretary
and Clerk
|
April 2017
|
N/A
|
142
|
Massachusetts Financial Services
Company, Director (since 2026),
Executive Vice President, General
Counsel and Secretary
|
|
Brian E. Langenfeld (k)
(age 52)
|
Assistant
Secretary
and
Assistant
Clerk
|
June 2006
|
N/A
|
142
|
Massachusetts Financial Services
Company, Vice President and Managing
Counsel
|
|
Rosa E. Licea-Mailloux (k)
(age 49)
|
Chief
Compliance
Officer
|
March 2022
|
N/A
|
142
|
Massachusetts Financial Services
Company, Senior Vice President (since
March 2025), Vice President
(2018-2025), Director of Corporate
Compliance (2018-2021), Senior Director
Compliance (2021-2022), Senior
Managing Director of North American
Compliance & Chief Compliance Officer
(since March 2022)
|
|
Amanda S. Mooradian (k)
(age 46)
|
Assistant
Secretary
and
Assistant
Clerk
|
September
2018
|
N/A
|
142
|
Massachusetts Financial Services
Company, Vice President and Senior
Counsel
|
|
Susan A. Pereira (k)
(age 55)
|
Assistant
Secretary
and
Assistant
Clerk
|
July 2005
|
N/A
|
142
|
Massachusetts Financial Services
Company, Vice President and Managing
Counsel
|
|
Kasey L. Phillips (k)
(age 55)
|
Treasurer
|
September
2012
|
N/A
|
142
|
Massachusetts Financial Services
Company, Senior Vice President
|
|
Michael D. Refkofsky (k)
(age 46)
|
Assistant
Treasurer
|
October
2025
|
N/A
|
142
|
Massachusetts Financial Services
Company, Vice President
|
58
Trustees and Officers - continued
|
Name, Age
|
Position(s)
Held with
Fund
|
Trustee/
Officer
Since(h)
|
Term
Expiring
|
Number
of MFS
Funds for
which
the
Person is
an
Officer
|
Principal
Occupations
During
the Past
Five Years
|
|
Matthew A. Stowe (k)
(age 51)
|
Assistant
Secretary
and
Assistant
Clerk
|
October
2014
|
N/A
|
142
|
Massachusetts Financial Services
Company, Senior Vice President and
Senior Managing Counsel
|
|
William B. Wilson (k)
(age 43)
|
Assistant
Secretary
and
Assistant
Clerk
|
October
2022
|
N/A
|
142
|
Massachusetts Financial Services
Company, Assistant Vice President and
Senior Counsel
|
(h)
Date first appointed to serve as Trustee/Officer of an MFS Fund. Each Trustee has
served continuously since appointment unless indicated otherwise. From January 2012 through
December 2016, Mr. DiLorenzo served as Treasurer of the Funds. From September 2012
through March 2024, Ms. Phillips served as Assistant Treasurer of the Funds. From
April 2017 through March 2024, Mr. Clark served as Assistant Treasurer of the Funds.
(j)
Directorships or trusteeships of companies required to report to the Securities and
Exchange
Commission (i.e., “public companies”).
(k)
“Interested person” of the Trust within the meaning of the Investment Company Act of 1940
(referred to as the 1940 Act), which is the principal federal law governing investment
companies like the fund, as a result of a position with MFS. The address of MFS is
111 Huntington Avenue, Boston, Massachusetts 02199-7618.
The Trust holds annual shareholder meetings for the purpose of electing Trustees,
and Trustees are elected for fixed terms. The Board of Trustees is currently divided into
three classes, each having a term of three years which term expires on the date of the third
annual meeting following the election to office of the Trustee’s class. Each year the term of one class expires. Each Trustee and officer will serve until next elected or his
or her earlier death, resignation, retirement or removal. Under the terms of the Board's
retirement policy, an Independent Trustee shall retire at the end of the calendar
year in which he or she reaches the earlier of 75 years of age or 15 years of service on the
Board (or, in the case of any Independent Trustee who joined the Board prior to 2015, 20
years of service on the Board).
Effective January 1, 2026, Messrs. Buller, Caroselli, Jones, Otis, and Ms. Smith are
members of the Trust’s Audit Committee.
59
Trustees and Officers - continued
Each of the Interested Trustees and certain Officers hold comparable officer positions
with certain affiliates of MFS.
|
Investment Adviser
|
Custodian
|
|
Massachusetts Financial Services Company
111 Huntington Avenue
Boston, MA 02199-7618
|
State Street Bank and Trust Company
1 Congress Street, Suite 1
Boston, MA 02114-2016
|
|
Portfolio Manager(s)
|
Independent Registered Public Accounting Firm
|
|
David Cole
Michael Skatrud
|
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
|
60
Board Review of Investment Advisory
Agreement
MFS Intermediate High Income Fund
The Investment Company Act of 1940 requires that both the full Board of Trustees and
a majority of the non-interested (“independent”) Trustees, voting separately, annually approve the continuation of the Fund’s investment advisory agreement with MFS. The Trustees consider matters bearing on the Fund and its advisory arrangements at their
meetings throughout the year, including a review of performance data at each regular
meeting. In addition, the independent Trustees met several times over the course
of three months beginning in May and ending in July 2025 (“contract review meetings”) for the specific purpose of considering whether to approve the continuation of the
investment advisory agreement for the Fund and the other investment companies that
the Board oversees (the “MFS Funds”). The independent Trustees were assisted in their evaluation of the Fund’s investment advisory agreement by independent legal counsel, from whom they received separate legal advice and with whom they met separately from MFS during various contract review meetings. The independent Trustees were also assisted in this process by an independent consultant who was retained by and
reported to the independent Trustees.
In connection with their deliberations regarding the continuation of the investment
advisory agreement, the Trustees, including the independent Trustees, considered such
information and factors as they believed, in light of the legal advice furnished to
them and their own business judgment, to be relevant. The investment advisory agreement
for the Fund was considered separately, although the Trustees also took into account
the common interests of all MFS Funds in their review. As described below, the Trustees considered the nature, quality, and extent of the various investment advisory,
administrative, and shareholder services performed by MFS under the existing investment advisory agreement and other arrangements with the Fund.
In connection with their contract review meetings, the Trustees received and relied
upon materials that included, among other items: (i) information provided by Broadridge Financial Solutions, Inc. (“Broadridge”), an independent third party, on the investment performance (based on net asset value) of the Fund for various time periods
ended December 31, 2024 and the investment performance (based on net asset value)
of a group of funds with substantially similar investment classifications/ objectives
(the “Broadridge performance universe”), (ii) information provided by Broadridge on the Fund’s advisory fees and other expenses and the advisory fees and other expenses of comparable funds identified by Broadridge as well as all other funds in the same investment classification/category (the “Broadridge expense group and universe”), (iii) information provided by MFS on the advisory fees of portfolios of other clients of
MFS, including institutional separate accounts and other clients, (iv) information as to
whether and to what extent applicable expense waivers, reimbursements or fee “breakpoints” are observed for the Fund, (v) information regarding MFS’ financial results and financial condition, including MFS’ and certain of its affiliates’ estimated profitability from services performed for the Fund and the MFS Funds as a whole, and
compared to MFS’ institutional business, (vi) MFS’ views regarding the outlook for the mutual fund industry and the strategic business plans of MFS, (vii) descriptions of
various functions performed by MFS for the Funds, such as compliance monitoring and
portfolio trading practices, and (viii) information regarding the overall organization
of
61
Board Review of Investment Advisory Agreement - continued
MFS, including information about MFS’ senior management and other personnel providing investment advisory, administrative and other services to the Fund and the
other MFS Funds. The comparative performance, fee and expense information prepared and provided by Broadridge was not independently verified and the independent Trustees did not independently verify any information provided to them
by MFS.
The Trustees’ conclusion as to the continuation of the investment advisory agreement was based on a comprehensive consideration of all information provided to the Trustees and not the result of any single factor. Some of the factors that figured
particularly in the Trustees’ deliberations are described below, although individual Trustees may have evaluated the information presented differently from one another,
giving different weights to various factors. It is also important to recognize that
the fee arrangements for the Fund and other MFS Funds are the result of years of review and
discussion between the independent Trustees and MFS, that certain aspects of such
arrangements may receive greater scrutiny in some years than in others, and that the
Trustees’ conclusions may be based, in part, on their consideration of these same arrangements during the course of the year and in prior years.
Based on information provided by Broadridge and MFS, the Trustees reviewed the Fund’s total return investment performance as well as the Broadridge performance universe over various time periods. The Trustees placed particular emphasis on the
total return performance of the Fund’s common shares in comparison to the performance of funds in its Broadridge performance universe over the five-year period
ended December 31, 2024, which the Trustees believed was a long enough period to reflect differing market conditions. The total return performance of the Fund’s common shares ranked 22nd out of a total of 30 funds in the Broadridge performance
universe for the five-year period (a ranking of first place out of the total number
of funds in the performance universe indicating the best performer and a ranking of last
place out of the total number of funds in the performance universe indicating the
worst performer). The total return performance of the Fund’s common shares ranked 25th out of a total of 33 funds for the one-year period and 20th out of a total of
33 funds for the three-year period ended December 31, 2024. Given the size of the Broadridge performance universe and information previously provided by MFS regarding differences between the Fund and other funds in its Broadridge performance universe, the Trustees also reviewed the Fund’s performance in comparison to the Bloomberg U.S. Corporate High-Yield Bond 2% Issuer Capped Index. The Fund underperformed its benchmark for the one-, three-, and five-year
periods ended December 31, 2024 (one-year: 7.8% total return for the Fund versus 8.2% total return for the benchmark; three-year: 1.7% total return for the Fund versus
2.9% total return for the benchmark; five-year: 2.9% total return for the Fund versus
4.2% total return for the benchmark). Because of the passage of time, these performance results may differ from the performance results for more recent periods,
including those shown elsewhere in this report.
The Trustees expressed concern to MFS about the substandard investment performance
of the Fund. In the course of their deliberations, the Trustees took into account
information provided by MFS in connection with the contract review meetings, as well
as during investment review meetings conducted with portfolio management personnel during the course of the year, as to MFS’ efforts to improve the Fund’s performance. In addition, the Trustees requested that they receive a separate update
on the Fund’s performance at each of their regular meetings. After reviewing these and
62
Board Review of Investment Advisory Agreement - continued
related factors, the Trustees concluded, within the context of their overall conclusions
regarding the investment advisory agreement, that MFS’ responses and efforts and plans to improve investment performance were sufficient to support approval of the
continuance of the investment advisory agreement for an additional one-year period,
ut that they would continue to closely monitor the performance of the Fund.
In assessing the reasonableness of the Fund’s advisory fee, the Trustees considered, among other information, the Fund’s advisory fee and the total expense ratio of the Fund’s common shares as a percentage of average daily net assets and the advisory fee and total expense ratios of the Broadridge expense group based on information provided by Broadridge. The Trustees considered that MFS currently observes an expense limitation for the Fund, which may not be changed without the Trustees’ approval. The Trustees also considered that, according to the data provided by Broadridge (which takes into account any fee reductions or expense limitations that
were in effect during the Fund’s last fiscal year), the Fund’s effective advisory fee rate was lower than the Broadridge expense group median and the Fund’s total expense ratio was approximately at the Broadridge expense group median.
The Trustees also considered the advisory fees charged by MFS to any institutional
separate accounts advised by MFS (“separate accounts”) and unaffiliated investment companies for which MFS serves as subadviser (“subadvised funds”) that have comparable investment strategies to the Fund, if any. In comparing these fees, the
Trustees considered information provided by MFS as to the generally broader scope
of services provided by MFS to the Fund, as well as the more extensive regulatory burdens
imposed on MFS in managing the Fund, in comparison to separate accounts and subadvised funds.
The Trustees considered that, as a closed-end fund, the Fund is unlikely to experience
meaningful asset growth. As a result, the Trustees did not view the potential for
realization of economies of scale as the Fund’s assets grow to be a material factor in their deliberations. The Trustees noted that they would consider economies of scale
in the future in the event the Fund experiences significant asset growth, such as through
an offering of preferred shares (which is not currently contemplated) or a material
increase in the market value of the Fund’s portfolio securities.
The Trustees also considered information prepared by MFS relating to MFS’ costs and profits with respect to the Fund, the MFS Funds considered as a group, and other investment companies and accounts advised by MFS, as well as MFS’ methodologies used to determine and allocate its costs to the MFS Funds, the Fund and other accounts and products for purposes of estimating profitability.
After reviewing these and other factors described herein, the Trustees concluded,
within the context of their overall conclusions regarding the investment advisory
agreement, that the advisory fees charged to the Fund represent reasonable compensation in light of the services being provided by MFS to the Fund.
In addition, the Trustees considered MFS’ resources and related efforts to continue to retain, attract and motivate capable personnel to serve the Fund. The Trustees also
considered current and developing conditions in the financial services industry, including the presence of large and well-capitalized companies which are spending,
and appear to be prepared to continue to spend, substantial sums to engage personnel
and to provide services to competing investment companies. In this regard, the
63
Board Review of Investment Advisory Agreement - continued
Trustees also considered the financial resources of MFS and its ultimate parent, Sun
Life Financial Inc. The Trustees also considered the advantages and possible disadvantages
to the Fund of having an adviser that also serves other investment companies as well
as other accounts.
The Trustees also considered the nature, quality, cost, and extent of administrative
services provided to the Fund by MFS under agreements other than the investment advisory agreement. The Trustees also considered the nature, extent and quality of
certain other services MFS performs or arranges for on the Fund’s behalf, which may include securities lending programs, directed expense payment programs, class action
recovery programs, and MFS’ interaction with third-party service providers, principally custodians and sub-custodians. The Trustees concluded that the various non-advisory
services provided by MFS and its affiliates on behalf of the Fund were satisfactory.
The Trustees considered so-called “fall-out benefits” to MFS such as reputational value derived from serving as investment manager to the MFS Funds. The Trustees also considered that MFS discontinued its historic practice of obtaining investment research
from portfolio brokerage commissions paid by certain MFS Funds effective January 2018, and directly pays or voluntarily reimburses a Fund, if applicable, for the costs
of external research acquired through the use of the Fund’s portfolio brokerage commissions.
Based on their evaluation of factors that they deemed to be material, including those
factors described above, the Board of Trustees, including the independent Trustees,
concluded that the Fund’s investment advisory agreement with MFS should be continued for an additional one-year period, commencing August 1, 2025.
64
Proxy Voting Policies and Information
MFS votes proxies on behalf of the fund pursuant to proxy voting policies and procedures that are available without charge, upon request, by calling 1-800-225-2606, by visiting mfs.com/proxyvoting, or by visiting the SEC’s Web site at http://www.sec.gov.
Information regarding how the fund voted proxies relating to portfolio securities
during the most recent twelve-month period ended June 30 is available by August 31 of each
year without charge by visiting mfs.com/proxyvoting, or by visiting the SEC’s Web site at http://www.sec.gov.
Quarterly Portfolio Disclosure
The fund files a complete schedule of portfolio holdings with the SEC for the first
and third quarters of each fiscal year as an exhibit to its reports on Form N-PORT. The
fund’s Form N-PORT reports are available on the SEC’s Web site at http://www.sec.gov. A shareholder can obtain the portfolio holdings report for the first and third quarters of the fund's fiscal year at mfs.com/closedendfunds by choosing the fund's name and then scrolling to the “Resources” section and clicking on the “Reports and Other Documents” tab.
Further Information
From time to time, MFS may post important information about the fund or the MFS Funds on the MFS Web site (mfs.com). This information is available at https://www.mfs.com/announcements or at mfs.com/closedendfunds by choosing the fund's name and then scrolling to the “Resources” section and clicking on the “Announcements” tab, if any.
Additional information about the fund (e.g., performance, dividends and the fund’s price history) is also available at mfs.com/closedendfunds by choosing the fund's name, if any.
INFORMATION ABOUT FUND CONTRACTS AND LEGAL CLAIMS
The fund has entered into contractual arrangements with an investment adviser, administrator, transfer agent, and custodian who each provide services to the fund.
Unless expressly stated otherwise, shareholders are not parties to, or intended beneficiaries of these contractual arrangements, and these contractual arrangements
are not intended to create any shareholder right to enforce them against the service
providers or to seek any remedy under them against the service providers, either directly or on behalf of the fund.
Under the Trust’s By-Laws, any claims asserted against or on behalf of the MFS Funds, including claims against Trustees and Officers, must be brought in state and federal
courts located within the Commonwealth of Massachusetts.
Federal Tax Information (unaudited)
The fund will notify shareholders of amounts for use in preparing 2025 income tax
forms in January 2026. The following information is provided pursuant to provisions of the Internal Revenue Code.
The fund intends to pass through the maximum amount allowable as Section 163(j) Interest Dividends as defined in Treasury Regulation §1.163(j)-1(b).
65
rev. 3/16
|
FACTS
|
WHAT DOES MFS DO WITH YOUR
PERSONAL INFORMATION?
|
|
Why?
|
Financial companies choose how they share your personal
information. Federal law gives consumers the right to limit some but
not all sharing. Federal law also requires us to tell you how we
collect, share, and protect your personal information. Please read this
notice carefully to understand what we do.
|
|
What?
|
The types of personal information we collect and share depend on
the product or service you have with us. This information can include:
|
|
• Social Security number and account balances
|
|
|
• Account transactions and transaction history
|
|
|
• Checking account information and wire transfer instructions
|
|
|
When you are no longer our customer, we continue to share your
information as described in this notice.
|
|
How?
|
All financial companies need to share customers' personal
information to run their everyday business. In the section below, we
list the reasons financial companies can share their customers'
personal information; the reasons MFS chooses to share; and
whether you can limit this sharing.
|
|
Reasons we can share your
personal information
|
Does
MFS share?
|
Can you limit
this sharing?
|
|
For our everyday business purposes –
such as to process your transactions, maintain your
account(s), respond to court orders and legal
investigations, or report to credit bureaus
|
Yes
|
No
|
|
For our marketing purposes –
to offer our products and services to you
|
No
|
We don't share
|
|
For joint marketing with other
financial companies
|
No
|
We don't share
|
|
For our affiliates' everyday business purposes –
information about your transactions and experiences
|
No
|
We don't share
|
|
For our affiliates' everyday business purposes –
information about your creditworthiness
|
No
|
We don't share
|
|
For nonaffiliates to market to you
|
No
|
We don't share
|
|
Questions?
|
Call 800-225-2606 or go to mfs.com.
|
66
Page 2
|
Who we are
|
|
|
Who is providing this notice?
|
MFS Funds, MFS Investment Management, MFS Institutional
Advisors, Inc., and MFS Heritage Trust Company.
|
|
What we do
|
|
|
How does MFS
protect my personal
information?
|
To protect your personal information from unauthorized access
and use, we use security measures that comply with federal
law. These measures include procedural, electronic, and
physical safeguards for the protection of the personal
information we collect about you.
|
|
How does MFS
collect my personal information?
|
We collect your personal information, for example, when you
|
|
• open an account or provide account information
|
|
|
• direct us to buy securities or direct us to sell your securities
|
|
|
• make a wire transfer
|
|
|
We also collect your personal information from others, such as
credit bureaus, affiliates, or other companies.
|
|
|
Why can't I limit all sharing?
|
Federal law gives you the right to limit only
|
|
• sharing for affiliates' everyday business purposes –
information about your creditworthiness
|
|
|
• affiliates from using your information to market to you
|
|
|
• sharing for nonaffiliates to market to you
|
|
|
State laws and individual companies may give you additional
rights to limit sharing.
|
|
|
Definitions
|
|
|
Affiliates
|
Companies related by common ownership or control. They can
be financial and nonfinancial companies.
|
|
• MFS does not share personal information with affiliates,
except for everyday business purposes as described on page
one of this notice.
|
|
|
Nonaffiliates
|
Companies not related by common ownership or control. They
can be financial and nonfinancial companies.
|
|
• MFS does not share with nonaffiliates so they can market to
you.
|
|
|
Joint marketing
|
A formal agreement between nonaffiliated financial
companies that together market financial products or services
to you.
|
|
• MFS doesn't jointly market.
|
|
|
Other important information
|
|
If you own an MFS product or receive an MFS service in the name of a third party such
as
a bank or broker-dealer, their privacy policy may apply to you instead of ours.
|
67
CONTACT US
COMPUTERSHARE TRUST COMPANY, N.A.
TRANSFER AGENT, REGISTRAR, AND
DIVIDEND DISBURSING AGENT
TRANSFER AGENT, REGISTRAR, AND
DIVIDEND DISBURSING AGENT
CALL
1-800-637-2304
9 a.m. to 5 p.m. Eastern time
WRITE
Computershare Trust Company, N.A.
P.O. Box 43078
Providence, RI 02940-3078
New York Stock Exchange Symbol: CIF
Item 1(b):
A copy of the notice transmitted to the Registrant’s shareholders in reliance on Rule 30e-3 of the Investment Company Act of 1940, as amended that contains disclosure specified by paragraph (c)(3) of Rule 30e-3 is attached hereto as EX-99.30e-3Notice.
ITEM 2. CODE OF ETHICS.
The Registrant has adopted a Code of Ethics (the “Code”) pursuant to Section 406 of the Sarbanes-Oxley Act and as defined in Form N-CSR that applies to the Registrant’s principal executive officer and principal financial and accounting officer. During the period covered by this report, the Registrant has not amended any provision in the Code that relates to an element of the Code’s definition enumerated in paragraph
(b)of Item 2 of this Form N-CSR. During the period covered by this report, the Registrant did not grant a waiver, including an implicit waiver, from any provision of the Code. A copy of the Code is attached hereto as EX-99.COE.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Messrs. Steven E. Buller, Clarence Otis, Jr., and Paula E. Smith, members of the Audit Committee, have been determined by the Board of Trustees in their reasonable business judgment to meet the definition of “audit committee financial expert” as such term is defined in Form N-CSR. In addition, Messrs. Buller, Otis, and Smith are “independent” members of the Audit Committee (as such term has been defined by the Securities and Exchange Commission in regulations implementing Section 407 of the Sarbanes-Oxley Act of 2002). The Securities and Exchange Commission has stated that the designation of a person as an audit committee financial expert pursuant to this Item 3 on the Form N-CSR does not impose on such a person any duties, obligations or liability that are greater than the duties, obligations or liability imposed on such person as a member of the Audit Committee and the Board of Trustees in the absence of such designation or identification.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Items 4(a) through 4(d) and 4(g):
The Board of Trustees has appointed Ernst & Young LLP (“E&Y”) to serve as independent accountants to the Registrant (hereinafter the “Registrant” or the “Fund”). The tables below set forth the audit fees billed to the Fund as well as fees for non-audit services provided to the Fund and/or to the Fund’s investment adviser, Massachusetts Financial Services Company (“MFS”), and to various entities either controlling, controlled by, or under common control with MFS that provide ongoing services to the Fund (“MFS Related Entities”).
For the fiscal years ended November 30, 2025 and 2024, audit fees billed to the Fund by E&Y were as follows:
|
Fees billed by E&Y: |
|
Audit Fees |
|
|
|
2025 |
|
2024 |
|
MFS Intermediate High Income Fund |
76,223 |
|
74,456 |
For the fiscal years ended November 30, 2025 and 2024, fees billed by E&Y for audit-related, tax and other services provided to the Fund and for audit-related, tax and other services provided to MFS and MFS Related Entities were as follows:
|
Fees billed by E&Y: |
Audit-Related Fees1 |
|
Tax Fees2 |
All Other Fees3 |
|||||||
|
|
|
2025 |
2024 |
|
2025 |
2024 |
2025 |
|
2024 |
||
|
To MFS Intermediate High |
14,830 |
14,482 |
|
259 |
267 |
0 |
|
0 |
|||
|
Income Fund |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Fees billed by E&Y: |
|
Audit-Related Fees1 |
|
Tax Fees2 |
All Other Fees3 |
||||||
|
|
|
2025 |
2024 |
|
2025 |
2024 |
2025 |
|
2024 |
||
|
To MFS and MFS Related |
|
0 |
0 |
|
0 |
0 |
|
245,568 |
|
3,600 |
|
|
Entities of MFS Intermediate |
|
|
|
|
|
|
|
|
|
|
|
|
High Income Fund* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
Fees Billed by E&Y: |
|
|
|
Aggregate Fees for Non-audit Services |
|
||||||
|
|
|
|
|
|
2025 |
|
|
2024 |
|
||
|
To MFS Intermediate High Income Fund, |
|
|
511,186 |
|
|
324,289 |
|
||||
|
MFS and MFS Related Entities# |
|
|
|
|
|
|
|
|
|
|
|
*This amount reflects the fees billed to MFS and MFS Related Entities for non-audit services relating directly to the operations and financial reporting of the Fund (portions of which services also related to the operations and financial reporting of other funds within the MFS Funds complex).
# This amount reflects the aggregate fees billed by E&Y for non-audit services rendered to the Fund and for non- audit services rendered to MFS and the MFS Related Entities.
1 The fees included under “Audit-Related Fees” are fees related to assurance and related services that are reasonably related to the performance of the audit or review of financial statements, but not reported under ‘‘Audit Fees,’’ including accounting consultations, agreed-upon procedure reports, attestation reports, comfort letters and internal control reviews.
2 The fees included under “Tax Fees” are fees associated with tax compliance, tax advice and tax planning, including services relating to the filing or amendment of federal, state or local income tax returns, regulated investment company qualification reviews and tax distribution and analysis.
3 The fees included under “All Other Fees” are fees for products and services provided by E&Y other than those reported under “Audit Fees,” “Audit-Related Fees” and “Tax Fees”.
Item 4(e)(1):
Set forth below are the policies and procedures established by the Audit Committee of the Board of Trustees relating to the pre-approval of audit and non-audit related services:
To the extent required by applicable law, pre-approval by the Audit Committee of the Board is needed for all audit and permissible non-audit services rendered to the Fund and all permissible non-audit services rendered to MFS or MFS Related Entities if the services relate directly to the operations and financial reporting of the Registrant. Pre- approval is currently on an engagement-by-engagement basis. In the event pre-approval of such services is necessary between regular meetings of the Audit Committee and it is not practical to wait to seek pre-approval at the next regular meeting of the Audit Committee, pre-approval of such services may be referred to the Chair of the Audit Committee for approval; provided that the Chair may not pre-approve any individual engagement for such services exceeding $50,000 or multiple engagements for such services in the aggregate exceeding $100,000 between such regular meetings of the Audit Committee. Any engagement pre-approved by the Chair between regular meetings of the Audit Committee shall be presented for ratification by the entire Audit Committee at its next regularly scheduled meeting.
Item 4(e)(2):
None, or 0%, of the services relating to the Audit-Related Fees, Tax Fees and All Other Fees paid by the Fund and MFS and MFS Related Entities relating directly to the operations and financial reporting of the Registrant disclosed above were approved by the audit committee pursuant to paragraphs (c)(7)(i)(C) of Rule 2-01 of Regulation S-X (which permits audit committee approval after the start of the engagement with respect to services other than audit, review or attest services, if certain conditions are satisfied).
Item 4(f):
Not applicable.
Item 4(h):
The Registrant’s Audit Committee has considered whether the provision by a Registrant’s independent registered public accounting firm of non-audit services to MFS and MFS Related Entities that were not pre-approved by the Committee (because such services were provided prior to the effectiveness of SEC rules requiring pre-approval or because such services did not relate directly to the operations and financial reporting of the Registrant) was compatible with maintaining the independence of the independent registered public accounting firm as the Registrant’s principal auditors.
Item 4(i):
Not applicable.
Item 4(j):
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The Registrant has an Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. Effective January 1, 2026, the members of the Audit Committee are Messrs. Steven E. Buller, John A. Caroselli, Peter D. Jones, Clarence Otis, Jr, and Paula E. Smith.
ITEM 6. INVESTMENTS
A schedule of investments of the Registrant is included as part of the report to shareholders of the Registrant under Item 1(a) of this Form N-CSR.
ITEM 7. FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 9. PROXY DISCLOSURES FOR OPEN-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 10. RENUMERATION PAID TO DIRECTORS, OFFICERS, AND OTHERS OF OPEN-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable to the Registrant.
ITEM 11. STATEMENT REGARDING BASIS FOR APPROVAL OF INVESTMENT ADVISORY CONTRACT.
This information is disclosed as part of the financial statements included in Item 1 above.
ITEM 12. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A copy of the proxy voting policies and procedures are attached hereto as Ex-99.PROXYPOL.
ITEM 13. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Portfolio Manager(s)
Information regarding the portfolio manager(s) of the MFS Intermediate High Income Fund (the "Fund"), is set forth below. Each portfolio manager is primarily responsible for the day-to-day management of the Fund.
|
Portfolio Manager |
Primary Role |
Since |
Title and Five Year History |
|
David Cole |
Portfolio Manager |
2007 |
Investment Officer of MFS; employed in the investment area of MFS |
|
|
|
|
since 2004. |
|
Michael Skatrud |
Portfolio Manager |
2018 |
Investment Officer of MFS; employed in the investment area of MFS |
|
|
|
|
since 2013. |
|
|
|
|
|
Compensation
MFS’ philosophy is to align portfolio manager compensation with the goal to provide shareholders with long-term value through a collaborative investment process. Therefore, MFS uses long-term investment performance as well as contribution to the overall investment process and collaborative culture as key factors in determining portfolio manager compensation. In addition, MFS seeks to maintain total compensation programs that are competitive in the asset management industry in each geographic market where it has employees. MFS uses competitive compensation data to ensure that compensation practices are aligned with its goals of attracting, retaining, and motivating the highest-quality professionals.
MFS reviews portfolio manager compensation annually. In determining portfolio manager compensation, MFS uses quantitative means and qualitative means to help ensure a durable investment process. As of December 31, 2024, portfolio manager total cash compensation is a combination of base salary and performance bonus:
Base Salary – Base salary generally represents a smaller percentage of portfolio manager total cash compensation than performance bonus. Performance Bonus – Generally, the performance bonus represents more than a majority of portfolio manager total cash compensation.
The performance bonus is based on a combination of quantitative and qualitative factors, generally with more weight given to the former and less weight given to the latter. The quantitative portion is primarily based on the pre-tax performance of accounts managed by the portfolio manager over a range of fixed-length time periods, intended to provide the ability to assess performance over time periods consistent with a full market cycle and a strategy's investment horizon. The fixed-length time periods include the portfolio manager's full tenure on each Fund/strategy and, when available, 10-, 5-, and 3-year periods. For portfolio managers who have served for less than three years, shorter- term periods, including the one-year period, will also be considered, as will performance in previous roles, if any, held at the firm. Emphasis is generally placed on longer performance periods when multiple performance periods are available. Performance is evaluated across the full set of strategies and portfolios managed by a given portfolio manager, relative to appropriate peer group universes and/or representative indices (“benchmarks”). As of December 31, 2024, the following benchmarks were used to measure the following portfolio manager's performance for the Fund:
|
Fund |
Portfolio Manager |
Benchmark(s) |
|
MFS Intermediate High Income Fund |
David Cole |
Bloomberg U.S. Corporate High-Yield 2% Issuer Capped |
|
|
|
Index |
|
|
|
|
|
|
Michael Skatrud |
Bloomberg U.S. Corporate High-Yield 2% Issuer Capped |
|
|
|
Index |
|
|
|
|
Benchmarks may include versions and components of indices, custom indices, and linked indices that combine performance of different indices for different portions of the time period, where appropriate.
The qualitative portion is based on the results of an annual internal peer review process (where portfolio managers are evaluated by other portfolio managers, analysts, and traders) and management’s assessment of overall portfolio manager contributions to the MFS investment process and the client experience (distinct from fund and other account performance).
The performance bonus may be in the form of cash and/or a deferred cash award, at the discretion of management. A deferred cash award is issued for a cash value and becomes payable over a three-year vesting period if the portfolio manager remains in the continuous employ of MFS or its affiliates. During the vesting period, the value of the unfunded deferred cash award will fluctuate as though the portfolio manager had invested the cash value of the award in an MFS fund(s) selected by the portfolio manager. A selected fund may, but is not required to, be a fund that is managed by the portfolio manager.
MFS Equity Plan – Portfolio managers also typically benefit from the opportunity to participate in the MFS Equity Plan. Equity interests are awarded by management, on a discretionary basis, taking into account tenure at MFS, contribution to the investment process, and other factors.
Finally, portfolio managers also participate in benefit plans (including a defined contribution plan and health and other insurance plans) and programs available generally to other employees of MFS. The percentage such benefits represent of any portfolio manager’s compensation depends upon the length of the individual’s tenure at MFS and salary level, as well as other factors.
Ownership of Fund Shares
The following table shows the dollar range of equity securities of the Fund beneficially owned by the Fund’s portfolio manager(s) as of the Fund's fiscal year ended November 30, 2025. The following dollar ranges apply:
N. None
A. $1 – $10,000
B. $10,001 – $50,000
C. $50,001 – $100,000
D. $100,001 – $500,000
E. $500,001 – $1,000,000
F. Over $1,000,000
|
Name of Portfolio Manager |
Dollar Range of Equity Securities in Fund |
|
David Cole |
N |
|
Michael Skatrud |
N |
Other Accounts
In addition to the Fund, each portfolio manager of the Fund is named as a portfolio manager of certain other accounts managed or sub- advised by MFS or an affiliate. The number and assets of these accounts were as follows as of the Fund's fiscal year ended November 30, 2025:
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Registered Investment Companies* |
Other Pooled Investment Vehicles |
Other Accounts |
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|
|
Number of Accounts |
Total |
Number of |
Total Assets |
Number of |
Total Assets |
|
Name |
|
Assets |
Accounts |
|
Accounts |
|
|
David Cole |
14 |
$14.9 billion |
9 |
$6.7 billion |
7 |
$1.9 billion |
|
|
|
|
|
|
|
|
|
Michael Skatrud |
13 |
$14.8 billion |
7 |
$1.6 billion |
4 |
$1.4 billion |
|
|
|
|
|
|
|
|
|
* Includes the Fund. |
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Advisory fees are not based upon performance of any of the accounts identified in the table above.
Potential Conflicts of Interest
MFS seeks to identify potential conflicts of interest resulting from a portfolio manager’s management of both the Fund and other accounts, and has adopted policies and procedures reasonably designed to address such potential conflicts. There is no guarantee that MFS will be successful in identifying or mitigating conflicts of interest.
The management of multiple funds and accounts (including accounts in which MFS, an affiliate, an employee, an officer, or a director has an interest) gives rise to conflicts of interest if the funds and accounts have different objectives and strategies, benchmarks, time horizons, and fees, as a portfolio manager must allocate his or her time and investment ideas across multiple funds and accounts. In certain instances, there are securities which are suitable for the Fund’s portfolio as well as for one or more other accounts advised by MFS or its subsidiaries (including accounts in which MFS, an affiliate, an employee, an officer, or a director has an interest). MFS' trade allocation policies could have a detrimental effect on the Fund if the Fund’s orders do not get fully executed or are delayed in getting executed due to being aggregated with those of other accounts advised by MFS or its subsidiaries. A portfolio manager may execute transactions for another fund or account that may adversely affect the value of the Fund’s investments. Investments selected for funds or accounts other than the Fund may outperform investments selected for the Fund.
When two or more accounts are simultaneously engaged in the purchase or sale of the same security, the securities are allocated among clients in a manner believed by MFS to be fair and equitable to each over time. Allocations may be based on many factors and may not always be pro rata based on assets managed. The allocation methodology could have a detrimental effect on the price or availability of a security with respect to the Fund.
MFS and/or a portfolio manager may have a financial incentive to allocate favorable or limited opportunity investments or structure the timing of investments to favor accounts other than the Fund; for instance, those that pay a higher advisory fee and/or have a performance adjustment, those that include an investment by the portfolio manager, and/or those in which MFS, its affiliates, its employees, its officers, and/or its directors own or have an interest.
To the extent permitted by applicable law, certain accounts may invest their assets in other accounts advised by MFS or its affiliates, including accounts that are advised by one or more of the same portfolio manager(s), which could result in conflicts of interest relating to asset allocation, timing of purchases and redemptions, and increased profitability for MFS, its affiliates, and/or its personnel, including portfolio managers.
ITEM 14. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
MFS Intermediate High Income Fund
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|
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(c) Total |
(d) Maximum |
|
|
|
|
|
Number of |
Number (or |
|
|
|
(a) Total number |
(b) |
Shares |
Approximate |
|
|
Period |
of Shares |
Average |
Purchased as |
Dollar Value) of |
|
|
|
Purchased |
Price |
Part of Publicly |
Shares that May |
|
|
|
|
Paid per |
Announced |
Yet Be Purchased |
|
|
|
|
Share |
Plans or |
under the Plans |
|
|
|
|
|
Programs |
or Programs |
|
|
|
|
|
|
|
|
|
12/01/24-12/31/24 |
0 |
N/A |
0 |
1,797,453 |
|
|
01/01/25-01/31/25 |
0 |
N/A |
0 |
1,797,453 |
|
|
02/01/25-02/28/25 |
0 |
N/A |
0 |
1,797,453 |
|
|
03/01/25-03/31/25 |
0 |
N/A |
0 |
1,797,453 |
|
|
04/01/25-04/30/25 |
102,100 |
1.60 |
102,100 |
1,695,353 |
|
|
05/01/25-05/31/25 |
0 |
N/A |
0 |
1,695,353 |
|
|
06/01/25-06/30/25 |
0 |
N/A |
0 |
1,695,353 |
|
|
07/01/25-07/31/25 |
0 |
N/A |
0 |
1,695,353 |
|
|
08/01/25-08/31/25 |
0 |
N/A |
0 |
1,695,353 |
|
|
09/01/25-09/30/25 |
0 |
N/A |
0 |
1,695,353 |
|
|
10/01/25-10/31/25 |
0 |
N/A |
0 |
1,790,198 |
|
|
11/01/25-11/30/25 |
0 |
N/A |
0 |
1,790,198 |
|
|
Total |
102,100 |
1.60 |
102,100 |
|
|
|
|
|
|
|
|
Note: The Board approved procedures to repurchase shares and reviews the results periodically. The notification to shareholders of the program is part of the semi-annual and annual reports sent to shareholders. These annual programs begin on October 1st of each year. The programs conform to the conditions of Rule 10b-18 of the Securities Exchange Act of 1934 and limit the aggregate number of shares that may be purchased in each annual period (October 1 through the following September 30) to 10% of the Registrant’s outstanding shares as of the first day of the plan year (October 1). The aggregate number of shares available for purchase for the October 1, 2025 plan year is 1,790,198.
ITEM 15. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There were no material changes to the procedures by which shareholders may send recommendations to the Board for nominees to the Registrant’s Board since the Registrant last provided disclosure as to such procedures in response to the requirements of Item 407 (c)(2)(iv) of Regulation S-K or this Item.
ITEM 16. CONTROLS AND PROCEDURES.
(a)Based upon their evaluation of the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as conducted within 90 days of the filing date of this report on Form N-CSR, the Registrant’s principal financial officer and principal executive officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the Registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
(b)There were no changes in the Registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the period covered by the report that have materially affected, or are 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.
During the fiscal year ended November 30, 2025, there were no fees or income related to securities lending activities of the Registrant.
ITEM 18. RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION.
Not applicable.
ITEM 19. EXHIBITS.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Attached hereto as EX-99.COE.
(2)A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2): Attached hereto as EX-99.302CERT.
(3)Any written solicitation to purchase securities under Rule 23c-1 under the 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.
(4)Change in the registrant’s independent public accountant. Not applicable.
(b)If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed “filed” for the purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. Attached hereto as EX-99.906CERT.
(c)Registrant’s Rule 30e-3 Notice pursuant to Item 1(b) of Form N-CSR. Attached hereto as EX-99.30e-3Notice.
(d)Proxy Voting Policies and Procedures pursuant to Item 7 of Form N-CSR. Attached hereto as EX-99.PROXYPOL.
(e) Notices to Trust’s common shareholders in accordance with Investment Company Act Section 19(a) and Rule 19a-1. Attached hereto as
EX-99.19a-1.
Notice
A copy of the Amended and Restated Declaration of Trust, as amended, of the Registrant is on file with the Secretary of State of The Commonwealth of Massachusetts and notice is hereby given that this instrument is executed on behalf of the Registrant by an officer of the Registrant as an officer and not individually and the obligations of or arising out of this instrument are not binding upon any of the Trustees or shareholders individually, but are binding only upon the assets and property of the respective constituent series of the Registrant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) MFS INTERMEDIATE HIGH INCOME FUND
By (Signature and Title)*
/S/ DAVID L. DILORENZO
David L. DiLorenzo, President
Date: January 14, 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 (Signature and Title)*
/S/ DAVID L. DILORENZO
David L. DiLorenzo, President (Principal Executive Officer)
Date: January 14, 2026
By (Signature and Title)*
/S/ KASEY L. PHILLIPS
Kasey L. Phillips, Treasurer (Principal Financial Officer and Accounting Officer) Date: January 14, 2026
* Print name and title of each signing officer under his or her signature.
MFS Intermediate High Income
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