OMB APPROVAL
OMB Number: 3235-0570
Expires: January 31, 2017
Estimated average burden
hours per response.....20.6
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 811-21043
Pioneer High Income Trust
(Exact name of registrant as specified in charter)
60 State Street, Boston, MA 02109
(Address of principal executive offices) (ZIP code)
Terrence J. Cullen, Pioneer Investment Management, Inc.,
60 State Street, Boston, MA 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: (617) 742-7825
Date of fiscal year end: March 31
Date of reporting period: April 1, 2013 through March 31, 2014
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
Pioneer High
Income Trust
--------------------------------------------------------------------------------
Annual Report | March 31, 2014
--------------------------------------------------------------------------------
Ticker Symbol: PHT
[LOGO] PIONEER
Investments(R)
visit us: us.pioneerinvestments.com
Table of Contents
Letter to Shareowners 2
Portfolio Management Discussion 4
Portfolio Summary 10
Prices and Distributions 11
Performance Update 12
Schedule of Investments 13
Financial Statements 41
Notes to Financial Statements 47
Report of Independent Registered Public Accounting Firm 60
Approval of Investment Advisory Agreement 62
Trustees, Officers and Service Providers 66
Pioneer High Income Trust | Annual Report | 3/31/14 1
President's Letter
Dear Shareowner,
A few months into 2014, we still expect U.S. economic growth for the year to be
in the 2.5% to 3% range, despite some weaker economic data releases during the
winter months driven in large part by harsh weather across much of the
continental U.S. While unemployment remains high, employment has been rising
steadily. Consumer incomes, savings, wealth, and debt-servicing capacity have
been solid buttresses for the recovering housing and auto industries. Industrial
activity is growing only moderately, but current corporate profits are generally
solid and balance sheets appear able to support needed capital spending and
dividend* payouts. A modestly improving European economy and continuing economic
improvement in Japan appear likely to result in improving global growth in 2014,
further supporting the U.S. economy. In addition, we feel that continuing slack
in labor markets and capacity utilization offer the potential for continuing
growth without bottlenecks and rising inflation.
After observing the strengthening economic trends, the Federal Reserve System
(the Fed) has begun scaling back its QE (quantitative easing) program, but
short-term interest rates remain near zero, and while Fed Chair Janet Yellen has
suggested that rates may be raised roughly six months after the QE program is
fully tapered, that would still place the potential rate hike sometime in 2015.
There are certainly risks and uncertainties still facing the global economy as
2014 moves along. The European economy, while improving, remains weak, the
Japanese economy faced a tax hike this spring, and a number of emerging market
countries are experiencing difficulties. There are also geopolitical worries
abroad, such as Russia's aggressive move against the Ukraine, and more potential
political fights at home, especially during a mid-term election year. While most
of the widely recognized risks we have outlined may already be "priced into" the
market, we believe investors should continue to expect market volatility.
At Pioneer, we have long advocated the benefits of staying diversified and
investing for the long term. And while diversification does not assure a profit
or protect against loss in a declining market, we believe there are still
opportunities for prudent investors to earn attractive returns. Our advice, as
always, is to work closely with a trusted financial advisor to discuss your
goals and work together to develop an investment strategy that meets your
individual needs, keeping in mind that there is no single best strategy that
works for every investor.
* Dividends are not guaranteed.
2 Pioneer High Income Trust | Annual Report | 3/31/14
Pioneer's investment teams have, since 1928, sought out attractive opportunities
in equity and bond markets, using in-depth research to identify undervalued
individual securities, and using thoughtful risk management to construct
portfolios which seek to balance potential risks and rewards in an ever-changing
world.
We encourage you to learn more about Pioneer and our time-tested approach to
investing by consulting with your financial advisor or visiting us online at
us.pioneerinvestments.com. We greatly appreciate your trust in us, and we thank
you for investing with Pioneer.
Sincerely,
/s/ Daniel K. Kingsbury
Daniel K. Kingsbury
President and CEO
Pioneer Investment Management USA, Inc.
Any information in this shareowner report regarding market or economic trends or
the factors influencing the Trust's historical or future performance are
statements of opinion as of the date of this report. These statements should not
be relied upon for any other purposes. Past performance is no guarantee of
future results, and there is no guarantee that market forecasts discussed will
be realized.
Pioneer High Income Trust | Annual Report | 3/31/14 3
Portfolio Management Discussion | 3/31/14
The credit-sensitive sectors, led by domestic high-yield corporate bonds, staged
a brisk comeback in the second half of the 12-month period ended March 31, 2014.
As a result, the high-yield market delivered healthy returns for the full
period, despite early volatility stemming from concerns about potential changes
to the U.S. Federal Reserve System's (the Fed's) monetary policies and worries
about the durability of the economic recovery. In the following interview,
Andrew Feltus discusses the factors that affected the performance of Pioneer
High Income Trust during the 12- month period. Mr. Feltus, Director of High
Yield and Bank Loans, a senior vice president and a portfolio manager at
Pioneer, is responsible for the daily management of the Trust.
Q How did the Trust perform during the 12 months ended March 31, 2014?
A Pioneer High Income Trust returned 10.32% at net asset value and 16.24% at
market price during the 12-month period ended March 31, 2014. During the
same 12-month period, the Trust's benchmark, the Bank of America Merrill
Lynch (BofA ML) High Yield Master II Index, returned 7.53% at net asset
value. The BofA ML High Yield Master II Index is an unmanaged, commonly
accepted measure of the performance of high-yield securities. Unlike the
Trust, the BofA ML High Yield Master II Index does not use leverage. While
the use of leverage increases investment opportunity, it also increases
investment risk. During the same 12-month period, the average return (at
market price) of the 32 closed-end funds in Lipper's High Current Yield
Closed End Funds category (which may or may not be leveraged) was 5.01%.
The shares of the Trust were selling at a 25.7% premium to net asset value
at the end of the 12-month period on March 31, 2014.
On March 31, 2014, the standardized 30-day SEC yield of the Trust's shares
was 6.73%*.
Q How would you describe the investment environment for high-yield bonds
during the 12-month period ended March 31, 2014?
A The backdrop for investing in high-yield bonds and other credit-sensitive
securities was challenging during the first half of the Trust's fiscal
year. The most immediate cause of volatility in the bond markets was the
market's reaction in May 2013 to then-Fed Chair Ben Bernanke's suggestion
that the Fed might begin tapering its quantitative easing (QE) bond-buying
program, which had been a key part of the Fed's accommodative monetary
policies that had helped to keep interest rates low and provided a measure
* The 30-day SEC yield is a standardized formula that is based on the
hypothetical annualized earning power (investment income only) of the
Trust's portfolio securities during the period indicated.
4 Pioneer High Income Trust | Annual Report | 3/31/14
of support to overall economic growth. The suggestion raised fears of
rising interest rates, which became a self-fulfilling prophecy and led to a
sell-off of the fixed-income markets in the second calendar quarter of
2013. Investors also began to worry about the vitality of the domestic
economic recovery as new-job creation continued to be weak and corporate
profit gains appeared to slow. In that environment, fixed-income
investments in general produced lackluster returns, with credit-sensitive
securities particularly hard hit on worries about potentially slowing
economic growth.
The fears abated and the market for credit-sensitive securities recovered
in the second half of the 12-month period, as more evidence accumulated
that the U.S. economy was gathering strength. Improving employment and
housing trends were some of the encouraging economic signs, and inflation,
meanwhile, remained in check. Investors also began to anticipate that any
monetary tightening by the Fed - based on follow-up statements made by Mr.
Bernanke after his "tapering" comments in May 2013 - would be done
gradually and in response to new evidence of economic strengthening.
Moreover, the transition of leadership at the Fed in early 2014 from Mr.
Bernanke to new Chair Janet Yellen appeared to signal confirmation of a
gradual evolution of monetary policy rather than an abrupt change. The Fed
ended up delaying its official announcement regarding the tapering of QE
until December of 2013, and began reducing its monthly bond purchases in
2014, with the eventual goal being to fully draw down the QE program by the
end of the current calendar year.
On the political front, a late-2013 bipartisan agreement establishing
top-line Federal spending levels for the next two fiscal years seemed to,
temporarily at least, put an end to the constant bickering between
Democrats and Republicans in Washington over the nation's fiscal course,
and that news also buoyed market sentiment. In addition, investors were
encouraged that fiscal policy would be less of a factor holding back the
economy's growth potential, as spending cuts at the Federal level
("sequestration") were slated to be eased as part of the bipartisan budget
agreement.
As the markets grew calmer over the final half of the Trust's fiscal year,
high-yield and investment-grade corporate bonds as well as most other
credit-sensitive securities tended to perform well, while U.S. Treasuries
and government agency debt came under pressure when market interest rates
for most maturities rose. Yield spreads (the differences in yields between
credit-sensitive debt and Treasuries of similar maturity) also tightened as
the credit sectors outperformed Treasuries.
Outside the U.S., growth trends appeared to be improving both in Europe and
Japan, although China and the emerging markets clearly tailed off during
the period. The European economy responded well to monetary
Pioneer High Income Trust | Annual Report | 3/31/14 5
support from the European Central Bank and the accompanying relaxation of
fiscal constraints that had helped to dampen growth. In Japan, meanwhile,
the loosening of both monetary and fiscal policy had helped stimulate the
country's economy, even in the face of disappointing structural reforms and
tax increases in 2014. The worries about slowing growth in China had
repercussions in many of the emerging markets, mainly due to the effects of
declining commodity prices. Currencies of emerging markets economies
dependent on the flow of capital from the United States also became more
volatile amid worries about looming monetary tightening by the Fed.
Q Which individual securities or investment decisions had the biggest effects
on the Trust's performance during the 12-month period ended March 31, 2014?
A The Trust performed well during the period, helped by strong security
selection results among high-yield corporate bonds, our heavy emphasis on
those bonds in the Trust's portfolio, and by the use of leverage to fund
the purchases of additional portfolio investments. As high-yield bonds
performed well, the use of leverage provided an opportunity for us to
amplify the Trust's return. Historically, the Trust has employed leverage
through the issuance of auction market preferred shares (AMPS). During the
12-month period, the Trust redeemed all of its outstanding AMPS. The Trust
continues to employ leverage through a margin loan financing agreement**.
The Trust's results were also helped by the portfolio's exposures to
investments in other securities, in addition to high-yield corporate bonds.
These included catastrophe-linked bonds issued by insurance companies
(which benefited from a mild hurricane season in 2013) and convertible
securities, which tend to do well when stock prices rise, as they did
throughout the Trust's fiscal year. To be sure, rising Treasury interest
rates did act as a limit on overall fixed-income performance, including the
performance of the Trust. However, the effect of rising Treasury rates on
performance was buffered somewhat by our decision to keep the Trust's
duration relatively short. (Duration is a measure of a Portfolio's price
sensitivity to changes in interest rates.) At the end of the Trust's fiscal
year, on March 31, 2014, the effective duration of the investments in the
Trust's portfolio was 2.55 years, while the duration of the benchmark BofA
ML High Yield Master II Index was 4.1 years.
Investments in high-yield bonds issued by companies in basic industries
such as chemicals and industrials did very well and aided the Trust's
performance during the period. Energy sector bonds represented the largest
component of the Trust's high-yield bond allocation, and while those
securities underperformed during the period, we still increased the
** Margin Loan Financing Agreement. See Notes to Financial Statements -- Note
12.
6 Pioneer High Income Trust | Annual Report | 3/31/14
portfolio's allocation to energy because of the industry's future earnings
prospects, which we believe were enhanced during the period by improved
commodity recovery rates at well sites, rising natural gas prices, and
stabilizing oil prices.
Individual securities that helped support the Trust's performance during
the 12-month period included the convertible securities issued by Time
Warner Telecom, which appreciated as the equity market rose, and the
convertibles of Meritor, a commercial vehicle parts manufacturer which
performed well as the automobile industry continued to recover. Among
individual high-yield bond investments in the Trust's portfolio, stand-out
performers included securities issued by Xerium Technologies, a
manufacturer of highly efficient rollers used in paper production, and by
Ono Finance, a Spanish cable communications corporation that was acquired
by Vodaphone.
The Trust's exposure to emerging markets bonds did not help performance
during the period. The Trust's cash position also tended to hold back
performance during the period: cash accounted for 4.4% of the Trust's total
managed assets as of March 31, 2014. Because cash earns very low yields,
especially relative to high-yield corporate bonds, the cash investments in
the Trust's portfolio limited potential yield. We would note, however, that
the cash position gave us the ability to invest quickly and
opportunistically during the summer of 2013 when some attractive high-yield
bonds were selling at low prices in the wake of the bond market sell-off.
Individual portfolio investments that disappointed during the 12-month
period included bonds of two companies that ran into financial difficulties
and defaulted on their debt: Rural/Metro, an ambulance service provider;
and Green Field Energy Services, an energy exploration and production
services company that lost a major contract. Another poor-performing
holding in the Trust's portfolio was the bond of Midwest Vanadium, an
Australian miner of vanadium, which is a mineral used in the steel
processing industry.
Q How did the level of leverage in the Trust change during the 12-month
period ended March 31, 2014?
A At the end of the 12-month period, 27.1% of the Trust's total managed
assets were financed by leverage, compared with 27.2% of the Trust's total
managed assets financed by leverage at the start of the period on April 1,
2013. The decrease was due to an increase in the values of securities in
which the Trust had invested.
As noted previously, the Trust historically employed leverage through the
issuance of AMPS. Between March 13, 2014 and March 18, 2014, the Trust
redeemed all of its outstanding AMPS. The Trust refinanced the AMPS through
a margin loan financing agreement. The percentage of the Trust's
Pioneer High Income Trust | Annual Report | 3/31/14 7
total managed assets financed by leverage through the margin loan financing
agreement is expected to be approximately the same as was previously
financed through the issuance of AMPS. However, the actual amount of
leverage employed by the Trust may change from time to time.
Q What is the investment outlook?
A We foresee improved growth trends in the U.S. as well as globally, which
should be good for the performance of high-yield corporate bonds as well as
credit-sensitive securities in general. The continuing economic recovery
should help sustain profit growth, buttress corporate balance sheets and
enable companies to meet their debt obligations. We think default rates
should remain low by historical standards. In the future, however, we
believe positive portfolio performance is likely to be even more dependent
upon good security selection, rather than on broad asset allocation
decisions. We think this may bode well for Pioneer's investment style, as
we rely heavily on fundamental analysis of individual corporations and
securities.
After strong performance by corporate bonds for most of the past five
years, the yield advantages of credit-sensitive securities are not as wide
as they were earlier, and investors should recognize that this factor will
affect performance. Moreover, as the normal turnover of Trust assets
occurs, we are finding that newer portfolio holdings tend to pay lower
yields than maturing holdings. This trend should not have an immediate
impact on the distributions paid to shareholders. However, the current high
dividend* paid by the Trust may be more difficult to maintain as time goes
by, especially when interest rates increase and the Trust's borrowing costs
go up.
Please refer to the Schedule of Investments on pages 13-40 for a full listing of
Trust securities.
Investments in high-yield or lower-rated securities are subject to greater-than-
average risk.
The Trust may invest in securities of issuers that are in default or that are in
bankruptcy.
Investing in foreign and/or emerging markets securities involves risks relating
to interest rates, currency exchange rates, economic, and political conditions.
When interest rates rise, the prices of fixed-income securities in the Trust
will generally fall. Conversely, when interest rates fall the prices of
fixed-income securities in the Trust will generally rise.
* Dividends are not guaranteed.
8 Pioneer High Income Trust | Annual Report | 3/31/14
Investments in the Trust are subject to possible loss due to the financial fail-
ure of the issuers of the underlying securities and their inability to meet
their debt obligations.
The Trust may invest up to 50% of its total assets in illiquid securities.
Illiquid securities may be difficult to dispose of at a price reflective of
their value at the times when the Trust believes it is desirable to do so, and
the market price of illiquid securities is generally more volatile than that of
more liquid securities. Illiquid securities are also more difficult to value and
investment of the Trust's assets in illiquid securities may restrict the Trust's
ability to take advantage of market opportunities.
Historically, the Trust employed leverage through the issuance of preferred
shares. The Trust has redeemed all of its outstanding preferred shares. The
Trust continues to employ leverage through a margin loan financing agreement.
Leverage creates significant risks, including the risk that the Trust's
incremental income or capital appreciation for investments purchased with the
proceeds of leverage will not be sufficient to cover the cost of leverage, which
may adversely affect the return for the holders of common shares.
The Trust is required to maintain certain regulatory and rating agency asset
coverage requirements in connection with its outstanding preferred shares. In
order to maintain required asset coverage levels, the Trust may be required to
alter the composition of its investment portfolio or take other actions, such as
redeeming preferred shares with the proceeds from portfolio transactions, at
what might be inopportune times in the market. Such actions could reduce the net
earnings or returns to holders of the Trust's common shares over time.
Risks of investing in the Trust are discussed in greater detail in the Trust's
original offering documents relating to its common shares and shareowner reports
issued from time to time.
These risks may increase share price volatility.
Past performance is no guarantee of future results, and there is no guarantee
that market forecasts discussed will be realized.
Any information in this shareowner report regarding market or economic trends or
the factors influencing the Trust's historical or future performance are
statements of opinion as of the date of this report. These statements should not
be relied upon for any other purposes.
Pioneer High Income Trust | Annual Report | 3/31/14 9
Portfolio Summary | 3/31/14
Portfolio Diversification
--------------------------------------------------------------------------------
(As a percentage of total investment portfolio)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
Corporate Bonds & Notes 81.4%
Senior Secured Floating Rate Loan Interests 4.7%
Convertible Bonds & Notes 4.0%
Tax Exempt Obligations 2.2%
Preferred Stocks 2.2%
Common Stocks 1.9%
Collateralized Mortgage Obligations 1.2%
Asset Backed Securities 1.1%
Sovereign Debt Obligations 0.6%
Convertible Preferred Stocks 0.6%
Municipal Collateralized Debt Obligation 0.1%
Rights/Warrants 0.0%*
* Amount rounds to less than 0.1%.
Portfolio Maturity
--------------------------------------------------------------------------------
(As a percentage of long-term holdings)
[THE FOLLOWING DATA WAS REPRESENTED AS A PIE CHART IN THE PRINTED MATERIAL]
0-2 years 7.1%
2-5 years 33.5%
5-7 years 31.3%
7-10 years 13.3%
10-20 years 8.0%
20+ years 6.8%
10 Largest Holdings
--------------------------------------------------------------------------------
(As a percentage of long-term holdings)**
1. Chrysler Group LLC/CG Co-Issuer, Inc., 8%, 6/15/19 1.25%
--------------------------------------------------------------------------------
2. Hanover Insurance Corp., 7.625%, 10/15/25 1.22
--------------------------------------------------------------------------------
3. Charlotte Special Facilities Revenue, 5.6%, 7/1/27 1.20
--------------------------------------------------------------------------------
4. Samson Investment Co., 10.75%, 2/15/20 (144A) 1.14
--------------------------------------------------------------------------------
5. Mueller Water Products, Inc., 7.375%, 6/1/17 1.01
--------------------------------------------------------------------------------
6. Pegasus Solutions, Inc., 13%, 4/15/14 (144A) 1.00
--------------------------------------------------------------------------------
7. Xerium Technologies, Inc., 8.875%, 6/15/18 0.91
--------------------------------------------------------------------------------
8. Stanadyne Holdings, Inc., 10%, 8/15/14 0.90
--------------------------------------------------------------------------------
9. Liberty Mutual Group, Inc., 10.75%, 6/15/58 (144A) 0.88
--------------------------------------------------------------------------------
10. Pilgrim's Pride Corp., 7.875%, 12/15/18 0.82
--------------------------------------------------------------------------------
** This list excludes temporary cash investments and derivative instruments.
The portfolio is actively managed, and current holdings may be different.
The holdings listed should not be considered recommendations to buy or sell
any security listed.
10 Pioneer High Income Trust | Annual Report | 3/31/14
Prices and Distributions | 3/31/14
Market Value per Common Share
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
3/31/14 3/31/13
--------------------------------------------------------------------------------
Market Value $17.83 $16.97
--------------------------------------------------------------------------------
Premium 25.7% 19.3%
--------------------------------------------------------------------------------
Net Asset Value per Common Share
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
3/31/14 3/31/13
--------------------------------------------------------------------------------
Net Asset Value $14.19 $14.23
--------------------------------------------------------------------------------
Distributions per Common Share*
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net Investment Short-Term Long-Term
Income Capital Gains Capital Gains
--------------------------------------------------------------------------------
4/1/13 - 3/31/14 $1.65 $ -- $ --
--------------------------------------------------------------------------------
* The amount of distributions made to shareowners during the period was in
excess of the net investment income earned by the Trust during the
period. The Trust has accumulated undistributed net investment income which
is part of the Trust's NAV. A portion of this accumulated net investment
income was distributed to shareowners during the period.
Pioneer High Income Trust | Annual Report | 3/31/14 11
Performance Update | 3/31/14
Investment Returns
--------------------------------------------------------------------------------
The mountain chart on the right shows the change in market value, plus
reinvested dividends and distributions, of a $10,000 investment made in common
shares of Pioneer High Income Trust during the periods shown, compared to that
of the Bank of America Merrill Lynch (BofA ML) High Yield Master II Index.
Average Annual Total Returns
(As of March 31, 2014)
--------------------------------------------------------------------------------
BofA ML
High Yield
Net Asset Market Master II
Period Value (NAV) Price Index (NAV)
--------------------------------------------------------------------------------
10 Years 11.12% 13.43% 8.54%
5 Years 28.34 30.95 18.19
1 Year 10.32 16.24 7.53
--------------------------------------------------------------------------------
[THE FOLLOWING DATA WAS REPRESENTED AS A MOUNTAIN CHART IN THE PRINTED MATERIAL]
Market Value of $10,000 Investment
Pioneer High BofA ML High Yield
Income Trust Master II Index
3/31/2004 $ 10,000 $ 10,000
3/31/2005 $ 10,197 $ 10,694
3/31/2006 $ 12,730 $ 11,467
3/31/2007 $ 14,972 $ 12,795
3/31/2008 $ 12,670 $ 12,346
3/31/2009 $ 9,155 $ 9,842
3/31/2010 $ 20,114 $ 15,474
3/31/2011 $ 24,161 $ 17,669
3/31/2012 $ 26,497 $ 18,664
3/31/2013 $ 30,355 $ 21,110
3/31/2014 $ 35,285 $ 22,699
Call 1-800-225-6292 or visit us.pioneerinvestments.com for the most recent
month-end performance results. Current performance may be lower or higher than
the performance data quoted.
Performance data shown represents past performance. Past performance is no
guarantee of future results. Investment return and market price will fluctuate,
and your shares may trade below NAV, due to such factors as interest rate
changes and the perceived credit quality of borrowers.
Total investment return does not reflect broker sales charges or commissions.
All performance is for common shares of the Trust.
Closed-end funds, unlike open-end funds, are not continuously offered. There is
a one-time public offering and, once issued, shares of closed-end funds are sold
in the open market through a stock exchange and frequently trade at prices lower
than their NAV. NAV per common share is total assets less total liabilities,
which include preferred shares or borrowings, as applicable, divided by the
number of common shares outstanding.
When NAV is lower than market price, dividends are assumed to be reinvested at
the greater of NAV or 95% of the market price. When NAV is higher, dividends are
assumed to be reinvested at prices obtained under the Trust's dividend
reinvestment plan.
The performance table and graph do not reflect the deduction of fees and taxes
that a shareowner would pay on Trust distributions or the sale of Trust shares.
The Bank of America Merrill Lynch High Yield Master II Index is an unmanaged,
commonly accepted measure of the performance of high yield securities. Index
returns are calculated monthly, assume reinvestment of dividends and, unlike
Trust returns, do not reflect any fees, expenses or sales charges. The Index
does not employ leverage. It is not possible to invest directly in the Index.
12 Pioneer High Income Trust | Annual Report | 3/31/14
Schedule of Investments | 3/31/14
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
ASSET BACKED SECURITIES -- 1.4%
of Net Assets
BANKS -- 0.2%
Thrifts & Mortgage Finance -- 0.2%
91,726(a) CCC/Caa3 Amortizing Residential Collateral Trust, Series
2002-BC1, Class M1, 1.429%, 1/25/32 $ 62,697
125,000 BB/NR CarNow Auto Receivables Trust, Series
2012-1A, Class D, 6.9%, 11/15/16 (144A) 126,443
412,000(b) CCC/C Citicorp Residential Mortgage Trust, Series
2006-2, Class M1, 5.918%, 9/25/36 374,440
250,000(c) B-/WR Security National Mortgage Loan Trust, Series
2007-1A, Class 1A3, 6.55%, 4/25/37 (144A) 245,427
--------------
Total Banks $ 809,007
---------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 0.5%
Hotels, Resorts, Cruise Lines -- 0.5%
252,734 BB/NR Westgate Resorts LLC, Series 2012-2A,
Class C, 9.0%, 1/20/25 (144A) $ 259,606
1,610,378 NR/NR Westgate Resorts LLC, Series 2012-BA,
Class A, 9.5%, 2/20/25 (144A) 1,641,579
181,170 NR/NR Westgate Resorts LLC, Series 2013-1A,
Class B, 3.75%, 8/20/25 (144A) 182,604
--------------
Total Consumer Services $ 2,083,789
---------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 0.2%
Thrifts & Mortgage Finance -- 0.2%
660,000(c) NR/NR GMAT Trust, Series 2013-1A, Class M, 5.0%,
11/25/43 (144A) $ 632,471
--------------
Total Diversified Financials $ 632,471
---------------------------------------------------------------------------------------------------------
MATERIALS -- 0.1%
Steel -- 0.1%
310,016 (b) B+/B3 Accredited Mortgage Loan Trust, Series
2003-3, Class A1, 5.21%, 1/25/34 $ 300,755
--------------
Total Materials $ 300,755
---------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 0.4%
Airlines -- 0.4%
1,291,983(a) CCC-/Caa3 Aircraft Finance Trust, Series 1999-1A,
Class A1, 0.635%, 5/15/24 (144A) $ 503,873
604,673(a) CCC+/Caa2 Aviation Capital Group Trust, Series
2000-1A, Class A1, 1.135%, 11/15/25
(144A) 309,895
1,375,264(a) CCC/Caa2 Lease Investment Flight Trust, Series 1,
Class A1, 0.545%, 7/15/31 990,190
--------------
Total Transportation $ 1,803,958
---------------------------------------------------------------------------------------------------------
TOTAL ASSET BACKED SECURITIES
(Cost $5,695,740) $ 5,629,980
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust | Annual Report | 3/31/14 13
Schedule of Investments | 3/31/14 (continued)
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
COLLATERALIZED MORTGAGE
OBLIGATIONS -- 1.5% of Net Assets
BANKS -- 0.9%
Thrifts & Mortgage Finance -- 0.9%
1,409,612(a) CCC/Caa2 Carrington Mortgage Loan Trust, Series
2007-FRE1, Class A2, 0.354%, 2/25/37 $ 1,272,645
135,185 NR/NR Extended Stay America Trust, Series
2013-ESHM, Class M, 7.625%, 12/5/19
(144A) 135,022
300,000(c) BB+/Ba2 GS Mortgage Securities Corp. II Commercial
Mortgage Pass Through Certificates, Series
2004-GG2, Class E, 5.987%, 8/10/38 299,793
287,822 NR/NR Homeowner Assistance Program Reverse
Mortgage Loan Trust, Series 2013-RM1,
Class A, 4.0%, 5/26/53 (144A) 281,634
250,000(c) BB/NR Springleaf Mortgage Loan Trust, Series
2013-1A, Class B1, 5.58%, 6/25/58 (144A) 249,950
498,000(c) BB-/Ba3 Wachovia Bank Commercial Mortgage Trust,
Series 2006-C24, Class AJ, 5.658%, 3/15/45 497,355
900,000(c) B-/B1 Wachovia Bank Commercial Mortgage Trust,
Series 2007-C34, Class AJ, 5.933%, 5/15/46 913,139
--------------
Total Banks $ 3,649,538
---------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 0.6%
Other Diversified Financial Services -- 0.1%
700,000(c) NR/B1 LB-UBS Commercial Mortgage Trust, Series
2005-C2, Class C, 5.164%, 4/15/40 $ 708,920
---------------------------------------------------------------------------------------------------------
Thrifts & Mortgage Finance -- 0.5%
725,000(b) NR/NR CAM Mortgage Trust, Series 2014-1, Class M,
5.5%, 12/15/53 (144A) $ 722,508
200,000 B/B3 JP Morgan Chase Commercial Mortgage
Securities Trust, Series 2006-CB16, Class AJ,
5.623%, 5/12/45 201,320
650,000(c) B-/NR JP Morgan Chase Commercial Mortgage
Securities Trust, Series 2007-LD12, Class AJ,
6.032%, 2/15/51 638,815
375,000(a) BB/NR JP Morgan Chase Commercial Mortgage
Securities Trust, Series 2013-FL3, Class E,
3.11%, 4/15/28 (144A) 374,178
--------------
$ 1,936,821
--------------
Total Diversified Financials $ 2,645,741
---------------------------------------------------------------------------------------------------------
TOTAL COLLATERALIZED MORTGAGE
OBLIGATIONS
(Cost $6,223,148) $ 6,295,279
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
14 Pioneer High Income Trust | Annual Report | 3/31/14
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
SENIOR SECURED FLOATING RATE
LOAN INTERESTS -- 6.1% of Net
Assets*(a)
COMMERCIAL & PROFESSIONAL
SERVICES -- 0.3%
Research & Consulting Services -- 0.3%
1,000,000 CCC+/Caa1 Sourcehov LLC, Second Lien Term Loan,
8.75%, 4/30/19 $ 1,019,167
--------------
Total Commercial & Professional Services $ 1,019,167
---------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 1.2%
Automobiles & Components -- 0.4%
1,639,688 B+/B2 CWGS Group LLC, Term Loan, 5.75%, 2/20/20 $ 1,651,985
---------------------------------------------------------------------------------------------------------
Education Services -- 0.7%
2,892,750 B+/B2 McGraw-Hill School Education Holdings LLC,
Term B Loan, 6.25%, 12/18/19 $ 2,916,615
---------------------------------------------------------------------------------------------------------
Publishing -- 0.1%
440,000 B-/B3 Lee Enterprises, Inc., First Lien Term Loan,
6.25%, 3/21/19 $ 442,200
--------------
Total Consumer Discretionary $ 5,010,800
---------------------------------------------------------------------------------------------------------
ENERGY -- 0.8%
Coal & Consumable Fuels -- 0.2%
587,500 CC/Ca PT Bumi Resources Tbk, Term Loan, 18.156%,
11/7/14 $ 587,500
---------------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 0.6%
2,500,000 B-/B2 Fieldwood Energy LLC, Closing Date Second
Lien Term Loan, 8.375%, 9/30/20 $ 2,606,920
--------------
Total Energy $ 3,194,420
---------------------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 0.8%
Agricultural Products -- 0.3%
1,046,525 CCC+/Caa1 Arysta LifeScience SPC LLC, Initial Second Lien
Term Loan, 8.25%, 11/30/20 $ 1,071,380
---------------------------------------------------------------------------------------------------------
Packaged Foods & Meats -- 0.5%
2,180,000 B-/NR New HB Acquisition LLC, Term B Loan,
6.75%, 4/9/20 $ 2,269,925
--------------
Total Food, Beverage & Tobacco $ 3,341,305
---------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 0.9%
Health Care Equipment & Services -- 0.2%
875,000 CCC+/Caa2 Accellent Inc., Initial Second Lien Term Loan,
6.5%, 2/21/22 $ 877,188
---------------------------------------------------------------------------------------------------------
Health Care Services -- 0.4%
1,496,250(m) B/B2 Gentiva Health Services, Inc., Initial Term
Loan B, 6.5%, 10/18/19 $ 1,483,782
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust | Annual Report | 3/31/14 15
Schedule of Investments | 3/31/14 (continued)
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
Health Care Technology -- 0.3%
1,198,702 CCC/Caa3 Medical Card System, Inc., Term Loan,
12.0%, 9/17/15 $ 1,158,246
--------------
Total Health Care Equipment & Services $ 3,519,216
---------------------------------------------------------------------------------------------------------
INDUSTRIALS -- 0.3%
Industrial Conglomerates -- 0.3%
1,240,000 B-/Caa1 Filtration Group Co., Initial Second Lien Term
Loan, 8.25%, 11/22/21 $ 1,273,325
--------------
Total Industrials $ 1,273,325
---------------------------------------------------------------------------------------------------------
INSURANCE -- 0.4%
Property & Casualty Insurance -- 0.4%
1,385,452 CCC/Caa2 Confie Seguros Holding II Co., Second Lien
Term Loan, 10.25%, 5/8/19 $ 1,397,575
--------------
Total Insurance $ 1,397,575
---------------------------------------------------------------------------------------------------------
MATERIALS -- 0.2%
Diversified Metals & Mining -- 0.0%
100,918(d) NR/NR PT Bakrie & Brothers Tbk, Facility Term Loan B,
0.0%, 1/20/13 $ 45,413
---------------------------------------------------------------------------------------------------------
Steel -- 0.2%
788,000 B/B1 Essar Steel Algoma, Inc., Term Loan, 9.25%,
9/19/14 $ 791,078
--------------
Total Materials $ 836,491
---------------------------------------------------------------------------------------------------------
MEDIA -- 0.1%
Publishing -- 0.1%
487,000 B/B2 Cengage Learning Acquisitions, Inc., Term Loan,
6.0%, 3/6/20 $ 493,493
--------------
Total Media $ 493,493
---------------------------------------------------------------------------------------------------------
RETAILING -- 0.3%
Computer & Electronics Retail -- 0.3%
1,383,948 B/B2 Targus Group International, Inc., Term Loan,
12.0%, 5/24/16 $ 1,162,516
--------------
Total Retailing $ 1,162,516
---------------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 0.6%
Application Software -- 0.6%
2,500,000 CCC+/Caa1 Vertafore, Inc., Second Lien Term Loan,
9.75%, 10/29/17 $ 2,553,908
--------------
Total Software & Services $ 2,553,908
---------------------------------------------------------------------------------------------------------
UTILITIES -- 0.2%
Electric Utilities -- 0.2%
1,316,443 CCC-/Caa3 Texas Competitive Electric Holdings Co., LLC,
2017 Term Loan, 4.737%, 10/10/17 $ 952,776
--------------
Total Utilities $ 952,776
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
16 Pioneer High Income Trust | Annual Report | 3/31/14
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
TOTAL SENIOR SECURED FLOATING
RATE LOAN INTERESTS
(Cost $24,720,911) $ 24,754,992
---------------------------------------------------------------------------------------------------------
CORPORATE BONDS & NOTES --
105.5% of Net Assets
AUTOMOBILES & COMPONENTS -- 2.6%
Auto Parts & Equipment -- 0.9%
2,000,000(e)(m) B/Caa1 Cooper-Standard Holding, Inc., 7.375%,
4/1/18 (144A) $ 2,047,520
1,140,000(m) B/Caa1 International Automotive Components Group
SA, 9.125%, 6/1/18 (144A) 1,202,700
229,000(m) BB-/B1 Tomkins LLC/Tomkins, Inc., 9.0%, 10/1/18 245,889
--------------
$ 3,496,109
---------------------------------------------------------------------------------------------------------
Automobile Manufacturers -- 1.7%
6,000,000(m) B/B1 Chrysler Group LLC/CG Co-Issuer, Inc., 8.0%,
6/15/19 $ 6,570,000
500,000(m) B/B1 Chrysler Group LLC/CG Co-Issuer, Inc., 8.25%,
6/15/21 565,625
--------------
$ 7,135,625
--------------
Total Automobiles & Components $ 10,631,734
---------------------------------------------------------------------------------------------------------
BANKS -- 1.0%
Regional Banks -- 0.3%
1,225,000(c)(f) BBB/Baa3 PNC Financial Services Group, Inc., 4.454%,
5/29/49 $ 1,228,675
---------------------------------------------------------------------------------------------------------
Thrifts & Mortgage Finance -- 0.7%
2,925,000(m) B+/Ba3 Provident Funding Associates LP / PFG
Finance Corp., 6.75%, 6/15/21 (144A) $ 2,925,000
--------------
Total Banks $ 4,153,675
---------------------------------------------------------------------------------------------------------
CAPITAL GOODS -- 9.3%
Aerospace & Defense -- 1.6%
2,200,000 B-/Caa1 ADS Tactical, Inc., 11.0%, 4/1/18 (144A) $ 2,183,500
3,889,000 B-/B2 DynCorp International, Inc., 10.375%, 7/1/17 4,064,005
--------------
$ 6,247,505
---------------------------------------------------------------------------------------------------------
Construction & Engineering -- 0.4%
1,500,000(m) B/B2 Abengoa Finance SAU, 8.875%, 11/1/17
(144A) $ 1,683,750
---------------------------------------------------------------------------------------------------------
Construction & Farm Machinery &
Heavy Trucks -- 2.1%
2,000,000 CCC-/B3 Navistar International Corp., 8.25%, 11/1/21 $ 2,040,000
4,760,000 CCC-/Caa2 Stanadyne Holdings, Inc., 10.0%, 8/15/14 4,742,150
2,500,000(b) CC/Ca Stanadyne Holdings, Inc., 12.0%, 2/15/15 1,887,500
--------------
$ 8,669,650
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust | Annual Report | 3/31/14 17
Schedule of Investments | 3/31/14 (continued)
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
Electrical Components & Equipment -- 0.5%
2,000,000(m) B-/B3 WireCo WorldGroup, Inc., 9.5%, 5/15/17 $ 2,060,000
---------------------------------------------------------------------------------------------------------
Industrial Conglomerates -- 0.7%
1,710,000(m) CCC+/Caa2 Boart Longyear Management Pty, Ltd., 7.0%,
4/1/21 (144A) $ 1,299,600
770,000(m) B/B2 Boart Longyear Management Pty, Ltd., 10.0%,
10/1/18 (144A) 800,800
605,000 B+/B2 JB Poindexter & Co., Inc., 9.0%, 4/1/22 (144A) 647,350
--------------
$ 2,747,750
---------------------------------------------------------------------------------------------------------
Industrial Machinery -- 3.3%
1,040,000(m) B/B2 Cleaver-Brooks, Inc., 8.75%, 12/15/19 (144A) $ 1,149,200
1,080,000(m) B-/Caa2 Liberty Tire Recycling, 11.0%, 10/1/16 (144A) 1,053,000
5,170,000(m) B/Caa1 Mueller Water Products, Inc., 7.375%, 6/1/17 5,286,325
1,840,000 CCC+/NR WPE International Cooperatief UA, 10.375%,
9/30/20 (144A) 1,108,600
4,500,000(m) B/B3 Xerium Technologies, Inc., 8.875%, 6/15/18 4,803,750
--------------
$ 13,400,875
---------------------------------------------------------------------------------------------------------
Trading Companies & Distributors -- 0.7%
2,510,000 B-/B3 TRAC Intermodal LLC / TRAC Intermodal Corp.,
11.0%, 8/15/19 $ 2,861,400
--------------
Total Capital Goods $ 37,670,930
---------------------------------------------------------------------------------------------------------
COMMERCIAL & PROFESSIONAL
SERVICES -- 1.2%
Commercial Printing -- 0.2%
700,000 B-/Caa1 Mustang Merger Corp., 8.5%, 8/15/21 (144A) $ 766,500
---------------------------------------------------------------------------------------------------------
Diversified Support Services -- 1.0%
3,900,000 B/Caa2 NANA Development Corp., 9.5%, 3/15/19
(144A) $ 3,997,500
---------------------------------------------------------------------------------------------------------
Environmental & Facilities Services -- 0.0%
2,180,000(d)(g) NR/WR Old AII, Inc., 10.0%, 12/15/16 $ 22
--------------
Total Commercial & Professional Services $ 4,764,022
---------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY -- 0.9%
Auto Parts & Equipment -- 0.4%
645,000 B/B3 Pittsburgh Glass Works LLC, 8.0%, 11/15/18
(144A) $ 701,437
675,000(m) B+/B2 Stackpole International Intermediate /
Stackpole International Powder, 7.75%,
10/15/21 (144A) 723,094
--------------
$ 1,424,531
---------------------------------------------------------------------------------------------------------
Department Stores -- 0.2%
900,000(m) CCC+/Caa2 Neiman Marcus Group, Ltd. LLC, 8.0%,
10/15/21 (144A) $ 988,875
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
18 Pioneer High Income Trust | Annual Report | 3/31/14
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
Movies & Entertainment -- 0.3%
1,275,000(m) B-/Caa1 SFX Entertainment, Inc., 9.625%, 2/1/19
(144A) $ 1,338,750
--------------
Total Consumer Discretionary $ 3,752,156
---------------------------------------------------------------------------------------------------------
CONSUMER DURABLES & APPAREL -- 4.7%
Home Furnishings -- 0.2%
850,000 B/B2 SIWF Merger Sub, Inc., 6.25%, 6/1/21 (144A) $ 884,000
---------------------------------------------------------------------------------------------------------
Homebuilding -- 1.5%
3,115,000(m) CCC/Caa2 Beazer Homes USA, Inc., 9.125%, 6/15/18 $ 3,294,112
750,000(m) CCC/Caa2 Beazer Homes USA, Inc., 9.125%, 5/15/19 808,125
1,975,000(m) B/B2 Rialto Holdings LLC / Rialto Corp., 7.0%,
12/1/18 (144A) 2,034,250
400,000(d)(g) NR/Ca Urbi Desarrollos Urbanos SAB de CV, 9.75%,
2/3/22 (144A) 44,000
--------------
$ 6,180,487
---------------------------------------------------------------------------------------------------------
Housewares & Specialties -- 1.6%
1,435,000(m) BB-/B1 Jarden Corp., 7.5%, 5/1/17 $ 1,652,044
3,000,000(m) CCC+/Caa2 Reynolds Group Issuer, Inc., 9.0%, 4/15/19 3,210,000
1,430,000(m) CCC+/Caa2 Reynolds Group Issuer, Inc., 9.875%, 8/15/19 1,598,025
--------------
$ 6,460,069
---------------------------------------------------------------------------------------------------------
Leisure Products -- 1.4%
EUR 800,000 CCC+/Caa2 Heckler & Koch GmbH, 9.5%, 5/15/18 (144A) $ 1,157,400
4,000,000 CCC+/Caa1 Icon Health & Fitness, Inc., 11.875%,
10/15/16 (144A) 3,760,000
880,000(e) CCC+/Caa2 PC Nextco Holdings LLC / PC Nextco Finance,
Inc., 8.75%, 8/15/19 (144A) 909,700
--------------
$ 5,827,100
--------------
Total Consumer Durables & Apparel $ 19,351,656
---------------------------------------------------------------------------------------------------------
CONSUMER SERVICES -- 3.7%
Business Services -- 0.7%
1,750,000(m) B/B2 Sitel LLC / Sitel Finance Corp., 11.0%,
8/1/17 (144A) $ 1,879,062
1,000,000 B-/Caa2 Sitel LLC / Sitel Finance Corp., 11.5%, 4/1/18 937,500
--------------
$ 2,816,562
---------------------------------------------------------------------------------------------------------
Casinos & Gaming -- 0.0%
623,466(e) NR/NR Mashantucket Western Pequot Tribe, 6.5%,
7/1/36 $ 93,520
---------------------------------------------------------------------------------------------------------
Education Services -- 0.2%
555,000 CCC/Caa1 Cambium Learning Group, Inc., 9.75%,
2/15/17 $ 560,550
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust | Annual Report | 3/31/14 19
Schedule of Investments | 3/31/14 (continued)
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
Hotels, Resorts, Cruise Lines -- 0.8%
1,680,000(e) B-/B3 MISA Investments, Ltd., 8.625%, 8/15/18
(144A) $ 1,730,400
1,500,000(m) B-/B2 Seven Seas Cruises S de RL LLC, 9.125%,
5/15/19 1,650,000
--------------
$ 3,380,400
---------------------------------------------------------------------------------------------------------
Restaurants -- 1.8%
4,055,000(b)(m) B-/Caa1 Burger King Capital Holdings LLC, 0.0%,
4/15/19 (144A) $ 3,710,325
1,400,000(m) B/B3 Burger King Corp., 9.875%, 10/15/18 1,527,750
2,000,000(m) CCC/Caa1 PF Chang's China Bistro, Inc., 10.25%,
6/30/20 (144A) 2,105,000
--------------
$ 7,343,075
---------------------------------------------------------------------------------------------------------
Specialized Consumer Services -- 0.2%
740,000(m) B-/B3 StoneMor Partners LP / Cornerstone Family
Services of WV, 7.875%, 6/1/21 (144A) $ 760,350
--------------
Total Consumer Services $ 14,954,457
---------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 2.5%
Asset Management & Custody Banks -- 0.3%
975,000(m) BBB-/Baa3 Janus Capital Group, Inc., 6.7%, 6/15/17 $ 1,100,815
---------------------------------------------------------------------------------------------------------
Consumer Finance -- 0.5%
1,030,000(m) B/B1 Jefferies Finance LLC / JFIN Co-Issuer Corp.,
7.375%, 4/1/20 (144A) $ 1,081,500
1,035,000(m) B+/B3 TMX Finance LLC / TitleMax Finance Corp.,
8.5%, 9/15/18 (144A) 1,133,325
--------------
$ 2,214,825
---------------------------------------------------------------------------------------------------------
Diversified Capital Markets -- 0.2%
700,000(c)(f)(m) BB-/NR Credit Suisse Group AG, 7.5%, 12/11/49
(144A) $ 760,375
---------------------------------------------------------------------------------------------------------
Investment Banking & Brokerage -- 0.4%
2,325,000(c)(f)(m) BB+/Ba2 Goldman Sachs Capital II, 4.0%, 12/29/49 $ 1,790,250
---------------------------------------------------------------------------------------------------------
Multi-Sector Holdings -- 0.5%
2,200,000 B/B3 Constellation Enterprises LLC, 10.625%,
2/1/16 (144A) $ 1,914,000
---------------------------------------------------------------------------------------------------------
Other Diversified Financial Services -- 0.4%
3,000,000(b)(g) BBB/NR Fixed Income Trust Series 2013-A, 0.0%,
(h)(m) 10/15/97 (144A) $ 1,748,033
---------------------------------------------------------------------------------------------------------
Specialized Finance -- 0.2%
695,000 B/B2 National Money Mart Co., 10.375%,
12/15/16 $ 698,475
--------------
Total Diversified Financials $ 10,226,773
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
20 Pioneer High Income Trust | Annual Report | 3/31/14
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
ENERGY -- 21.8%
Coal & Consumable Fuels -- 1.1%
950,000 CC/Ca Bumi Capital Pte, Ltd., 12.0%, 11/10/16
(144A) $ 579,500
2,125,000(d) CCC/Caa2 James River Coal Co., 7.875%, 4/1/19 276,250
800,000(m) B-/Caa1 Murray Energy Corp., 8.625%, 6/15/21 (144A) 842,000
2,485,000(m) B-/Caa1 Penn Virginia Corp., 8.5%, 5/1/20 2,764,562
--------------
$ 4,462,312
---------------------------------------------------------------------------------------------------------
Integrated Oil & Gas -- 0.3%
350,000 B-/B3 Jones Energy Holdings LLC / Jones Energy
Finance Corp., 6.75%, 4/1/22 (144A) $ 356,562
750,000 NR/Caa1 YPF SA, 8.875%, 12/19/18 (144A) 782,813
--------------
$ 1,139,375
---------------------------------------------------------------------------------------------------------
Oil & Gas Drilling -- 2.7%
1,500,000(m) B/B3 Hercules Offshore, Inc., 8.75%, 7/15/21
(144A) $ 1,627,500
2,500,000(m) CCC+/(P)Caa1 Ocean Rig UDW, Inc., 7.25%, 4/1/19 (144A) 2,496,875
1,700,000 CCC+/Caa1 Ocean Rig UDW, Inc., 9.5%, 4/27/16 (144A) 1,787,125
1,025,000(m) B-/B3 Offshore Group Investments, Ltd., 7.125%,
4/1/23 1,042,938
1,900,000(m) B+/B2 Pioneer Energy Services Corp., 9.875%,
3/15/18 2,004,500
1,800,000(m) B+/B1 Shelf Drill Holdings, Ltd., 8.625%, 11/1/18
(144A) 1,948,500
--------------
$ 10,907,438
---------------------------------------------------------------------------------------------------------
Oil & Gas Equipment & Services -- 1.7%
408,000(i)(m) NR/NR DP Producer AS, 0.0%, 12/31/49 (144A) $ 8,160
1,847,000 B/B1 Expro Finance Luxembourg SCA, 8.5%,
12/15/16 (144A) 1,932,424
3,100,000 B/Caa1 Forbes Energy Services, Ltd., 9.0%, 6/15/19 3,107,750
16,000(d)(g) NR/NR Green Field Energy Services, Inc., 13.0%,
11/15/16 (144A) 1,120
2,000,000(m) B/B3 Seitel, Inc., 9.5%, 4/15/19 2,070,000
--------------
$ 7,119,454
---------------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 13.4%
1,200,000(m) CCC+/Caa1 Athlon Holdings LP / Athlon Finance Corp.,
7.375%, 4/15/21 (144A) $ 1,278,000
775,000(m) BB-/B1 Berry Petroleum Co., 10.25%, 6/1/14 784,687
500,000(m) B-/B3 Comstock Resources, Inc., 7.75%, 4/1/19 532,500
1,830,000(m) B-/B3 Comstock Resources, Inc., 9.5%, 6/15/20 2,086,200
3,450,000(m) B/B2 EP Energy LLC / EP Energy Finance, Inc.,
9.375%, 5/1/20 3,989,062
1,295,000(m) B-/B3 EPL Oil & Gas, Inc., 8.25%, 2/15/18 1,401,837
The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust | Annual Report | 3/31/14 21
Schedule of Investments | 3/31/14 (continued)
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
Oil & Gas Exploration &
Production -- (continued)
3,000,000 CCC/Caa1 Goodrich Petroleum Corp., 8.875%, 3/15/19 $ 3,105,000
785,000(m) CCC+/Caa1 Halcon Resources Corp., 8.875%, 5/15/21 814,438
1,205,000(m) CCC+/Caa1 Halcon Resources Corp., 9.25%, 2/15/22
(144A) 1,256,213
2,035,000(m) CCC+/Caa1 Halcon Resources Corp., 9.75%, 7/15/20 2,192,713
1,325,000(m) CCC+/Caa1 Halcon Resources Corp., 9.75%, 7/15/20
(144A) 1,424,375
900,000 B-/Caa1e Legacy Reserves LP / Legacy Reserves
Finance Corp., 6.625%, 12/1/21 897,750
2,235,000(m) B-/Caa1 Lightstream Resources, Ltd., 8.625%,
2/1/20 (144A) 2,235,000
530,000(m) B-/Caa1 Memorial Production Partners LP / Memorial
Production Finance Corp., 7.625%, 5/1/21
(144A) 559,150
950,000(m) B-/Caa1 Memorial Production Partners LP / Memorial
Production Finance Corp., 7.625%, 5/1/21 1,002,250
2,000,000(m) CCC+/Caa1 Midstates Petroleum Co., Inc., 9.25%, 6/1/21 2,090,000
1,050,000(m) CCC+/Caa1 Midstates Petroleum Co., Inc., 10.75%,
10/1/20 1,160,250
2,400,000(m) B+/NR MIE Holdings Corp., 9.75%, 5/12/16 (144A) 2,526,000
2,750,000 B/Caa1 PetroQuest Energy, Inc., 10.0%, 9/1/17 2,928,750
1,110,000(m) B-/Caa1 QR Energy LP / QRE Finance Corp., 9.25%,
8/1/20 1,187,700
3,380,000 CCC-/Caa3 Quicksilver Resources, Inc., 7.125%, 4/1/16 3,151,850
2,200,000 B-/B3 Resolute Energy Corp., 8.5%, 5/1/20 2,299,000
2,035,000 B-/B3 RKI Exploration & Production LLC / RKI
Finance Corp., 8.5%, 8/1/21 (144A) 2,197,800
1,497,000(m) BB-/B2 Rosetta Resources, Inc., 9.5%, 4/15/18 1,573,721
5,500,000(m) CCC+/B3 Samson Investment Co., 10.75%, 2/15/20
(144A) 5,995,000
2,735,000(m) B-/B3 Sanchez Energy Corp., 7.75%, 6/15/21
(144A) 2,919,613
2,770,000(m) CCC+/Caa1 Talos Production LLC / Talos Production
Finance, Inc., 9.75%, 2/15/18 (144A) 2,901,575
--------------
$ 54,490,434
---------------------------------------------------------------------------------------------------------
Oil & Gas Refining & Marketing -- 2.2%
3,100,000 B+/B2 Calumet Specialty Products Partners LP /
Calumet Finance Corp., 6.5%, 4/15/21
(144A) $ 3,123,250
3,000,000(m) CCC/Caa1 Seven Generations Energy, Ltd., 8.25%,
5/15/20 (144A) 3,285,000
2,215,000 BB+/Ba2 Tesoro Corp., 9.75%, 6/1/19 2,357,646
--------------
$ 8,765,896
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
22 Pioneer High Income Trust | Annual Report | 3/31/14
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
Oil & Gas Storage & Transportation -- 0.4%
1,524,000(a)(m) BB/Ba1 Energy Transfer Partners LP, 3.255%, 11/1/66 $ 1,394,460
350,000(c)(m) BBB-/Baa2 Enterprise Products Operating LLC, 8.375%,
8/1/66 394,187
--------------
$ 1,788,647
--------------
Total Energy $ 88,673,556
---------------------------------------------------------------------------------------------------------
FOOD, BEVERAGE & TOBACCO -- 6.3%
Agricultural Products -- 1.1%
2,100,000(m) CCC+/Caa1 Pinnacle Operating Corp., 9.0%, 11/15/20
(144A) $ 2,268,000
1,215,000 B/B2 Southern States Cooperative, Inc., 10.0%,
8/15/21 (144A) 1,219,556
1,100,000 B/NR Tonon Bioenergia SA, 9.25%, 1/24/20 (144A) 995,500
--------------
$ 4,483,056
---------------------------------------------------------------------------------------------------------
Packaged Foods & Meats -- 4.2%
775,000 BB/Ba3 Bertin SA / Bertin Finance, Ltd., 10.25%,
10/5/16 (144A) $ 871,875
1,250,000 B+/B2 CFG Investment SAC, 9.75%, 7/30/19 (144A) 1,221,875
688,000(m) B/B1 Chiquita Brands International, Inc. / Chiquita
Brands LLC, 7.875%, 2/1/21 767,980
3,500,000(m) B/B3 FAGE Dairy Industry SA/FAGE USA Dairy
Industry, Inc., 9.875%, 2/1/20 (144A) 3,718,750
1,000,000 B/B2 Marfrig Holding Europe BV, 8.375%, 5/9/18
(144A) 998,000
1,200,000 B/B2 Marfrig Holding Europe BV, 11.25%, 9/20/21
(144A) 1,287,000
3,400,000(m) BB-/B1 Minerva Luxembourg SA, 7.75%, 1/31/23
(144A) 3,481,600
400,000 BB-/B1 Minerva Luxembourg SA, 12.25%, 2/10/22
(144A) 446,000
4,000,000(m) BB-/B3 Pilgrim's Pride Corp., 7.875%, 12/15/18 4,300,000
--------------
$ 17,093,080
---------------------------------------------------------------------------------------------------------
Tobacco -- 1.0%
3,835,000(m) B-/Caa1 Alliance One International, Inc., 9.875%,
7/15/21 $ 3,921,288
--------------
Total Food, Beverage & Tobacco $ 25,497,424
---------------------------------------------------------------------------------------------------------
HEALTH CARE -- 0.3%
Pharmaceuticals -- 0.3%
1,240,000(m) CCC+/Caa2 JLL/Delta Dutch Newco BV, 7.5%, 2/1/22
(144A) $ 1,277,200
--------------
Total Health Care $ 1,277,200
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust | Annual Report | 3/31/14 23
Schedule of Investments | 3/31/14 (continued)
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT & SERVICES -- 6.0%
Health Care Equipment & Services -- 1.0%
3,799,000(m) B+/B2 Physio-Control International, Inc., 9.875%,
1/15/19 (144A) $ 4,264,377
---------------------------------------------------------------------------------------------------------
Health Care Facilities -- 2.3%
2,560,000(m) B-/B3 CHS/Community Health Systems, Inc.,
6.875%, 2/1/22 (144A) $ 2,675,200
2,400,000(m) B-/B3 Kindred Healthcare, Inc., 6.375%, 4/15/22
(144A) 2,406,000
3,475,000 B-/B3 Kindred Healthcare, Inc., 8.25%, 6/1/19 3,722,594
600,000(m) CCC+/Caa1 United Surgical Partners International, Inc.,
9.0%, 4/1/20 666,000
--------------
$ 9,469,794
---------------------------------------------------------------------------------------------------------
Health Care Services -- 0.9%
1,000,000(m) CCC+/Caa2 BioScrip, Inc., 8.875%, 2/15/21 (144A) $ 1,042,500
2,527,000 CCC+/Caa2 Gentiva Health Services, Inc., 11.5%, 9/1/18 2,669,144
--------------
$ 3,711,644
---------------------------------------------------------------------------------------------------------
Health Care Supplies -- 0.8%
3,000,000(m) B-/Caa2 Immucor, Inc., 11.125%, 8/15/19 $ 3,390,000
---------------------------------------------------------------------------------------------------------
Health Care Technology -- 0.3%
900,000(m) CCC+/Caa1 Emdeon, Inc., 11.0%, 12/31/19 $ 1,042,875
---------------------------------------------------------------------------------------------------------
IT Consulting & Other Services -- 0.7%
2,380,000(m) CCC+/Caa1 Truven Health Analytics, Inc., 10.625%,
6/1/20 $ 2,701,300
--------------
Total Health Care Equipment & Services $ 24,579,990
---------------------------------------------------------------------------------------------------------
HOUSEHOLD & PERSONAL PRODUCTS -- 1.1%
Personal Products -- 1.1%
1,745,000(m) B+/B2 Albea Beauty Holdings SA, 8.375%, 11/1/19
(144A) $ 1,893,325
2,315,000(m) CCC+/Caa1 Monitronics International, Inc., 9.125%,
4/1/20 2,477,050
--------------
Total Household & Personal Products $ 4,370,375
---------------------------------------------------------------------------------------------------------
INDUSTRIALS -- 0.3%
Industrial Machinery -- 0.3%
1,075,000 B-/Caa1 BC Mountain LLC / BC Mountain Finance, Inc.,
7.0%, 2/1/21 (144A) $ 1,064,250
--------------
Total Industrials $ 1,064,250
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
24 Pioneer High Income Trust | Annual Report | 3/31/14
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
INSURANCE -- 8.2%
Insurance Brokers -- 1.0%
GBP 1,625,000(m) NR/Caa2 Towergate Finance Plc, 10.5%, 2/15/19
(144A) $ 2,871,838
1,000,000(m) CCC+/Caa2 USI, Inc., 7.75%, 1/15/21 (144A) 1,042,500
--------------
$ 3,914,338
---------------------------------------------------------------------------------------------------------
Multi-Line Insurance -- 1.5%
3,075,000(c)(m) BB/Baa3 Liberty Mutual Group, Inc., 10.75%, 6/15/58
(144A) $ 4,612,500
1,100,000(m) BBB/Baa2 MetLife, Inc., 10.75%, 8/1/39 1,666,500
--------------
$ 6,279,000
---------------------------------------------------------------------------------------------------------
Property & Casualty Insurance -- 1.6%
5,300,000(m) BBB-/Baa3 Hanover Insurance Corp., 7.625%, 10/15/25 $ 6,391,689
265,000(c)(f)(m) BB+/Ba2 White Mountains Insurance Group, Ltd.,
7.506%, 5/29/49 (144A) 278,203
--------------
$ 6,669,892
---------------------------------------------------------------------------------------------------------
Reinsurance -- 4.1%
250,000(a) BB-/NR Atlas Reinsurance VII, Ltd., 8.103%, 1/7/16
(144A) $ 263,250
500,000(a) BB+/NR Blue Danube II, Ltd., 4.297%, 5/23/16 (144A) 508,400
400,000(a) NR/NR Caelus Re 2013, Ltd., 6.88%, 4/7/17 (144A) 419,360
500,000(a) BB-/NR Caelus Re, Ltd., 5.28%, 3/7/16 (144A) 508,050
250,000(a) NR/Ba2 Combine Re, Ltd., 10.03%, 1/7/15 (144A) 263,425
1,000,000(a) NR/NR Combine Re, Ltd., 17.78%, 1/7/15 (144A) 1,072,800
250,000(a) BB-/NR Compass Re, Ltd., 10.28%, 1/8/15 (144A) 256,875
250,000(a) B+/NR Compass Re, Ltd., 11.28%, 1/8/15 (144A) 257,925
250,000(a) BB/NR East Lane Re V, Ltd., 9.03%, 3/16/16 (144A) 269,650
400,000(a) BB/NR East Lane Re, Ltd., 6.68%, 3/13/15 (144A) 411,920
350,000(c) BB-/NR Embarcadero Re, Ltd., 6.664%, 8/4/14 (144A) 353,500
250,000(c) BB-/NR Embarcadero Re, Ltd., 7.412%, 2/13/15
(144A) 256,575
350,000(a) BB+/NR Foundation Re III, Ltd., 5.03%, 2/25/15 356,090
500,000(a) NR/NR Galileo Re, Ltd., 7.43%, 1/9/17 (144A) 519,950
250,000(a) BB-/NR Ibis Re II, Ltd., 8.38%, 2/5/15 (144A) 255,925
400,000(a) B-/NR Ibis Re II, Ltd., 13.53%, 2/5/15 (144A) 416,480
250,000(a) NR/NR Loma Reinsurance, Ltd., 17.03%, 1/8/18
(144A) 256,425
400,000(a) BB/NR Longpoint Re, Ltd. III, 4.03%, 5/18/16 (144A) 407,600
750,000(a) B/NR Mystic Re, Ltd., 12.03%, 3/12/15 (144A) 795,825
250,000(a) B+/NR Mythen Re, Ltd. Series 2012-2 Class A,
8.549%, 1/5/17 (144A) 266,100
250,000(a) NR/NR Mythen Re, Ltd. Series 2013-1 Class B, 8.03%,
7/9/15 (144A) 258,875
The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust | Annual Report | 3/31/14 25
Schedule of Investments | 3/31/14 (continued)
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
Reinsurance -- (continued)
500,000(a)(m) CC/NR Queen Street II Capital, Ltd., 7.53%, 4/9/14
(144A) $ 500,350
250,000(a) BB-/NR Queen Street V Re, Ltd., 8.53%, 4/9/15
(144A) 259,550
250,000(a) B/NR Queen Street VI Re, Ltd., 10.38%, 4/9/15
(144A) 263,500
250,000(a) B/NR Queen Street VII Re, Ltd., 8.63%, 4/8/16
(144A) 264,375
725,000(a) B+/NR Residential Reinsurance 2011, Ltd., 8.78%,
6/6/15 (144A) 767,050
250,000(a) NR/NR Residential Reinsurance 2011, Ltd., 8.93%,
12/6/15 (144A) 261,650
250,000(a) BB-/NR Residential Reinsurance 2011, Ltd., 9.03%,
6/6/15 (144A) 263,000
450,000(a) B-/NR Residential Reinsurance 2011, Ltd., 12.03%,
6/6/15 (144A) 474,615
250,000(a) NR/NR Residential Reinsurance 2011, Ltd., 13.28%,
12/6/15 (144A) 264,825
250,000(a) BB/NR Residential Reinsurance 2012, Ltd., 5.78%,
12/6/16 (144A) 260,550
250,000(a) BB/NR Residential Reinsurance 2012, Ltd., 8.03%,
6/6/16 (144A) 275,725
250,000(a) BB-/NR Residential Reinsurance 2012, Ltd., 10.03%,
6/6/16 (144A) 276,950
400,000(a) NR/NR Residential Reinsurance 2012, Ltd., 12.78%,
12/6/16 (144A) 436,240
250,000(a) NR/NR Residential Reinsurance 2012, Ltd., 19.03%,
12/6/16 (144A) 279,550
400,000(a) NR/NR Residential Reinsurance 2012, Ltd., 22.03%,
6/6/16 (144A) 477,240
250,000(a) B-/NR Residential Reinsurance 2013, Ltd., 9.28%,
6/6/17 (144A) 260,925
500,000(a) BB/NR Sanders Re, Ltd., 4.03%, 5/5/17 (144A) 506,050
603,600(g)(j) NR/NR Sector Re V, Ltd., 0.0%, 12/1/17 (144A) 613,860
924(g)(j) NR/NR Sector Re V, Ltd., 0.0%, 3/1/18 (144A) 233,912
600,000(g)(j) NR/NR Silverton RE, Ltd., 0.0%, 9/16/16 (144A) 623,040
250,000(a) NR/NR Successor X, Ltd., 16.28%, 11/10/15 (144A) 258,675
250,000(a) NR/NR Successor X, Ltd., 16.53%, 1/27/15 (144A) 264,275
300,000(a) B+/NR Tar Heel Re, Ltd., 8.53%, 5/9/16 (144A) 323,250
--------------
$ 16,784,157
--------------
Total Insurance $ 33,647,387
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
26 Pioneer High Income Trust | Annual Report | 3/31/14
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
MATERIALS -- 16.6%
Commodity Chemicals -- 1.3%
3,250,000(m) BBB/WR Basell Finance Co. BV, 8.1%, 3/15/27 (144A) $ 4,240,460
1,100,000 BB-/B2 Rain CII Carbon LLC / CII Carbon Corp., 8.25%,
1/15/21 (144A) 1,133,000
--------------
$ 5,373,460
---------------------------------------------------------------------------------------------------------
Construction Materials -- 0.8%
3,000,000(m) B-/Caa2 Texas Industries, Inc., 9.25%, 8/15/20 $ 3,465,000
---------------------------------------------------------------------------------------------------------
Diversified Chemicals -- 0.4%
1,597,000 B/B2 Kinove German Bondco GmbH, 9.625%,
6/15/18 (144A) $ 1,732,745
---------------------------------------------------------------------------------------------------------
Diversified Metals & Mining -- 1.7%
2,000,000(m) B/B3 Global Brass & Copper, Inc., 9.5%, 6/1/19 $ 2,310,000
3,000,000(d) D/WR Midwest Vanadium Pty, Ltd., 11.5%, 2/15/18
(144A) 1,650,000
642,778 (e)(g)(h) NR/NR Mirabela Nickel, Ltd., 3.5%, 3/28/14 (144A) 626,708
2,775,000(d)(g) D/WR Mirabela Nickel, Ltd., 8.75%, 4/15/18 (144A) 666,000
1,200,000(m) CCC+/B3 Molycorp, Inc., 10.0%, 6/1/20 1,188,000
410,000 B/Caa1 Prince Mineral Holding Corp., 11.5%,
12/15/19 (144A) 460,225
--------------
$ 6,900,933
---------------------------------------------------------------------------------------------------------
Forest Products -- 1.0%
4,000,000(m) B-/B3 Millar Western Forest Products, Ltd., 8.5%,
4/1/21 $ 4,210,000
---------------------------------------------------------------------------------------------------------
Gold -- 0.7%
3,055,000(m) BB-/B1 IAMGOLD Corp., 6.75%, 10/1/20 (144A) $ 2,718,950
---------------------------------------------------------------------------------------------------------
Metal & Glass Containers -- 1.9%
1,973,733(e)(m) CCC+/Caa2 Ardagh Finance SA, 11.125%, 6/1/18 (144A) $ 2,163,705
EUR 2,250,000(m) CCC+/Caa1 Ardagh Glass Finance Plc, 8.75%, 2/1/20
(144A) 3,332,312
500,000 CCC+/Caa2 Beverage Packaging Holdings Luxembourg II
SA / Beverage Packaging Holdings II Is, 6.0%,
6/15/17 (144A) 517,500
1,450,000(m) CCC+/Caa1 BWAY Holdings Co., 10.0%, 6/15/18 1,544,250
--------------
$ 7,557,767
---------------------------------------------------------------------------------------------------------
Paper Packaging -- 2.6%
2,000,000(m) CCC+/Caa1 Berry Plastics Corp., 9.5%, 5/15/18 $ 2,115,000
2,150,057(b) NR/NR Bio Pappel SAB de CV, 10.0%, 8/27/16 2,158,657
2,220,000(m) B-/NR Exopack Holding Corp., 10.0%, 6/1/18
(144A) 2,408,700
445,000 B-/Caa2 Exopack Holdings SA, 7.875%, 11/1/19
(144A) 471,700
The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust | Annual Report | 3/31/14 27
Schedule of Investments | 3/31/14 (continued)
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
Paper Packaging -- (continued)
2,500,000(m) B-/Caa1 Pretium Packaging LLC / Pretium Finance,
Inc., 11.5%, 4/1/16 $ 2,675,000
500,000 BB/B1 Sealed Air Corp., 8.125%, 9/15/19 (144A) 558,750
--------------
$ 10,387,807
---------------------------------------------------------------------------------------------------------
Paper Products -- 0.8%
1,590,000(m) CCC+/B2 Appvion, Inc., 9.0%, 6/1/20 (144A) $ 1,621,800
776,000(m) B/B3 Mercer International, Inc., 9.5%, 12/1/17 838,080
595,000(m) B-/Caa1 Unifrax I LLC / Unifrax Holding Co., 7.5%,
2/15/19 (144A) 630,700
--------------
$ 3,090,580
---------------------------------------------------------------------------------------------------------
Specialty Chemicals -- 0.6%
2,600,000 CCC+/NR Hexion US Finance Corp., 9.0%, 11/15/20 $ 2,574,000
---------------------------------------------------------------------------------------------------------
Steel -- 4.8%
2,450,000(m) B-/Caa1 AM Castle & Co., 12.75%, 12/15/16 $ 2,750,125
1,200,000 B+/B3 APERAM, 7.375%, 4/1/16 (144A) 1,236,000
1,764,000 B/Caa1 Atkore International, Inc., 9.875%, 1/1/18 1,896,300
3,550,000 CCC/Caa2 Essar Steel Algoma, Inc., 9.875%, 6/15/15
(144A) 2,307,500
700,000 CCC+/Caa1 Ferrexpo Finance Plc, 7.875%, 4/7/16 (144A) 672,000
1,900,000 NR/Caa1 Metinvest BV, 8.75%, 2/14/18 (144A) 1,738,500
2,915,000 B/B2 Optima Specialty Steel, Inc., 12.5%,
12/15/16 (144A) 3,213,787
1,804,000(m) B-/B3 Permian Holdings, Inc., 10.5%, 1/15/18
(144A) 1,835,570
3,750,000 CCC+/NR Ryerson, Inc., 9.0%, 10/15/17 4,045,313
--------------
$ 19,695,095
--------------
Total Materials $ 67,706,337
---------------------------------------------------------------------------------------------------------
MEDIA -- 5.4%
Broadcasting -- 1.3%
1,000,000(m) B-/Caa2 Intelsat Luxembourg SA, 7.75%, 6/1/21
(144A) $ 1,052,500
3,805,000(m) B/B3 Townsquare Radio LLC / Townsquare Radio,
Inc., 9.0%, 4/1/19 (144A) 4,185,500
--------------
$ 5,238,000
---------------------------------------------------------------------------------------------------------
Cable -- 1.0%
EUR 1,200,000 B+/B1 Nara Cable Funding, Ltd., 8.875%, 12/1/18
(144A) $ 1,802,032
1,500,000(m) B-/Caa1 Ono Finance II Plc, 10.875%, 7/15/19 (144A) 1,672,500
EUR 350,000 B-/Caa1 Ono Finance II Plc, 11.125%, 7/15/19 (144A) 541,264
--------------
$ 4,015,796
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
28 Pioneer High Income Trust | Annual Report | 3/31/14
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
Movies & Entertainment -- 2.4%
2,765,000(m) B-/B3 AMC Entertainment, Inc., 9.75%, 12/1/20 $ 3,186,662
1,400,000(m) B-/B2 Gibson Brands, Inc., 8.875%, 8/1/18 (144A) 1,491,000
1,900,000 CCC+/Caa1 Production Resource Group, Inc., 8.875%,
5/1/19 1,510,500
3,575,000 B/Caa1 WMG Acquisition Corp., 6.75%, 4/15/22
(144A) 3,597,344
--------------
$ 9,785,506
---------------------------------------------------------------------------------------------------------
Publishing -- 0.7%
400,000(m) B/B3 Interactive Data Corp., 10.25%, 8/1/18 $ 432,500
2,200,000(g)(m) B-/B3 MPL 2 Acquisition Canco, Inc., 9.875%,
8/15/18 (144A) 2,332,000
--------------
$ 2,764,500
--------------
Total Media $ 21,803,802
---------------------------------------------------------------------------------------------------------
PHARMACEUTICALS, BIOTECHNOLOGY &
LIFE SCIENCES -- 1.4%
Biotechnology -- 1.4%
1,400,000 B/B3 ConvaTec Healthcare E SA, 10.5%, 12/15/18
(144A) $ 1,557,500
4,104,000(m) B-/Caa2 Lantheus Medical Imaging, Inc., 9.75%,
5/15/17 4,083,480
--------------
Total Pharmaceuticals, Biotechnology &
Life Sciences $ 5,640,980
---------------------------------------------------------------------------------------------------------
REAL ESTATE -- 0.8%
Diversified Real Estate Activities -- 0.1%
330,000 B+/B1 Alam Synergy Pte, Ltd., 9.0%, 1/29/19
(144A) $ 340,725
---------------------------------------------------------------------------------------------------------
Diversified REIT's -- 0.4%
1,500,000(m) B/Ba3 CNL Lifestyle Properties, Inc., 7.25%,
4/15/19 $ 1,575,000
---------------------------------------------------------------------------------------------------------
Mortgage REITs -- 0.3%
1,225,000 NR/NR NorthStar Realty Finance Corp., 3.0%,
9/30/14 $ 1,222,795
--------------
Total Real Estate $ 3,138,520
---------------------------------------------------------------------------------------------------------
RETAILING -- 0.2%
Speciality Stores -- 0.2%
685,000 B/B3 Radio Systems Corp., 8.375%, 11/1/19
(144A) $ 758,638
--------------
Total Retailing $ 758,638
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust | Annual Report | 3/31/14 29
Schedule of Investments | 3/31/14 (continued)
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 0.8%
Semiconductors -- 0.8%
3,250,000(m) B/B2 Advanced Micro Devices, Inc., 7.5%, 8/15/22 $ 3,217,500
CNH 1,000,000(d) NR/NR LDK Solar Co., Ltd., 10.0%, 2/28/14 26,760
--------------
Total Semiconductors &
Semiconductor Equipment $ 3,244,260
---------------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 3.4%
Application Software -- 0.2%
955,000 B-/B3 Interface Security Systems Holdings, Inc. /
Interface Security Systems LLC, 9.25%,
1/15/18 (144A) $ 955,000
---------------------------------------------------------------------------------------------------------
Data Processing &
Outsourced Services -- 1.9%
1,783,000(m) B-/Caa1 First Data Corp., 8.25%, 1/15/21 (144A) $ 1,934,555
650,000 B-/Caa1 First Data Corp., 10.625%, 6/15/21 731,250
1,783,000(m) B-/Caa1 First Data Corp., 12.625%, 1/15/21 2,121,770
1,157,963(e)(m) NR/NR First Data Holdings, Inc., 14.5%, 9/24/19
(144A) 1,088,485
1,650,000(e)(m) B-/Caa1 Igloo Holdings Corp., 8.25%, 12/15/17 (144A) 1,689,188
--------------
$ 7,565,248
---------------------------------------------------------------------------------------------------------
Systems Software -- 1.3%
5,509,397(e)(g) NR/NR Pegasus Solutions, Inc., 13.0%, 4/15/14
(144A) $ 5,233,927
--------------
Total Software & Services $ 13,754,175
---------------------------------------------------------------------------------------------------------
TECHNOLOGY HARDWARE &
EQUIPMENT -- 0.8%
Communications Equipment -- 0.7%
1,350,000(e)(m) B/B3 CommScope Holding Co., Inc. , 6.625%,
6/1/20 (144A) $ 1,427,625
1,500,000 CCC+/Caa1 CPI International, Inc., 8.0%, 2/15/18 1,548,750
--------------
$ 2,976,375
---------------------------------------------------------------------------------------------------------
Electronic Equipment & Instruments -- 0.1%
350,000(m) BB-/B1 Viasystems, Inc., 7.875%, 5/1/19 (144A) $ 377,125
--------------
Total Technology Hardware & Equipment $ 3,353,500
---------------------------------------------------------------------------------------------------------
TELECOMMUNICATION SERVICES -- 2.2%
Alternative Carriers -- 0.1%
600,000 NR/WR PAETEC Holding Corp., 9.875%, 12/1/18 $ 658,500
---------------------------------------------------------------------------------------------------------
Integrated Telecommunication Services -- 1.7%
3,539,000 CCC+/Caa1 Cincinnati Bell, Inc., 8.75%, 3/15/18 $ 3,702,679
1,400,000(m) BB-/Ba2 Frontier Communications Corp., 7.625%,
4/15/24 1,463,000
The accompanying notes are an integral part of these financial statements.
30 Pioneer High Income Trust | Annual Report | 3/31/14
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
Integrated Telecommunication
Services -- (continued)
1,650,000(m) B+/B3 GCI, Inc., 6.75%, 6/1/21 $ 1,670,625
--------------
$ 6,836,304
---------------------------------------------------------------------------------------------------------
Wireless Telecommunication Services -- 0.4%
300,000 B-/B3 Altice Finco SA, 8.125%, 1/15/24 (144A) $ 323,250
400,000 NR/NR Unison Ground Lease Funding LLC, 5.78%,
3/15/20 (144A) 382,646
725,000(m) BB/Ba3 Vimpel Communications Via VIP Finance
Ireland, Ltd. OJSC, 9.125%, 4/30/18 (144A) 793,875
--------------
$ 1,499,771
--------------
Total Telecommunication Services $ 8,994,575
---------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 2.5%
Airlines -- 0.3%
500,000 B-/NR Gol Finance, 9.25%, 7/20/20 (144A) $ 485,000
600,000(m) B/B2 United Continental Holdings, Inc., 6.375%,
6/1/18 647,250
--------------
$ 1,132,250
---------------------------------------------------------------------------------------------------------
Marine -- 0.1%
295,000 B+/B3 Navios South American Logistics, Inc./Navios
Logistics Finance US, Inc., 9.25%, 4/15/19 $ 315,650
---------------------------------------------------------------------------------------------------------
Railroads -- 0.3%
1,179,745(e) CCC/Caa3 Florida East Coast Holdings Corp., 10.5%,
8/1/17 $ 1,213,663
---------------------------------------------------------------------------------------------------------
Trucking -- 1.8%
3,500,000(m) B-/B2 Jack Cooper Holdings Corp., 9.25%, 6/1/20
(144A) $ 3,815,000
1,375,000(m) B+/B1 Swift Services Holdings, Inc., 10.0%,
11/15/18 1,510,781
2,000,000 CCC+/Caa1 Syncreon Group BV / Syncreon Global Finance
US, Inc., 8.625%, 11/1/21 (144A) 2,085,000
--------------
$ 7,410,781
--------------
Total Transportation $ 10,072,344
---------------------------------------------------------------------------------------------------------
UTILITIES -- 1.5%
Electric Utilities -- 0.9%
310,000 NR/Caa3 Empresa Distrbuidora Y Comercializadora
Norte, 9.75%, 10/25/22 (144A) $ 194,525
1,010,000(c)(m) BB+/Ba1 Enel SpA, 8.75%, 9/24/73 (144A) 1,133,321
885,000 CCC+/B3 Energy Future Intermediate Holding Co.,
LLC / EFIH Finance, Inc., 10.25%, 12/1/20
(144A) 932,569
1,000,000(m) BBB-/Baa3 PNM Resources, Inc., 9.25%, 5/15/15 1,092,510
The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust | Annual Report | 3/31/14 31
Schedule of Investments | 3/31/14 (continued)
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
Electric Utilities -- (continued)
350,000 CCC-/Caa3 Texas Competitive Electric Holdings Co.,
LLC / TCEH Finance, Inc., 11.5%, 10/1/20
(144A) $ 268,625
--------------
$ 3,621,550
---------------------------------------------------------------------------------------------------------
Multi-Utilities -- 0.6%
2,704,905 NR/NR Ormat Funding Corp., 8.25%, 12/30/20 $ 2,610,233
--------------
Total Utilities $ 6,231,783
---------------------------------------------------------------------------------------------------------
TOTAL CORPORATE BONDS & NOTES
(Cost $404,323,516) $ 429,314,499
---------------------------------------------------------------------------------------------------------
CONVERTIBLE BONDS & NOTES --
5.2% of Net Assets
CAPITAL GOODS -- 1.0%
Construction & Farm Machinery &
Heavy Trucks -- 1.0%
2,625,000(m) B-/NR Meritor, Inc., 7.875%, 3/1/26 $ 4,006,406
--------------
Total Capital Goods $ 4,006,406
---------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 0.1%
Asset Management & Custody Banks -- 0.1%
400,000 BBB/NR Apollo Investment Corp., 5.75%, 1/15/16 $ 424,500
--------------
Total Diversified Financials $ 424,500
---------------------------------------------------------------------------------------------------------
ENERGY -- 1.4%
Coal & Consumable Fuels -- 0.5%
1,905,000 CCC+/NR Massey Energy Co., 3.25%, 8/1/15 $ 1,899,047
---------------------------------------------------------------------------------------------------------
Oil & Gas Drilling -- 0.6%
2,265,000(b)(m) NR/NR Hercules Offshore, Inc., 0.0%, 6/1/38 $ 2,259,338
---------------------------------------------------------------------------------------------------------
Oil & Gas Exploration & Production -- 0.3%
1,340,000(m) BB-/Ba3 Chesapeake Energy Corp., 2.5%, 5/15/37 $ 1,363,450
--------------
Total Energy $ 5,521,835
---------------------------------------------------------------------------------------------------------
HEALTH CARE -- 0.2%
Biotechnology -- 0.2%
1,400,000(m) NR/NR Corsicanto, Ltd., 3.5%, 1/15/32 $ 968,625
--------------
Total Health Care $ 968,625
---------------------------------------------------------------------------------------------------------
HEALTH CARE EQUIPMENT &
SERVICES -- 1.1%
Health Care Equipment & Services -- 0.8%
2,837,000(b) B+/NR Hologic, Inc., 2.0%, 12/15/37 $ 3,243,046
---------------------------------------------------------------------------------------------------------
Health Care Facilities -- 0.2%
780,000 B/NR LifePoint Hospitals, Inc., 3.5%, 5/15/14 $ 828,750
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
32 Pioneer High Income Trust | Annual Report | 3/31/14
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
Health Care Services -- 0.1%
361,000 B+/B2 Omnicare, Inc., 3.25%, 12/15/35 $ 385,367
--------------
Total Health Care Equipment & Services $ 4,457,163
---------------------------------------------------------------------------------------------------------
MATERIALS -- 0.8%
Diversified Chemicals -- 0.8%
4,000,000(k) B+/NR Hercules, Inc., 6.5%, 6/30/29 $ 3,447,500
--------------
Total Materials $ 3,447,500
---------------------------------------------------------------------------------------------------------
MEDIA -- 0.5%
Movies & Entertainment -- 0.5%
1,832,000(m) B/NR Live Nation Entertainment, Inc., 2.875%,
7/15/27 $ 1,859,480
--------------
Total Media $ 1,859,480
---------------------------------------------------------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR
EQUIPMENT -- 0.1%
Semiconductors -- 0.1%
750,000 NR/NR ReneSola, Ltd., 4.125%, 3/15/18 (144A) $ 592,031
42,000(d)(g) NR/NR Suntech Power Holdings Co., Ltd., 3.0%,
3/15/13 4,200
--------------
Total Semiconductors &
Semiconductor Equipment $ 596,231
---------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE BONDS & NOTES
(Cost $17,139,831) $ 21,281,740
---------------------------------------------------------------------------------------------------------
SOVEREIGN DEBT OBLIGATIONS --
0.8% OF NET ASSETS
Argentina -- 0.3%
1,200,000 CCC+/Caa2 City of Buenos Aires, 12.5%, 4/6/15 (144A) $ 1,248,000
---------------------------------------------------------------------------------------------------------
Russia -- 0.5%
1,589,200(b) BBB/Baa1 Russian Government International Bond, 7.5%,
3/31/30 $ 1,807,715
---------------------------------------------------------------------------------------------------------
TOTAL SOVEREIGN DEBT OBLIGATIONS
(Cost $2,336,197) $ 3,055,715
---------------------------------------------------------------------------------------------------------
TAX EXEMPT OBLIGATIONS --
2.8% of Net Assets
New York -- 0.8%
3,475,000 BB/B2 New York City Industrial Development Agency
Revenue, 7.625%, 12/1/32 $ 3,492,410
---------------------------------------------------------------------------------------------------------
North Carolina -- 2.0%
1,670,000 NR/NR Charlotte North Carolina Special Facilities
Revenue, 7.75%, 2/1/28 $ 1,671,853
6,300,000 NR/NR Charlotte Special Facilities Revenue, 5.6%,
7/1/27 6,299,685
--------------
$ 7,971,538
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust | Annual Report | 3/31/14 33
Schedule of Investments | 3/31/14 (continued)
---------------------------------------------------------------------------------------------------------
Principal S&P/Moody's
Amount Rating
USD ($) (unaudited) Value
---------------------------------------------------------------------------------------------------------
TOTAL TAX EXEMPT OBLIGATIONS
(Cost $7,941,734) $ 11,463,948
---------------------------------------------------------------------------------------------------------
MUNICIPAL COLLATERALIZED DEBT
OBLIGATION -- 0.2% of Net Assets
3,300,000(c)(g) NR/NR Non-Profit Preferred Funding Trust I, 0.0%,
9/15/37 (144A) $ 701,448
---------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL COLLATERALIZED
DEBT OBLIGATION
(Cost $3,293,636) $ 701,448
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
Shares
---------------------------------------------------------------------------------------------------------
COMMON STOCKS -- 2.5% of Net Assets
CAPITAL GOODS -- 0.2%
Building Products -- 0.2%
894(g)(h)(l) Panolam Holdings Co. $ 700,002
--------------
Total Capital Goods $ 700,002
---------------------------------------------------------------------------------------------------------
ENERGY -- 0.0%
Oil & Gas Exploration & Production -- 0.0%
4,444(l) Halcon Resources Corp. $ 19,243
--------------
Total Energy $ 19,243
---------------------------------------------------------------------------------------------------------
MATERIALS -- 0.3%
Diversified Metals & Mining -- 0.3%
3,402 Freeport-McMoRan Copper & Gold, Inc. Class B $ 112,504
11,145 Lyondell Basell Industries NV, Class A 991,236
--------------
$ 1,103,740
--------------
Total Materials $ 1,103,740
---------------------------------------------------------------------------------------------------------
PHARMACEUTICALS, BIOTECHNOLOGY &
LIFE SCIENCES -- 0.2%
Pharmaceuticals -- 0.2%
17,818 Teva Pharmaceutical Industries, Ltd. (A.D.R.) $ 941,503
--------------
Total Pharmaceuticals, Biotechnology &
Life Sciences $ 941,503
---------------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 0.0%
Systems Software -- 0.0%
10,942(g)(l) Perseus Holding Corp. $ 27,355
--------------
Total Software & Services $ 27,355
---------------------------------------------------------------------------------------------------------
TRANSPORTATION -- 1.8%
Air Freight & Logistics -- 1.0%
3,266(l) CEVA Holdings LLC $ 4,082,175
---------------------------------------------------------------------------------------------------------
Airlines -- 0.6%
71,109 Delta Air Lines, Inc. $ 2,463,927
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
34 Pioneer High Income Trust | Annual Report | 3/31/14
---------------------------------------------------------------------------------------------------------
Shares Value
---------------------------------------------------------------------------------------------------------
Marine -- 0.2%
877,784(g)(l) Horizon Lines, Inc., Class A $ 649,560
--------------
Total Transportation $ 7,195,662
---------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost $8,297,947) $ 9,987,505
---------------------------------------------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCKS --
0.7% of Net Assets
DIVERSIFIED FINANCIALS -- 0.5%
Other Diversified Financial Services -- 0.5%
1,880(f) Bank of America Corp., 7.25 $ 2,151,115
--------------
Total Diversified Financials $ 2,151,115
---------------------------------------------------------------------------------------------------------
ENERGY -- 0.2%
Oil & Gas Exploration & Production -- 0.2%
1,100(f)(l) Halcon Resources Corp., 5.75 $ 898,150
--------------
Total Energy $ 898,150
---------------------------------------------------------------------------------------------------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $2,164,242) $ 3,049,265
---------------------------------------------------------------------------------------------------------
PREFERRED STOCKS -- 2.8% of
Net Assets
BANKS -- 0.7%
Diversified Banks -- 0.7%
3,000(c)(f) AgStar Financial Services ACA, 6.75 $ 2,989,500
--------------
Total Banks $ 2,989,500
---------------------------------------------------------------------------------------------------------
DIVERSIFIED FINANCIALS -- 0.9%
Other Diversified Financial Services -- 0.9%
132,750(c) GMAC Capital Trust I, 8.125 $ 3,624,075
--------------
Total Diversified Financials $ 3,624,075
---------------------------------------------------------------------------------------------------------
ENERGY -- 0.2%
Oil & Gas Storage & Transportation -- 0.2%
33,350(c) NuStar Logistics LP, 7.625 $ 893,780
--------------
Total Energy $ 893,780
---------------------------------------------------------------------------------------------------------
INSURANCE -- 0.9%
Reinsurance -- 0.9%
539,984(g)(l) Altair Re, 0.0 $ 607,266
840,000(g)(l) Altair Re II, Ltd., 0.0 854,616
8,500(g)(l) Lorenz Re, Ltd., 0.0 1,020,000
950,000(g)(l) Pangaea Re, 0.0 1,045,171
--------------
$ 3,527,053
--------------
Total Insurance $ 3,527,053
---------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust | Annual Report | 3/31/14 35
Schedule of Investments | 3/31/14 (continued)
---------------------------------------------------------------------------------------------------------
Shares Value
---------------------------------------------------------------------------------------------------------
SOFTWARE & SERVICES -- 0.1%
Systems Software -- 0.1%
5,745(g)(l) Perseus Holding Corp., 14.0 $ 471,090
--------------
Total Software & Services $ 471,090
---------------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS
(Cost $10,333,218) $ 11,505,498
---------------------------------------------------------------------------------------------------------
RIGHTS/WARRANTS -- 0.0% of
Net Assets
AUTOMOBILES & COMPONENTS -- 0.0%
Auto Parts & Equipment -- 0.0%
344(l) Lear Corp., Expires 11/9/14 $ 57,589
--------------
Total Automobiles & Components $ 57,589
---------------------------------------------------------------------------------------------------------
ENERGY -- 0.0%
Oil & Gas Equipment & Services -- 0.0%
650(g)(l) Green Field Energy Services, Inc., Expires
11/15/21 (144A) $ 656
--------------
Total Energy $ 656
---------------------------------------------------------------------------------------------------------
TOTAL RIGHTS/WARRANTS
(Cost $42,352) $ 58,245
---------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES -- 129.5%
(Cost -- $492,512,472) (n)(o) $ 527,098,114
---------------------------------------------------------------------------------------------------------
OTHER ASSETS AND LIABILITIES -- (29.5)% $ (120,214,575)
---------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO
COMMON SHAREOWNERS -- 100.0% $ 406,883,539
---------------------------------------------------------------------------------------------------------
REIT Real Estate Investment Trust.
NR Security not rated by S&P or Moody's.
WR Rating withdrawn by either S&P or Moody's.
(144A) Security is exempt from registration under Rule 144A of the Securities
Act of 1933. Such securities may be resold normally to qualified
institutional buyers in a transaction exempt from registration. At March
31, 2014, the value of these securities amounted to $238,739,168, or
58.7% of total net assets applicable to common shareowners.
+ Amount rounds to less than 0.1%.
* Senior secured floating rate loan interests in which the Trust invests
generally pay interest at rates that are periodically redetermined by
reference to a base lending plus a premium. These base lending rates are
generally (i) the lending rate offered by one or more major European
banks, such as LIBOR (London InterBank Offered Rate), (ii) the prime
rate offered by one or more major United States banks, (iii) the
certificate of deposit or (iv) other base lending rates used by
commercial lenders. The interest rate shown is the rate accruing at
March 31, 2014.
(a) Floating rate note. The rate shown is the coupon rate at March 31, 2014.
(b) Debt obligation initially issued at one coupon which converts to a
higher coupon at a specific date. The rate shown is the rate at March
31, 2014.
The accompanying notes are an integral part of these financial statements.
36 Pioneer High Income Trust | Annual Report | 3/31/14
(c) The interest rate is subject to change periodically. The interest is
shown is the rate at March 31, 2014.
(d) Security is in default and is non income producing.
(e) Payment in Kind (PIK) security which may pay interest in the form of
additional principal amount.
(f) Security is perpetual in nature and has no stated maturity date.
(g) Indicates a security that has been deemed as illiquid. As of March 31,
2014 the aggregate cost of illiquid securities in the Trust's portfolio
was $25,836,596. As of that date, the aggregate value of illiquid
securities in the Trust's portfolio of $18,203,986 represented 4.5% of
total net assets applicable to common shareowners.
(h) Security is valued using fair value methods (other than prices supplied
by independent pricing services). See Notes to Financial Statements --
Note 1A.
(i) The company is scheduled for approval of a reorganization plan.
(j) Security issued with a zero coupon. Income is recognized through
accretion of discount.
(k) Security is priced as a unit.
(l) Non-income producing.
(m) Denotes security pledged and segregated as collateral for the
margin-loan financing agreement. See Notes to Financial Statements --
Note 10.
(n) At March 31, 2014, the net unrealized appreciation on investments based
on cost for federal tax purposes of $494,414,432 was as follows:
Aggregate gross unrealized appreciation for all investments in which
there is an excess of value over tax cost $ 52,242,968
Aggregate gross unrealized depreciation for all investments in which
there is an excess of tax cost over value (19,559,286)
--------------
Net unrealized depreciation $ 32,683,682
==============
For financial reporting purposes net unrealized appreciation on investments was
$34,585,642 and cost of investments aggregated $492,512,472.
(o) Distributions of Investments by country of issue, as a percentage of
total investments in securities, is as follows:
United States 77.1%
Canada 3.5
Luxembourg 2.9
Cayman Islands 2.2
Netherlands 2.4
Ireland 1.9
United Kingdom 1.4
Other (individually less than 1%) 8.6
------
100.0%
======
Purchases and sales of securities (excluding temporary cash investments) for the
year ended March 31, 2014 aggregated $157,204,535 and $165,832,790,
respectively.
Glossary of Terms:
(A.D.R.) American Depositary Receipt
Principal amounts are denominated in U.S. dollars unless otherwise noted.
EUR -- Euro
CNH -- New Chinese Yuan
GBP -- Great British Pound
The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust | Annual Report | 3/31/14 37
CREDIT DEFAULT SWAP AGREEMENTS -- SELL PROTECTION
---------------------------------------------------------------------------------------------------------
Premiums Net Unrealized
Notional Obligation Expiration Received Appreciation
Principal ($)(1) Counterparty Entity/Index Coupon Date (Paid) (Depreciation)
---------------------------------------------------------------------------------------------------------
2,000,000 JPMorgan Goodyear Tire
Chase & Co. & Rubber Co. 5.00% 12/20/17 $(65,000) $337,415
---------------------------------------------------------------------------------------------------------
(1) The notional amount is the maximum amount that a seller of credit
protection would be obligated to pay upon occurrence of a credit event.
Various inputs are used in determining the value of the Trust's investments.
These inputs are summarized in the three broad levels below.
Level 1 -- quoted prices in active markets for identical securities.
Level 2 -- other significant observable inputs (including quoted prices for
similar securities, interest rates, prepayment speeds credit
risks, etc.) Level 3 -- significant unobservable inputs
(including the Trust's own assumptions in determining fair value
of investments).
Level 3 -- significant unobservable inputs (including the Trust's own
assumptions in determining fair value of investments).
Generally, equity securities are categorized as Level 1, fixed income securities
and senior loans are categorized as Level 2, and securities valued using fair
value methods (other than prices supplied by independent pricing services) as
level 3. See Notes to Financial Statements -- Note 1A.
The accompanying notes are an integral part of these financial statements.
38 Pioneer High Income Trust | Annual Report | 3/31/14
The following is a summary of the inputs used as of March 31, 2014, in valuing
the Trust's investments.
---------------------------------------------------------------------------------------------------------
Level 1 Level 2 Level 3 Total
---------------------------------------------------------------------------------------------------------
Asset Backed Securities $ -- $ 5,629,980 $ -- $ 5,629,980
Collateralized Mortgage
Obligations -- 6,295,279 -- 6,295,279
Senior Secured Floating
Rate Loan Interests -- 24,754,992 -- 24,754,992
Corporate Bonds & Notes
Diversified Financials
Other Diversified
Financial Services -- -- 1,748,033 1,748,033
Materials
Diversified Metals
& Mining -- 6,274,225 626,708 6,900,933
Insurance
Reinsurance -- 15,313,345 1,470,812 16,784,157
All Other -- 403,881,376 -- 403,881,376
Convertible Bonds & Notes -- 21,281,740 -- 21,281,740
Sovereign Debt Obligations -- 3,055,715 -- 3,055,715
Tax Exempt Obligations -- 11,463,948 -- 11,463,948
Municipal Collateralized
Debt Obligation -- 701,448 -- 701,448
Common Stocks
Transportation
Air Freight & Logistics -- 4,082,175 -- 4,082,175
Capital Goods
Building Products -- -- 700,002 700,002
Software & Services
Systems Software -- 27,355 -- 27,355
All Other 5,177,973 -- -- 5,177,973
Convertible Preferred Stocks
Energy
Oil & Gas Exploration
& Production -- 898,150 -- 898,150
All Other 2,151,115 -- -- 2,151,115
Preferred Stocks
Insurance
Reinsurance -- -- 3,527,053 3,527,053
Banks
Diversified Banks -- 2,989,500 -- 2,989,500
Software & Services
Systems Software -- 471,090 -- 471,090
All Other 4,517,855 -- -- 4,517,855
Rights/Warrants
Energy
Oil & Gas Equipment
& Services -- 656 -- 656
All Other 57,589 -- -- 57,589
---------------------------------------------------------------------------------------------------------
Total Investments
in Securities $ 11,904,532 $ 507,120,974 $ 8,072,608 $ 527,098,114
=========================================================================================================
Other Financial Instruments
Credit Default Swap
Agreements $ -- $ 337,415 $ -- $ 337,415
Forward Foreign
Currency Contracts -- (361,034) -- (361,034)
---------------------------------------------------------------------------------------------------------
Total Other Financial
Instruments $ -- $ (23,619) $ -- $ (23,619)
=========================================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust | Annual Report | 3/31/14 39
The following is a reconciliation of assets valued using significant
unobservable inputs (level 3):
-----------------------------------------------------------------------------------------------------------------------------------
Change in
Balance Realized Unrealized Accrued Transfers Transfers Balance
as of gain appreciation discounts/ in to out of as of
3/31/13 (loss)(1) (depreciation)(2) Purchases Sales premiums Level 3* Level 3* 3/31/14
-----------------------------------------------------------------------------------------------------------------------------------
Corporate Bonds
& Notes
Diversified
Financials
Other Diversified
Financial
Services $ 1,772,245 $ -- $ (24,673) $ -- $ -- $ 461 $ -- $ -- $ 1,748,033
Materials
Diversified
Metals &
Mining -- -- (16,070) 642,778 -- -- -- -- 626,708
Insurance
Reinsurance -- 4,524 221,030 1,210,500 (1,450,000) (1,062) 1,485,820 -- 1,470,812
Common
Stocks
Capital Goods
Building
Products 522,096 -- 177,906 -- -- -- -- -- 700,002
Preferred Stocks
Insurance
Reinsurance -- -- 350,009 3,837,060 (660,016) -- -- -- 3,527,053
-----------------------------------------------------------------------------------------------------------------------------------
Total $ 2,294,341 $ 4,524 $ 708,202 $ 5,690,338 $ (2,110,016) $ (601) $1,485,820 $ -- $ 8,072,608
-----------------------------------------------------------------------------------------------------------------------------------
* Transfers are calculated on the beginning of period value.
(1) Realized gain (loss) on these securities is included in the realized gain
(loss) from investments in the Statement of Operations.
(2) Unrealized appreciation (depreciation) on these securities is included in
the change in unrealized appreciation (depreciation) from investments in
the Statement of Operations.
Net change in unrealized appreciation of Level 3 investments still held and
considered Level 3 at 03/31/14: 708,202.
The accompanying notes are an integral part of these financial statements.
40 Pioneer High Income Trust | Annual Report | 3/31/14
Statement of Assets and Liabilities | 3/31/14
ASSETS:
Investments in securities, at value (cost $492,512,472) $527,098,114
Cash 24,648,547
Foreign currencies, at value(cost $6,269,390) 6,146,286
Receivables --
Investment securities sold 853,750
Interest receivable 10,688,486
Dividends receivable 49,968
Unrealized appreciation on credit default swaps 337,415
Reinvestment of distributions 344,207
---------------------------------------------------------------------------------------------------
Total assets $570,166,773
---------------------------------------------------------------------------------------------------
LIABILITIES:
Payables --
Margin Loan Financing $151,000,000
Investment securities purchased 11,205,927
Due to affiliates 257,096
Administration fee payable 1,974
Net unrealized depreciation on forward foreign currency contracts 361,034
Interest expense payable 70,477
Credit default swaps, premiums received 65,000
Due to broker 200,000
Accrued expenses 121,726
---------------------------------------------------------------------------------------------------
Total liabilities $163,283,234
---------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Paid-in capital $408,873,646
Undistributed net investment income 9,468,075
Accumulated net realized loss on investments, credit default
swaps and foreign currency transactions (45,898,328)
Net unrealized appreciation on investments 34,585,642
Net unrealized appreciation on credit default swaps 337,415
Net unrealized depreciation on forward foreign currency contracts
and other assets and liabilities denominated in foreign currencies (482,911)
---------------------------------------------------------------------------------------------------
Net assets applicable to common shareowners $406,883,539
===================================================================================================
NET ASSET VALUE PER COMMON SHARE:
No par value (unlimited number of shares authorized)
Based on $406,883,539/28,679,504 common shares $ 14.19
===================================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust | Annual Report | 3/31/14 41
Statement of Operations
For the Year Ended 3/31/14
INVESTMENT INCOME:
Interest $ 45,518,251
Dividends (net of foreign taxes withheld $6,294) 739,600
Facility and other fees 795,331
---------------------------------------------------------------------------------------------------
Total Investment income $ 47,053,182
---------------------------------------------------------------------------------------------------
EXPENSES:
Management fees $ 3,309,729
Administrative reimbursements 126,994
Transfer agent fees and expenses 34,397
Shareholder communications expense 13,705
Auction agent fees 369,407
Custodian fees 22,800
Professional fees 107,080
Printing expenses 25,280
Trustees' fees 17,200
Pricing fees 23,500
Miscellaneous 62,050
---------------------------------------------------------------------------------------------------
Net operating expenses $ 4,112,142
---------------------------------------------------------------------------------------------------
Interest expense $ 70,477
---------------------------------------------------------------------------------------------------
Net operating expenses and interest expense $ 4,182,619
---------------------------------------------------------------------------------------------------
Net investment income $ 42,870,563
---------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS,
CREDIT DEFAULT SWAPS AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain (loss) on:
Investments $ (2,589,283)
Credit default swaps 550,484
Forward foreign currency contracts and other assets and
liabilities denominated in foreign currencies (202,604) $ (2,241,403)
---------------------------------------------------------------------------------------------------
Change in net unrealized appreciation (depreciation) on:
Investments $ 5,367,229
Credit default swaps (1,604)
Forward foreign currency contracts and other assets and
liabilities denominated in foreign currencies (434,624) $ 4,931,001
---------------------------------------------------------------------------------------------------
Net gain on investments $ 2,689,598
---------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREOWNERS FROM
NET INVESTMENT INCOME: $ (147,163)
---------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 45,412,998
===================================================================================================
The accompanying notes are an integral part of these financial statements.
42 Pioneer High Income Trust | Annual Report | 3/31/14
Statements of Changes in Net Assets
---------------------------------------------------------------------------------------------------
Year Year
Ended Ended
3/31/14 3/31/13
---------------------------------------------------------------------------------------------------
FROM OPERATIONS:
Net investment income $ 42,870,563 $ 50,114,370
Net realized gain (loss) on investments, credit default
swaps and foreign currency transactions (2,241,403) 3,889,471
Change in unrealized appreciation (depreciation) on
investments, credit default swaps and foreign
currency transactions 4,931,001 14,394,668
Distributions to preferred shareowners from net
investment income (147,163) (238,251)
---------------------------------------------------------------------------------------------------
Net increase in net assets resulting from operations $ 45,412,998 $ 68,160,258
---------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREOWNERS:
Net investment income and previously undistributed
net investment income ($1.65 and $1.65 per
share, respectively) $ (47,096,627) $ (46,710,842)
---------------------------------------------------------------------------------------------------
Total distributions to common shareowners $ (47,096,627) $ (46,710,842)
---------------------------------------------------------------------------------------------------
FROM TRUST SHARE TRANSACTIONS:
Reinvestment of distributions $ 4,068,896 $ 3,531,089
---------------------------------------------------------------------------------------------------
Net increase in net assets applicable to common
shareowners from Trust share transactions $ 4,068,896 $ 3,531,089
---------------------------------------------------------------------------------------------------
Net increase in net assets applicable to
common shareowners $ 2,385,267 $ 24,980,505
NET ASSETS APPLICABLE TO COMMON SHAREOWNERS:
Beginning of year 404,498,272 379,517,767
---------------------------------------------------------------------------------------------------
End of year $ 406,883,539 $ 404,498,272
---------------------------------------------------------------------------------------------------
Undistributed net investment income $ 9,468,075 $ 15,645,598
===================================================================================================
The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust | Annual Report | 3/31/14 43
Statement of Cash Flows
For the Year Ended March 31, 2014
Cash Flows From Operating Activities
Net increase in net assets resulting from operations (excluding
preferred distributions) $ 45,560,161
---------------------------------------------------------------------------------------------------
Adjustment to reconcile Net Investment Income to Net Cash
and Foreign Currency From Operating Activities
Purchase of investments securities $ (2,631,019,164)
Proceeds from disposition of investment securities 2,656,876,589
Net accretion and amortization of discount/premium on corporate
debt obligations and short term investments (3,384,950)
Net payments on swap premiums (46,875)
Decrease in receivable for investments sold 1,047,691
Increase in payable for investments purchased 1,110,564
Decrease in interest 2,036,177
Increase in dividend receivable (1,236)
Increase in reinvestment of distributions (46,233)
Decrease in miscellaneous assets 112,923
Decrease in due to affiliates 1,109
Increase in due to Administration fee payable (31,221)
Increase in due to broker (90,000)
Increase in due to custodian (1,725,335)
Decrease in accrued expenses (18,067)
Decrease in interest expense payable 70,477
Change in unrealized appreciation of investments (5,367,229)
Fluctuations on foreign exchange contracts depreciation from currency (123,104)
Change in unrealized depreciation of credit default swaps 1,604
Change in unrealized depreciation of foreign currency contracts and
other foreign denominated currencies 434,624
Net realized gain on investments 2,589,283
---------------------------------------------------------------------------------------------------
Net cash and foreign currency provided by operating activities $ 67,987,788
---------------------------------------------------------------------------------------------------
Cash flows Used Financing Activities:
---------------------------------------------------------------------------------------------------
Distributions to preferred shares $ (147,163)
---------------------------------------------------------------------------------------------------
Redemption of preferred shares (151,007,996)
---------------------------------------------------------------------------------------------------
Margin Loan Financing 151,000,000
---------------------------------------------------------------------------------------------------
Cash dividends paid to common shareholders (47,096,627)
---------------------------------------------------------------------------------------------------
Reinvestment of distributions 4,068,896
---------------------------------------------------------------------------------------------------
Net cash flow used in financing activities $ (43,182,890)
---------------------------------------------------------------------------------------------------
Cash and Foreign Currency
Beginning of the year $ 5,989,935
---------------------------------------------------------------------------------------------------
End of year $ 30,794,833
---------------------------------------------------------------------------------------------------
Cash Flow Information
Cash paid for interest $ --
===================================================================================================
The accompanying notes are an integral part of these financial statements.
44 Pioneer High Income Trust | Annual Report | 3/31/14
Financial Highlights
------------------------------------------------------------------------------------------------------------------------------
Year Year
Year Year Ended Ended Year
Ended Ended 3/31/12 3/31/11 Ended
3/31/14 3/31/13 (Consolidated) (Consolidated) 3/31/10
------------------------------------------------------------------------------------------------------------------------------
Per Share Operating Performance
Net asset value, beginning of period $ 14.23 $ 13.45 $ 14.33 $ 13.23 $ 7.07
------------------------------------------------------------------------------------------------------------------------------
Increase (decrease) from investment operations:(a)
Net investment income $ 1.50 $ 1.74 $ 1.70 $ 1.68 $ 1.65
Net realized and unrealized gain (loss) on investments
and foreign currency transactions 0.12 0.70 (0.92) 1.09 6.17
------------------------------------------------------------------------------------------------------------------------------
Distributions to preferred shareowners from:
Net investment income (0.01) (0.01) (0.01) (0.02) (0.01)
------------------------------------------------------------------------------------------------------------------------------
Net increase from investment operations $ 1.61 $ 2.43 $ 0.77 $ 2.75 $ 7.81
------------------------------------------------------------------------------------------------------------------------------
Distributions to common shareowners from:
Net investment income and previously undistributed net
investment income (1.65)* (1.65) (1.65) (1.65) (1.65)
------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net asset value $ (0.04) $ 0.78 $ (0.88) $ 1.10 $ 6.16
------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period(b) $ 14.19 $ 14.23 $ 13.45 $ 14.33 $ 13.23
------------------------------------------------------------------------------------------------------------------------------
Market value, end of period(b) $ 17.83 $ 16.97 $ 16.66 $ 16.55 $ 15.38
==============================================================================================================================
Total return at market value(c) 16.24% 12.65% 11.53% 20.12% 119.69%
Ratios to average net assets of common shareowners:
Total expenses (d) 1.04% 1.08% 1.05% 1.11% 1.23%
Net investment income before preferred share distributions 10.70% 13.03% 12.66% 12.43% 14.92%
Preferred share distributions 0.04% 0.06% 0.05% 0.12% 0.13%
Net investment income available to common shareowners 10.66% 12.97% 12.61% 12.31% 14.79%
Portfolio turnover 30% 27% 24% 10% 15%
Net assets of common shareowners, end of period (in thousands) $406,884 $404,498 $379,518 $401,348 $367,087
* The amount of distributions made to shareowners during the period were in
excess of the net investment income earned by the Trust during the period.
The Trust has accumulated undistributed net investment income which is part
of the Trust's NAV. A portion of this accumulated net investment income was
distributed to shareowners during the period.
The accompanying notes are an integral part of these financial statements.
Pioneer High Income Trust | Annual Report | 3/31/14 45
Financial Highlights (continued)
------------------------------------------------------------------------------------------------------------------------------
Year Year
Year Year Ended Ended Year
Ended Ended 3/31/12 3/31/11 Ended
3/31/14 3/31/13 (Consolidated) (Consolidated) 3/31/10
------------------------------------------------------------------------------------------------------------------------------
Preferred shares outstanding (in thousands) $ -- $151,000 $151,000 $151,000 $151,000
Asset coverage per preferred share, end of period $ -- $ 91,971 $ 87,835 $ 91,450 $ 85,777
Average market value per preferred share (e) $ -- $ 25,000 $ 25,000 $ 25,000 $ 25,000
Liquidation value, including dividends payable,
per preferred share $ -- $ 25,001 $ 25,001 $ 25,001 $ 25,001
==============================================================================================================================
(a) The per common share data presented above is based upon the average common
shares outstanding for the periods presented.
(b) Net asset value and market value are published in Barron's on Saturday, The
Wall Street Journal on Monday and The New York Times on Monday and
Saturday.
(c) Total investment return is calculated assuming a purchase of common shares
at the current market value on the first day and a sale at the current
market value on the last day of the periods reported. Dividends and
distributions, if any, are assumed for purposes of this calculation to be
reinvested at prices obtained under the Trust's dividend reinvestment plan.
Total investment return does not reflect brokerage commissions. Past
performance is not a guarantee of future results.
(d) Expense ratios do not reflect the effect of distribution payments to
preferred shareowners.
(e) Market value is redemption value without an active market.
The information above represents the audited operating performance data for a
share of common stock outstanding, total investment return, ratios to average
net assets and other supplemental data for the periods indicated. This
information has been determined based upon financial information provided in the
financial statements and market value data for the Trust's common shares.
The accompanying notes are an integral part of these financial statements.
46 Pioneer High Income Trust | Annual Report | 3/31/14
Notes to Financial Statements | 3/31/14
1. Organization and Significant Accounting Policies
Pioneer High Income Trust (the Trust) was organized as a Delaware statutory
trust on January 30, 2002. Prior to commencing operations on April 26, 2002, the
Trust had no operations other than matters relating to its organization and
registration as a diversified, closed-end management investment company under
the Investment Company Act of 1940, as amended. The investment objective of the
Trust is to seek a high level of current income and the Trust may, as a
secondary objective, also seek capital appreciation to the extent that it is
consistent with its investment objective.
The Trust's financial statements have been prepared in conformity with U.S.
generally accepted accounting principles that require the management of the
Trust to, among other things, make estimates and assumptions that affect the
reported amounts of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements, and the reported
amounts of income, expenses and gain or loss on investments during the reporting
year. Actual results could differ from those estimates.
The following is a summary of significant accounting policies followed by the
Trust in the preparation of its financial statements, which are consistent with
those policies generally accepted in the investment company industry:
A. Security Valuation
Security transactions are recorded as of trade date. Senior floating rate
loan interests (senior loans) are valued in accordance with guidelines
established by the Board of Trustees at the mean between the last available
bid and asked prices from one or more brokers or dealers as obtained from
Loan Pricing Corporation, an independent pricing service. If price
information is not available from Loan Pricing Corporation or if the price
information is deemed to be unreliable, price information will be obtained
from an alternative loan interest pricing service. If no reliable price
quotes are available from either the primary or alternative pricing service
broker quotes will be solicited. Fixed-income securities with remaining
maturities of more than sixty days are valued at prices supplied by
independent pricing services, which consider such factors as market prices,
market events, quotations from one or more brokers, Treasury spreads,
yields, maturities and ratings. Valuations may be supplemented by dealers
and other sources, as required. Equity securities that have traded on an
exchange are valued at the last sale price on the principal exchange where
they are traded. Equity securities that have not traded on the date of
valuation or securities for which sale prices are not available, generally
are valued using the mean between the last bid and
Pioneer High Income Trust | Annual Report | 3/31/14 47
asked prices. Short-term fixed income securities with remaining maturities
of sixty days or less generally are valued at amortized cost. Shares of
money market mutual funds are valued at such funds' net asset value.
Trading in foreign securities is substantially completed each day at
various times prior to the close of the New York Stock Exchange (NYSE). The
values of such securities used in computing the net asset value of the
Trust's shares are determined as of such times.
Securities and senior loans for which independent pricing services are
unable to supply prices or for which market prices and/or quotations are
not readily available or are considered to be unreliable are valued by a
fair valuation team comprised of certain personnel of Pioneer Investment
Management, Inc. (PIM), the Trust's investment adviser, pursuant to
procedures adopted by the Trust's Board of Trustees. PIM's fair valuation
team uses fair value methods approved by the Valuation Committee of the
Board of Trustees. PIM's valuation team is responsible for monitoring
developments that may impact fair valued securities and for discussing and
assessing fair value on an ongoing basis, and at least quarterly, with the
Valuation Committee of the Board of Trustees.
Inputs used when applying fair value methods to value a security may
include credit ratings, the financial condition of the company, current
market conditions and comparable securities. The Trust may use fair value
methods if it is determined that a significant event has occurred after the
close of the exchange or market on which the security trades and prior to
the determination of the Trust's net asset value. Examples of a significant
event might include political or economic news, corporate restructurings,
natural disasters, terrorist activity or trading halts. Thus, the valuation
of the Trust's securities may differ significantly from exchange prices and
such differences could be material.
At March 31, 2014, three securities were valued using fair value methods
(other than securities valued using prices supplied by independent pricing
services or broker-dealers) representing 0.8% of net assets applicable to
common shareowners. The value of these fair valued securities are
$3,074,743.
Discounts and premiums on debt securities are accreted or amortized,
respectively, daily, into interest income on an effective yield to maturity
basis with a corresponding increase or decrease in the cost basis of the
security. Premiums and discounts related to certain mortgage-backed
securities are amortized or accreted in proportion to the monthly paydowns.
Interest income, including interest on income bearing cash accounts, is
recorded on an accrual basis, net of unrecoverable foreign taxes withheld
at the applicable country rates.
48 Pioneer High Income Trust | Annual Report | 3/31/14
Dividend income is recorded on the ex-dividend date, except that certain
dividends from foreign securities where the ex-dividend date may have
passed are recorded as soon as the Trust becomes aware of the ex-dividend
data in the exercise of reasonable diligence.
Gains and losses on sales of investments are calculated on the identified
cost method for both financial reporting and federal income tax purposes.
B. Foreign Currency Translation
The books and records of the Trust are maintained in U.S. dollars. Amounts
denominated in foreign currencies are translated into U.S. dollars using
current exchange rates.
Net realized gains and losses on foreign currency transactions, if any,
represent, among other things, the net realized gains and losses on foreign
currency contracts, disposition of foreign currencies and the difference
between the amount of income accrued and the U.S. dollars actually
received. Further, the effects of changes in foreign currency exchange
rates on investments are not segregated in the Statement of Operations from
the effects of changes in the market prices of those securities but are
included with the net realized and unrealized gain or loss on investments.
C. Forward Foreign Currency Contracts
The Trust may enter into forward foreign currency contracts (contracts) for
the purchase or sale of a specific foreign currency at a fixed price on a
future date. All contracts are marked to market daily at the applicable
exchange rates, and any resulting unrealized appreciation or depreciation
are recorded in the Trust's financial statements. The Trust records
realized gains and losses at the time a contract is offset by entry into a
closing transaction or extinguished by delivery of the currency. Risks may
arise upon entering into these contracts from the potential inability of
counterparties to meet the terms of the contracts and from unanticipated
movements in the value of foreign currencies relative to the U.S. dollar
(see Note 5).
D. Federal Income Taxes
It is the Trust's policy to comply with the requirements of the Internal
Revenue Code applicable to regulated investment companies and to distribute
all of its taxable income and net realized capital gains, if any, to its
shareowners. Therefore, no federal income tax provision is required. As of
March 31, 2014, the Trust did not accrue any interest or penalties with
respect to uncertain tax positions, which if applicable, would be recorded
as income tax expense in the Statement of Operations. Tax returns filed
within the prior three years remain subject to examination by federal and
state tax authorities.
Pioneer High Income Trust | Annual Report | 3/31/14 49
The amount and character of income and capital gain distributions to
shareowners are determined in accordance with federal income tax rules,
which differ from U.S. generally accepted accounting principles.
Distributions in excess of net investment income or net realized gains are
temporary overdistributions for financial statement and tax purposes.
Capital accounts within the financial statements are adjusted for permanent
book/tax differences to reflect tax character, but are not adjusted for
temporary differences. At March 31, 2013, the Trust reclassified $1,804,296
to decrease undistributed net investment income, $1,804,294 to decrease net
realized loss on investments, credit default swaps and foreign currency
transactions and $2 to increase paid-in capital to reflect permanent
book/tax differences. These adjustments have no impact on the net assets or
results of operations.
At March 31, 2014, the Trust was permitted to carryforward indefinitely
$50,381 of short-term capital losses and $1,657,658 of long-term capital
losses without limitation. Additionally, at March 31, 2014, the Trust had a
net capital loss carryforward of $44,553,197 of which the following amounts
will expire between 2018 and 2019 if not utilized: $42,435,787 in 2018 and
$2,117,410 in 2019.
The Trust elected to defer $288,512 of capital losses recognized between
November 1, 2013 and March 31, 2014 to its fiscal year ending March 31,
2015.
The tax character of distributions paid to shareowners during the years
ended March 31, 2014 and March 31, 2013 was as follows:
---------------------------------------------------------------------------
2014 2013
---------------------------------------------------------------------------
Distribution paid from:
Ordinary income $47,243,790 $46,949,093
---------------------------------------------------------------------------
Total $47,243,790 $46,949,093
===========================================================================
The following shows the components of distributable earnings (losses) on a
federal income tax basis at March 31, 2014.
---------------------------------------------------------------------------
2014
---------------------------------------------------------------------------
Distributable earnings:
Undistributed ordinary income $ 13,520,971
Capital loss carryforward $(46,261,236)
Post-October loss deferred (288,512)
Unrealized appreciation 31,038,670
---------------------------------------------------------------------------
Total $ (1,990,107)
===========================================================================
The difference between book-basis and tax-basis unrealized appreciation is
primarily attributable to the realization for tax purposes of unrealized
gains on investments in passive foreign investment companies, the book/tax
50 Pioneer High Income Trust | Annual Report | 3/31/14
differences in the accrual of income on securities in default, the
difference between book and tax amortization methods and discounts on fixed
income securities and other book/tax temporary differences.
E. Risks
Information regarding the Trust's principal risks is contained in the
Trust's original offering prospectus, with additional information included
in the Trust's shareowner reports issued from time to time. Please refer to
those documents when considering the Trust's principal risks. At times, the
Trust's investments may represent industries or industry sectors that are
interrelated or have common risks, making the Trust more susceptible to any
economic, political, or regulatory developments or other risks affecting
those industries and sectors.
Under normal market conditions, the Trust invests at least 80% of its
assets in below investment grade (high-yield) debt securities, loans and
preferred stocks. Because the Trust's investments are concentrated in
high-yield securities, the Trust is subject to risks of such securities.
Below investment grade securities are commonly referred to as "junk bonds"
and are considered speculative with respect to the issuer's capacity to pay
interest and repay principal. The Trust's investments in certain foreign
markets or countries with limited developing markets may subject the Trust
to a greater degree of risk than in a developed market. These risks include
disruptive political or economic conditions and the possible imposition of
adverse governmental laws or currency exchange restrictions.
F. Repurchase Agreements
With respect to repurchase agreements entered into by the Trust, the value
of the underlying securities (collateral), including accrued interest, is
required to be equal to or in excess of the repurchase price. The
collateral for all repurchase agreements is held in safekeeping in the
customer-only account of the Trust's custodian or a sub-custodian of the
Trust. PIM is responsible for determining that the value of the collateral
remains at least equal to the repurchase price.
G. Automatic Dividend Reinvestment Plan
All common shareowners whose shares are registered in their own names
automatically participate in the Automatic Dividend Reinvestment Plan (the
Plan), under which participants receive all dividends and capital gain
distributions (collectively, dividends) in full and fractional common
shares of the Trust in lieu of cash. Shareowners may elect not to
participate in the Plan. Shareowners not participating in the Plan receive
all dividends and capital gain distributions in cash. Participation in the
Plan is completely voluntary and may be terminated or resumed at any time
without penalty by notifying American Stock Transfer & Trust Company, the
agent for shareowners in
Pioneer High Income Trust | Annual Report | 3/31/14 51
administering the Plan (the Plan Agent), in writing prior to any dividend
record date; otherwise such termination or resumption will be effective
with respect to any subsequently declared dividend or other distribution.
If a shareowner's shares are held in the name of a brokerage firm, bank or
other nominee, the shareowner can ask the firm or nominee to participate in
the Plan on the shareowner's behalf. If the firm or nominee does not offer
the Plan, dividends will be paid in cash to the shareowner of record. A
firm or nominee may reinvest a shareowner's cash dividends in common shares
of the Trust on terms that differ from the terms of the Plan.
Whenever the Trust declares a dividend on common shares payable in cash,
participants in the Plan will receive the equivalent in common shares
acquired by the Plan Agent either (i) through receipt of additional
unissued but authorized common shares from the Trust or (ii) by purchase of
outstanding common shares on the New York Stock Exchange or elsewhere. If,
on the payment date for any dividend, the net asset value per common share
is equal to or less than the market price per share plus estimated
brokerage trading fees (market premium), the Plan Agent will invest the
dividend amount in newly issued common shares. The number of newly issued
common shares to be credited to each account will be determined by dividing
the dollar amount of the dividend by the net asset value per common share
on the date the shares are issued, provided that the maximum discount from
the then current market price per share on the date of issuance does not
exceed 5%. If, on the payment date for any dividend, the net asset value
per common share is greater than the market value (market discount), the
Plan Agent will invest the dividend amount in common shares acquired in
open-market purchases. There are no brokerage charges with respect to newly
issued common shares. However, each participant will pay a pro rata share
of brokerage trading fees incurred with respect to the Plan Agent's
open-market purchases. Participating in the Plan does not relieve
shareowners from any federal, state or local taxes which may be due on
dividends paid in any taxable year. Shareowners holding Plan shares in a
brokerage account may be able to transfer the shares to another broker and
continue to participate in the Plan.
H. Credit Default Swap Agreements
A credit default swap is a contract between a buyer of protection and a
seller of protection against a pre-defined credit event. The Trust may buy
or sell credit default swap contracts to seek to increase the Trust's
income, or to attempt to hedge the risk of default on portfolio securities.
As a seller of protection, the Trust would be required to pay the notional
(or other agreed-upon) value of the referenced debt obligation to the
counterparty in the event of a default by a U.S. or foreign corporate
issuer of a debt obligation, which
52 Pioneer High Income Trust | Annual Report | 3/31/14
would likely result in a loss to the Trust. In return, the Trust would
receive from the counterparty a periodic stream of payments during the term
of the contract provided that no event of default occurred. The maximum
exposure of loss to the seller would be the notional value of the credit
default swaps outstanding. If no default occurs, the Trust would keep the
stream of payments and would have no payment obligation. The Trust may also
buy credit default swap contracts in order to hedge against the risk of
default of debt securities, in which case the Trust would function as the
counterparty referenced above.
When the Trust enters into a credit default swap contract, the protection
buyer makes an upfront or periodic payment to the protection seller in
exchange for the right to receive a contingent payment. An upfront payment
made by the Trust, as the protection buyer, is recorded as an asset in the
Statement of Assets and Liabilities. Periodic payments received or paid by
the Trust are recorded as realized gains or losses in the Statement of
Operations.
Credit default swap contracts are marked-to-market daily using valuations
supplied by independent sources and the change in value, if any, is
recorded as unrealized appreciation or depreciation in the Statement of
Assets and Liabilities. Payments received or made as a result of a credit
event or upon termination of the contract are recognized, net of the
appropriate amount of the upfront payment, as realized gains or losses in
the Statement of Operations.
Credit default swap contracts involving the sale of protection may involve
greater risks than if the Trust had invested in the referenced debt
instrument directly. Credit default swap contracts are subject to general
market risk, liquidity risk, counterparty risk and credit risk. If the
Trust is a protection buyer and no credit event occurs, it will lose its
investment. If the Trust is a protection seller and a credit event occurs,
the value of the referenced debt instrument received by the Trust, together
with the periodic payments received, may be less than the amount the Trust
pays to the protection buyer, resulting in a loss to the Trust.
Open credit default swap contracts at March 31, 2014 are listed in the
Schedule of Investments. The average value of swap contracts open during
the year ended March 31, 2014 was $79,423.
2. Management Agreement
PIM, a wholly owned indirect subsidiary of UniCredit S.p.A. (UniCredit), manages
the Trust's portfolio. Management fees payable under the Trust's Advisory
Agreement with PIM are calculated daily at the annual rate of 0.60% of the
Trust's average daily managed assets. "Managed assets" means (a) the total
assets of the Trust, including any form of investment leverage, minus (b) all
accrued liabilities incurred in the normal course of operations, which
Pioneer High Income Trust | Annual Report | 3/31/14 53
shall not include any liabilities or obligations attributable to investment
leverage obtained through (i) indebtedness of any type (including, without
limitation, borrowing through a credit facility or the issuance of debt
securities), (ii) the issuance of preferred stock or other similar preference
securities, and/or (iii) any other means. For the year ended March 31, 2014,
the net management fee was 0.60% of the Trust's average daily managed assets,
which was equivalent to 0.83% of the Trust's average daily net assets.
In addition, under PIM's management and administration agreements, certain other
services and costs are paid by PIM and reimbursed by the Trust. At March 31,
2014, $269,255 was payable to PIM related to management costs, administrative
costs and certain other services is included in "Due to affiliates" and
"Administration fee payable" on the Statement of Assets and Liabilities.
3. Transfer Agents
Pioneer Investment Management Shareholder Services, Inc. (PIMSS), a wholly owned
indirect subsidiary of UniCredit, through a sub-transfer agency agreement with
American Stock Transfer & Trust Company, provides substantially all transfer
agent and shareowner services related to the Trust's common shares at negotiated
rates. Deutsche Bank Trust Company Americas (Deutsche Bank) is the transfer
agent, registrar, dividend paying agent and auction agent with respect to the
Trust's Auction Market Preferred Shares (AMPS). The Trust pays Deutsche Bank an
annual fee, as is agreed to from time to time by the Trust and Deutsche Bank,
for providing such services.
In addition, the Trust reimburses PIMSS for out-of-pocket expenses incurred by
PIMSS related to shareowner communications activities such as proxy and
statement mailings and outgoing calls.
4. Expense Offset Arrangement
The Trust has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion of
the Trust's custodian expenses. For the year ended March 31, 2014, the Trust
expenses were not reduced under such arrangement.
5. Forward Foreign Currency Contracts
At March 31, 2014, the Trust had entered into various forward foreign currency
contracts that obligate the Trust to deliver or take delivery of currencies at
specified future maturity dates. Alternatively, prior to the settlement date of
a forward foreign currency contract, the Trust may close out such contract by
entering into an offsetting contract. The average value of contracts open during
the year ended March 31, 2014 was $7,070,870.
54 Pioneer High Income Trust | Annual Report | 3/31/14
Open foreign currency contracts at March 31, 2014, were as follows:
--------------------------------------------------------------------------------------------
Net Net
Contracts In Unrealized
to Receive/ Exchange Settlement Appreciation/
Currency (Deliver) for US$ Date US$ Value (Depreciation)
--------------------------------------------------------------------------------------------
EUR (1,400,000) $(1,932,756) 04/24/14 $(1,928,688) $ 4,068
EUR (1,500,000) (1,991,659) 04/24/14 (2,066,452) (74,793)
EUR (3,694,000) (4,814,069) 04/24/14 (5,088,982) (274,913)
GBP (1,500,688) (2,478,228) 03/30/15 (2,493,624) (15,396)
--------------------------------------------------------------------------------------------
Total $ (361,034)
============================================================================================
6. Assets and Liabilities Offsetting
Financial instruments subject to an enforceable master netting agreement have
been offset on the Statements of Assets and Liabilities. The following charts
show gross assets and liabilities as of March 31, 2014.
--------------------------------------------------------------------------------------------
Assets:
Gross
Amounts Net Gross Amounts Not Offset
Offset Amounts of in the Statement of
in the Assets Assets and Liabilities
Gross Statement Presented --------------------------
Amounts of of Assets In the Cash
Recognized and Assets and Financial Collateral Net
Description Assets Liabilities Liabilities Instruments Received Amount
--------------------------------------------------------------------------------------------
Credit default
swaps $337,415 $ -- $337,415 $ -- $ -- $337,415
Forward
Foreign
Currency
Contracts $ 4,068 $(4,068) $ -- $ -- $ -- $ 4,068
--------------------------------------------------------------------------------------------
$341,483 $(4,068) $337,415 $ -- $ -- $341,483
============================================================================================
--------------------------------------------------------------------------------------------
Liabilities:
Gross
Amounts Net Gross Amounts Not Offset
Offset Amounts of in the Statement of
in the Assets Assets and Liabilities
Gross Statement Presented --------------------------
Amounts of of Assets In the Cash
Recognized and Assets and Financial Collateral Net
Description Assets Liabilities Liabilities Instruments Received Amount
--------------------------------------------------------------------------------------------
Credit default
swaps $ -- $ -- $ -- $ -- $ -- $ --
Forward
Foreign
Currency
Contracts $365,102 $ -- $365,102 $ -- $ -- $365,102
--------------------------------------------------------------------------------------------
$365,102 $ -- $365,102 $ -- $ -- $365,102
============================================================================================
Pioneer High Income Trust | Annual Report | 3/31/14 55
7. Unfunded Loan Commitments
As of March 31, 2014, the Trust had an no unfunded loan commitments.
The Trust had the following bridge loans outstanding at March 31, 2014.
--------------------------------------------------------------------------------------------
Unrealized
Appreciation
Borrower Par Cost Value (Depreciation)
--------------------------------------------------------------------------------------------
Entegris, Inc, Bridge Loan $ 830,000 $ 830,000 $ 830,000 $ --
Industrial Packaging Corp.,
Bridge Loan 1,595,000 1,595,000 1,595,000 --
============================================================================================
8. Trust Shares
There are an unlimited number of common shares of beneficial interest
authorized.
Transactions in common shares of beneficial interest for the year ended March
31, 2014 and March 31, 2013 were as follows:
--------------------------------------------------------------------------------------------
3/31/14 3/31/13
--------------------------------------------------------------------------------------------
Shares outstanding at beginning of year 28,429,194 28,213,163
Reinvestment of distributions 250,310 216,031
--------------------------------------------------------------------------------------------
Shares outstanding at end of year 28,679,504 28,429,194
============================================================================================
The Trust redeemed all outstanding Series W7 AMPS on March 13, 2013, all Series
TH7 AMPS on March 14, 2014 and Series M7 AMPS on March 18, 2014. See Note 10 for
additional information.
9. Additional Disclosures about Derivative Instruments and Hedging Activities:
Values of derivative instruments as of March 31, 2014 were as follows:
--------------------------------------------------------------------------------------------
Derivatives Not
Accounted for as Assets Derivatives 2014 Liabilities Derivatives 2014
Hedging Instruments --------------------------------------------------------------------
Under Accounting Statement of Assets Statement of Assets
Standards Codification and Liabilities and Liabilities
(ASC) 815 Location Value Location Value
--------------------------------------------------------------------------------------------
Forward foreign Net unrealized Net unrealized
currency contracts appreciation on depreciation on
forward foreign forward foreign
currency contracts $ 4,068 currency contracts $(365,102)
Credit default swaps Net unrealized Net unrealized
appreciation on depreciation on
credit default credit default
swaps $ 337,415 swaps $ --
--------------------------------------------------------------------------------------------
Total $ 341,483 $(365,102)
============================================================================================
56 Pioneer High Income Trust | Annual Report | 3/31/14
The effect of derivative instruments on the Statement of Operations for the
year ended March 31, 2014 was as follows:
--------------------------------------------------------------------------------------------
Change in
Derivatives Not Realized Unrealized
Accounted for as Gain or Appreciation or
Hedging Instruments (Loss) on (Depreciation)
Under Accounting Location of Gain or (Loss) Derivatives on Derivatives
Standards Codification on Derivatives Recognized Recognized Recognized
(ASC) 815 in Income in Income in Income
--------------------------------------------------------------------------------------------
Forward foreign Net realized gain (loss) on
currency contracts forward foreign currency contracts
and other assets and liabilities
denominated in foreign currencies $(166,983)
Forward foreign Change in net unrealized
currency contracts appreciation (depreciation) on
forward foreign currency contracts
and other assets and liabilities
denominated in foreign currencies $(434,624)
Credit Default Swaps Net realized gain (loss) on credit
default swaps $ 550,484
Credit Default Swaps Change in unrealized appreciation
(depreciation) on credit default swaps $ (1,604)
10. Redemption of AMPS
The Trust redeemed all of its outstanding auction market preferred shares
("AMPS") at the liquidation preference per share (sometimes referred to as "at
par"), together with accrued and unpaid dividends, if any, as of the redemption
date, as follows:
--------------------------------------------------------------------------------------------
Liquidation Accrued and
Shares Redemption Preference Unpaid Dividends
Series Outstanding Date Per Share Paid Per Share
--------------------------------------------------------------------------------------------
W 2,020 March 13, 2014 $25,000 $ --
TH 2,000 March 14, 2014 $25,000 $ --
M 2,020 March 18, 2014 $25,000 $ --
--------------------------------------------------------------------------------------------
The Trust continues to employ leverage for investment purposes through a margin
loan financing agreement in the amount of $151,000,000 (see note 11). As of
March 31, 2014, 27.1% of the Trust's total managed assets were financed by
leverage through the margin loan financing agreement, compared with 27.1% of
assets as of March 1, 2014. At this time the refinancing is not expected to
affect the Trust's monthly distribution rate per common share.
Pioneer High Income Trust | Annual Report | 3/31/14 57
11. Dividends to Preferred Shareowners
Prior to the redemption of the Trust's AMPS (See Note 10.), dividends on Series
M7 and Series TH7 were cumulative at a rate which reset every seven days based
on the results of an auction. Since February 2008, the Trust's auctions related
to the AMPS failed. Accordingly, during the period, dividends were paid at the
maximum rate on the auction dates described in the prospectus for the AMPS.
Dividends on Series W28 were also cumulative at a rate that reset every 28 days
based on the results of an auction. The maximum rate for each 7-day series was
150% of the 7 day commercial paper rate. The maximum rate for the 28-day series
is 150% of the 30 day commercial paper rate. Dividend rates on AMPS ranged from
0.05% to 0.225% during the period from April 1, 2013 to the redemption of Series
W7 AMPS on March 13, 2014, Series TH7 on March 14, 2014 and Series M7 AMPS on
March 18, 2014.
12. Margin Loan Financing
Effective March 10, 2014, the Trust entered into a margin loan financing
agreement with Credit Suisse. The margin loan is offered at a daily rate equal
to the U.S. three-month LIBOR rate plus 0.70%. There is no fixed borrowing
limit.
At March 31, 2014, the Trust had a borrowing outstanding under the margin
agreement totaling $151,000,000. The interest rate charged at March 31, 2014 was
0.9306%. The margin loan was established in conjunction with the redemption of
all of the Trust's auction market preferred shares (See Note 10). During the
term of the loan through March 31, 2014, the average daily balance was
$137,875,000 at a weighted average interest rate of 0.93372%. With respect to
the margin agreement, interest expense of $70,477 is included in the Statement
of Operations.
The Trust is required to fully collateralize its outstanding loan balance as
determined by Credit Suisse. Pledged assets are held in a segregated account and
are denoted in the Schedule of Investments.
The Trust is required to maintain 300% asset coverage with respect to amounts
outstanding under the margin loan financing agreement. Asset coverage is
calculated by subtracting the Trust's total liabilities, not including any bank
loans and senior securities, from the Trust's total assets and dividing such
amount by the principal amount of the borrowings outstanding.
As of the date indicated below, the Trust's debt outstanding and asset coverage
were as follows:
--------------------------------------------------------------------------------------------
Total Amount Asset Coverage
of Debt Per $1,000 of
Date Outstanding Indebtedness
--------------------------------------------------------------------------------------------
March 31, 2014 $151,000,000 $3,419
============================================================================================
58 Pioneer High Income Trust | Annual Report | 3/31/14
13. Subsequent Events
The Board of Trustees of the Trust declared on April 2, 2014 a monthly dividend
from undistributed and accumulated net investment income of $0.1375 per common
share, payable April 30, 2014, to common shareowners of record on April 16,
2014.
Pioneer High Income Trust | Annual Report | 3/31/14 59
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and the Shareowners of
Pioneer High Income Trust:
--------------------------------------------------------------------------------
We have audited the accompanying statement of assets and liabilities of Pioneer
High Income Trust (the "Trust"), including the schedule of investments, as of
March 31, 2014, and the related statement of operations and cash flows for the
year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Trust's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Trust's internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Trust's internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of March 31, 2014, by correspondence with the custodian, and
brokers or by other appropriate auditing procedures where replies from brokers
were not received. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Pioneer High Income Trust at March 31, 2014, the results of its operations and
cash flows, changes in its net assets and financial highlights for the year then
ended, and the changes in its net assets for the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended, in conformity with U.S. generally accepted accounting principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
May 22, 2014
60 Pioneer High Income Trust | Annual Report | 3/31/14
ADDITIONAL INFORMATION (unaudited)
During the period, there have been no material changes in the Trust's invest-
ment objective or fundamental policies that have not been approved by the
shareowners. There have been no changes in the Trust's charter or By-Laws that
would delay or prevent a change in control of the Trust which has not been
approved by the shareowners. During the period, there have been no changes in
the principal risk factors associated with investment in the Trust. There were
no changes in the persons who are primarily responsible for the day-to-day
management of the Trust's portfolio.
Notice is hereby given in accordance with Section 23(c) of the Investment
Company Act of 1940 that the Trust may purchase, from time to time, its common
shares in the open market.
IMPORTANT TAX INFORMATION (unaudited)
The following information is provided with respect to the ordinary income
distributions paid by Pioneer High Income Trust during the fiscal year ended
March 31, 2014:
Interest-Related Dividends for Non-U.S. Residents 58.31%*
---------------------------
* Represents the portion of the taxable ordinary income dividends eligible
for tax exemption from U.S. withholding tax for nonresident aliens and
foreign corporations.
Pioneer High Income Trust | Annual Report | 3/31/14 61
Approval of Investment Advisory Agreement
Pioneer Investment Management, Inc. (PIM) serves as the investment adviser to
Pioneer High Income Trust (the Trust) pursuant to an investment advisory
agreement between PIM and the Trust. In order for PIM to remain the investment
adviser of the Trust, the Trustees of the Trust must determine annually whether
to renew the investment advisory agreement for the Trust.
The contract review process began in March 2013 as the Trustees of the Trust
agreed on, among other things, an overall approach and timeline for the process.
In July 2013, the Trustees approved the format of the contract review materials
and submitted their formal request to PIM to furnish information necessary to
evaluate the terms of the investment advisory agreement. The contract review
materials were provided to the Trustees in July 2013 and September 2013. After
reviewing and discussing the materials, the Trustees submitted a request for
additional information to PIM, and materials were provided in response to this
request. Meetings of the Independent Trustees of the Trust were held in July,
September, and November, 2013 to review and discuss the contract review
materials. In addition, the Trustees took into account the information related
to the Trust provided to the Trustees at regularly scheduled meetings.
At a meeting held on November 12, 2013, based on their evaluation of the
information provided by PIM and third parties, the Trustees of the Trust,
including the Independent Trustees voting separately, unanimously approved the
renewal of the investment advisory agreement for another year. In considering
the renewal of the investment advisory agreement, the Trustees considered
various factors that they determined were relevant, including the factors
described below. In all quintile rankings referred to throughout this
disclosure, first quintile is most favorable to the Trust's shareowners. Thus,
highest relative performance would be first quintile and lowest relative
expenses would also be first quintile. The Trustees did not identify any single
factor as the controlling factor in determining to approve the renewal of the
agreement.
Nature, Extent and Quality of Services
The Trustees considered the nature, extent and quality of the services that had
been provided by PIM to the Trust, taking into account the investment objective
and strategy of the Trust. The Trustees reviewed the terms of the investment
advisory agreement. The Trustees also reviewed PIM's investment approach for the
Trust and its research process. The Trustees considered the resources of PIM and
the personnel of PIM who provide investment management services to the Trust.
They also reviewed the amount of non-Trust assets managed by the portfolio
managers of the Trust. The Trustees considered the non-investment resources and
personnel of PIM involved in
62 Pioneer High Income Trust | Annual Report | 3/31/14
PIM's services to the Trust, including PIM's compliance and legal resources and
personnel. The Trustees noted the substantial attention and high priority given
by PIM's senior management to the Pioneer fund complex.
The Trustees considered that PIM supervises and monitors the performance of the
Trust's service providers and provides the Trust with personnel (including Trust
officers) and other resources that are necessary for the Trust's business
management and operations. The Trustees also considered that, as administrator,
PIM is responsible for the administration of the Trust's business and other
affairs. The Trustees considered the fees paid to PIM for the provision of
administration services.
Based on these considerations, the Trustees concluded that the nature, extent
and quality of services that had been provided by PIM to the Trust were
satisfactory and consistent with the terms of the investment advisory agreement.
Performance of the Trust
The Trustees review the Trust's performance on a regular basis, based on
analysis and data prepared by PIM for this purpose and discuss performance
issues with PIM on an ongoing basis. For purposes of their contract renewal
deliberations, the Trustees considered the performance results of the Trust over
various time periods. They reviewed information comparing the Trust's
performance with the performance of its peer group of funds as classified by
Morningstar, Inc. (Morningstar), an independent provider of investment company
data, and with the performance of the Trust's benchmark index. The Trustees
considered that the Trust's annualized total return was in the first quintile of
its Morningstar category for the one, three, five and ten year periods ended
June 30, 2013. The Trustees also considered that the Trust's yield (for the
twelve months ended June 30, 2013) exceeded the yield of the Trust's benchmark
index for the same period. The Trustees also reviewed data provided by PIM
showing how leverage had benefited the Trust's common shareholders. The Trustees
noted the discussions held throughout the year regarding the Trust's performance
and confirmed that those discussions were factored into the Trustees'
deliberations concerning the renewal of the advisory agreement. The Trustees
concluded that the investment performance of the Trust was satisfactory.
Management Fee and Expenses
The Trustees considered information showing the fees and expenses of the Trust
in comparison to the management fees and the expense ratios of a peer group of
funds selected on the basis of criteria determined by the Independent Trustees
for this purpose using data provided by Strategic Insight Mutual Fund Research
and Consulting, LLC (Strategic Insight), an independent third party.
Pioneer High Income Trust | Annual Report | 3/31/14 63
The Trustees considered that the Trust's management fee (based on managed
assets) for the twelve months ended June 30, 2013 was in the first quintile
relative to the management fees paid by other funds in its Strategic Insight
peer group for the comparable period. The Trustees also considered that the
Trust's expense ratio (based on managed assets) for the twelve months ended June
30, 2013 was in the first quintile relative to its Strategic Insight peer group
for the comparable period.
The Trustees reviewed management fees charged by PIM and PIM's affiliate,
Pioneer Institutional Asset Management, Inc. (together with PIM, "Pioneer") to
institutional and other clients, including publicly offered European funds
sponsored by affiliates of Pioneer, unaffiliated U.S. registered investment
companies (in a sub-advisory capacity), and unaffiliated foreign and domestic
separate accounts. The Trustees also considered PIM's costs in providing
services to the Trust and Pioneer's costs in providing services to the other
clients and considered the differences in management fees and profit margins for
Trust and non-Trust services. In evaluating the fees associated with Pioneer's
client accounts, the Trustees took into account the respective demands,
resources and complexity associated with the Trust and client accounts. The
Trustees noted that, in some instances, the fee rates for those clients were
lower than the management fee for the Trust and considered that, under the
investment advisory agreement with the Trust, PIM performs additional services
for the Trust that it does not provide to those other clients or services that
are broader in scope, including oversight of the Trust's other service providers
and activities related to compliance and the extensive regulatory and tax
regimes to which the Trust is subject. The Trustees also considered the
different entrepreneurial risks associated with PIM's management of the Trust
and Pioneer's management of the other client accounts. The Trustees concluded
that the management fee payable by the Trust to PIM was reasonable in relation
to the nature and quality of the services provided by PIM.
Profitability
The Trustees considered information provided by PIM regarding the profitability
of PIM with respect to the advisory services provided by PIM to the Trust,
including the methodology used by PIM in allocating certain of its costs to the
management of the Trust. The Trustees also considered PIM's profit margin in
connection with the overall operation of the Trust. They further reviewed the
financial results realized by PIM and its affiliates from non-fund businesses.
The Trustees considered PIM's profit margins with respect to the Trust in
comparison to the limited industry data available and noted that the
profitability of any adviser was affected by numerous factors, including its
organizational structure and method for allocating expenses. The Trustees
concluded that PIM's profitability with respect to the management of the Trust
was not unreasonable.
64 Pioneer High Income Trust | Annual Report | 3/31/14
Economies of Scale
The Trustees considered the extent to which PIM may realize economies of scale
or other efficiencies in managing and supporting the Trust. Since the Trust is a
closed-end fund that has not raised additional capital, the Trustees concluded
that economies of scale were not a relevant consideration in the renewal of the
investment advisory agreement.
Other Benefits
The Trustees considered the other benefits to PIM from its relationship with the
Trust. The Trustees considered the character and amount of fees paid by the
Trust, other than under the investment advisory agreement, for services provided
by PIM and its affiliates. The Trustees further considered the revenues and
profitability of PIM's businesses other than the fund business. The Trustees
considered the intangible benefits to PIM by virtue of its relationship with the
Trust and the other Pioneer funds. The Trustees concluded that the receipt of
these benefits was reasonable in the context of the overall relationship between
PIM and the Trust.
Conclusion
After consideration of the factors described above as well as other factors, the
Trustees, including all of the Independent Trustees, concluded that the
investment advisory agreement between PIM and the Trust, including the fees
payable thereunder, was fair and reasonable and voted to approve the proposed
renewal of the investment advisory agreement for the Trust.
Pioneer High Income Trust | Annual Report | 3/31/14 65
Trustees, Officers and Service Providers
Investment Adviser
Pioneer Investment Management, Inc.
Custodian and Sub-Administrator
Brown Brothers Harriman & Co.
Independent Registered Public Accounting Firm
Ernst & Young LLP
Principal Underwriter
Pioneer Funds Distributor, Inc.
Legal Counsel
Bingham McCutchen LLP
Shareowner Services and Transfer Agent
Pioneer Investment Management Shareholder Services, Inc.
Proxy Voting Policies and Procedures of the Fund are available without charge,
upon request, by calling our toll free number (1-800-225-6292). Information
regarding how the Fund voted proxies relating to portfolio securities during the
most recent 12-month period ended June 30 is publicly available to shareowners
at us.pioneerinvestments.com. This information is also available on the
Securities and Exchange Commission's web site at www.sec.gov.
Trustees and Officers
The Trust's Trustees and officers are listed below, together with their
principal occupations during at least the past five years. Trustees who are
interested persons of the Trust within the meaning of the 1940 Act are referred
to as Interested Trustees. Trustees who are not interested persons of the Trust
are referred to as Independent Trustees. Each of the Trustees serves as a
Trustee of each of the 55 U.S. registered investment portfolios for which
Pioneer serves as investment adviser (the "Pioneer Funds"). The address for all
Trustees and all officers of the Trust is 60 State Street, Boston, Massachusetts
02109.
The Statement of Additional Information of the Fund includes additional
information about the Trustees and is available, without charge, upon request,
by calling 1-800-225-6292.
66 Pioneer High Income Trust | Annual Report | 3/31/14
Independent Trustees
------------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Trust Length of Service Principal Occupation Held by Trustee
------------------------------------------------------------------------------------------------------------------------------------
Thomas J. Perna (63) Class I Trustee since Private investor (2004-2008 and Director, Broadridge
Chairman of the Board 2006. Term expires 2013-present); Chairman (2008 - 2013) and Financial Solutions, Inc.
and Trustee in 2015. Chief Executive Officer (2008 - 2012), (investor communications
Quadriserv, Inc. (technology products for and securities processing
securities lending industry); and Senior provider for financial
Executive Vice President, The Bank of New services industry) (2009
York (financial and securities services) - present); Director,
(1986 - 2004) Quadriserv, Inc. (2005 -
2013); and Commissioner,
New Jersey State Civil
Service Commission (2011
- present)
------------------------------------------------------------------------------------------------------------------------------------
David R. Bock (70) Class II Trustee since Managing Partner, Federal City Capital Director of Enterprise
Trustee 2005. Term expires Advisors (corporate advisory services Community Investment,
in 2016. Elected by company) (1997 - 2004 and 2008 - Inc. (privately held
Preferred Shares only. present); Interim Chief Executive Officer, affordable housing finance
Oxford Analytica, Inc. (privately held company) (1985 - 2010);
research and consulting company) (2010); Director of Oxford
Executive Vice President and Chief Analytica, Inc. (2008 -
Financial Officer, I-trax, Inc. (publicly present); Director of The
traded health care services company) Swiss Helvetia Fund, Inc.
(2004 - 2007); and Executive Vice (closed-end fund) (2010 -
President and Chief Financial Officer, present); and Director of
Pedestal Inc. (internet-based mortgage New York Mortgage Trust
trading company) (2000 - 2002) (publicly traded mortgage
REIT) (2004 - 2009, 2012
- present)
------------------------------------------------------------------------------------------------------------------------------------
Benjamin M. Friedman (69) Class III Trustee since William Joseph Maier Professor of Trustee, Mellon
Trustee 2008. Term expires Political Economy, Harvard University Institutional Funds
in 2014. (1972 - present) Investment Trust and
Mellon Institutional
Funds Master Portfolio
(oversaw 17 portfolios in
fund complex) (1989-2008)
------------------------------------------------------------------------------------------------------------------------------------
Pioneer High Income Trust | Annual Report | 3/31/14 67
Independent Trustees (continued)
------------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Trust Length of Service Principal Occupation Held by Trustee
------------------------------------------------------------------------------------------------------------------------------------
Margaret B.W. Graham (66) Class III Trustee since Founding Director, Vice President and None
Trustee 2002. Term expires Corporate Secretary, The Winthrop Group,
in 2014. Inc. (consulting firm) (1982 - present);
Desautels Faculty of Management, McGill
University (1999 - present); and Manager
of Research Operations and
Organizational Learning, Xerox PARC,
Xerox's advance research center
(1990-1994)
------------------------------------------------------------------------------------------------------------------------------------
Marc O. Mayer (56)+ Class III Trustee since Founding Partner and Chief Executive Trustee, Alliance
Trustee 2014. Term expires Officer, Alignment Financial Services Bernstein Mutual Funds
in 2014. (investment management) (2013- present); (oversaw 92 funds in fund
Chief Executive Officer and Director, GMO complex) (2003-2008);
LLC (investment management) (2009-2011); Board of Overseers,
Executive Vice President, Alliance Columbia Business School
Bernstein LP (investment management) (2010-present); and
(2000-2009); and Executive Vice Director, Alpha Parity
President and Director, Sanford C. LLC (hedge fund)
Bernstein & Co., LLC (investment (2013-present)
management) (1989-2000)
------------------------------------------------------------------------------------------------------------------------------------
Marguerite A. Piret (65) Class I Trustee since President and Chief Executive Officer, Director of New America
Trustee 2002. Term expires Newbury, Piret & Company, Inc. High Income Fund, Inc.
in 2015. Elected by (investment banking firm) (1981 - (closed-end investment
Preferred Shares only. present) company) (2004 -
present); and member,
Board of Governors,
Investment Company
Institute (2000 - 2006)
------------------------------------------------------------------------------------------------------------------------------------
+ Mr. Mayer resigned as a Trustee of the Trust effective May 6, 2014.
68 Pioneer High Income Trust | Annual Report | 3/31/14
Interested Trustees
------------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Trust Length of Service Principal Occupation Held by Trustee
------------------------------------------------------------------------------------------------------------------------------------
Daniel K. Kingsbury (55)* Class I Trustee since Chairman (2013 - present), Director, CEO None
Trustee, President and Chief 2013; Class II Trustee and President of PIM-USA (since February
Executive Officer of the Trust from 2007-2013. Term 2007); Chairman (2013 - present),
expires in 2016. Director and President of Pioneer and
Pioneer Institutional Asset Management,
Inc. (since February 2007); Executive
Vice President of all of the Pioneer
Funds (2007 - 2013); Director of PGAM
(2007 - 2010); Head of New Europe
Division, PGAM (2000 - 2005); and Head
of New Markets Division, PGAM (2005 -
2007)
------------------------------------------------------------------------------------------------------------------------------------
Kenneth J. Taubes (55)* Class III Trustee since Director and Executive Vice President None
Trustee 2014. Term expires (since 2008) and Chief Investment
in 2014. Officer, U.S. (since 2010), of PIM-USA;
Executive Vice President of Pioneer
(since 2008); Executive Vice President
of Pioneer Institutional Asset
Management, Inc. (since 2009); Portfolio
Manager of Pioneer (since 1999)
------------------------------------------------------------------------------------------------------------------------------------
* Mr. Kingsbury and Mr. Taubes are Interested Trustees because
they are officers or directors of the Trust's investment
adviser and certain of its affiliates.
Pioneer High Income Trust | Annual Report | 3/31/14 69
Trust Officers
------------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Trust Length of Service Principal Occupation Held by Officer
------------------------------------------------------------------------------------------------------------------------------------
Mark D. Goodwin (49) Since 2014. Serves Executive Vice President and Chief None
Executive Vice President at the discretion of Operating Officer of Pioneer since 2005
the Board. and Executive Vice President of all the
Pioneer funds since 2014
------------------------------------------------------------------------------------------------------------------------------------
Christopher J. Kelley (49) Since 2010. Serves Vice President and Associate General None
Secretary and Chief Legal at the discretion of Counsel of Pioneer since January 2008;
Officer the Board. Secretary and Chief Legal Officer of all
of the Pioneer Funds since June 2010;
Assistant Secretary of all of the
Pioneer Funds from September 2003 to May
2010; and Vice President and Senior
Counsel of Pioneer from July 2002 to
December 2007
------------------------------------------------------------------------------------------------------------------------------------
Carol B. Hannigan (53) Since 2010. Serves Fund Governance Director of Pioneer None
Assistant Secretary at the discretion of since December 2006 and Assistant
the Board. Secretary of all the Pioneer Funds since
June 2010; Manager - Fund Governance of
Pioneer from December 2003 to November
2006; and Senior Paralegal of Pioneer
from January 2000 to November 2003
------------------------------------------------------------------------------------------------------------------------------------
Thomas Reyes (51) Since 2010. Serves Senior Counsel of Pioneer since May 2013 None
Assistant Secretary at the discretion of and Assistant Secretary of all the
the Board. Pioneer Funds since June 2010; Counsel
of Pioneer from June 2007 to May 2013
------------------------------------------------------------------------------------------------------------------------------------
Mark E. Bradley (54) Since 2008. Serves Vice President - Fund Treasury of None
Treasurer and Chief Financial at the discretion of Pioneer; Treasurer of all of the Pioneer
and Accounting Officer of the Board. Funds since March 2008; Deputy Treasurer
the Fund of Pioneer from March 2004 to February
2008; and Assistant Treasurer of all of
the Pioneer Funds from March 2004 to
February 2008
------------------------------------------------------------------------------------------------------------------------------------
70 Pioneer High Income Trust | Annual Report | 3/31/14
------------------------------------------------------------------------------------------------------------------------------------
Name, Age and Term of Office and Other Directorships
Position Held with the Trust Length of Service Principal Occupation Held by Officer
------------------------------------------------------------------------------------------------------------------------------------
Luis I. Presutti (48) Since 2002. Serves Director - Fund Treasury of Pioneer; and None
Assistant Treasurer at the discretion of Assistant Treasurer of all of the
the Board. Pioneer Funds
------------------------------------------------------------------------------------------------------------------------------------
Gary Sullivan (55) Since 2002. Serves Fund Accounting Manager - Fund Treasury None
Assistant Treasurer at the discretion of of Pioneer; and Assistant Treasurer of
the Board. all of the Pioneer Funds
------------------------------------------------------------------------------------------------------------------------------------
David F. Johnson (34) Since 2009. Serves Fund Administration Manager - Fund None
Assistant Treasurer at the discretion of Treasury of Pioneer since November 2008;
the Board. Assistant Treasurer of all of the
Pioneer Funds since January 2009; and
Client Service Manager - Institutional
Investor Services at State Street Bank
from March 2003 to March 2007
------------------------------------------------------------------------------------------------------------------------------------
Jean M. Bradley (61) Since 2010. Serves Chief Compliance Officer of Pioneer and None
Chief Compliance Officer at the discretion of of all the Pioneer Funds since March
the Board. 2010; Director of Adviser and Portfolio
Compliance at Pioneer since October
2005; and Senior Compliance Officer for
Columbia Management Advisers, Inc. from
October 2003 to October 2005
------------------------------------------------------------------------------------------------------------------------------------
Kelly O'Donnell (43) Since 2006. Serves Director - Transfer Agency Compliance of None
Anti-Money Laundering Officer at the discretion of Pioneer and Anti-Money Laundering Officer
the Board. of all the Pioneer funds since 2006
------------------------------------------------------------------------------------------------------------------------------------
Pioneer High Income Trust | Annual Report | 3/31/14 71
This page for your notes.
72 Pioneer High Income Trust | Annual Report | 3/31/14
This page for your notes.
Pioneer High Income Trust | Annual Report | 3/31/14 73
This page for your notes.
74 Pioneer High Income Trust | Annual Report | 3/31/14
This page for your notes.
Pioneer High Income Trust | Annual Report | 3/31/14 75
This page for your notes.
76 Pioneer High Income Trust | Annual Report | 3/31/14
How to Contact Pioneer
We are pleased to offer a variety of convenient ways for you to contact us for
assistance or information.
You can call American Stock Transfer & Trust Company (AST) for:
--------------------------------------------------------------------------------
Account Information 1-800-710-0935
Or write to AST:
--------------------------------------------------------------------------------
For Write to
General inquiries, lost dividend checks, American Stock
change of address, lost stock certificates, Transfer & Trust
stock transfer Operations Center
6201 15th Ave.
Brooklyn, NY 11219
Dividend reinvestment plan (DRIP) American Stock
Transfer & Trust
Wall Street Station
P.O. Box 922
New York, NY 10269-0560
Website www.amstock.com
For additional information, please contact your investment advisor or visit our
web site us.pioneerinvestments.com.
The Trust files a complete schedule of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareowners may view the filed Form N-Q by visiting the Commission's
web site at www.sec.gov. The filed form may also be viewed and copied at the
Commission's Public Reference Room in Washington, DC. Information regarding the
operations of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
[LOGO] PIONEER
Investments(R)
Pioneer Investment Management, Inc.
60 State Street
Boston, MA 02109
us.pioneerinvestments.com
Securities offered through Pioneer Funds Distributor, Inc.
60 State Street, Boston, MA 02109
Underwriter of Pioneer Mutual Funds, Member SIPC
(C) 2014 Pioneer Investments 19206-08-0514
ITEM 2. CODE OF ETHICS.
(a) Disclose whether, as of the end of the period covered by the report, the
registrant has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal accounting
officer or controller, or persons performing similar functions, regardless of
whether these individuals are employed by the registrant or a third party. If
the registrant has not adopted such a code of ethics, explain why it has not
done so.
The registrant has adopted, as of the end of the period covered by this report,
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer and controller.
(b) For purposes of this Item, the term "code of ethics" means written standards
that are reasonably designed to deter wrongdoing and to promote:
(1) Honest and ethical conduct, including the ethical handling of actual
or apparent conflicts of interest between personal and professional
relationships;
(2) Full, fair, accurate, timely, and understandable disclosure in
reports and documents that a registrant files with, or submits to, the
Commission and in other public communications made by the registrant;
(3) Compliance with applicable governmental laws, rules, and
regulations;
(4) The prompt internal reporting of violations of the code to an
appropriate person or persons identified in the code; and
(5) Accountability for adherence to the code.
(c) The registrant must briefly describe the nature of any amendment, during the
period covered by the report, to a provision of its code of ethics that applies
to the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, and that relates to any element of the code of
ethics definition enumerated in paragraph (b) of this Item. The registrant must
file a copy of any such amendment as an exhibit pursuant to Item 10(a), unless
the registrant has elected to satisfy paragraph (f) of this Item by posting its
code of ethics on its website pursuant to paragraph (f)(2) of this Item, or by
undertaking to provide its code of ethics to any person without charge, upon
request, pursuant to paragraph (f)(3) of this Item.
The registrant has made no amendments to the code of ethics during the period
covered by this report.
(d) If the registrant has, during the period covered by the report, granted a
waiver, including an implicit waiver, from a provision of the code of ethics to
the registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party, that relates to one or more of the items set forth
in paragraph (b) of this Item, the registrant must briefly describe the nature
of the waiver, the name of the person to whom the waiver was granted, and the
date of the waiver.
Not applicable.
(e) If the registrant intends to satisfy the disclosure requirement under
paragraph (c) or (d) of this Item regarding an amendment to, or a waiver from,
a provision of its code of ethics that applies to the registrant's principal
executive officer, principal financial officer, principal accounting officer or
controller, or persons performing similar functions and that relates to any
element of the code of ethics definition enumerated in paragraph (b) of this
Item by posting such information on its Internet website, disclose the
registrant's Internet address and such intention.
Not applicable.
(f) The registrant must:
(1) File with the Commission, pursuant to Item 12(a)(1), a copy of
its code of ethics that applies to the registrant's principal
executive officer,principal financial officer, principal accounting
officer or controller, or persons performing similar functions,
as an exhibit to its annual
report on this Form N-CSR (see attachment);
(2) Post the text of such code of ethics on its Internet website and
disclose, in its most recent report on this Form N-CSR, its Internet
address and the fact that it has posted such code of ethics on its
Internet website; or
(3) Undertake in its most recent report on this Form N-CSR to provide to
any person without charge, upon request, a copy of such code of ethics
and explain the manner in which such request may be made.
See Item 10(2)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
(a) (1) Disclose that the registrant's board of trustees has determined that
the registrant either:
(i) Has at least one audit committee financial expert serving on its audit
committee; or
(ii) Does not have an audit committee financial expert serving on its audit
committee.
The registrant's Board of Trustees has determined that the registrant has at
least one audit committee financial expert.
(2) If the registrant provides the disclosure required by paragraph
(a)(1)(i) of this Item, it must disclose the name of the audit committee
financial expert and whether that person is "independent." In order to be
considered "independent" for purposes of this Item, a member of an audit
committee may not, other than in his or her capacity as a member of the audit
committee, the board of trustees, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other
compensatory fee from the issuer; or
(ii) Be an "interested person" of the investment company as defined in
Section 2(a)(19) of the Act (15 U.S.C. 80a-2(a)(19)).
Ms. Marguerite A. Piret, an independent trustee, is such an audit committee
financial expert.
(3) If the registrant provides the disclosure required by paragraph (a)(1)
(ii) of this Item, it must explain why it does not have an audit committee
financial expert.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Disclose, under the caption AUDIT FEES, the aggregate fees billed for each
of the last two fiscal years for professional services rendered by the principal
accountant for the audit of the registrant's annual financial statements or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for those fiscal years.
Fees for audit services provided to the Trust, including
fees associated with the filings to update its Form N-2
and issuance of comfort letters, totaled approximately
$38,581 in 2014 and $42,076 in 2013.
(b) Disclose, under the caption AUDIT-RELATED FEES, the aggregate fees billed in
each of the last two fiscal years for assurance and related services by the
principal accountant that are reasonably related to the performance of the audit
of the registrant's financial statements and are not reported under
paragraph (a) of this Item. Registrants shall describe the nature of the
services comprising the fees disclosed under this category.
Audit related fees for the Trust's audit related services
totaled approximately $9,650 and $9,652 in 2014 and
2013, respectively.
(c) Disclose, under the caption TAX FEES, the aggregate fees billed in each of
the last two fiscal years for professional services rendered by the principal
accountant for tax compliance, tax advice, and tax planning. Registrants shall
describe the nature of the services comprising the fees disclosed under this
category.
Fees for tax compliance services, primarily for tax
returns, totaled approximately $8,131 and $8,290 for
2014 and 2013, respectively.
(d) Disclose, under the caption ALL OTHER FEES, the aggregate fees billed in
each of the last two fiscal years for products and services provided by the
principal accountant, other than the services reported in paragraphs (a) through
(c) of this Item. Registrants shall describe the nature of the services
comprising the fees disclosed under this category.
Audit related fees for the Trust's audit related services
totaled approximately $9,650 and $9,652 in 2014 and
2013, respectively.
(e) (1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
PIONEER FUNDS
APPROVAL OF AUDIT, AUDIT-RELATED, TAX AND OTHER SERVICES
PROVIDED BY THE INDEPENDENT AUDITOR
SECTION I - POLICY PURPOSE AND APPLICABILITY
The Pioneer Funds recognize the importance of maintaining the independence of
their outside auditors. Maintaining independence is a shared responsibility
involving Pioneer Investment Management, Inc ("PIM"), the audit committee and
the independent auditors.
The Funds recognize that a Fund's independent auditors: 1) possess knowledge of
the Funds, 2) are able to incorporate certain services into the scope of the
audit, thereby avoiding redundant work, cost and disruption of Fund personnel
and processes, and 3) have expertise that has value to the Funds. As a result,
there are situations where it is desirable to use the Fund's independent
auditors for services in addition to the annual audit and where the potential
for conflicts of interests are minimal. Consequently, this policy, which is
intended to comply with Rule 210.2-01(C)(7), sets forth guidelines and
procedures to be followed by the Funds when retaining the independent audit firm
to perform audit, audit-related tax and other services under those
circumstances, while also maintaining independence.
Approval of a service in accordance with this policy for a Fund shall also
constitute approval for any other Fund whose pre-approval is required pursuant
to Rule 210.2-01(c)(7)(ii).
In addition to the procedures set forth in this policy, any non-audit services
that may be provided consistently with Rule 210.2-01 may be approved by the
Audit Committee itself and any pre-approval that may be waived in accordance
with Rule 210.2-01(c)(7)(i)(C) is hereby waived.
Selection of a Fund's independent auditors and their compensation shall be
determined by the Audit Committee and shall not be subject to this policy.
SECTION II - POLICY
---------------- -------------------------------- -------------------------------------------------
SERVICE SERVICE CATEGORY DESCRIPTION SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
CATEGORY
---------------- -------------------------------- -------------------------------------------------
I. AUDIT Services that are directly o Accounting research assistance
SERVICES related to performing the o SEC consultation, registration
independent audit of the Funds statements, and reporting
o Tax accrual related matters
o Implementation of new accounting
standards
o Compliance letters (e.g. rating agency
letters)
o Regulatory reviews and assistance
regarding financial matters
o Semi-annual reviews (if requested)
o Comfort letters for closed end
offerings
---------------- -------------------------------- -------------------------------------------------
II. Services which are not o AICPA attest and agreed-upon procedures
AUDIT-RELATED prohibited under Rule o Technology control assessments
SERVICES 210.2-01(C)(4) (the "Rule") o Financial reporting control assessments
and are related extensions of o Enterprise security architecture
the audit services support the assessment
audit, or use the
knowledge/expertise gained
from the audit procedures as a
foundation to complete the
project. In most cases, if
the Audit-Related Services are
not performed by the Audit
firm, the scope of the Audit
Services would likely
increase. The Services are
typically well-defined and
governed by accounting
professional standards (AICPA,
SEC, etc.)
---------------- -------------------------------- -------------------------------------------------
------------------------------------- ------------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the audit period for all services and related fees
pre-approved specific service reported at each regularly
subcategories. Approval of the scheduled Audit Committee
independent auditors as meeting.
auditors for a Fund shall
constitute pre approval for
these services.
------------------------------------- ------------------------------------
o "One-time" pre-approval o A summary of all such
for the fund fiscal year within services and related fees
a specified dollar limit (including comparison to
for all pre-approved specified dollar limits)
specific service subcategories reported quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limit for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for Audit-Related
Services not denoted as
"pre-approved", or
to add a specific service
subcategory as "pre-approved"
------------------------------------- ------------------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
III. TAX SERVICES Services which are not o Tax planning and support
prohibited by the Rule, o Tax controversy assistance
if an officer of the Fund o Tax compliance, tax returns, excise
determines that using the tax returns and support
Fund's auditor to provide o Tax opinions
these services creates
significant synergy in
the form of efficiency,
minimized disruption, or
the ability to maintain a
desired level of
confidentiality.
----------------------- --------------------------- -----------------------------------------------
------------------------------------- -------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- -------------------------
------------------------------------- -------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year all such services and
within a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for tax services not
denoted as pre-approved, or to add a specific
service subcategory as
"pre-approved"
------------------------------------- -------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- --------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PRE-APPROVED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- --------------------------- -----------------------------------------------
IV. OTHER SERVICES Services which are not o Business Risk Management support
prohibited by the Rule, o Other control and regulatory
A. SYNERGISTIC, if an officer of the Fund compliance projects
UNIQUE QUALIFICATIONS determines that using the
Fund's auditor to provide
these services creates
significant synergy in
the form of efficiency,
minimized disruption,
the ability to maintain a
desired level of
confidentiality, or where
the Fund's auditors
posses unique or superior
qualifications to provide
these services, resulting
in superior value and
results for the Fund.
----------------------- --------------------------- -----------------------------------------------
--------------------------------------- ------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------- --------------------------
o "One-time" pre-approval o A summary of
for the fund fiscal year within all such services and
a specified dollar limit related fees
(including comparison
to specified dollar
limits) reported
quarterly.
o Specific approval is
needed to exceed the
pre-approved dollar limits for
these services (see general
Audit Committee approval policy
below for details on obtaining
specific approvals)
o Specific approval is
needed to use the Fund's
auditors for "Synergistic" or
"Unique Qualifications" Other
Services not denoted as
pre-approved to the left, or to
add a specific service
subcategory as "pre-approved"
------------------------------------- --------------------------
SECTION III - POLICY DETAIL, CONTINUED
----------------------- ------------------------- -----------------------------------------------
SERVICE CATEGORY SERVICE CATEGORY SPECIFIC PROHIBITED SERVICE SUBCATEGORIES
DESCRIPTION
----------------------- ------------------------- -----------------------------------------------
PROHIBITED SERVICES Services which result 1. Bookkeeping or other services
in the auditors losing related to the accounting records or
independence status financial statements of the audit
under the Rule. client*
2. Financial information systems design
and implementation*
3. Appraisal or valuation services,
fairness* opinions, or
contribution-in-kind reports
4. Actuarial services (i.e., setting
actuarial reserves versus actuarial
audit work)*
5. Internal audit outsourcing services*
6. Management functions or human
resources
7. Broker or dealer, investment
advisor, or investment banking services
8. Legal services and expert services
unrelated to the audit
9. Any other service that the Public
Company Accounting Oversight Board
determines, by regulation, is
impermissible
----------------------- ------------------------- -----------------------------------------------
------------------------------------------- ------------------------------
AUDIT COMMITTEE APPROVAL POLICY AUDIT COMMITTEE
REPORTING POLICY
------------------------------------------- ------------------------------
o These services are not to be o A summary of all
performed with the exception of the(*) services and related
services that may be permitted fees reported at each
if they would not be subject to audit regularly scheduled
procedures at the audit client (as Audit Committee meeting
defined in rule 2-01(f)(4)) level will serve as continual
the firm providing the service. confirmation that has
not provided any
restricted services.
------------------------------------------- ------------------------------
--------------------------------------------------------------------------------
GENERAL AUDIT COMMITTEE APPROVAL POLICY:
o For all projects, the officers of the Funds and the Fund's auditors will each
make an assessment to determine that any proposed projects will not impair
independence.
o Potential services will be classified into the four non-restricted service
categories and the "Approval of Audit, Audit-Related, Tax and Other
Services" Policy above will be applied. Any services outside the specific
pre-approved service subcategories set forth above must be specifically
approved by the Audit Committee.
o At least quarterly, the Audit Committee shall review a report summarizing the
services by service category, including fees, provided by the Audit firm as
set forth in the above policy.
--------------------------------------------------------------------------------
(2) Disclose the percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee pursuant
to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
Non-Audit Services
Beginning with non-audit service contracts entered into
on or after May 6, 2003, the effective date of the new
SEC pre-approval rules, the Trust's audit committee is
required to pre-approve services to affiliates defined by
SEC rules to the extent that the services are determined
to have a direct impact on the operations or financial
reporting of the Trust. For the years ended March 31,
2014 and 2013, there were no services provided to an
affiliate that required the Trust's audit committee pre-
approval.
(f) If greater than 50 percent, disclose the percentage of hours expended on the
principal accountants engagement to audit the registrant's financial statements
for the most recent fiscal year that were attributed to work performed by
persons other than the principal accountant's full-time, permanent employees.
N/A
(g) Disclose the aggregate non-audit fees billed by the registrants accountant
for services rendered to the registrant, and rendered to the registrants
investment adviser (not including any sub-adviser whose role is primarily
portfolio management and is subcontracted with or overseen by another investment
adviser), and any entity controlling, controlled by, or under common control
with the adviser that provides ongoing services to the registrant for each of
the last two fiscal years of the registrant.
The aggregate non-audit fees for the Trust and affiliates,
as previously defined, totaled approximately $17,781 in
2014 and $17,942 in 2013.
(h) Disclose whether the registrants audit committee of the board of trustees
has considered whether the provision of non-audit services that were rendered to
the registrants investment adviser (not including any subadviser whose role is
primarily portfolio management and is subcontracted with or overseen by another
investment adviser), and any entity controlling, controlled by, or under common
control with the investment adviser that provides ongoing services to the
registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of
Rule 2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.
The Fund's audit committee of the Board of Trustees
has considered whether the provision of non-audit
services that were rendered to the Affiliates (as
defined) that were not pre- approved pursuant to
paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is
compatible with maintaining the principal accountant's
independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS
(a) If the registrant is a listed issuer as defined in Rule 10A-3
under the Exchange Act (17 CFR 240.10A-3), state whether
or not the registrant has a separately-designated standing
audit committee established in accordance with Section
3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)).
If the registrant has such a committee, however designated,
identify each committee member. If the entire board of directors
is acting as the registrant's audit committee as specified in
Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)),
so state.
N/A
(b) If applicable, provide the disclosure required by Rule 10A-3(d)
under the Exchange Act (17 CFR 240.10A-3(d)) regarding an exemption
from the listing standards for audit committees.
N/A
ITEM 6. SCHEDULE OF INVESTMENTS.
File Schedule of Investments in securities of unaffiliated issuers
as of the close of the reporting period as set forth in 210.1212
of Regulation S-X [17 CFR 210.12-12], unless the schedule is
included as part of the report to shareholders filed under Item
1 of this Form.
Included in Item 1
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
A closed-end management investment company that is filing an annual report on
this Form N-CSR must, unless it invests exclusively in non-voting securities,
describe the policies and procedures that it uses to determine how to vote
proxies relating to portfolio securities, including the procedures that the
company uses when a vote presents a conflict between the interests of its
shareholders, on the one hand, and those of the company's investment adviser;
principal underwriter; or any affiliated person (as defined in Section 2(a)(3)
of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules
thereunder) of the company, its investment adviser, or its principal
underwriter, on the other. Include any policies and procedures of the company's
investment adviser, or any other third party, that the company uses, or that are
used on the company's behalf, to determine how to vote proxies relating to
portfolio securities.
Proxy Voting Policies and Procedures of
Pioneer Investment Management, Inc.
VERSION DATED July, 2004
Overview
Pioneer Investment Management, Inc. ("Pioneer") is a fiduciary that owes
each of its client's duties of care and loyalty with respect to all
services undertaken on the client's behalf, including proxy voting. When
Pioneer has been delegated proxy-voting authority for a client, the duty of
care requires Pioneer to monitor corporate events and to vote the proxies.
To satisfy its duty of loyalty, Pioneer must place its client's interests
ahead of its own and must cast proxy votes in a manner consistent with the
best interest of its clients. Pioneer will vote all proxies presented in a
timely manner.
The Proxy Voting Policies and Procedures are designed to complement
Pioneer's investment policies and procedures regarding its general
responsibility to monitor the performance and/or corporate events of
companies that are issuers of securities held in accounts managed by
Pioneer. Pioneer's Proxy Voting Policies summarize Pioneer's position on a
number of issues solicited by companies held by Pioneer's clients. The
policies are guidelines that provide a general indication on how Pioneer
would vote but do not include all potential voting scenarios.
Pioneer's Proxy Voting Procedures detail monitoring of voting, exception
votes, and review of conflicts of interest and ensure that case-by-case
votes are handled within the context of the overall guidelines (i.e. best
interest of client). The overriding goal is that all proxies for US and
non-US companies that are received promptly will be voted in accordance
with Pioneer's policies or specific client instructions. All shares in a
company held by Pioneer-managed accounts will be voted alike, unless a
client has given us specific voting instructions on an issue or has not
delegated authority to us or the Proxy Voting Oversight Group determines
that the circumstances justify a different approach.
Pioneer does not delegate the authority to vote proxies relating to its
clients to any of its affiliates, which include other subsidiaries of
UniCredito.
Any questions about these policies and procedures should be directed to the
Proxy Coordinator.
1
Proxy Voting Procedures
Proxy Voting Service
Pioneer has engaged an independent proxy voting service to assist in the
voting of proxies. The proxy voting service works with custodians to ensure
that all proxy materials are received by the custodians and are processed
in a timely fashion. To the extent applicable, the proxy voting service
votes all proxies in accordance with the proxy voting policies established
by Pioneer. The proxy voting service will refer proxy questions to the
Proxy Coordinator (described below) for instructions under circumstances
where: (1) the application of the proxy voting guidelines is unclear; (2) a
particular proxy question is not covered by the guidelines; or (3) the
guidelines call for specific instructions on a case-by-case basis. The
proxy voting service is also requested to call to the Proxy Coordinator's
attention specific proxy questions that, while governed by a guideline,
appear to involve unusual or controversial issues. Pioneer reserves the
right to attend a meeting in person and may do so when it determines that
the company or the matters to be voted on at the meeting are strategically
important to its clients.
Proxy Coordinator
Pioneer's Director of Investment Operations (the "Proxy Coordinator")
coordinates the voting, procedures and reporting of proxies on behalf of
Pioneer's clients. The Proxy Coordinator will deal directly with the proxy
voting service and, in the case of proxy questions referred by the proxy
voting service, will solicit voting recommendations and instructions from
the Director of Portfolio Management US or, to the extent applicable,
investment sub-advisers. The Proxy Coordinator is responsible for ensuring
that these questions and referrals are responded to in a timely fashion and
for transmitting appropriate voting instructions to the proxy voting
service. The Proxy Coordinator is responsible for verifying with the
Compliance Department whether Pioneer's voting power is subject to any
limitations or guidelines issued by the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries).
Referral Items
From time to time, the proxy voting service will refer proxy questions to
the Proxy Coordinator that are described by Pioneer's policy as to be voted
on a case-by-case basis, that are not covered by Pioneer's guidelines or
where Pioneer's guidelines may be unclear with respect to the matter to be
voted on. Under such certain circumstances, the Proxy Coordinator will seek
a written voting recommendation from the Director of Portfolio Management
US. Any such recommendation will include: (i) the manner in which the
proxies should be voted; (ii) the rationale underlying any such decision;
and (iii) the disclosure of any contacts or communications made between
Pioneer and any outside parties concerning the proxy proposal prior to the
time that the voting instructions are provided. In addition, the Proxy
Coordinator will ask the Compliance Department to review the question for
any actual or apparent conflicts of interest as described below under
"Conflicts of
2
Interest." The Compliance Department will provide a "Conflicts of Interest
Report," applying the criteria set forth below under "Conflicts of
Interest," to the Proxy Coordinator summarizing the results of its review.
In the absence of a conflict of interest, the Proxy Coordinator will vote
in accordance with the recommendation of the Director of Portfolio
Management US.
If the matter presents a conflict of interest for Pioneer, then the Proxy
Coordinator will refer the matter to the Proxy Voting Oversight Group for a
decision. In general, when a conflict of interest is present, Pioneer will
vote according to the recommendation of the Director of Portfolio
Management US where such recommendation would go against Pioneer's interest
or where the conflict is deemed to be immaterial. Pioneer will vote
according to the recommendation of its proxy voting service when the
conflict is deemed to be material and the Pioneer's internal vote
recommendation would favor Pioneer's interest, unless a client specifically
requests Pioneer to do otherwise. When making the final determination as to
how to vote a proxy, the Proxy Voting Oversight Group will review the
report from the Director of Portfolio Management US and the Conflicts of
Interest Report issued by the Compliance Department.
Conflicts of Interest
A conflict of interest occurs when Pioneer's interests interfere, or appear
to interfere with the interests of Pioneer's clients. Occasionally, Pioneer
may have a conflict that can affect how its votes proxies. The conflict may
be actual or perceived and may exist when the matter to be voted on
concerns:
o An affiliate of Pioneer, such as another company belonging to
the UniCredito Italiano S.p.A. banking group (a "UniCredito
Affiliate");
o An issuer of a security for which Pioneer acts as a sponsor,
advisor, manager, custodian, distributor, underwriter, broker, or
other similar capacity (including those securities specifically
declared by PGAM to present a conflict of interest for Pioneer);
o An issuer of a security for which UniCredito has informed Pioneer
that a UniCredito Affiliate acts as a sponsor, advisor, manager,
custodian, distributor, underwriter, broker, or other similar
capacity; or
o A person with whom Pioneer (or any of its affiliates) has an
existing, material contract or business relationship that was not
entered into in the ordinary course of Pioneer's business.
o Pioneer will abstain from voting with respect to companies
directly or indirectly owned by UniCredito Italiano Group, unless
otherwise directed by a client. In addition, Pioneer will inform
PGAM Global Compliance and the PGAM Independent Directors before
exercising such rights.
Any associate involved in the proxy voting process with knowledge of any
apparent or actual conflict of interest must disclose such conflict to the
Proxy Coordinator and the Compliance Department. The Compliance Department
will review each item referred to Pioneer to determine whether an actual or
potential conflict of interest with Pioneer exists in connection with the
proposal(s) to be voted upon. The review will be conducted by comparing the
apparent parties affected by the proxy proposal being
3
voted upon against the Compliance Department's internal list of interested
persons and, for any matches found, evaluating the anticipated magnitude
and possible probability of any conflict of interest being present. For
each referral item, the determination regarding the presence or absence of
any actual or potential conflict of interest will be documented in a
Conflicts of Interest Report to the Proxy Coordinator.
Securities Lending
In conjunction with industry standards Proxies are not available to be
voted when the shares are out on loan through either Pioneer's lending
program or a client's managed security lending program. However, Pioneer
will reserve the right to recall lent securities so that they may be voted
according to the Pioneer's instructions. If a portfolio manager would like
to vote a block of previously lent shares, the Proxy Coordinator will work
with the portfolio manager and Investment Operations to recall the
security, to the extent possible, to facilitate the vote on the entire
block of shares.
Share-Blocking
"Share-blocking" is a market practice whereby shares are sent to a
custodian (which may be different than the account custodian) for record
keeping and voting at the general meeting. The shares are unavailable for
sale or delivery until the end of the blocking period (typically the day
after general meeting date).
Pioneer will vote in those countries with "share-blocking." In the event a
manager would like to sell a security with "share-blocking", the Proxy
Coordinator will work with the Portfolio Manager and Investment Operations
Department to recall the shares (as allowable within the market time-frame
and practices) and/or communicate with executing brokerage firm. A list of
countries with "share-blocking" is available from the Investment Operations
Department upon request.
Record Keeping
The Proxy Coordinator shall ensure that Pioneer's proxy voting service:
o Retains a copy of the proxy statement received (unless the proxy
statement is available from the SEC's Electronic Data Gathering,
Analysis, and Retrieval (EDGAR) system);
o Retains a record of the vote cast;
o Prepares Form N-PX for filing on behalf of each client that is a
registered investment company; and
o Is able to promptly provide Pioneer with a copy of the voting
record upon its request.
4
The Proxy Coordinator shall ensure that for those votes that may require
additional documentation (i.e. conflicts of interest, exception votes and
case-by-case votes) the following records are maintained:
o A record memorializing the basis for each referral vote cast;
o A copy of any document created by Pioneer that was material in
making the decision on how to vote the subject proxy; and
o A copy of any conflict notice, conflict consent or any other
written communication (including emails or other electronic
communications) to or from the client (or in the case of an
employee benefit plan, the plan's trustee or other fiduciaries)
regarding the subject proxy vote cast by, or the vote
recommendation of, Pioneer.
o Pioneer shall maintain the above records in the client's file for a
period not less than ten (10) years.
Disclosure
Pioneer shall take reasonable measures to inform its clients of the process
or procedures clients must follow to obtain information regarding how
Pioneer voted with respect to assets held in their accounts. In addition,
Pioneer shall describe to clients its proxy voting policies and procedures
and will furnish a copy of its proxy voting policies and procedures upon
request. This information may be provided to clients through Pioneer's Form
ADV (Part II) disclosure, by separate notice to the client, or through
Pioneer's website.
Proxy Voting Oversight Group
The members of the Proxy Voting Oversight Group are Pioneer's: Director of
Portfolio Management US, Head of Investment Operations, and Director of
Compliance. Other members of Pioneer will be invited to attend meetings and
otherwise participate as necessary. The Head of Investment Operations will
chair the Proxy Voting Oversight Group.
The Proxy Voting Oversight Group is responsible for developing, evaluating,
and changing (when necessary) Pioneer's Proxy Voting Policies and
Procedures. The group meets at least annually to evaluate and review these
policies and procedures and the services of its third-party proxy voting
service. In addition, the Proxy Voting Oversight Group will meet as
necessary to vote on referral items and address other business as
necessary.
Amendments
Pioneer may not amend its Proxy Voting Policies And Procedures without the
prior approval of the Proxy Voting Oversight Group and its corporate
parent, Pioneer Global Asset Management S.p.A
5
Proxy Voting Policies
Pioneer's sole concern in voting proxies is the economic effect of the
proposal on the value of portfolio holdings, considering both the short-
and long-term impact. In many instances, Pioneer believes that supporting
the company's strategy and voting "for" management's proposals builds
portfolio value. In other cases, however, proposals set forth by management
may have a negative effect on that value, while some shareholder proposals
may hold the best prospects for enhancing it. Pioneer monitors developments
in the proxy-voting arena and will revise this policy as needed.
All proxies that are received promptly will be voted in accordance with the
specific policies listed below. All shares in a company held by
Pioneer-managed accounts will be voted alike, unless a client has given us
specific voting instructions on an issue or has not delegated authority to
us. Proxy voting issues will be reviewed by Pioneer's Proxy Voting
Oversight Group, which consists of the Director of Portfolio Management US,
the Director of Investment Operations (the Proxy Coordinator), and the
Director of Compliance.
Pioneer has established Proxy Voting Procedures for identifying and
reviewing conflicts of interest that may arise in the voting of proxies.
Clients may request, at any time, a report on proxy votes for securities
held in their portfolios and Pioneer is happy to discuss our proxy votes
with company management. Pioneer retains a proxy voting service to provide
research on proxy issues and to process proxy votes.
Administrative
While administrative items appear infrequently in U.S. issuer proxies, they
are quite common in non-U.S. proxies.
We will generally support these and similar management proposals:
o Corporate name change.
o A change of corporate headquarters.
o Stock exchange listing.
o Establishment of time and place of annual meeting.
o Adjournment or postponement of annual meeting.
o Acceptance/approval of financial statements.
o Approval of dividend payments, dividend reinvestment plans and other
dividend-related proposals.
o Approval of minutes and other formalities.
6
o Authorization of the transferring of reserves and allocation of
income.
o Amendments to authorized signatories.
o Approval of accounting method changes or change in fiscal year-end.
o Acceptance of labor agreements.
o Appointment of internal auditors.
Pioneer will vote on a case-by-case basis on other routine business;
however, Pioneer will oppose any routine business proposal if insufficient
information is presented in advance to allow Pioneer to judge the merit of
the proposal. Pioneer has also instructed its proxy voting service to
inform Pioneer of its analysis of any administrative items inconsistent, in
its view, with supporting the value of Pioneer portfolio holdings so that
Pioneer may consider and vote on those items on a case-by-case basis.
Auditors
We normally vote for proposals to:
o Ratify the auditors. We will consider a vote against if we are
concerned about the auditors' independence or their past work for
the company. Specifically, we will oppose the ratification of
auditors and withhold votes from audit committee members if
non-audit fees paid by the company to the auditing firm exceed the
sum of audit fees plus audit-related fees plus permissible tax
fees according to the disclosure categories proposed by the
Securities and Exchange Commission.
o Restore shareholder rights to ratify the auditors.
We will normally oppose proposals that require companies to:
o Seek bids from other auditors.
o Rotate auditing firms, except where the rotation is statutorily
required or where rotation would demonstrably strengthen financial
disclosure.
o Indemnify auditors.
o Prohibit auditors from engaging in non-audit services for the
company.
Board of Directors
On issues related to the board of directors, Pioneer normally supports
management. We will, however, consider a vote against management in
instances where corporate performance has been very poor or where the board
appears to lack independence.
7
General Board Issues
Pioneer will vote for:
o Audit, compensation and nominating committees composed of
independent directors exclusively.
o Indemnification for directors for actions taken in good faith in
accordance with the business judgment rule. We will vote against
proposals for broader indemnification.
o Changes in board size that appear to have a legitimate business
purpose and are not primarily for anti-takeover reasons.
o Election of an honorary director.
We will vote against:
o Minimum stock ownership by directors.
o Term limits for directors. Companies benefit from experienced
directors, and shareholder control is better achieved through
annual votes.
o Requirements for union or special interest representation on the
board.
o Requirements to provide two candidates for each board seat.
We will vote on a case-by case basis on these issues:
o Separate chairman and CEO positions. We will consider voting with
shareholders on these issues in cases of poor corporate
performance.
Elections of Directors
In uncontested elections of directors we will vote against:
o Individual directors with absenteeism above 25% without valid
reason. We support proposals that require disclosure of director
attendance.
o Insider directors and affiliated outsiders who sit on the audit,
compensation, stock option or nominating committees. For the
purposes of our policy, we accept the definition of affiliated
directors provided by our proxy voting service.
We will also vote against:
o Directors who have failed to act on a takeover offer where the
majority of shareholders have tendered their shares.
o Directors who appear to lack independence or are associated with
very poor corporate performance.
8
We will vote on a case-by case basis on these issues:
o Re-election of directors who have implemented or renewed a
dead-hand or modified dead-hand poison pill (a "dead-hand poison
pill" is a shareholder rights plan that may be altered only by
incumbent or "dead " directors. These plans prevent a potential
acquirer from disabling a poison pill by obtaining control of the
board through a proxy vote).
o Contested election of directors.
o Prior to phase-in required by SEC, we would consider supporting
election of a majority of independent directors in cases of poor
performance.
o Mandatory retirement policies.
o Directors who have ignored a shareholder proposal that has been
approved by shareholders for two consecutive years.
Takeover-Related Measures
Pioneer is generally opposed to proposals that may discourage takeover
attempts. We believe that the potential for a takeover helps ensure that
corporate performance remains high.
Pioneer will vote for:
o Cumulative voting.
o Increase ability for shareholders to call special meetings.
o Increase ability for shareholders to act by written consent.
o Restrictions on the ability to make greenmail payments.
o Submitting rights plans to shareholder vote.
o Rescinding shareholder rights plans ("poison pills").
o Opting out of the following state takeover statutes:
o Control share acquisition statutes, which deny large holders voting
rights on holdings over a specified threshold.
o Control share cash-out provisions, which require large holders to
acquire shares from other holders.
o Freeze-out provisions, which impose a waiting period on large
holders before they can attempt to gain control.
o Stakeholder laws, which permit directors to consider interests of
non-shareholder constituencies.
9
o Disgorgement provisions, which require acquirers to disgorge profits
on purchases made before gaining control.
o Fair price provisions.
o Authorization of shareholder rights plans.
o Labor protection provisions.
o Mandatory classified boards.
We will vote on a case-by-case basis on the following issues:
o Fair price provisions. We will vote against provisions requiring
supermajority votes to approve takeovers. We will also consider
voting against proposals that require a supermajority vote to
repeal or amend the provision. Finally, we will consider the
mechanism used to determine the fair price; we are generally
opposed to complicated formulas or requirements to pay a premium.
o Opting out of state takeover statutes regarding fair price
provisions. We will use the criteria used for fair price
provisions in general to determine our vote on this issue.
o Proposals that allow shareholders to nominate directors.
We will vote against:
o Classified boards, except in the case of closed-end mutual funds.
o Limiting shareholder ability to remove or appoint directors. We
will support proposals to restore shareholder authority in this
area. We will review on a case-by-case basis proposals that
authorize the board to make interim appointments.
o Classes of shares with unequal voting rights.
o Supermajority vote requirements.
o Severance packages ("golden" and "tin" parachutes). We will support
proposals to put these packages to shareholder vote.
o Reimbursement of dissident proxy solicitation expenses. While we
ordinarily support measures that encourage takeover bids, we
believe that management should have full control over corporate
funds.
o Extension of advance notice requirements for shareholder proposals.
o Granting board authority normally retained by shareholders (e.g.,
amend charter, set board size).
o Shareholder rights plans ("poison pills"). These plans generally
allow shareholders to buy additional shares at a below-market
price in the event of a change in control and may deter some bids.
10
Capital Structure
Managements need considerable flexibility in determining the company's
financial structure, and Pioneer normally supports managements' proposals
in this area. We will, however, reject proposals that impose high barriers
to potential takeovers.
Pioneer will vote for:
o Changes in par value.
o Reverse splits, if accompanied by a reduction in number of shares.
o Share repurchase programs, if all shareholders may participate on
equal terms.
o Bond issuance.
o Increases in "ordinary" preferred stock.
o Proposals to have blank-check common stock placements (other than
shares issued in the normal course of business) submitted for
shareholder approval.
o Cancellation of company treasury shares.
We will vote on a case-by-case basis on the following issues:
o Reverse splits not accompanied by a reduction in number of shares,
considering the risk of delisting.
o Increase in authorized common stock. We will make a determination
considering, among other factors:
o Number of shares currently available for issuance;
o Size of requested increase (we would normally approve increases of up to
100% of current authorization);
o Proposed use of the additional shares; and
o Potential consequences of a failure to increase the number of shares
outstanding (e.g., delisting or bankruptcy).
o Blank-check preferred. We will normally oppose issuance of a new
class of blank-check preferred, but may approve an increase in a
class already outstanding if the company has demonstrated that it
uses this flexibility appropriately.
o Proposals to submit private placements to shareholder vote.
o Other financing plans.
We will vote against preemptive rights that we believe limit a company's
financing flexibility.
11
Compensation
Pioneer supports compensation plans that link pay to shareholder returns
and believes that management has the best understanding of the level of
compensation needed to attract and retain qualified people. At the same
time, stock-related compensation plans have a significant economic impact
and a direct effect on the balance sheet. Therefore, while we do not want
to micromanage a company's compensation programs, we will place limits on
the potential dilution these plans may impose.
Pioneer will vote for:
o 401(k) benefit plans.
o Employee stock ownership plans (ESOPs), as long as shares
allocated to ESOPs are less than 5% of outstanding shares. Larger
blocks of stock in ESOPs can serve as a takeover defense. We will
support proposals to submit ESOPs to shareholder vote.
o Various issues related to the Omnibus Budget and Reconciliation Act
of 1993 (OBRA), including:
o Amendments to performance plans to conform with OBRA;
o Caps on annual grants or amendments of administrative features;
o Adding performance goals; and
o Cash or cash-and-stock bonus plans.
o Establish a process to link pay, including stock-option grants, to
performance, leaving specifics of implementation to the company.
o Require that option repricings be submitted to shareholders.
o Require the expensing of stock-option awards.
o Require reporting of executive retirement benefits (deferred
compensation, split-dollar life insurance, SERPs, and pension
benefits).
o Employee stock purchase plans where the purchase price is equal to
at least 85% of the market price, where the offering period is no
greater than 27 months and where potential dilution (as defined
below) is no greater than 10%.
12
We will vote on a case-by-case basis on the following issues:
o Executive and director stock-related compensation plans. We will
consider the following factors when reviewing these plans:
o The program must be of a reasonable size. We will approve plans
where the combined employee and director plans together would
generate less than 15% dilution. We will reject plans with 15% or
more potential dilution.
Dilution = (A + B + C) / (A + B + C + D), where
A = Shares reserved for plan/amendment,
B = Shares available under continuing plans,
C = Shares granted but unexercised and
D = Shares outstanding.
o The plan must not:
o Explicitly permit unlimited option repricing authority or that
have repriced in the past without shareholder approval.
o Be a self-replenishing "evergreen" plan, plans that grant
discount options and tax offset payments.
o We are generally in favor of proposals that increase participation beyond
executives.
o We generally support proposals asking companies to adopt rigorous
vesting provisions for stock option plans such as those that vest
incrementally over, at least, a three- or four-year period with a pro
rata portion of the shares becoming exercisable on an annual basis
following grant date.
o We generally support proposals asking companies to disclose their
window period policies for stock transactions. Window period policies
ensure that employees do not exercise options based on insider
information contemporaneous with quarterly earnings releases and other
material corporate announcements.
o We generally support proposals asking companies to adopt stock holding
periods for their executives.
o All other employee stock purchase plans.
o All other compensation-related proposals, including deferred
compensation plans, employment agreements, loan guarantee programs
and retirement plans.
o All other proposals regarding stock compensation plans, including
extending the life of a plan, changing vesting restrictions,
repricing options, lengthening exercise periods or accelerating
distribution of awards and pyramiding and cashless exercise
programs.
13
We will vote against:
o Pensions for non-employee directors. We believe these retirement
plans reduce director objectivity.
o Elimination of stock option plans.
We will vote on a case-by case basis on these issues:
o Limits on executive and director pay.
o Stock in lieu of cash compensation for directors.
Corporate Governance
Pioneer will vote for:
o Confidential Voting.
o Equal access provisions, which allow shareholders to contribute
their opinion to proxy materials.
o Proposals requiring directors to disclose their ownership of shares
in the company.
We will vote on a case-by-case basis on the following issues:
o Change in the state of incorporation. We will support
reincorporations supported by valid business reasons. We will
oppose those that appear to be solely for the purpose of
strengthening takeover defenses.
o Bundled proposals. We will evaluate the overall impact of the
proposal.
o Adopting or amending the charter, bylaws or articles of association.
o Shareholder appraisal rights, which allow shareholders to demand
judicial review of an acquisition price.
We will vote against:
o Shareholder advisory committees. While management should solicit
shareholder input, we prefer to leave the method of doing so to
management's discretion.
o Limitations on stock ownership or voting rights.
o Reduction in share ownership disclosure guidelines.
14
Mergers and Restructurings
Pioneer will vote on the following and similar issues on a case-by-case
basis:
o Mergers and acquisitions.
o Corporate restructurings, including spin-offs, liquidations, asset
sales, joint ventures, conversions to holding company and
conversions to self-managed REIT structure.
o Debt restructurings.
o Conversion of securities.
o Issuance of shares to facilitate a merger.
o Private placements, warrants, convertible debentures.
o Proposals requiring management to inform shareholders of merger
opportunities.
We will normally vote against shareholder proposals requiring that the
company be put up for sale.
Mutual Funds
Many of our portfolios may invest in shares of closed-end mutual funds or
exchange-traded funds. The non-corporate structure of these investments
raises several unique proxy voting issues.
Pioneer will vote for:
o Establishment of new classes or series of shares.
o Establishment of a master-feeder structure.
Pioneer will vote on a case-by-case on:
o Changes in investment policy. We will normally support changes
that do not affect the investment objective or overall risk level
of the fund. We will examine more fundamental changes on a
case-by-case basis.
o Approval of new or amended advisory contracts.
o Changes from closed-end to open-end format.
o Authorization for, or increase in, preferred shares.
o Disposition of assets, termination, liquidation, or mergers.
o Classified boards of closed-end mutual funds, but will typically
support such proposals.
15
Social Issues
Pioneer will abstain on stockholder proposals calling for greater
disclosure of corporate activities with regard to social issues. "Social
Issues" may generally be described as shareholder proposals for a company
to:
o Conduct studies regarding certain issues of public concern and
interest;
o Study the feasibility of the company taking certain actions with
regard to such issues; or
o Take specific action, including ceasing certain behavior and
adopting company standards and principles, in relation to issues
of public concern and interest.
We believe these issues are important and should receive management
attention.
Pioneer will vote against proposals calling for substantial changes in the
company's business or activities. We will also normally vote against
proposals with regard to contributions, believing that management should
control the routine disbursement of funds.
16
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
(a) If the registrant is a closed-end management investment company that
is filing an annual report on this Form N-CSR,provide the following
information:
(1) State the name, title, and length of service of the person or persons
employed by or associated with the registrant or an investment adviser
of the registrant who are primarily responsible for the day-to-day management
of the registrant's portfolio ("Portfolio Manager"). Also state each Portfolio
Manager's business experience during the past 5 years.
ADDITIONAL INFORMATION ABOUT THE PORTFOLIO MANAGER
OTHER ACCOUNTS MANAGED BY THE PORTFOLIO MANAGER
The table below indicates, for the portfolio manager of the fund, information
about the accounts other than the fund over which the portfolio manager has
day-to-day investment responsibility. All information on the number of accounts
and total assets in the table is as of March 31, 2014. For purposes of the
table, "Other Pooled Investment Vehicles" may include investment partnerships,
undertakings for collective investments in transferable securities ("UCITS")
and other non-U.S. investment funds and group trusts, and "Other Accounts" may
include separate accounts for institutions or individuals, insurance company
general or separate accounts, pension funds and other similar institutional
accounts but generally do not include the portfolio manager's personal
investment accounts or those which the manager may be deemed to own
beneficially under the code of ethics. Certain funds and other accounts managed
by the portfolio manager may have substantially similar investment strategies.
NUMBER OF ASSETS
ACCOUNTS MANAGED
MANAGED FOR FOR WHICH
WHICH ADVISORY ADVISORY
NUMBER OF FEE IS FEE IS
NAME OF ACCOUNTS TOTAL ASSETS PERFORMANCE- PERFORMANCE-
PORTFOLIO MANAGER TYPE OF ACCOUNT MANAGED MANAGED (000'S) BASED BASED (000'S)
------------------- ---------------------------------- ----------- ----------------- ---------------- --------------
Andrew Feltus Other Registered Investment
Companies 12 $13,321,055 N/A N/A
Other Pooled Investment Vehicles 8 $14,200,931 4 10,179,518
Other Accounts 7 $ 3,392,877 N/A N/A
------------------- ---------------------------------- -- ----------- ---------------- ----------
POTENTIAL CONFLICTS OF INTEREST
When a portfolio manager is responsible for the management of more than one
account, the potential arises for the portfolio manager to favor one account
over another. The principal types of potential conflicts of interest that may
arise are discussed below. For the reasons outlined below, Pioneer does not
believe that any material conflicts are likely to arise out of a portfolio
manager's responsibility for the management of the fund as well as one or more
other accounts. Although Pioneer has adopted procedures that it believes are
reasonably designed to detect and prevent violations of the federal securities
laws and to mitigate the potential for conflicts of interest to affect its
portfolio management decisions, there can be no assurance that all conflicts
will be identified or that all procedures will be effective in mitigating the
potential for such risks. Generally, the risks of such conflicts of interest
are increased to the extent that a portfolio manager has a financial incentive
to favor one account over another. Pioneer has structured its compensation
arrangements in a manner that is intended to limit such potential for conflicts
of interest. See "Compensation of Portfolio Managers" below.
o A portfolio manager could favor one account over another in allocating new
investment opportunities that have limited supply, such as initial public
offerings and private placements. If, for example, an initial public
offering that was expected to appreciate in value significantly shortly
after the offering was allocated to a single account, that account may be
expected to have better investment performance than other accounts that did
not receive an allocation of the initial public offering. Generally,
investments for which there is limited availability are allocated based upon
a range of factors including available cash and consistency with the
accounts' investment objectives and policies. This allocation methodology
necessarily involves some subjective elements but is intended over time to
treat each client in an equitable and fair manner. Generally, the investment
opportunity is allocated among participating accounts on a pro rata
0
basis. Although Pioneer believes that its practices are reasonably designed to
treat each client in an equitable and fair manner, there may be instances
where a fund may not participate, or may participate to a lesser degree than
other clients, in the allocation of an investment opportunity.
o A portfolio manager could favor one account over another in the order in
which trades for the accounts are placed. If a portfolio manager determines
to purchase a security for more than one account in an aggregate amount that
may influence the market price of the security, accounts that purchased or
sold the security first may receive a more favorable price than accounts
that made subsequent transactions. The less liquid the market for the
security or the greater the percentage that the proposed aggregate purchases
or sales represent of average daily trading volume, the greater the
potential for accounts that make subsequent purchases or sales to receive a
less favorable price. When a portfolio manager intends to trade the same
security on the same day for more than one account, the trades typically are
"bunched," which means that the trades for the individual accounts are
aggregated and each account receives the same price. There are some types of
accounts as to which bunching may not be possible for contractual reasons
(such as directed brokerage arrangements). Circumstances may also arise
where the trader believes that bunching the orders may not result in the
best possible price. Where those accounts or circumstances are involved,
Pioneer will place the order in a manner intended to result in as favorable
a price as possible for such client.
o A portfolio manager could favor an account if the portfolio manager's
compensation is tied to the performance of that account to a greater degree
than other accounts managed by the portfolio manager. If, for example, the
portfolio manager receives a bonus based upon the performance of certain
accounts relative to a benchmark while other accounts are disregarded for
this purpose, the portfolio manager will have a financial incentive to seek
to have the accounts that determine the portfolio manager's bonus achieve
the best possible performance to the possible detriment of other accounts.
Similarly, if Pioneer receives a performance-based advisory fee, the
portfolio manager may favor that account, whether or not the performance of
that account directly determines the portfolio manager's compensation.
o A portfolio manager could favor an account if the portfolio manager has a
beneficial interest in the account, in order to benefit a large client or to
compensate a client that had poor returns. For example, if the portfolio
manager held an interest in an investment partnership that was one of the
accounts managed by the portfolio manager, the portfolio manager would have
an economic incentive to favor the account in which the portfolio manager
held an interest.
o If the different accounts have materially and potentially conflicting
investment objectives or strategies, a conflict of interest could arise. For
example, if a portfolio manager purchases a security for one account and
sells the same security for another account, such trading pattern may
disadvantage either the account that is long or short. In making portfolio
manager assignments, Pioneer seeks to avoid such potentially conflicting
situations. However, where a portfolio manager is responsible for accounts
with differing investment objectives and policies, it is possible that the
portfolio manager will conclude that it is in the best interest of one
account to sell a portfolio security while another account continues to hold
or increase the holding in such security.
COMPENSATION OF PORTFOLIO MANAGER
Pioneer has adopted a system of compensation for portfolio managers that seeks
to align the financial interests of the portfolio managers with those of
shareholders of the accounts (including Pioneer funds) the portfolio managers
manage, as well as with the financial performance of Pioneer. The compensation
program for all Pioneer portfolio managers includes a base salary (determined
by the rank and tenure of the employee) and an annual bonus program, as well as
customary benefits that are offered generally to all full-time employees. Base
compensation is fixed and normally reevaluated on an annual basis. Pioneer
seeks to set base compensation at market rates, taking into account the
experience and responsibilities of the portfolio manager. The bonus plan is
intended to provide a competitive level of annual bonus compensation that is
tied to the portfolio manager achieving superior investment performance and
align the interests of
1
the investment professional with those of shareholders, as well as with the
financial performance of Pioneer. Any bonus under the plan is completely
discretionary, with a maximum annual bonus that may be in excess of base
salary. The annual bonus is based upon a combination of the following factors:
o QUANTITATIVE INVESTMENT PERFORMANCE. The quantitative investment performance
calculation is based on pre-tax investment performance of all of the
accounts managed by the portfolio manager (which includes the fund and any
other accounts managed by the portfolio manager) over a one-year period (20%
weighting) and four-year period (80% weighting), measured for periods ending
on December 31. The accounts, which include the fund, are ranked against a
group of mutual funds with similar investment objectives and investment
focus (60%) and a broad-based securities market index measuring the
performance of the same type of securities in which the accounts invest
(40%), which, in the case of the fund, is the Bank of America Merrill Lynch
High Yield Master II Index. As a result of these two benchmarks, the
performance of the portfolio manager for compensation purposes is measured
against the criteria that are relevant to the portfolio manager's
competitive universe.
o QUALITATIVE PERFORMANCE. The qualitative performance component with respect
to all of the accounts managed by the portfolio manager includes objectives,
such as effectiveness in the areas of teamwork, leadership, communications
and marketing, that are mutually established and evaluated by each portfolio
manager and management.
o PIONEER RESULTS AND BUSINESS LINE RESULTS. Pioneer's financial performance,
as well as the investment performance of its investment management group,
affect a portfolio manager's actual bonus by a leverage factor of plus or
minus (+/-) a predetermined percentage.
The quantitative and qualitative performance components comprise 80% and 20%,
respectively, of the overall bonus calculation (on a pre-adjustment basis). A
portion of the annual bonus is deferred for a specified period and may be
invested in one or more Pioneer funds.
Certain portfolio managers participate in other programs designed to reward and
retain key contributors. Senior executives or other key employees are granted
performance units based on the stock price performance of UniCredit and the
financial performance of Pioneer Global Asset Management S.p.A., which are
affiliates of Pioneer. Portfolio managers also may participate in a deferred
compensation program, whereby deferred amounts are invested in one or more
Pioneer funds.
SHARE OWNERSHIP BY PORTFOLIO MANAGER
The following table indicates as of March 31, 2014 the value, within the
indicated range, of shares beneficially owned by the portfolio manager of the
fund.
BENEFICIAL OWNERSHIP
NAME OF PORTFOLIO MANAGER OF THE FUND*
--------------------------- ---------------------
Andrew Feltus C
--------------------------- ---------------------
* Key to Dollar Ranges
A. None
B. $1 - $10,000
C. $10,001 - $50,000
D. $50,001 - $100,000
E. $100,001 - $500,000
F. $500,001 - $1,000,000
G. Over $1,000,000
2
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
(a) If the registrant is a closed-end management investment company,
in the following tabular format, provide the information specified in
paragraph (b) of this Item with respect to any purchase made by or on
behalf of the registrant or any affiliated purchaser, as defined in
Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of
shares or other units of any class of the registrant's equity securities
that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781).
During the period covered by this report, there were no purchases
made by or on behalf of the registrant or any affiliated purchaser
as defined in Rule 10b-18(a)(3) under the Securities Exchange Act
of 1934 (the Exchange Act), of shares of the registrants equity
securities that are registered by the registrant pursuant to
Section 12 of the Exchange Act.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Describe any material changes to the procedures by which shareholders
may recommend nominees to the registrant's board of directors, where
those changes were implemented after the registrant last provided
disclosure in response to the requirements of Item 407(c)(2)(iv) of
Regulation S-R(17 CFR 229.407)(as required by Item 22(b)(15))
of Schedule 14A (17 CFR 240.14a-101), or this Item.
There have been no material changes to the procedures by which the
shareholders may recommend nominees to the registrant's board of
directors since the registrant last provided disclosure in response
to the requirements of Item 407(c)(2)(iv) of Regulation S-R of Schedule 14(A)
in its definitive proxy statement, or this item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Disclose the conclusions of the registrant's principal executive and
principal financials officers, or persons performing similar functions,
regarding the effectiveness of the registrant's disclosure
controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR
270.30a-3(c))) as of a date within 90 days of the filing date of the report
that includes the disclosure required by this paragraph,
based on the evaluation of these controls and procedures required by Rule
30a-3(b) under the Act (17 CFR 270.30(a)-3(b) and Rules 13a-15(b) or 15d-15(b)
under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)).
The registrant's principal executive officer
and principal financial officer have
concluded that the registrant's disclosure
controls and procedures are effective based
on the evaluation of these controls and
procedures as of a date within 90 days of the
filing date of this report.
(b) Disclose any change in the registrant's internal control over financial
reporting (as defined in Rule 30a-3(d) under the Act (17CFR 270.30a-3(d)) that
occured during the second fiscal quarter of the period covered by this report
that has materially affected, or is reasonably likely to materially affect,
the registrant's internal control over financial reporting.
There were no significant changes in the
registrant's internal control over financial
reporting that occurred during the second
fiscal quarter of the period covered by this
report that have materially affected, or are
reasonably likely to materially affect, the
registrant's internal control over financial
reporting.
The registrant's principal executive officer and principal financial
officer, however, voluntarily are reporting the following information:
In August of 2006 the registrant's investment adviser
enhanced its internal procedures for reporting performance
information required to be included in prospectuses.
Those enhancements involved additional internal controls
over the appropriateness of performance data
generated for this purpose. Such enhancements were made
following an internal review which identified
prospectuses relating to certain classes of shares of
a limited number of registrants where, inadvertently,
performance information not reflecting the deduction of
applicable sales charges was included. Those prospectuses
were revised, and the revised prospectuses were distributed to
shareholders.
ITEM 12. EXHIBITS.
(a) File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(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.
(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(a)) , exactly as set forth below:
Filed herewith.
SIGNATURES
[See General Instruction F]
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) Pioneer High Income Trust
By (Signature and Title)* /s/ Daniel K. Kingsbury
Daniel K. Kingsbury, President
Date May 29, 2014
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/ Daniel K. Kingsbury
Daniel K. Kingsbury, President
Date May 29, 2014
By (Signature and Title)* /s/ Mark Bradley
Mark Bradley, Treasurer & Chief Accounting & Financial Officer
Date May 29, 2014
* Print the name and title of each signing officer under his or her signature.