nvcsrs
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-22043
Van Kampen Dynamic Credit Opportunities Fund
(Exact name of registrant as specified in charter)
522 Fifth Avenue, New York, New York 10036
(Address of principal executive offices) (Zip code)
Edward C. Wood III
522 Fifth Avenue, New York, New York 10036
(Name and address of agent for service)
Registrants telephone number, including area code: 212-762-4000
Date of fiscal year end: 7/31
Date of reporting period: 1/31/10
Item 1. Report to Shareholders.
The
Funds semi-annual report transmitted to shareholders
pursuant to Rule 30e-1
under the Investment Company Act of 1940 is as follows:
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MUTUAL FUNDS
Van Kampen
Dynamic Credit
Opportunities Fund
(VTA)
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Privacy Notice information on the
back.
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Welcome, Shareholder
In this report, youll learn about how your investment in
Van Kampen Dynamic Credit Opportunities Fund performed
during the semiannual period. The portfolio management team will
provide an overview of the market conditions and discuss some of
the factors that affected investment performance during the
reporting period. In addition, this report includes the
funds financial statements and a list of fund investments
as of January 31, 2010.
Market forecasts
provided in this report may not necessarily come to pass. There
is no assurance that the fund will achieve its investment
objective. The fund is subject to market risk, which is the
possibility that the market values of securities owned by the
fund will decline and that the value of the fund shares may
therefore be less than what you paid for them. Accordingly, you
can lose money investing in this fund. Please see the prospectus
for more complete information on investment risks.
An investment in
senior loans is subject to certain risks such as loan defaults
and illiquidity due to insufficient collateral
backing.
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NOT FDIC INSURED
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OFFER NO BANK GUARANTEE
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MAY LOSE VALUE
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NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
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NOT A DEPOSIT
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Performance
Summary as
of 1/31/10 (Unaudited)
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Dynamic
Credit Opportunities Fund
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Symbol:
VTA
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Average Annual
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Based
on
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Based
on
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Total
Returns
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NAV
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Market
Price
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Since Inception (6/26/07)
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4.06
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%
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5.86
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%
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1-year
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71.66
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81.16
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6-month
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20.01
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31.71
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Performance data
quoted represents past performance, which is no guarantee of
future results, and current performance may be lower or higher
than the figures shown. For the most recent month-end
performance figures, please visit vankampen.com or speak with
your financial advisor. Investment returns and principal value
will fluctuate and fund shares, when redeemed, may be worth more
or less than their original cost.
The NAV per share is
determined by dividing the value of the funds portfolio
securities, cash and other assets, less all liabilities, by the
total number of common shares outstanding. The common share
market price is the price the market is willing to pay for
shares of the fund at a given time. Common share market price is
influenced by a range of factors, including supply and demand
and market conditions. Total return assumes an investment at the
beginning of the period, reinvestment of all distributions for
the period in accordance with the funds dividend
reinvestment plan, and sale of all shares at the end of the
period. Periods of less than one year are not annualized.
1
Fund Report
For the six-month
period ended January 31, 2010
Market
Conditions
The senior loan market continued to rally strongly throughout
the reporting period. For the six-month period ended
January 31, 2010, the S&P LSTA Leveraged Loan Index
(the Index) gained 11.75 percent, while average
loan prices rose from 81.20 cents on the dollar to 89.49 cents
on the dollar. Within the Index, lower quality loans
outperformed for the period, with CCC rated issuers
(+26.53 percent) significantly outpacing higher credit
quality BB (+4.74 percent) and B (+11.81 percent)
issuers.
From a technical standpoint, the loan market continued to
benefit from increasing demand, loan repayments and relatively
tepid new loan issuance. The bank loan category of retail mutual
funds continued to enjoy strong inflows over the course of the
period sparked by the opportunity to purchase senior loans at a
discount and the prospect of higher short-term interest rates in
the future. Additionally, loan repayments were strong as the
trend of companies issuing new high yield bonds and using the
proceeds to pre-pay bank debt at par continued. New loan
issuance, on the other hand, remained weak, especially in the
first half of the reporting period. In the later part of the
fourth quarter of 2009 and continuing into 2010, new issuance
did pick up substantially; however, in the fourth quarter of
2009, the pool of investable loans still contracted as loan
repayments of $32 billion were well in excess of the
$26 billion of new loan issuance.
The loan market benefited from a substantial improvement in
credit fundamentals. Borrowers performance generally
reflected the growth in U.S. GDP that we experienced in the
second half of 2009, and this growth is expected to continue in
2010. The improved macroeconomic conditions translated into an
improving default picture. The senior loan default rate peaked
in November 2009 at 10.8 percent and by the end of January
2010 had declined to 8.8 percent. We expect the rate to
fall to the mid-single digits by the end of 2010.
The European high yield market has followed much the same trend
as the U.S. market. The loan and bond markets performed
strongly as many of the technical factors noted above that have
driven the U.S. market have also been in play in Europe.
The European bond market has seen new issuance surge, while the
European loan market has yet to experience any meaningful amount
of new issuance.
Although we are cautiously optimistic that the loan rally will
continue in 2010, albeit at a much slower pace than in 2009, it
is clear that risks and uncertainties remain that could
negatively impact the markets. The economic recovery is likely
to be less robust than previous recoveries as the consumer
remains stressed with unemployment just below 10 percent
and foreclosures still at an elevated level. There is
uncertainty as to how the economy will react as governments and
central banks begin to remove the global stimulus as well as
concerns about the size of the budget deficit both here in the
U.S. and in other countries around the world.
2
Performance
Analysis
The Funds return can be calculated based upon either the
market price or the net asset value (NAV) of its shares. NAV per
share is determined by dividing the value of the Funds
portfolio securities, cash and other assets, less all
liabilities by the total number of common shares outstanding,
while market price reflects the supply and demand for the
shares. As a result, the two returns can differ, as they did
during the reporting period. For the six months ended
January 31, 2010, the Fund returned 31.71 percent on a
market price basis and 20.01 percent on an NAV basis.
Total return for
the six-month period ended January 31, 2010
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Based
on NAV
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Based
on Market Price
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20.01
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%
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31.71
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%
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Performance data
quoted represents past performance, which is no guarantee of
future results, and current performance may be lower or higher
than the figures shown. Investment return, net asset value and
common share market price will fluctuate and Fund shares, when
sold, may be worth more or less than their original cost. See
Performance Summary for additional performance
information.
The Fund invests primarily in senior secured loans to
non-investment grade companies. Although non-investment grade
companies have a higher probability of defaulting than
investment grade companies, our loans are typically secured by
the assets of the company and are senior in the capital
structure and thus are generally repaid before any of the
companys other obligations. As of the end of the reporting
period, 72 percent of the Funds assets are first lien
senior secured loans. The remainder is a mix of second lien
senior secured loans and high yield bonds. Concentration in the
portfolio by both industry and borrower remains low.
We continued to adhere to our research-intensive investment
process, employing a
bottom-up
security selection process driven by thorough analysis of
individual company fundamentals. We focus primarily on investing
in companies that we believe will have consistent cash flows and
strong collateral coverage and thus we typically have a bias
toward more defensive industries such as health care, utilities,
food and cable.
The Fund used leverage, which enhanced returns as loan prices
increased during the period. Leverage involves borrowing at a
floating short-term rate and reinvesting the proceeds at a
higher rate. Unlike other fixed-income asset classes, using
leverage in conjunction with senior loans does not involve the
same degree of risk from rising short-term interest rates since
the income from senior loans generally adjusts to changes in
interest rates, as do the rates which determine the Funds
borrowing costs. The use of leverage could, however, increase
the funds volatility. (Similarly, should short-term rates
fall, borrowing costs would also decline.) We believe the modest
use of leverage will continue to benefit shareholders in the
periods ahead.
As of the end of the reporting period, approximately
37 percent of the Funds assets were invested
internationally, primarily in Europe, and continued to be
managed by
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Van Kampens subadvisor, Avenue Europe International
Management, L.P. This exposure to non-dollar assets was entirely
hedged into U.S. dollars, effectively eliminating currency
risk in the portfolio. International assets are split roughly
evenly between high yield bonds and loans, whereas the vast
majority of the portfolios U.S. assets are senior
secured loans.
The Fund also used a limited amount of credit derivatives for
investment purposes. Credit derivatives provide the opportunity
to gain exposure in loans and bonds often at higher yields than
if we invested in the underlying loan or bond directly, albeit
with the risk of greater volatility. We adhere to the same
research-intensive investment process when investing in credit
derivatives. At the end of the reporting period, credit
derivatives accounted for approximately 15 percent of the
Funds total investments.
Market
Outlook
While we have certainly witnessed a dramatic rally in loan
prices over the past year, given current price levels and the
potential for declining default rates this year, we believe
there are still compelling investment opportunities in senior
secured loans. Additionally, while investors continue to have
the ability to purchase loans at what we believe are relatively
attractive values, they are also positioning themselves well
should short-term interest rates begin to rise in the future.
Because senior loans pay a floating interest rate, should
short-term rates move higher, senior loan investors may benefit
through increasing distribution yields. This can act as a nice
complement to fixed rate investments that typically face a
headwind in a rising interest rate environment.
There is no guarantee that any sectors mentioned will
continue to perform as discussed herein or that securities in
such sectors will be held by the Fund in the future.
4
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Top
10 Issuer Exposure (Unaudited)
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Ardagh Glass Finance
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2.9
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%
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CB Bus AB
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2.5
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Versatel AG
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2.4
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Regency Entertainment SA
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2.0
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First Data Corp.
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2.0
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Nyco Holdings 2 Aps
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1.9
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Ontex
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1.8
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Calpine Corp.
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1.8
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UPC Broadband Holding B.V.
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1.8
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Virgin Media Investment Holdings Ltd.
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1.8
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Top
Five Sector Exposure (Unaudited)
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Telecommunications
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9.3
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%
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Containers & Glass Products
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7.6
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Cable & Satellite Television
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7.4
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Lodging & Casinos
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7.0
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Chemicals & Plastics
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5.2
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Moodys
Credit Rating Exposure Distribution (Unaudited)
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Baa
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1.6
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%
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Ba
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19.8
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B
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38.3
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Caa
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8.0
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Ca
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1.8
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C
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0.1
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NR
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30.4
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Capital
Structure Distribution (Unaudited)
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1st Lien
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69.5
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%
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2nd Lien
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8.5
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Unsecured
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5.1
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Other
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16.9
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Subject to change
daily. Provided for informational purposes only and should not
be deemed as a recommendation to buy or sell the securities
mentioned or securities in the sectors shown above. All
percentages include total exposure of loans and bonds, with
unfunded loan commitments being treated as if they were funded.
This method of aggregation is reflected in both the numerator
and denominator of each calculation. Securities are classified
by sectors that represent broad groupings of related industries.
Van Kampen is a wholly owned subsidiary of a global
securities firm which is engaged in a wide range of financial
services including, for example, securities trading and
brokerage activities, investment banking, research and analysis,
financing and financial advisory services.
5
Derivatives
Policy
The Fund has amended and restated its policy on derivatives to
permit it to invest in the derivative investments discussed
below.
The Fund may use derivative instruments for a variety of
purposes, including hedging, risk management, portfolio
management or to earn income. Derivatives are financial
instruments whose value is based on the value of another
underlying asset, interest rate, index or financial instrument.
A derivative instrument often has risks similar to its
underlying instrument and may have additional risks, including
imperfect correlation between the value of the derivative and
the underlying instrument, risks of default by the other party
to certain transactions, magnification of losses incurred due to
changes in the market value of the securities, instruments,
indices or interest rates to which they relate, and risks that
the transactions may not be liquid. The use of derivatives
involves risks that are different from, and possibly greater
than, the risks associated with other portfolio investments.
Derivatives may involve the use of highly specialized
instruments that require investment techniques and risk analyses
different from those associated with other portfolio
investments. Certain derivative transactions may give rise to a
form of leverage. Leverage associated with derivative
transactions may cause the Fund to liquidate portfolio positions
when it may not be advantageous to do so to satisfy its
obligations or to meet earmarking or segregation requirements,
pursuant to applicable SEC rules and regulations, or may cause
the Fund to be more volatile than if the Fund had not been
leveraged. Although the Investment Adviser and/or Subadviser
seek to use derivatives to further the Funds investment
objective, there is no assurance that the use of derivatives
will achieve this result.
Following is a description of the derivative instruments and
techniques that the Fund may use and their associated risks:
Futures. A futures contract is a standardized
agreement between two parties to buy or sell a specific quantity
of an underlying instrument at a specific price at a specific
future time. The value of a futures contract tends to increase
and decrease in tandem with the value of the underlying
instrument. Futures contracts are bilateral agreements, with
both the purchaser and the seller equally obligated to complete
the transaction. Depending on the terms of the particular
contract, futures contracts are settled through either physical
delivery of the underlying instrument on the settlement date or
by payment of a cash settlement amount on the settlement date. A
decision as to whether, when and how to use futures involves the
exercise of skill and judgment and even a well conceived futures
transaction may be unsuccessful because of market behavior or
unexpected events. In addition to the derivatives risks
discussed above, the prices of futures can be highly volatile,
using futures can lower total return, and the potential loss
from futures can exceed the Funds initial investment in
such contracts.
Options. If a Fund buys an option, it buys a legal
contract giving it the right to buy or sell a specific amount of
the underlying instrument or futures contract on the underlying
instrument such as a security, currency or index, at an agreed
upon price typically in exchange for a premium paid by the Fund.
If a Fund sells an option, it
6
sells to another person the right to buy from or sell to the
Fund a specific amount of the underlying instrument or futures
contract on the underlying instrument at an agreed upon price
typically in exchange for a premium received by the Fund.
A decision as to whether, when and how to use options involves
the exercise of skill and judgment and even a well conceived
option transaction may be unsuccessful because of market
behavior or unexpected events. The prices of options can be
highly volatile and the use of options can lower total returns.
Swaps. A swap contract is an agreement between two
parties pursuant to which the parties exchange payments at
specified dates on the basis of a specified notional amount,
with the payments calculated by reference to specified
securities, indexes, reference rates, currencies or other
instruments. Most swap agreements provide that when the period
payment dates for both parties are the same, the payments are
made on a net basis (i.e., the two payment streams are netted
out, with only the net amount paid by one party to the other).
The Funds obligations or rights under a swap contract
entered into on a net basis will generally be equal only to the
net amount to be paid or received under the agreement, based on
the relative values of the positions held by each counterparty.
Swap agreements are not entered into or traded on exchanges and
there is no central clearing or guaranty function for swaps.
Therefore, swaps are subject to credit risk or the risk of
default or non-performance by the counterparty. Swaps could
result in losses if interest rate or foreign currency exchange
rates or credit quality changes are not correctly anticipated by
the Fund or if the reference index, security or investments do
not perform as expected. The Funds use of swaps may
include those based on the credit of an underlying security and
commonly referred to as credit default swaps. Where
the Fund is the buyer of a credit default swap contract, it
would be entitled to receive the par (or other
agreed-upon)
value of a referenced debt obligation from the counterparty to
the contract only in the event of a default by a third party on
the debt obligation. If no default occurs, the Fund would have
paid to the counterparty a periodic stream of payments over the
term of the contract and received no benefit from the contract.
When the Fund is the seller of a credit default swap contract,
it receives the stream of payments but is obligated to pay upon
default of the referenced debt obligation.
Structured Investments. The Fund also may invest a
portion of its assets in structured notes and other types of
structured investments. A structured note is a derivative
security for which the amount of principal repayment and/or
interest payments is based on the movement of one or more
factors. These factors include, but are not limited
to, currency exchange rates, interest rates (such as the prime
lending rate or LIBOR), referenced bonds and stock indices.
Investments in structured notes involve risks including interest
rate risk, credit risk and market risk. Changes in interest
rates and movement of the factor may cause significant price
fluctuations and changes in the reference factor may cause the
interest rate on the structured note to be reduced to zero and
any further changes in the reference factor may then reduce the
principal amount payable on maturity. Other types of structured
investments include interests in entities organized and operated
for the purpose of restructuring the investment characteristics
of underlying investment interests or securities. These
investment entities may be structured as trusts or other types
of pooled investment vehicles.
7
Holders of structured investments bear risks of the underlying
investment and are subject to counterparty risk. Certain
structured investments may be thinly traded or have a limited
trading market and may have the effect of increasing the
Funds illiquidity to the extent that the Fund, at a
particular point in time, may be unable to find qualified buyers
for these securities.
Foreign Currency Forward Contracts. In connection
with its investments in foreign securities, the Fund also may
enter into contracts with banks, brokers or dealers to purchase
or sell securities or foreign currencies at a future date
(forward contracts). A foreign currency forward
contract is a negotiated agreement between the contracting
parties to exchange a specified amount of currency at a
specified future time at a specified rate. The rate can be
higher or lower than the spot rate between the currencies that
are the subject of the contract. Forward foreign currency
exchange contracts may be used to protect against uncertainty in
the level of future foreign currency exchange rates or to gain
or modify exposure to a particular currency. In addition, the
Fund may use cross currency hedging or proxy hedging with
respect to currencies in which the Fund has or expects to have
portfolio or currency exposure. Cross currency hedges involve
the sale of one currency against the positive exposure to a
different currency and may be used for hedging purposes or to
establish an active exposure to the exchange rate between any
two currencies. Hedging the Funds currency risks
involves the risk of mismatching the Funds objectives
under a forward or futures contract with the value of securities
denominated in a particular currency. Furthermore, such
transactions reduce or preclude the opportunity for gain if the
value of the currency should move in the direction opposite to
the position taken. There is an additional risk to the effect
that currency contracts create exposure to currencies in which
the Funds securities are not denominated. Unanticipated
changes in currency prices may result in poorer overall
performance for the Fund than if it had not entered into such
contracts.
Portfolio
Management
Van Kampen Dynamic Credit Opportunities Fund is managed by
members of the Advisers Senior Loan Group, which currently
includes Gerard Fogarty, a Vice President of the Adviser, and
Jeffrey Scott and Philip Yarrow, each an Executive Director of
the Adviser. All team members are responsible for the
day-to-day
management of the Advisers portion of the Funds
portfolio.
Mr. Fogarty joined the Adviser in 2007 and began managing
the Fund in July 2008. Mr. Fogarty has approximately
12 years of investment experience. From 2003 to 2007 and
prior to joining the Adviser, Mr. Fogarty was employed by
JPMorgan and held a number of positions including Director in
the financial institutions group, and, most recently as a Credit
Executive in the commercial real estate group. Prior to joining
JPMorgan, Mr. Fogarty was employed as an Associate in the
financial institutions group at Bank of America.
Mr. Fogarty received a B.S. from Indiana University and an
M.B.A. from the University of Chicago Graduate School of
Business.
8
Mr. Scott joined the Adviser in 2005 and began managing the
Fund in July 2008. Mr. Scott has approximately
19 years of investment industry experience. Prior to
joining the Adviser, Mr. Scott was employed by State Farm
Insurance Companies where he served as an Assistant Vice
President in the Mutual Fund Group responsible for product
development and strategy as well as a Regional Vice President
for Sales for the Financial Services Division. Mr. Scott
received a B.S. from Elmhurst College and an M.B.A. from the
University of Chicago Graduate School of Business.
Mr. Scott also holds the Chartered Financial Analyst
designation.
Mr. Yarrow joined the Adviser in 2005 and began managing
the Fund in June 2007. Mr. Yarrow has over 14 years of
investment experience. Prior to joining the Adviser,
Mr. Yarrow was a credit analyst and a portfolio manager at
Bank One/JPMorgan. Mr. Yarrow received a bachelors
degree in mathematics and economics from the University of
Nottingham and an M.B.A. in finance from Northwestern
University. Mr. Yarrow also holds the Chartered Financial
Analyst designation.
The Fund is also managed by Avenue Europe International
Management, L.P., the Funds investment subadviser (the
Subadviser). Richard Furst, Senior Portfolio Manager
of the Subadviser, and Raul Ramirez, a Portfolio Manager of the
Subadviser, are responsible for the
day-to-day
management of the Subadvisers portion of the Funds
portfolio.
Mr. Furst has been associated with the Subadviser in an
investment management capacity since 2004. Prior to joining the
Subadviser, he was a portfolio manager with Moore Capital Group,
managing approximately $1 billion of U.S. and European
distressed and high yield securities. Prior to that, he was a
Managing Director and Head of U.S. Special Situations
Trading group for Bank of America. Previously, Mr. Furst
was a Vice President in the High Yield and Distressed Trading
and Research department of Salomon Brothers, Inc., after serving
as an Analyst in their Mergers, Acquisitions, and Restructuring
group.
Mr. Ramirez has been associated with the Subadviser in an
investment management capacity since 2006. Prior to joining the
Subadviser, Mr. Ramirez was a portfolio manager based in
London at Goldentree Asset Management UK, focused on European
investments. Previously, Mr. Ramirez was Executive Director
of the Special Situations Group at Morgan Stanley, focused on
the European energy sector. While at Morgan Stanley,
Mr. Ramirez was also the Head of European Distressed
Research.
9
For More
Information About Portfolio Holdings
Each Van Kampen fund provides a complete schedule of
portfolio holdings in its semiannual and annual reports within
60 days of the end of the funds second and fourth
fiscal quarters. The semiannual reports and the annual reports
are filed electronically with the Securities and Exchange
Commission (SEC) on
Form N-CSRS
and
Form N-CSR,
respectively. Van Kampen also delivers the semiannual and
annual reports to fund shareholders, and makes these reports
available on its public Web site, www.vankampen.com. In addition
to the semiannual and annual reports that Van Kampen
delivers to shareholders and makes available through the
Van Kampen public Web site, each fund files a complete
schedule of portfolio holdings with the SEC for the funds
first and third fiscal quarters on
Form N-Q.
Van Kampen does not deliver the reports for the first and
third fiscal quarters to shareholders, nor are the reports
posted to the Van Kampen public Web site. You may, however,
obtain the
Form N-Q
filings (as well as the
Form N-CSR
and N-CSRS
filings) by accessing the SECs Web site,
http://www.sec.gov.
You may also review and copy them at the SECs Public
Reference Room in Washington, DC. Information on the
operation of the SECs Public Reference Room may be
obtained by calling the SEC at
(800) SEC-0330.
You can also request copies of these materials, upon payment of
a duplicating fee, by electronic request at the SECs email
address (publicinfo@sec.gov) or by writing the Public Reference
section of the SEC, Washington, DC
20549-1520.
You may obtain copies of a funds fiscal quarter filings by
contacting Van Kampen Client Relations at
(800) 847-2424.
Proxy Voting
Policy and Procedures and Proxy Voting Record
You may obtain a copy of the Funds Proxy Voting Policy and
Procedures without charge, upon request, by calling toll free
(800) 847-2424
or by visiting our Web site at www.vankampen.com. It is also
available on the Securities and Exchange Commissions Web
site at
http://www.sec.gov.
You may obtain information regarding how the Fund voted proxies
relating to portfolio securities during the most recent
twelve-month period ended June 30 without charge by visiting our
Web site at www.vankampen.com. This information is also
available on the Securities and Exchange Commissions Web
site at
http://www.sec.gov.
10
Investment Advisory Agreement Approval
The current investment adviser for the Fund is Van Kampen
Asset Management (the Adviser) pursuant to the
investment advisory agreement approved by the Board on May
20-21, 2009.
The Adviser is a wholly owned subsidiary of Van Kampen
Investments Inc. (Van Kampen Investments),
which is an indirect wholly owned subsidiary of Morgan Stanley.
The current investment subadviser for the Fund is Avenue Europe
International Management, L.P. (the Subadviser)
pursuant to the investment subadvisory agreement approved by the
Board on May
20-21, 2009.
The Subadviser is a part of Avenue Capital Group. Morgan Stanley
owns an indirect, non-controlling interest in the Subadviser.
On October 19, 2009, Morgan Stanley entered into a
definitive agreement to sell substantially all of its retail
asset management business, including Van Kampen
Investments, to Invesco Ltd., a leading independent global
investment management company (the Transaction). As
a result of this Transaction, the asset management business of
Van Kampen Investments will be combined with that of
Invesco Advisers, Inc. (Invesco), a subsidiary of
Invesco Ltd.
The closing of the Transaction (currently expected to be in
mid-2010) will constitute an assignment of the
current advisory agreements for the Fund and, therefore,
pursuant to the Investment Company Act of 1940 (the 1940
Act), will result in the automatic termination of the
Funds current advisory agreements. The 1940 Act requires
that shareholders of the Fund approve any new advisory
agreements for the Fund.
In connection with the Transaction, the Funds Board of
Trustees has approved a new investment advisory arrangement
between the Fund and Invesco, which arrangement includes
(i) a new advisory agreement with Invesco, which agreement
allows Invesco to enter into subadvisory agreements and delegate
any or all of its rights, duties or obligations to one or more
wholly owned affiliates of Invesco Ltd. as subadvisers and
(ii) that Invesco enter into a master subadvisory agreement
with several of Invesco Ltd.s wholly owned affiliates. In
addition, the Funds Board of Trustees has approved a new
investment subadvisory agreement between Invesco and the
Subadviser, such that the Subadviser can continue to provide
investment subadvisory services to the Fund. The new advisory
agreement with Invesco, the new master subadvisory agreement and
the new investment subadvisory agreement with the Subadviser are
collectively referred to herein as the New Advisory
Agreements.
The Funds Board of Trustees is seeking shareholder
approval of the New Advisory Agreements at a special meeting of
shareholders and a proxy statement is being sent to shareholders
in advance of the special meeting. Closing of the Transaction
and shareholder approval of the New Advisory Agreements are
conditions precedent to the effectiveness of the New Advisory
Agreements. As part of the Transaction, it is also expected that
Invesco and its affiliates will provide the Fund with
administrative and client servicing services that are currently
provided by Van Kampen Investments and its affiliates.
11
At several in-person and telephonic meetings held in August,
September, October, November and December 2009, the Board
discussed and ultimately approved the New Advisory Agreements.
At these meetings, the Board considered information provided by
Morgan Stanley, Van Kampen Investments and Invesco
regarding, among other things: Invescos organization and
personnel; business strategy; ownership structure; financial
strength; affiliations (including other asset management
affiliations); asset management practices and capabilities;
legal and regulatory matters; and compliance matters. Emphasis
during these meetings focused on Invesco being a global
investment management leader with momentum in the
U.S. retail market, and that the combination of Invesco and
Morgan Stanleys retail asset management business,
including Van Kampen Investments, can bring additional
value to the Funds shareholders. The parties discussed
Invescos independence as a publicly traded entity, its
strategic focus solely on the investment management business
(including Invescos investment reputation, broad product
line, service quality, industry relationships and objective of
putting investors interests first) and its significant
depth in resources, diversification, performance and experience.
The parties discussed how the current Invesco and
Van Kampen Investments businesses compare and complement
each other and the synergies of the combined organization which
management believes will benefit the Funds shareholders.
The parties discussed aligning the Fund and other funds
currently advised by the Adviser together with other funds and
products currently advised by Invesco and its affiliates towards
using a single, common operating platform (which includes, among
other things, common investment operating platforms, common
global performance measurement and risk analysis, and common
compliance policies and procedures).
In connection with the Boards consideration of the New
Advisory Agreements, the Trustees considered the factors
discussed above as well as the following:
Nature, Extent and Quality of the Services to be
Provided. The Board considered the roles and
responsibilities of each of the adviser (and its affiliates) and
the Subadviser, including those specific to portfolio
management, support and trading functions anticipated to be
servicing the Fund. The Board noted that the current portfolio
management team for the Fund is expected to remain the same
under the New Advisory Agreements. The Trustees discussed with
Invesco the resources available in managing the Fund. The
Trustees also discussed certain other services that are to be
provided by Invesco or its affiliates to the Fund including
subadvisory services, certain global performance measurement and
risk analysis, compliance, accounting, and administrative
services. The Board has determined that the nature, extent and
quality of the services to be provided by Invesco (and its
affiliates) and the Subadviser support its decision to approve
the New Advisory Agreements.
Projected Fees and Expenses of the Fund. The Board
considered that the advisory fee rate for the Fund would remain
the same under the New Advisory Agreements as they are under the
current advisory agreement and the current subadvisory
agreement. The Board had previously determined that such fees
were acceptable under the current advisory agreement and the
current subadvisory agreement. The Board has determined that the
projected fees and expenses of the Fund support its decision to
approve the New Advisory Agreements.
12
Expenses in Providing the Service and
Profitability. At least annually, the Trustees expect
to review expenses in providing services to the Fund and other
funds advised by Invesco and the Subadviser and the
profitability of Invesco and the Subadviser. In connection with
the Fund, the Trustees discussed revenues and expenses,
including among other things, revenues for advisory services,
portfolio management-related expenses, and other costs. The
Board has determined that the analysis of expenses and
profitability support its decision to approve the New Advisory
Agreements.
Economies of Scale. The Board noted that economies
of scale were already reflected in the advisory fees. In future
determinations of whether to approve the continuation of the New
Advisory Agreements, the Board will consider whether economies
of scale exist and should be passed along to shareholders.
Other Benefits of the Relationship. The Board
considered other benefits to Invesco and its affiliates derived
from its relationship with the Fund and other funds advised by
Invesco. These benefits include, among other things, fees for
administrative services (which is reimbursement of
Invescos cost or such reasonable compensation as may be
approved by the Board), transfer agency services provided to
other funds in the fund family, in certain cases research to be
received by Invesco or its affiliates generated from commission
dollars spent on funds portfolio trading, and in certain
cases distribution or service related fees related to sales of
other funds in the fund family. The Trustees reviewed with
Invesco each of these arrangements and the reasonableness of its
costs relative to the services performed. The Board has
determined that the other benefits received by Invesco or its
affiliates support its decision to approve the New Advisory
Agreements.
13
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio of
Investments n January 31,
2010 (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
Amount
|
|
|
|
|
|
Stated
|
|
|
(000)
|
|
Borrower
|
|
Coupon
|
|
Maturity*
|
|
Value
|
|
|
|
|
|
|
Variable Rate Senior Loan Interests** 103.0%
|
|
|
|
|
Aerospace/Defense 0.7%
|
$
|
1,974
|
|
|
Booz Allen Hamilton, Inc., Term Loan
|
|
6.00%
|
|
07/31/15
|
|
$
|
1,991,777
|
|
|
2,262
|
|
|
IAP Worldwide Services, Inc., Term Loan (a)
|
|
9.25
|
|
12/30/12
|
|
|
1,973,226
|
|
|
783
|
|
|
TASC, Inc., Term Loan
|
|
5.50 to 5.75
|
|
12/18/14 to 12/18/15
|
|
|
787,391
|
|
|
2,000
|
|
|
Wesco Aircraft Hardware Corp., Term Loan
|
|
5.99
|
|
03/28/14
|
|
|
1,907,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,659,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Automotive 2.9%
|
|
1,575
|
|
|
Acument Global Technologies, Term Loan (a)
|
|
14.00
|
|
08/11/13
|
|
|
1,208,858
|
|
|
6,954
|
|
|
Federal-Mogul Corp., Term Loan
|
|
2.17
|
|
12/29/14 to 12/28/15
|
|
|
5,911,233
|
|
|
11,056
|
|
|
Ford Motor Co., Term Loan
|
|
3.24 to 3.26
|
|
12/16/13
|
|
|
10,367,268
|
|
|
3,837
|
|
|
Metokote Corp., Term Loan
|
|
9.00
|
|
11/27/11
|
|
|
3,270,679
|
|
|
4,935
|
|
|
Oshkosh Truck Corp., Term Loan
|
|
6.26
|
|
12/06/13
|
|
|
4,963,406
|
|
|
1,622
|
|
|
TRW Automotive, Inc., Term Loan
|
|
5.00
|
|
05/30/15 to 05/30/16
|
|
|
1,626,647
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,348,091
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Banking 0.0%
|
|
198
|
|
|
Dollar Financial Corp., Term Loan
|
|
7.00
|
|
10/30/12
|
|
|
192,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beverage, Food & Tobacco 7.1%
|
|
5,000
|
|
|
Alliance Boots Holdings Ltd., Term Loan (United Kingdom)
|
|
3.35
|
|
07/05/15
|
|
|
6,592,373
|
|
|
4,587
|
|
|
Coleman Natural Foods, LLC, Term Loan
|
|
6.74 to 6.93
|
|
08/22/12
|
|
|
2,752,255
|
|
|
8,178
|
|
|
Dole Food Co., Inc., Term Loan
|
|
7.89 to 8.00
|
|
04/12/13
|
|
|
8,271,775
|
|
|
10,000
|
|
|
DSW Holdings, Inc., Term Loan
|
|
4.25
|
|
03/02/12
|
|
|
8,716,670
|
|
|
12,000
|
|
|
Farleys & Sathers Candy Co., Inc., Term Loan
|
|
11.25
|
|
01/02/12
|
|
|
11,640,000
|
|
|
1,276
|
|
|
Foodvest Ltd., Term Loan (Sweden)
|
|
4.93
|
|
10/02/16
|
|
|
1,755,216
|
|
|
5,000
|
|
|
FSB Global Holdings, Inc., Term Loan
|
|
6.00
|
|
03/29/14
|
|
|
4,500,000
|
|
|
1,957
|
|
|
Liberator Midco Ltd., Term Loan (United Kingdom)
|
|
2.68 to 3.05
|
|
11/03/14 to 11/03/15
|
|
|
2,684,383
|
|
|
3,000
|
|
|
LJVH Holdings, Inc., Term Loan (Canada)
|
|
5.75
|
|
01/19/15
|
|
|
2,711,250
|
|
|
3,561
|
|
|
Panrico, Inc., Term Loan (Spain)
|
|
3.36 to 3.74
|
|
05/30/14 to 05/29/15
|
|
|
3,838,551
|
|
|
12,677
|
|
|
Pinnacle Foods Finance, LLC, Term Loan
|
|
2.98 to 7.50
|
|
04/02/14
|
|
|
12,348,295
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,810,768
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BroadcastingCable 7.7%
|
|
6,500
|
|
|
Bultel Cable Bulgaria EAD, Term Loan (Bulgaria) (b)
|
|
5.45 to 6.45
|
|
10/27/15 to 10/27/16
|
|
|
9,012,244
|
|
|
22,904
|
|
|
Charter Communications Operating, LLC, Term Loan (c)
|
|
2.26 to 2.76
|
|
03/06/14 to 09/06/14
|
|
|
21,255,123
|
|
14
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio
of
Investments n January 31,
2010 (Unaudited) continued
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
Amount
|
|
|
|
|
|
Stated
|
|
|
(000)
|
|
Borrower
|
|
Coupon
|
|
Maturity*
|
|
Value
|
|
|
|
|
|
|
BroadcastingCable (Continued)
|
$
|
2,708
|
|
|
CSC Holdings, Inc., Term Loan
|
|
1.25 to 1.30%
|
|
02/24/12
|
|
$
|
2,652,650
|
|
|
1,191
|
|
|
Discovery Communications Holdings, LLC, Term Loan
|
|
5.25
|
|
05/14/14
|
|
|
1,206,880
|
|
|
10,000
|
|
|
Kabel Baden-Wurttemberg GmbH, Term Loan (Germany)
|
|
2.93 to 3.43
|
|
06/09/14 to 06/09/15
|
|
|
13,674,347
|
|
|
4,126
|
|
|
Knology, Inc., Term Loan
|
|
3.75
|
|
06/30/14
|
|
|
4,029,948
|
|
|
4,972
|
|
|
TWCC Holdings, Corp., Term Loan
|
|
7.25
|
|
09/14/15
|
|
|
5,021,000
|
|
|
1,250
|
|
|
UPC Broadband Holding B.V., Term Loan (Netherlands)
|
|
3.93
|
|
12/30/16
|
|
|
1,231,562
|
|
|
10,000
|
|
|
UPC Broadband Holding B.V., Term Loan (Netherlands)
|
|
5.00
|
|
12/31/17
|
|
|
13,160,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
71,244,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BroadcastingDiversified 0.8%
|
|
7,713
|
|
|
Alpha Topco, Ltd., Term Loan (United Kingdom)
|
|
2.45 to 3.82
|
|
12/31/13 to 06/30/14
|
|
|
7,037,464
|
|
|
874
|
|
|
Cumulus Media, Inc., Term Loan
|
|
4.23
|
|
06/11/14
|
|
|
782,603
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,820,067
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BroadcastingRadio 0.6%
|
|
1,857
|
|
|
CMP KC, LLC, Term Loan (b) (d)
|
|
6.25
|
|
05/03/11
|
|
|
566,500
|
|
|
4,795
|
|
|
CMP Susquehanna Corp., Term Loan
|
|
2.25
|
|
05/05/13
|
|
|
3,940,089
|
|
|
1,721
|
|
|
Multicultural Radio Broadcasting, Inc., Term Loan
|
|
2.98
|
|
12/18/12
|
|
|
1,409,273
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,915,862
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BroadcastingTelevision 2.3%
|
|
2,673
|
|
|
FoxCo Acquisition, LLC, Term Loan
|
|
7.50
|
|
07/14/15
|
|
|
2,549,787
|
|
|
638
|
|
|
High Plains Broadcasting Operating Co., LLC, Term Loan
|
|
9.00
|
|
09/14/16
|
|
|
564,212
|
|
|
2,420
|
|
|
Newport Television, LLC, Term Loan
|
|
9.00
|
|
09/14/16
|
|
|
2,141,960
|
|
|
18,801
|
|
|
Univision Communications, Inc., Term Loan
|
|
2.50
|
|
09/29/14
|
|
|
16,422,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,678,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buildings & Real Estate 1.2%
|
|
2,000
|
|
|
El Ad IDB Las Vegas, LLC, Term Loan
|
|
4.23
|
|
08/09/12
|
|
|
895,000
|
|
|
3,000
|
|
|
FX Luxury Las Vegas I, LLC, Term Loan (d) (e)
|
|
11.25
|
|
07/06/09
|
|
|
31,500
|
|
|
2,979
|
|
|
Ginn LA CS Borrower, LLC, Term Loan (d)
|
|
6.20 to 7.75
|
|
06/08/11
|
|
|
208,552
|
|
|
4,500
|
|
|
Ginn LA CS Borrower, LLC, Term Loan (b) (d)
|
|
10.20
|
|
06/08/12
|
|
|
7,501
|
|
|
2,618
|
|
|
Kyle Acquisition Group, LLC, Term Loan (d)
|
|
4.00
|
|
07/20/11
|
|
|
187,593
|
|
|
2,382
|
|
|
Kyle Acquisition Group, LLC, Term Loan (d) (e)
|
|
5.75
|
|
07/20/09
|
|
|
170,742
|
|
15
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio
of
Investments n January 31,
2010 (Unaudited) continued
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
Amount
|
|
|
|
|
|
Stated
|
|
|
(000)
|
|
Borrower
|
|
Coupon
|
|
Maturity*
|
|
Value
|
|
|
|
|
|
|
Buildings & Real Estate (Continued)
|
$
|
1,806
|
|
|
Lake at Las Vegas Joint Venture, LLC, Revolving Credit
Agreement (a) (c) (d)
|
|
14.35%
|
|
06/20/12
|
|
$
|
52,663
|
|
|
3,034
|
|
|
Lake at Las Vegas Joint Venture, LLC, Term Loan
|
|
9.73 to 13.20
|
|
04/30/10
|
|
|
1,213,767
|
|
|
18,236
|
|
|
Lake at Las Vegas Joint Venture, LLC, Term
Loan (a) (c) (d)
|
|
15.35 to 20.00
|
|
10/01/10 to 12/22/12
|
|
|
531,870
|
|
|
1,634
|
|
|
NLV Holdings, LLC, Term Loan (a) (c)
|
|
3.00
|
|
05/09/12
|
|
|
120,491
|
|
|
5,844
|
|
|
Realogy Corp., Term Loan
|
|
3.23 to 3.25
|
|
10/10/13
|
|
|
5,215,437
|
|
|
4,573
|
|
|
Rhodes Ranch General Partnership, Term
Loan (a) (c) (d)
|
|
3.25 to 11.75
|
|
11/21/10 to 11/21/11
|
|
|
450,015
|
|
|
2,000
|
|
|
Standard Pacific Corp., Term Loan
|
|
2.02
|
|
05/05/13
|
|
|
1,710,000
|
|
|
2,497
|
|
|
Tamarack Resorts, LLC, Term Loan (d)
|
|
7.50 to 8.05
|
|
05/19/11
|
|
|
49,924
|
|
|
209
|
|
|
Tamarack Resorts, LLC, Term Loan (d) (e)
|
|
20.25
|
|
07/02/09
|
|
|
166,886
|
|
|
610
|
|
|
WCI Communities, Inc., Term Loan (a)
|
|
10.00 to 11.00
|
|
09/03/14 to 09/02/16
|
|
|
586,212
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,598,153
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Business Equipment & Services 2.3%
|
|
2,933
|
|
|
GSI Holdings, LLC, Term Loan
|
|
3.26
|
|
08/01/14
|
|
|
2,580,600
|
|
|
2,687
|
|
|
NCO Financial Systems, Term Loan
|
|
7.50
|
|
05/15/13
|
|
|
2,661,897
|
|
|
9,682
|
|
|
Nielsen Finance, LLC, Term Loan
|
|
2.23
|
|
08/09/13
|
|
|
9,283,900
|
|
|
3,909
|
|
|
RGIS Holdings, LLC, Term Loan
|
|
2.74 to 2.75
|
|
04/30/14
|
|
|
3,635,470
|
|
|
3,905
|
|
|
SMG Holdings, Inc., Term Loan
|
|
3.25 to 3.43
|
|
07/27/14
|
|
|
3,631,546
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21,793,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemicals, Plastics & Rubber 5.4%
|
|
3,363
|
|
|
Ashland Chemicals, Term Loan
|
|
6.00 to 7.65
|
|
11/13/13 to 05/13/14
|
|
|
3,396,358
|
|
|
5,000
|
|
|
Brenntag Holding GmbH & Co., KG, Term Loan (Germany)
|
|
4.25
|
|
07/07/15
|
|
|
4,889,285
|
|
|
6,883
|
|
|
Hexion Specialty Chemicals, Inc., Term Loan
|
|
2.56 to 4.06
|
|
05/06/13
|
|
|
6,438,653
|
|
|
4,348
|
|
|
Huntsman International, LLC, Term Loan
|
|
2.48 to 2.49
|
|
06/30/16
|
|
|
4,170,652
|
|
|
72
|
|
|
Lyondell Chemical Co., Revolving Credit Agreement (c)
|
|
3.50 to 3.73
|
|
12/22/14
|
|
|
52,240
|
|
|
16,939
|
|
|
Lyondell Chemical Co., Term Loan (c)
|
|
3.73 to 13.00
|
|
04/06/10 to 12/22/14
|
|
|
13,550,988
|
|
|
1,793
|
|
|
Nalco Co., Term Loan
|
|
1.98 to 6.50
|
|
05/06/16 to 05/13/16
|
|
|
1,802,756
|
|
|
4,925
|
|
|
PQ Corp., Term Loan
|
|
3.49 to 3.50
|
|
07/30/14
|
|
|
4,598,719
|
|
|
6,178
|
|
|
Solutia, Inc., Term Loan
|
|
7.25
|
|
02/28/14
|
|
|
6,285,453
|
|
|
5,733
|
|
|
Univar, Inc., Term Loan
|
|
3.23
|
|
10/10/14
|
|
|
5,431,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,616,808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio
of
Investments n January 31,
2010 (Unaudited) continued
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
Amount
|
|
|
|
|
|
Stated
|
|
|
(000)
|
|
Borrower
|
|
Coupon
|
|
Maturity*
|
|
Value
|
|
|
|
|
|
|
Construction Material 2.4%
|
$
|
1,877
|
|
|
Axia, Inc., Term Loan (a) (c) (d)
|
|
5.00%
|
|
12/21/12
|
|
$
|
234,645
|
|
|
5,105
|
|
|
Axia, Inc., Term Loan (a) (b) (c) (d)
|
|
17.95
|
|
12/21/12
|
|
|
0
|
|
|
£ 9,514
|
|
|
Baxi Group Ltd., Term Loan (United Kingdom)
|
|
3.35 to 4.35
|
|
12/27/11 to 12/27/12
|
|
|
14,628,478
|
|
|
1,960
|
|
|
Baxi Group Ltd., Term Loan (United Kingdom)
|
|
3.35 to 4.50
|
|
06/13/11 to 10/07/16
|
|
|
2,616,990
|
|
|
1,036
|
|
|
Building Materials Holding Corp., Term Loan (a)
|
|
8.00
|
|
01/04/15
|
|
|
776,629
|
|
|
2,331
|
|
|
Contech Construction Products, Inc., Term Loan
|
|
2.24
|
|
01/31/13
|
|
|
2,124,089
|
|
|
2,000
|
|
|
Custom Building Products, Inc., Term Loan
|
|
10.75
|
|
04/20/12
|
|
|
1,935,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,315,831
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Containers, Packaging & Glass 2.1%
|
|
1,204
|
|
|
Anchor Glass Container Corp., Term Loan
|
|
6.75
|
|
06/20/14
|
|
|
1,217,061
|
|
|
8,858
|
|
|
Berlin Packaging, LLC, Term Loan
|
|
3.23 to 6.77
|
|
08/17/14 to 08/17/15
|
|
|
6,658,726
|
|
|
2,685
|
|
|
Berry Plastics Group, Inc., Term Loan
|
|
2.25
|
|
04/03/15
|
|
|
2,434,859
|
|
|
6,540
|
|
|
Graham Packaging Co., LP, Term Loan
|
|
2.50 to 6.75
|
|
10/07/11 to 04/05/14
|
|
|
6,606,609
|
|
|
2,800
|
|
|
Reynolds Group Holdings, Inc., Term Loan
|
|
6.25
|
|
11/05/15
|
|
|
2,841,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,758,905
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diversified Manufacturing 0.4%
|
|
5,058
|
|
|
Euramax International, Inc., Term Loan (a)
|
|
10.00 to 14.00
|
|
06/29/13
|
|
|
3,945,098
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ecological 0.5%
|
|
6,850
|
|
|
Synagro Technologies, Inc., Term Loan
|
|
4.98
|
|
10/02/14
|
|
|
4,795,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Education & Child Care 1.6%
|
|
920
|
|
|
Bright Horizons Family Solutions, Inc., Revolving Credit
Agreement
|
|
3.50 to 3.74
|
|
05/28/14
|
|
|
864,800
|
|
|
9,133
|
|
|
Cengage Learning, Holdings II, Inc. LP, Term Loan
|
|
2.75
|
|
07/03/14
|
|
|
8,133,493
|
|
|
500
|
|
|
Educate, Inc., Term Loan
|
|
5.51
|
|
06/16/14
|
|
|
434,166
|
|
|
1,964
|
|
|
Education Management, LLC, Term Loan
|
|
2.06
|
|
06/03/13
|
|
|
1,889,727
|
|
|
5,000
|
|
|
Nelson Education Ltd., Term Loan (Canada)
|
|
6.25
|
|
07/03/15
|
|
|
3,825,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,147,186
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Electronics 3.0%
|
|
9,373
|
|
|
Edwards Ltd., Term Loan (Cayman Islands) (a)
|
|
2.26 to 5.99
|
|
05/31/14 to 11/30/14
|
|
|
6,870,555
|
|
17
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio
of
Investments n January 31,
2010 (Unaudited) continued
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
Amount
|
|
|
|
|
|
Stated
|
|
|
(000)
|
|
Borrower
|
|
Coupon
|
|
Maturity*
|
|
Value
|
|
|
|
|
|
|
Electronics (Continued)
|
$
|
5,923
|
|
|
Infor Enterprise Solutions Holdings, Inc., Term Loan
|
|
3.99%
|
|
07/28/12
|
|
$
|
5,552,641
|
|
|
6,805
|
|
|
Open Solutions, Inc., Term Loan
|
|
2.38
|
|
01/23/14
|
|
|
6,061,805
|
|
|
4,854
|
|
|
Stratus Technologies, Inc., Term Loan
|
|
4.01
|
|
03/29/11
|
|
|
4,223,106
|
|
|
1,946
|
|
|
Sungard Data Systems, Inc., Term Loan
|
|
1.98 to 6.75
|
|
02/28/14 to 02/26/16
|
|
|
1,929,032
|
|
|
3,103
|
|
|
Verint Systems, Inc., Term Loan
|
|
3.49
|
|
05/25/14
|
|
|
2,931,870
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,569,009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Entertainment & Leisure 3.5%
|
|
3,517
|
|
|
Fender Musical Instruments Corp., Term Loan
|
|
2.51
|
|
06/09/14
|
|
|
3,050,778
|
|
|
1,750
|
|
|
Hicks Sports Group, LLC, Term Loan (d)
|
|
6.75
|
|
12/22/10
|
|
|
1,451,042
|
|
|
26,879
|
|
|
Metro-Goldwyn-Mayer
Studios, Inc., Term Loan (d)
|
|
20.50
|
|
04/08/12
|
|
|
15,724,184
|
|
|
£ 5,350
|
|
|
Red Football Ltd., Term Loan (United Kingdom)
|
|
3.02 to 3.27
|
|
08/01/14
|
|
|
8,524,188
|
|
|
1,995
|
|
|
Regal Cinemas, Inc., Term Loan
|
|
4.00
|
|
10/28/13
|
|
|
2,000,525
|
|
|
1,457
|
|
|
Ticketmaster Entertainment, Inc., Term Loan
|
|
7.00
|
|
07/25/14
|
|
|
1,449,857
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,200,574
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Farming & Agriculture 0.5%
|
|
5,000
|
|
|
WM. Bolthouse Farms, Inc., Term Loan
|
|
9.00
|
|
12/16/13
|
|
|
4,897,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance 5.2%
|
|
3,635
|
|
|
C.G. JCF Corp., Term Loan
|
|
3.24
|
|
08/01/14
|
|
|
3,280,668
|
|
|
27,297
|
|
|
First Data Corp., Term Loan
|
|
2.98 to 3.00
|
|
09/24/14
|
|
|
23,634,169
|
|
|
5,723
|
|
|
National Processing Co. Group, Inc., Term Loan
|
|
7.00 to 10.75
|
|
09/29/13 to 09/29/14
|
|
|
5,379,313
|
|
|
5,829
|
|
|
Nuveen Investments, Inc., Term Loan
|
|
3.25 to 3.32
|
|
11/13/14
|
|
|
5,159,910
|
|
|
3,234
|
|
|
Oxford Acquisition III, Ltd., Term Loan (United Kingdom)
|
|
2.25
|
|
05/12/14
|
|
|
3,050,731
|
|
|
9,782
|
|
|
RJO Holdings, Corp., Term Loan (a)
|
|
5.24 to 8.99
|
|
07/12/14 to 07/13/15
|
|
|
3,919,397
|
|
|
4,779
|
|
|
Transfirst Holdings, Inc., Term Loan (a)
|
|
3.01 to 7.01
|
|
06/15/14 to 06/15/15
|
|
|
4,322,617
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,746,805
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio
of
Investments n January 31,
2010 (Unaudited) continued
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
Amount
|
|
|
|
|
|
Stated
|
|
|
(000)
|
|
Borrower
|
|
Coupon
|
|
Maturity*
|
|
Value
|
|
|
|
|
|
|
Health & Beauty 0.9%
|
$
|
5,081
|
|
|
American Safety Razor Co., Term Loan
|
|
6.51%
|
|
01/30/14
|
|
$
|
2,781,653
|
|
|
8,054
|
|
|
Marietta Intermediate Holding Corp., Term Loan (a)
|
|
7.25 to 12.00
|
|
11/30/10 to 12/31/12
|
|
|
1,357,778
|
|
|
4,776
|
|
|
Philosophy, Inc., Term Loan
|
|
2.24
|
|
03/16/14
|
|
|
4,226,979
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,366,410
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare 5.2%
|
|
2,985
|
|
|
Capella Healthcare, Inc., Term Loan
|
|
5.75
|
|
03/02/15
|
|
|
2,969,886
|
|
|
1,980
|
|
|
Catalent Pharma Solutions, Term Loan
|
|
2.48
|
|
04/10/14
|
|
|
1,811,421
|
|
|
5,541
|
|
|
Community Health Systems, Inc., Term Loan
|
|
2.51
|
|
07/25/14
|
|
|
5,244,790
|
|
|
3,170
|
|
|
Concentra, Inc., Term Loan (a)
|
|
5.76
|
|
06/25/15
|
|
|
2,773,841
|
|
|
7,075
|
|
|
HCA, Inc., Term Loan
|
|
2.50
|
|
11/18/13
|
|
|
6,738,875
|
|
|
4,345
|
|
|
HCR Healthcare, LLC, Term Loan
|
|
2.73
|
|
12/22/14
|
|
|
4,134,991
|
|
|
6,141
|
|
|
Health Management Associates, Inc., Term Loan
|
|
2.00
|
|
02/28/14
|
|
|
5,845,067
|
|
|
1,689
|
|
|
Healthcare Partners, LLC, Term Loan
|
|
2.00
|
|
10/31/13
|
|
|
1,625,662
|
|
|
2,925
|
|
|
Inverness Medical Innovations, Inc., Term Loan
|
|
2.23 to 2.25
|
|
06/26/14
|
|
|
2,800,688
|
|
|
1,667
|
|
|
Rehabcare Group, Inc., Term Loan
|
|
6.00
|
|
11/24/15
|
|
|
1,674,167
|
|
|
5,872
|
|
|
Surgical Care Affiliates, LLC., Term Loan
|
|
2.25
|
|
12/29/14
|
|
|
5,442,706
|
|
|
3,927
|
|
|
United Surgical Partners International, Inc., Term Loan
|
|
2.24 to 2.25
|
|
04/19/14 to 04/21/14
|
|
|
3,684,413
|
|
|
4,104
|
|
|
Viant Holdings, Inc., Term Loan
|
|
2.51
|
|
06/25/14
|
|
|
4,042,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,788,609
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Home & Office Furnishings, Housewares & Durable
Consumer Products 1.1%
|
|
8,651
|
|
|
Hunter Fan Co., Term Loan
|
|
2.74 to 6.99
|
|
04/16/14 to 10/16/14
|
|
|
4,449,198
|
|
|
4,875
|
|
|
Mattress Holdings, Corp., Term Loan
|
|
2.51
|
|
01/18/14
|
|
|
3,526,249
|
|
|
2,208
|
|
|
National Bedding Co., LLC, Term Loan
|
|
5.31
|
|
02/28/14
|
|
|
1,970,357
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,945,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotels, Motels, Inns & Gaming 8.9%
|
|
3,536
|
|
|
Amadeus IT Group SA, Term Loan (Spain)
|
|
1.68
|
|
07/07/12
|
|
|
4,744,339
|
|
|
3,682
|
|
|
Amadeus IT Group SA, Term Loan (Spain)
|
|
1.48
|
|
12/31/19
|
|
|
3,564,287
|
|
|
1,996
|
|
|
BLB Worldwide Holdings, Inc., Term Loan (a)
|
|
4.75
|
|
07/18/11
|
|
|
1,267,755
|
|
|
5,500
|
|
|
BLB Worldwide Holdings, Inc., Term Loan (d)
|
|
6.50
|
|
07/18/12
|
|
|
302,500
|
|
19
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio
of
Investments n January 31,
2010 (Unaudited) continued
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
Amount
|
|
|
|
|
|
Stated
|
|
|
(000)
|
|
Borrower
|
|
Coupon
|
|
Maturity*
|
|
Value
|
|
|
|
|
|
|
Hotels, Motels, Inns & Gaming (Continued)
|
$
|
7,555
|
|
|
Cannery Casino Resorts, LLC, Term Loan
|
|
2.48 to 4.48%
|
|
05/18/13 to 05/16/14
|
|
$
|
6,331,705
|
|
|
3,463
|
|
|
CCM Merger, Inc., Term Loan
|
|
8.50
|
|
07/12/12
|
|
|
3,430,289
|
|
|
£ 1,936
|
|
|
Gala Group Ltd., Term Loan (United Kingdom)
|
|
3.53
|
|
12/01/12
|
|
|
2,932,759
|
|
|
2,689
|
|
|
Golden Nugget, Inc., Term Loan
|
|
2.25 to 3.51
|
|
06/30/14 to 12/31/14
|
|
|
1,378,167
|
|
|
16,218
|
|
|
Harrahs Operating Co., Inc., Term Loan
|
|
3.25 to 9.50
|
|
01/28/15 to 10/31/16
|
|
|
13,533,314
|
|
|
7,944
|
|
|
Las Vegas Sands, Venetian Casino, Term Loan
|
|
2.01
|
|
05/23/14
|
|
|
7,018,110
|
|
|
9,560
|
|
|
Magnolia Hill, LLC, Term Loan
|
|
3.49 to 14.00
|
|
10/30/13 to 04/30/14
|
|
|
8,880,534
|
|
|
2,529
|
|
|
MGM Mirage, Term Loan
|
|
6.00
|
|
10/03/11
|
|
|
2,437,359
|
|
|
20,500
|
|
|
Regency Entertainment SA, Term Loan (Greece)
|
|
2.95 to 3.32
|
|
03/03/14 to 03/02/15
|
|
|
23,875,515
|
|
|
3,337
|
|
|
Venetian Macau, Ltd., Term Loan
|
|
4.76
|
|
05/25/12 to 05/27/13
|
|
|
3,186,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
82,883,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance 2.4%
|
|
3,894
|
|
|
Alliant Holdings I, Inc., Term Loan
|
|
3.25
|
|
08/21/14
|
|
|
3,685,890
|
|
|
6,018
|
|
|
AmWins Group, Inc., Term Loan
|
|
2.76
|
|
06/08/13
|
|
|
5,589,589
|
|
|
2,324
|
|
|
Conseco, Inc., Term Loan
|
|
7.50
|
|
10/10/13
|
|
|
2,216,267
|
|
|
1,750
|
|
|
HMSC Corp., Term Loan
|
|
5.75
|
|
10/03/14
|
|
|
1,229,375
|
|
|
3,654
|
|
|
Mitchell International, Inc., Term Loan
|
|
5.56
|
|
03/30/15
|
|
|
3,032,430
|
|
|
1,995
|
|
|
USI Holdings Corp., Term Loan
|
|
7.00
|
|
05/05/14
|
|
|
1,953,853
|
|
|
4,461
|
|
|
Vertafore, Inc., Term Loan
|
|
6.26 to 7.50
|
|
01/31/13 to 07/31/14
|
|
|
4,331,058
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,038,462
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Machinery 1.0%
|
|
5,655
|
|
|
Goodman Global, Inc., Term Loan
|
|
6.25
|
|
02/13/14
|
|
|
5,713,885
|
|
|
3,906
|
|
|
Mold-Masters Luxembourg Holdings, SA, Term Loan
|
|
3.75
|
|
10/11/14
|
|
|
3,222,220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,936,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media 1.8%
|
|
£ 11,000
|
|
|
Virgin Media Investment Holdings Ltd., Term Loan (United Kingdom)
|
|
3.00
|
|
08/15/16
|
|
|
16,647,192
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Products & Services 0.4%
|
|
1,837
|
|
|
Biomet, Inc., Term Loan
|
|
3.23 to 3.25
|
|
03/25/15
|
|
|
1,794,887
|
|
|
1,712
|
|
|
Carestream Health, Inc., Term Loan
|
|
2.23
|
|
04/30/13
|
|
|
1,626,635
|
|
|
452
|
|
|
Orthofix Holdings, Inc., Term Loan
|
|
6.75
|
|
09/22/13
|
|
|
452,077
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,873,599
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining, Steel, Iron & Non-Precious
Metals 0.3%
|
|
3,242
|
|
|
John Maneely Co., Term Loan
|
|
3.50
|
|
12/09/13
|
|
|
3,113,614
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio
of
Investments n January 31,
2010 (Unaudited) continued
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
Amount
|
|
|
|
|
|
Stated
|
|
|
(000)
|
|
Borrower
|
|
Coupon
|
|
Maturity*
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
Natural Resources 0.5%
|
$
|
4,000
|
|
|
Dresser, Inc., Term Loan
|
|
5.99 to 6.02%
|
|
05/04/15
|
|
$
|
3,805,000
|
|
|
611
|
|
|
Targa Resources, Inc., Term Loan
|
|
6.00
|
|
07/05/16
|
|
|
613,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,418,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Durable Consumer Products 5.1%
|
|
6,618
|
|
|
Amscan Holdings, Inc., Term Loan
|
|
2.50
|
|
05/25/13
|
|
|
6,204,258
|
|
|
1,938
|
|
|
Huish Detergents, Inc., Term Loan
|
|
2.01
|
|
04/26/14
|
|
|
1,879,528
|
|
|
8,359
|
|
|
KIK Custom Products, Inc., Term Loan
|
|
2.50 to 5.25
|
|
06/02/14 to 11/30/14
|
|
|
5,608,324
|
|
|
2,931
|
|
|
Mega Brands, Inc., Term Loan (Canada)
|
|
9.75
|
|
07/26/12
|
|
|
1,961,318
|
|
|
16,128
|
|
|
Ontex, Term Loan (Belgium)
|
|
3.56 to 4.56
|
|
07/05/12 to 07/05/13
|
|
|
21,690,288
|
|
|
9,698
|
|
|
Spectrum Brands, Inc., Term Loan
|
|
8.00 to 8.75
|
|
06/29/12
|
|
|
9,698,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,042,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paper & Forest Products 0.5%
|
|
3,200
|
|
|
Ainsworth Lumber Co., Ltd, Term Loan
|
|
5.25
|
|
06/26/14
|
|
|
2,736,000
|
|
|
407
|
|
|
Verso Paper Holding, LLC, Term Loan (a)
|
|
6.53 to 7.28
|
|
02/01/13
|
|
|
208,609
|
|
|
3,436
|
|
|
White Birch Paper Co., Term Loan (Canada) (a) (d)
|
|
7.00
|
|
05/08/14
|
|
|
1,331,432
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,276,041
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pharmaceuticals 2.5%
|
|
3,000
|
|
|
Nyco Holdings 2 Aps, Term Loan (Denmark)
|
|
1.75 to 3.71
|
|
12/29/13 to 12/29/15
|
|
|
4,008,241
|
|
|
20,596
|
|
|
Nyco Holdings 2 Aps, Term Loan (Denmark)
|
|
1.75 to 3.71
|
|
12/29/13 to 12/29/15
|
|
|
19,391,602
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23,399,843
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Printing & Publishing 4.8%
|
|
5,731
|
|
|
Affiliated Media, Term Loan
|
|
6.73
|
|
12/30/10 to 08/02/13
|
|
|
2,561,862
|
|
|
4,000
|
|
|
Endurance Business Media, Inc., Term Loan (b) (d)
|
|
11.25
|
|
01/26/14
|
|
|
0
|
|
|
4,123
|
|
|
Gatehouse Media, Inc., Term Loan
|
|
2.24
|
|
08/28/14
|
|
|
2,056,250
|
|
|
1,527
|
|
|
SuperMedia, Inc., Term Loan
|
|
11.00
|
|
12/31/15
|
|
|
1,444,915
|
|
|
3,166
|
|
|
Knowledgepoint 360 Group, LLC, Term Loan
|
|
3.53 to 7.28
|
|
04/14/14 to 04/13/15
|
|
|
2,174,547
|
|
|
4,927
|
|
|
Merrill Communications, LLC, Term Loan (a)
|
|
14.75 to 15.00
|
|
11/15/13
|
|
|
3,116,401
|
|
|
2,333
|
|
|
Newsday, LLC, Term Loan
|
|
6.50
|
|
08/01/13
|
|
|
2,356,667
|
|
|
11,888
|
|
|
Primacom, Term Loan (Germany)
|
|
4.72 to 5.22
|
|
09/25/10 to 12/05/14
|
|
|
13,103,901
|
|
|
1,447
|
|
|
Primedia, Inc., Term Loan
|
|
2.48 to 2.50
|
|
08/01/14
|
|
|
1,255,566
|
|
|
1,604
|
|
|
R.H. Donnelley, Inc., Term Loan
|
|
9.25
|
|
10/24/14
|
|
|
1,565,039
|
|
|
16,000
|
|
|
Tribune Co., Bridge Loan (c) (d)
|
|
8.25
|
|
12/20/15
|
|
|
440,000
|
|
|
14,146
|
|
|
Tribune Co., Term Loan (c) (d)
|
|
5.25
|
|
06/04/14
|
|
|
8,894,465
|
|
21
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio
of
Investments n January 31,
2010 (Unaudited) continued
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
Amount
|
|
|
|
|
|
Stated
|
|
|
(000)
|
|
Borrower
|
|
Coupon
|
|
Maturity*
|
|
Value
|
|
|
|
|
|
|
Printing & Publishing (Continued)
|
$
|
6,690
|
|
|
Yell Group PLC, Term Loan (United Kingdom)
|
|
3.98%
|
|
07/31/14
|
|
$
|
5,248,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,218,149
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restaurants & Food Service 0.5%
|
|
1,531
|
|
|
Center Cut Hospitality, Inc., Term Loan
|
|
9.25
|
|
07/06/14
|
|
|
1,362,833
|
|
|
3,233
|
|
|
Volume Services America, Inc., Term Loan
|
|
9.25
|
|
12/31/12
|
|
|
3,176,102
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,538,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RetailOil & Gas 0.4%
|
|
3,859
|
|
|
The Pantry, Inc., Term Loan
|
|
1.74
|
|
05/15/14
|
|
|
3,670,475
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RetailSpecialty 1.6%
|
|
6,315
|
|
|
Travelport, LLC, Term Loan
|
|
2.89
|
|
08/23/13
|
|
|
8,456,690
|
|
|
6,500
|
|
|
Zapf, Term Loan (Germany) (b)
|
|
4.97
|
|
11/30/12
|
|
|
6,759,183
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,215,873
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RetailStores 2.2%
|
|
4,268
|
|
|
Dollar General Corp., Term Loan
|
|
2.98
|
|
07/07/14
|
|
|
4,132,041
|
|
|
6,502
|
|
|
General Nutrition Centers, Inc., Term Loan
|
|
2.49 to 2.53
|
|
09/16/13
|
|
|
6,265,912
|
|
|
4,093
|
|
|
Guitar Center, Inc., Term Loan
|
|
3.74
|
|
10/09/14
|
|
|
3,673,186
|
|
|
5,471
|
|
|
Rite Aid Corp., Term Loan
|
|
6.00
|
|
06/04/14
|
|
|
5,195,959
|
|
|
1,020
|
|
|
Sally Holdings, Inc., Term Loan
|
|
2.48
|
|
11/15/13
|
|
|
1,000,678
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,267,776
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Software 1.4%
|
|
9,786
|
|
|
NDS Finance Ltd., Term Loan (United Kingdom)
|
|
4.93
|
|
10/14/15
|
|
|
13,059,407
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TelecommunicationsEquipment &
Services 1.4%
|
|
4,400
|
|
|
Avaya, Inc., Term Loan
|
|
3.01
|
|
10/24/14
|
|
|
3,953,713
|
|
|
4,774
|
|
|
EWT (Escaline S.A.R.L), Term Loan (Germany)
|
|
3.18 to 3.68
|
|
10/31/14 to 10/30/15
|
|
|
5,716,884
|
|
|
3,852
|
|
|
Fibernet, Term Loan (Bulgaria) (b)
|
|
3.42 to 3.92
|
|
12/20/14 to 12/20/15
|
|
|
3,471,512
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,142,109
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TelecommunicationsLocal Exchange
Carriers 1.1%
|
|
6,402
|
|
|
Global Tel*Link Corp., Term Loan
|
|
9.00
|
|
02/14/13
|
|
|
6,418,382
|
|
|
3,222
|
|
|
Hawaiian Telcom Communications, Inc., Term Loan (a) (c)
|
|
4.75
|
|
06/01/14
|
|
|
2,706,408
|
|
|
1,389
|
|
|
Sorenson Communications, Inc., Term Loan
|
|
6.00
|
|
08/16/13
|
|
|
1,351,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,476,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TelecommunicationsLong Distance 0.5%
|
|
5,167
|
|
|
Level 3 Communications, Inc., Term Loan
|
|
2.50 to 11.50
|
|
03/13/14
|
|
|
4,742,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio
of
Investments n January 31,
2010 (Unaudited) continued
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
Amount
|
|
|
|
|
|
Stated
|
|
|
(000)
|
|
Borrower
|
|
Coupon
|
|
Maturity*
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
TelecommunicationsWireless 0.9%
|
$
|
2,916
|
|
|
Asurion Corp., Term Loan
|
|
3.23 to 3.27%
|
|
07/03/14
|
|
$
|
2,836,202
|
|
|
3,788
|
|
|
MetroPCS Wireless, Inc., Term Loan
|
|
2.50 to 2.56
|
|
11/04/13
|
|
|
3,668,871
|
|
|
1,814
|
|
|
NTELOS, Inc., Term Loan
|
|
5.75
|
|
08/07/15
|
|
|
1,830,639
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,335,712
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Textiles & Leather 1.1%
|
|
3,466
|
|
|
Gold Toe Investment Corp., Term Loan
|
|
8.50 to 11.75
|
|
10/30/13 to 04/30/14
|
|
|
2,674,937
|
|
|
2,632
|
|
|
Hanesbrands, Inc., Term Loan
|
|
5.25
|
|
12/10/15
|
|
|
2,669,955
|
|
|
5,000
|
|
|
Levi Strauss & Co., Term Loan
|
|
2.48
|
|
03/27/14
|
|
|
4,637,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,982,392
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Utilities 6.3%
|
|
5,000
|
|
|
Bicent Power, LLC, Term Loan
|
|
4.26
|
|
12/31/14
|
|
|
3,512,500
|
|
|
4,353
|
|
|
BRSP, LLC, Term Loan
|
|
7.50
|
|
06/24/14
|
|
|
4,298,989
|
|
|
22,678
|
|
|
Calpine Corp., Term Loan (g)
|
|
3.14
|
|
03/29/14
|
|
|
21,487,001
|
|
|
4,337
|
|
|
First Light Power Resources, Inc., Term Loan
|
|
2.75 to 4.81
|
|
11/01/13 to 05/01/14
|
|
|
4,111,301
|
|
|
187
|
|
|
Mach Gen, LLC, Term Loan
|
|
2.28
|
|
02/22/13
|
|
|
173,678
|
|
|
3,761
|
|
|
NRG Energy, Inc., Term Loan
|
|
1.98 to 2.00
|
|
02/01/13
|
|
|
3,647,853
|
|
|
5,000
|
|
|
Primary Energy Operations, LLC, Term Loan
|
|
6.50
|
|
10/23/14
|
|
|
4,925,000
|
|
|
12,987
|
|
|
Texas Competitive Electric Holdings, Co., LLC, Term Loan
|
|
3.73 to 3.75
|
|
10/10/14
|
|
|
10,636,914
|
|
|
6,000
|
|
|
TPF Generation Holdings, LLC, Term Loan
|
|
4.48 to 4.50
|
|
12/15/14
|
|
|
5,362,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58,155,736
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Variable Rate Senior Loan
Interests** 103.0%
|
|
|
959,589,669
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Notes 26.6%
|
|
|
|
|
BroadcastingCable 1.3%
|
|
5,000
|
|
|
Kabel Deutschland GmbH (Germany)
|
|
10.63
|
|
07/01/14
|
|
|
5,250,000
|
|
|
5,000
|
|
|
UPC Germany GmbH (Germany) (h)
|
|
9.63
|
|
12/01/19
|
|
|
7,053,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,303,814
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Buildings & Real Estate 0.4%
|
|
£ 3,160
|
|
|
European Loan Conduit (United Kingdom) (b)
|
|
0.78
|
|
07/25/17
|
|
|
3,599,026
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemicals, Plastics & Rubber 0.7%
|
|
5,000
|
|
|
Cognis GmbH (Germany) (h)
|
|
2.25
|
|
09/15/13
|
|
|
4,700,000
|
|
|
1,893
|
|
|
Wellman, Inc. (a) (b)
|
|
5.00
|
|
01/29/19
|
|
|
1,893,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,593,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction Material 0.2%
|
|
2,000
|
|
|
Compression Polymers Corp. (f)
|
|
7.18
|
|
07/01/12
|
|
|
1,910,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio
of
Investments n January 31,
2010 (Unaudited) continued
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
Amount
|
|
|
|
|
|
Stated
|
|
|
(000)
|
|
Borrower
|
|
Coupon
|
|
Maturity*
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
Containers, Packaging & Glass 7.8%
|
|
8,321
|
|
|
Ardagh Glass Finance BV (Ireland) (h)
|
|
8.88%
|
|
07/01/13
|
|
$
|
11,940,856
|
|
|
17,200
|
|
|
Ardagh Glass Finance (Ireland) (h)
|
|
7.13 to 8.75
|
|
06/15/17 to 02/01/20
|
|
|
23,357,574
|
|
|
2,800
|
|
|
Berry Plastics Group, Inc. (f)
|
|
5.00
|
|
02/15/15
|
|
|
2,618,000
|
|
|
4,500
|
|
|
Impress Holdings (Netherlands) (h)
|
|
9.25
|
|
09/15/14
|
|
|
6,504,414
|
|
|
9,000
|
|
|
Impress Metal Packaging Holdings BV (Netherlands) (h)
|
|
3.81
|
|
09/15/13
|
|
|
11,979,352
|
|
|
12,725
|
|
|
Pregis Corp.
|
|
5.68
|
|
04/15/13
|
|
|
16,231,745
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,631,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Entertainment & Leisure 1.3%
|
|
5,000
|
|
|
Red Football Ltd., Term Loan (United Kingdom) (h)
|
|
8.38
|
|
02/01/17
|
|
|
4,900,000
|
|
|
£ 5,000
|
|
|
Red Football Ltd., Term Loan (United Kingdom) (h)
|
|
8.75
|
|
02/01/17
|
|
|
7,433,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,333,830
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance 1.8%
|
|
12,000
|
|
|
GMAC, Inc.
|
|
5.38 to 6.00
|
|
06/06/11 to 05/23/12
|
|
|
16,468,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Healthcare 0.7%
|
|
6,167
|
|
|
Apria Healthcare Group, Inc.
|
|
11.25
|
|
11/01/14
|
|
|
6,629,167
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotels, Motels, Inns & Gaming 0.2%
|
|
2,000
|
|
|
Wynn Las Vegas, LLC
|
|
6.63
|
|
12/01/14
|
|
|
1,925,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Media 0.5%
|
|
4,250
|
|
|
Virgin Media Finance PLC (United Kingdom)
|
|
9.50
|
|
08/15/16
|
|
|
4,526,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mining, Steel, Iron & Non-Precious
Metals 1.4%
|
|
11,500
|
|
|
FMG Finance Pty Ltd. (Australia) (h)
|
|
10.63
|
|
09/01/16
|
|
|
13,081,250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Durable Consumer Products 0.2%
|
|
1,539
|
|
|
Targus Group International, Inc., (b)
|
|
10.00
|
|
12/15/15
|
|
|
1,500,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TelecommunicationsEquipment &
Services 3.9%
|
|
6,000
|
|
|
Iesy Hessen GmbH & Co, Kg (Germany) (h)
|
|
3.60
|
|
04/15/13
|
|
|
8,277,400
|
|
|
24,150
|
|
|
Versatel AG (Germany) (h)
|
|
3.46
|
|
06/15/14
|
|
|
28,461,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,738,760
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TelecommunicationsLocal Exchange
Carriers 0.1%
|
|
1,000
|
|
|
Qwest Corp. (f)
|
|
3.50
|
|
06/15/13
|
|
|
982,500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio
of
Investments n January 31,
2010 (Unaudited) continued
|
|
|
|
|
|
|
|
|
|
|
|
|
Principal
|
|
|
|
|
|
|
|
|
Amount
|
|
|
|
|
|
Stated
|
|
|
(000)
|
|
Borrower
|
|
Coupon
|
|
Maturity*
|
|
Value
|
|
|
|
|
|
|
|
|
|
|
|
TelecommunicationsWireless 1.6%
|
$
|
14,000
|
|
|
Wind Acquisition Fin SA (Italy) (h)
|
|
10.75%
|
|
12/01/15
|
|
$
|
15,155,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TransportationCargo 3.2%
|
|
22,112
|
|
|
CB Bus AB (Sweden) (b)
|
|
9.13
|
|
08/01/12
|
|
|
29,585,229
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation Infrastructure 1.3%
|
|
5,000
|
|
|
Channel Link (United Kingdom) (b)
|
|
2.25
|
|
06/30/12
|
|
|
5,545,996
|
|
|
£ 5,000
|
|
|
Channel Link (United Kingdom) (b)
|
|
2.08
|
|
06/20/12
|
|
|
6,394,005
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,940,001
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Notes 26.6%
|
|
|
247,903,271
|
|
|
|
|
|
|
|
|
|
|
Equities 0.3%
|
|
|
|
|
Axia, Inc. (Warrants for 6,352 common shares, Expiration
date 12/31/18, Acquired 09/24/08, Cost $0) (b) (i)
|
|
|
0
|
|
Building Materials Holding Corp. (512,204 common shares,
Acquired 01/11/10, Cost $770,554) (i) (j)
|
|
|
384,153
|
|
Cumulus Media, Inc. (Warrants for 1,568 common shares,
Expiration date 06/29/19, Acquired 01/14/10,
Cost $0) (b)
|
|
|
2,007
|
|
Euramax International, Inc. (1,870 common shares, Acquired
07/09/09, Cost $1,962,106) (i) (j)
|
|
|
138,365
|
|
SuperMedia, Inc. (7,080 common shares, Acquired 01/07/10,
Cost $525,307) (j)
|
|
|
257,075
|
|
Newhall Holding Co., LLC (235,259 common shares, Acquired
8/26/09, Cost $2,010,219) (j)
|
|
|
429,348
|
|
Targus Group International, Inc. (62,413 common shares,
Acquired 12/16/09, Cost $0) (b) (i) (j)
|
|
|
0
|
|
Vitruvian Exploration, LLC (76,400 common shares, Acquired
10/19/09, Cost $3,276,000) (j)
|
|
|
840,400
|
|
WCI Communities, Inc. (1,830 common shares, Acquired
09/23/09, Cost $205,427) (j)
|
|
|
155,550
|
|
Wellman, Inc. (1,892 common shares, Acquired 02/12/09
& 06/16/09, Cost $4,958,713) (b) (j)
|
|
|
622,790
|
|
|
|
|
|
|
|
|
|
|
|
Total Equities 0.3%
|
|
|
2,829,688
|
|
|
|
|
|
|
|
|
|
|
|
Total Long-Term Investments 129.9%
(Cost $1,388,186,970)
|
|
|
1,210,322,628
|
|
|
|
|
|
|
25
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio
of
Investments n January 31,
2010 (Unaudited) continued
|
|
|
|
|
|
|
|
|
|
|
|
|
Borrower
|
|
Value
|
|
|
|
|
|
|
|
Time Deposit 1.4%
|
|
|
|
|
State Street Bank & Trust Corp. ($13,347,872 par,
0.01% coupon, dated 1/31/10, to be sold on 2/01/10
at $13,347,875) (g)
|
|
$
|
13,347,872
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments 131.3
(Cost $1,401,534,842)
|
|
|
1,223,670,500
|
|
|
|
|
|
|
Foreign Currency 0.8%
(Cost $7,388,428)
|
|
|
7,323,532
|
|
|
|
|
|
|
Borrowings (28.4%)
|
|
|
(264,500,000
|
)
|
|
|
|
|
|
Liabilities in Excess of Other Assets (3.7%)
|
|
|
(34,993,103
|
)
|
|
|
|
|
|
|
|
|
|
|
Net Assets 100.0%
|
|
$
|
931,500,929
|
|
|
|
|
|
|
Par amounts are
denominated in US currency unless otherwise noted.
£Great
Britain Pound
Euro
Percentages are
calculated as a percentage of net assets.
|
|
|
(a)
|
|
All
or a portion of this security is
payment-in-kind.
|
|
(b)
|
|
Market
value is determined in accordance with procedures established in
good faith by the Board of Trustees.
|
|
(c)
|
|
This
borrower has filed for protection in federal bankruptcy court.
|
|
(d)
|
|
This
Senior Loan interest is non-income producing.
|
|
(e)
|
|
Senior
Loan is past due.
|
|
(f)
|
|
Variable
rate security. Interest rate shown is that in effect at
January 31, 2010.
|
|
(g)
|
|
All
or a portion of this security is designated in connection with
unfunded loan commitments.
|
|
(h)
|
|
144A-Private
Placement security which is exempt from registration under
Rule 144A of the Securities Act of 1933, as amended. This
security may only be resold in transactions exempt from
registration which are normally those transactions with
qualified institutional buyers.
|
|
(i)
|
|
Restricted
security. Securities were acquired through the restructuring of
senior loans. These securities are restricted, as they are not
allowed to be deposited via the Depository Trust Company.
If at a later point in time, the company wishes to register, the
issuer will bear the costs associated with registration. The
aggregate value of restricted securities represents 0.02% of the
net assets of the Fund.
|
|
(j)
|
|
Non-income
producing security.
|
|
*
|
|
Senior
Loans in the Funds portfolio generally are subject to
mandatory and/or optional prepayment. Because of these mandatory
prepayment conditions and because there may be significant
economic incentives for a Borrower to prepay, prepayments of
Senior Loans in the Funds portfolio may occur. As a
result, the actual
|
26
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio
of
Investments n January 31,
2010 (Unaudited) continued
|
|
|
|
|
remaining
maturity of Senior Loans held in the Funds portfolio may
be substantially less than the stated maturities shown.
|
|
**
|
|
Senior
Loans in which the Fund invests generally pay interest at rates
which are periodically redetermined by reference to a base
lending rate plus a premium. These base lending rates are
generally (i) the lending rate offered by one or more major
European banks, such as the London Inter-Bank Offered Rate
(LIBOR), (ii) the prime rate offered by one or
more major United States banks or (iii) the certificate of
deposit rate. Senior Loans are generally considered to be
restricted in that the Fund ordinarily is contractually
obligated to receive approval from the Agent Bank and/or
Borrower prior to the disposition of a Senior Loan.
|
Swap contracts
outstanding as of January 31, 2010:
Credit Default Swaps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pay/
|
|
|
|
|
|
|
|
|
|
Credit
|
|
|
|
|
|
|
Receive
|
|
|
|
Notional
|
|
|
|
|
|
Rating of
|
|
|
|
|
Buy/Sell
|
|
Fixed
|
|
Expiration
|
|
Amount
|
|
Upfront
|
|
|
|
Reference
|
Counterparty
|
|
Reference
Entity
|
|
Protection
|
|
Rate
|
|
Date
|
|
(000)
|
|
Payments
|
|
Value
|
|
Equity*
|
|
Bank of America N.A.
|
|
Seat Pagine
Gialle S.P.A
|
|
|
Sell
|
|
|
|
3.350
|
%
|
|
09/20/12
|
|
$
|
6,932
|
|
|
$
|
0
|
|
|
$
|
(1,601,876
|
)
|
|
|
B
|
|
Bank of America N.A.
|
|
Seat Pagine
Gialle S.P.A
|
|
|
Sell
|
|
|
|
3.650
|
|
|
12/20/12
|
|
|
6,932
|
|
|
|
0
|
|
|
|
(1,677,237
|
)
|
|
|
B
|
|
Credit Suisse
International
|
|
Codere Finance
Luxembourg SA
|
|
|
Sell
|
|
|
|
3.420
|
|
|
09/20/12
|
|
|
6,932
|
|
|
|
0
|
|
|
|
(371,476
|
)
|
|
|
B
|
|
Goldman Sachs
International
|
|
ArcelorMittal
|
|
|
Sell
|
|
|
|
5.400
|
|
|
06/20/11
|
|
|
6,932
|
|
|
|
0
|
|
|
|
507,379
|
|
|
|
BBB
|
|
Goldman Sachs
International
|
|
ArcelorMittal
|
|
|
Sell
|
|
|
|
5.750
|
|
|
06/20/10
|
|
|
6,932
|
|
|
|
0
|
|
|
|
192,614
|
|
|
|
BBB
|
|
Goldman Sachs
International
|
|
Calpine
Corporation
|
|
|
Sell
|
|
|
|
5.000
|
|
|
03/20/10
|
|
|
1,500
|
|
|
|
(165,000
|
)
|
|
|
11,202
|
|
|
|
B
|
|
Goldman Sachs
International
|
|
Calpine
Corporation
|
|
|
Sell
|
|
|
|
5.000
|
|
|
03/20/11
|
|
|
2,000
|
|
|
|
(65,000
|
)
|
|
|
(881
|
)
|
|
|
B
|
|
Goldman Sachs
International
|
|
CDX.NA.HY.9
|
|
|
Sell
|
|
|
|
3.750
|
|
|
12/20/12
|
|
|
34,400
|
|
|
|
(1,431,000
|
)
|
|
|
(101,802
|
)
|
|
|
NR
|
|
Goldman Sachs
International
|
|
CDX.NA.HY.10
|
|
|
Sell
|
|
|
|
5.000
|
|
|
06/20/13
|
|
|
17,400
|
|
|
|
(1,128,250
|
)
|
|
|
440,794
|
|
|
|
NR
|
|
Goldman Sachs
International
|
|
Citgo Petroleum
Corp.
|
|
|
Sell
|
|
|
|
3.000
|
|
|
12/20/10
|
|
|
5,000
|
|
|
|
0
|
|
|
|
(2,023
|
)
|
|
|
BB
|
|
Goldman Sachs
International
|
|
Gala Group
Finance
|
|
|
Sell
|
|
|
|
3.450
|
|
|
12/20/12
|
|
|
6,932
|
|
|
|
0
|
|
|
|
(287,385
|
)
|
|
|
NR
|
|
Goldman Sachs
International
|
|
Gala Group
Finance
|
|
|
Sell
|
|
|
|
4.150
|
|
|
03/20/13
|
|
|
6,932
|
|
|
|
0
|
|
|
|
(186,217
|
)
|
|
|
NR
|
|
Goldman Sachs
International
|
|
LCDX.NA.10
|
|
|
Sell
|
|
|
|
3.250
|
|
|
12/20/12
|
|
|
48,000
|
|
|
|
(5,305,000
|
)
|
|
|
350,000
|
|
|
|
NR
|
|
Goldman Sachs
International
|
|
LCDX9
|
|
|
Sell
|
|
|
|
2.250
|
|
|
12/20/12
|
|
|
40,000
|
|
|
|
(3,245,000
|
)
|
|
|
(427,000
|
)
|
|
|
NR
|
|
Goldman Sachs
International
|
|
Peermont Global
|
|
|
Sell
|
|
|
|
3.500
|
|
|
09/20/12
|
|
|
6,932
|
|
|
|
0
|
|
|
|
(490,036
|
)
|
|
|
B
|
|
Goldman Sachs
International
|
|
Texas
Competitive
Electric
|
|
|
Sell
|
|
|
|
2.850
|
|
|
06/20/10
|
|
|
5,000
|
|
|
|
0
|
|
|
|
(30,049
|
)
|
|
|
B
|
|
27
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio
of
Investments n January 31,
2010 (Unaudited) continued
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pay/
|
|
|
|
|
|
|
|
|
|
Credit
|
|
|
|
|
|
|
Receive
|
|
|
|
Notional
|
|
|
|
|
|
Rating of
|
|
|
|
|
Buy/Sell
|
|
Fixed
|
|
Expiration
|
|
Amount
|
|
Upfront
|
|
|
|
Reference
|
Counterparty
|
|
Reference
Entity
|
|
Protection
|
|
Rate
|
|
Date
|
|
(000)
|
|
Payments
|
|
Value
|
|
Equity*
|
|
Goldman Sachs
International
|
|
Texas
Competitive
Electric
|
|
|
Sell
|
|
|
|
5.000
|
%
|
|
06/20/10
|
|
$
|
3,000
|
|
|
$
|
(97,500
|
)
|
|
$
|
14,144
|
|
|
|
B
|
|
Goldman Sachs
International
|
|
UPC Holding
|
|
|
Sell
|
|
|
|
3.450
|
|
|
09/20/12
|
|
|
6,932
|
|
|
|
0
|
|
|
|
(68,549
|
)
|
|
|
B
|
|
Goldman Sachs
International
|
|
Xstrata PLC
|
|
|
Sell
|
|
|
|
5.800
|
|
|
06/20/10
|
|
|
6,932
|
|
|
|
0
|
|
|
|
190,800
|
|
|
|
BBB
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Credit Default Swaps
|
|
$
|
225,620
|
|
|
$
|
(11,436,750
|
)
|
|
$
|
(3,537,598
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio
of
Investments n January 31,
2010 (Unaudited) continued
|
|
|
|
|
Swap Collateral
Pledged to Counterparty
|
|
|
|
Bank of America N.A.
|
|
$
|
4,453,000
|
|
Credit Suisse International
|
|
|
848,000
|
|
Goldman Sachs International
|
|
|
1,680,000
|
|
|
|
|
|
|
Total Swap Collateral Pledged
|
|
$
|
6,981,000
|
|
|
|
|
|
|
Total Swap Contracts
|
|
$
|
3,443,402
|
|
|
|
|
|
|
NRNot Rated
|
|
|
*
|
|
Credit
ratings as issued by Standard & Poors.
|
Forward foreign
currency contracts outstanding as of January 31,
2010:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized
|
|
|
|
|
Current
|
|
Appreciation/
|
|
|
In Exchange
for
|
|
Value
|
|
Depreciation
|
|
Long Contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
2,428,761 expiring 02/25/10
|
|
|
US$
|
|
|
|
$3,367,275
|
|
|
$
|
(63,755
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short Contracts:
|
|
|
|
|
|
|
|
|
|
|
|
|
Euro
227,392,616 expiring 02/25/10
|
|
|
US$
|
|
|
|
315,260,979
|
|
|
|
11,223,199
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pound Sterling
18,973,329 expiring 02/25/10
|
|
|
US$
|
|
|
|
30,323,591
|
|
|
|
454,943
|
|
4,904,450 expiring 02/25/10
|
|
|
US$
|
|
|
|
7,838,400
|
|
|
|
75,421
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
530,364
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Short Contracts
|
|
|
11,753,563
|
|
|
|
|
|
|
Total Forward Foreign Currency Contracts
|
|
$
|
11,689,808
|
|
|
|
|
|
|
Summary of
Long-Term Investments by Country Classification
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage of
|
|
|
|
|
Long-Term
|
Country
|
|
Value
|
|
Investment
|
|
United States
|
|
$
|
758,967,539
|
|
|
|
62.7
|
%
|
United Kingdom
|
|
|
115,421,608
|
|
|
|
9.5
|
|
Germany
|
|
|
97,886,175
|
|
|
|
8.1
|
|
Ireland
|
|
|
35,298,430
|
|
|
|
2.9
|
|
Netherlands
|
|
|
32,876,047
|
|
|
|
2.7
|
|
Sweden
|
|
|
31,340,445
|
|
|
|
2.6
|
|
Greece
|
|
|
23,875,514
|
|
|
|
2.0
|
|
Denmark
|
|
|
23,399,843
|
|
|
|
1.9
|
|
Belgium
|
|
|
21,690,288
|
|
|
|
1.8
|
|
Luxembourg
|
|
|
15,155,000
|
|
|
|
1.3
|
|
Australia
|
|
|
13,081,250
|
|
|
|
1.1
|
|
Bulgaria
|
|
|
12,483,756
|
|
|
|
1.0
|
|
Spain
|
|
|
12,147,177
|
|
|
|
1.0
|
|
Canada
|
|
|
9,829,001
|
|
|
|
0.8
|
|
Cayman Islands
|
|
|
6,870,555
|
|
|
|
0.6
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,210,322,628
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
29
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio
of
Investments n January 31,
2010 (Unaudited) continued
Fair Value
Measurements
Various inputs are
used in determining the value of the Funds investments.
These inputs are summarized in the three broad levels listed
below. (See Note 1(B) in the Notes to Financial Statements
for further information regarding fair value measurements.)
The following is a
summary of the inputs used as of January 31, 2010 in
valuing the Funds investments carried at value.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
|
|
|
|
|
|
Significant
|
|
|
|
|
|
|
Other
Significant
|
|
Unobservable
|
|
|
Investments
|
|
Quoted
Prices
|
|
Observable
Inputs
|
|
Inputs
|
|
Total
|
|
|
Investments in an Asset Position:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable Rate Senior Loan Interests
|
|
$
|
|
|
|
$
|
926,612,009
|
|
|
$
|
32,977,660
|
|
|
$
|
959,589,669
|
|
Notes
|
|
|
|
|
|
|
199,385,655
|
|
|
|
48,517,616
|
|
|
|
247,903,271
|
|
Equities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BroadcastingDiversified
|
|
|
2,007
|
|
|
|
|
|
|
|
|
|
|
|
2,007
|
|
Buildings & Real Estate
|
|
|
584,898
|
|
|
|
|
|
|
|
|
|
|
|
584,898
|
|
Chemicals, Plastics & Rubber
|
|
|
|
|
|
|
|
|
|
|
622,790
|
|
|
|
622,790
|
|
Construction Material
|
|
|
384,153
|
|
|
|
|
|
|
|
|
|
|
|
384,153
|
|
Diversified Manufacturing
|
|
|
138,365
|
|
|
|
|
|
|
|
|
|
|
|
138,365
|
|
Natural Resources
|
|
|
|
|
|
|
840,400
|
|
|
|
|
|
|
|
840,400
|
|
Printing & Publishing
|
|
|
257,075
|
|
|
|
|
|
|
|
|
|
|
|
257,075
|
|
Short-term Investments
|
|
|
|
|
|
|
13,347,872
|
|
|
|
|
|
|
|
13,347,872
|
|
Forward Foreign Currency Contracts
|
|
|
|
|
|
|
11,753,563
|
|
|
|
|
|
|
|
11,753,563
|
|
Credit Default Swap
|
|
|
|
|
|
|
1,706,933
|
|
|
|
|
|
|
|
1,706,933
|
|
Unfunded Commitments
|
|
|
|
|
|
|
12,658
|
|
|
|
|
|
|
|
12,658
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments in an Asset Position
|
|
|
1,366,498
|
|
|
|
1,153,659,090
|
|
|
|
82,118,066
|
|
|
|
1,237,143,654
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in a Liability Position:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Forward Foreign Currency Contracts
|
|
|
|
|
|
|
(63,755
|
)
|
|
|
|
|
|
|
(63,755
|
)
|
Credit Default Swap
|
|
|
|
|
|
|
(5,244,531
|
)
|
|
|
|
|
|
|
(5,244,531
|
)
|
Unfunded Commitments
|
|
|
|
|
|
|
(3,778,504
|
)
|
|
|
|
|
|
|
(3,778,504
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Investments in a Liability Position
|
|
$
|
|
|
|
$
|
(9,086,790
|
)
|
|
$
|
|
|
|
$
|
(9,086,790
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Portfolio
of
Investments n January 31,
2010 (Unaudited) continued
Following is a
reconciliation of investments in which significant unobservable
inputs (Level 3) were used in determining value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in
Loans and Securities
|
|
|
|
|
|
|
Variable
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rate
|
|
|
|
Equities
|
|
|
|
|
|
|
Senior
|
|
|
|
|
|
Chemicals,
|
|
|
|
|
|
|
|
|
Loan
|
|
|
|
Construction
|
|
Plastics
&
|
|
Diversified
|
|
|
|
Unfunded
|
|
|
Interest
|
|
Notes
|
|
Materials
|
|
Rubber
|
|
Manufacturing
|
|
Total
|
|
Commitments
|
|
Balance as of August 1, 2009
|
|
$
|
20,874,117
|
|
|
$
|
37,161,648
|
|
|
$
|
14,163
|
|
|
$
|
1,103,660
|
|
|
$
|
95,360
|
|
|
$
|
59,248,948
|
|
|
$
|
(13,947
|
)
|
Accrued Discounts/Premiums
|
|
|
151,509
|
|
|
|
443,078
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
594,587
|
|
|
|
|
|
Realized Gain/Loss
|
|
|
(2,071,287
|
)
|
|
|
(180,171
|
)
|
|
|
(98,533
|
)
|
|
|
|
|
|
|
|
|
|
|
(2,349,991
|
)
|
|
|
|
|
Change in Unrealized Appreciation/Depreciation
|
|
|
2,950,055
|
|
|
|
(1,427,965
|
)
|
|
|
128,368
|
|
|
|
(480,870
|
)
|
|
|
1,866,746
|
|
|
|
3,036,334
|
|
|
|
13,947
|
|
Net Purchases/Sales
|
|
|
13,365,500
|
|
|
|
12,521,026
|
|
|
|
(43,998
|
)
|
|
|
|
|
|
|
|
|
|
|
25,842,528
|
|
|
|
|
|
Net Transfers In and/or Out of Level 3*
|
|
|
(2,292,234
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,962,106
|
)
|
|
|
(4,254,340
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 31, 2010
|
|
$
|
32,977,660
|
|
|
$
|
48,517,616
|
|
|
$
|
|
|
|
$
|
622,790
|
|
|
$
|
|
|
|
$
|
82,118,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Change in Unrealized Appreciation/Depreciation from
Investments Still Held as of 1/31/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(98,595
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
The
value of Net Transfers In and/or Out of Level 3 was
measured using the market value as of the beginning of the
period for transfer in and the market value as of the end of the
period for transfers out.
|
31
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Financial Statements
Statement
of Assets and Liabilities
January 31, 2010
(Unaudited)
|
|
|
|
|
|
|
Assets:
|
|
|
|
|
|
|
Total Investments (Cost $1,401,534,842)
|
|
$
|
1,223,670,500
|
|
|
|
Foreign Currency (Cost $7,388,428)
|
|
|
7,323,532
|
|
|
|
Receivables:
|
|
|
|
|
|
|
Investments Sold
|
|
|
11,795,928
|
|
|
|
Interest
|
|
|
8,718,569
|
|
|
|
Forward Foreign Currency Contracts
|
|
|
11,753,563
|
|
|
|
Swap Contracts
|
|
|
3,443,402
|
|
|
|
Other
|
|
|
267,317
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
|
1,266,972,811
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
Payables:
|
|
|
|
|
|
|
Borrowings
|
|
|
264,500,000
|
|
|
|
Investments Purchased
|
|
|
64,620,299
|
|
|
|
Investment Advisory Fee
|
|
|
1,247,175
|
|
|
|
Income Distributions
|
|
|
512,025
|
|
|
|
Other Affiliates
|
|
|
85,909
|
|
|
|
Unfunded Commitments
|
|
|
3,765,846
|
|
|
|
Trustees Deferred Compensation and Retirement Plans
|
|
|
83,870
|
|
|
|
Forward Foreign Currency Contracts
|
|
|
63,755
|
|
|
|
Accrued Interest Expense
|
|
|
56,054
|
|
|
|
Accrued Expenses
|
|
|
536,949
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities
|
|
|
335,471,882
|
|
|
|
|
|
|
|
|
|
|
Net Assets
|
|
$
|
931,500,929
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value Per Common Share ($931,500,929 divided by
73,975,236 shares outstanding)
|
|
$
|
12.59
|
|
|
|
|
|
|
|
|
|
|
Net Assets Consist of:
|
|
|
|
|
|
|
Common Shares ($0.01 par value with an unlimited number of
shares authorized, 73,975,236 shares issued and outstanding)
|
|
$
|
739,752
|
|
|
|
Paid in Surplus
|
|
|
1,409,545,445
|
|
|
|
Accumulated Undistributed Net Investment Income
|
|
|
(14,254,655
|
)
|
|
|
Net Unrealized Depreciation
|
|
|
(162,653,379
|
)
|
|
|
Accumulated Net Realized Loss
|
|
|
(301,876,234
|
)
|
|
|
|
|
|
|
|
|
|
Net Assets
|
|
$
|
931,500,929
|
|
|
|
|
|
|
|
|
|
|
32
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Financial
Statements continued
Statement
of Operations
For the Six Months Ended
January 31, 2010 (Unaudited)
|
|
|
|
|
|
|
Investment Income:
|
|
|
|
|
|
|
Interest Income
|
|
$
|
39,162,990
|
|
|
|
Other
|
|
|
1,189,581
|
|
|
|
|
|
|
|
|
|
|
Total Income
|
|
|
40,352,571
|
|
|
|
|
|
|
|
|
|
|
Expenses:
|
|
|
|
|
|
|
Investment Advisory Fee
|
|
|
7,080,602
|
|
|
|
Credit Line
|
|
|
2,018,543
|
|
|
|
Custody
|
|
|
231,560
|
|
|
|
Professional Fees
|
|
|
169,166
|
|
|
|
Accounting & Administrative Expenses
|
|
|
153,364
|
|
|
|
Transfer Agent Fees
|
|
|
54,742
|
|
|
|
Trustees Fees and Related Expenses
|
|
|
39,368
|
|
|
|
Reports to Shareholders
|
|
|
32,519
|
|
|
|
Registration Fees
|
|
|
6,721
|
|
|
|
Other
|
|
|
35,348
|
|
|
|
|
|
|
|
|
|
|
Total Operating Expense
|
|
|
9,821,933
|
|
|
|
Interest Expense
|
|
|
384,910
|
|
|
|
|
|
|
|
|
|
|
Total Expenses
|
|
|
10,206,843
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
$
|
30,145,728
|
|
|
|
|
|
|
|
|
|
|
Realized and Unrealized Gain/Loss:
|
|
|
|
|
|
|
Realized Gain/Loss:
|
|
|
|
|
|
|
Investments
|
|
$
|
(39,277,062
|
)
|
|
|
Swap Contracts
|
|
|
6,289,503
|
|
|
|
Forward Foreign Currency Contracts
|
|
|
1,864,975
|
|
|
|
Foreign Currency Transactions
|
|
|
(2,951,388
|
)
|
|
|
|
|
|
|
|
|
|
Net Realized Loss
|
|
|
(34,073,972
|
)
|
|
|
|
|
|
|
|
|
|
Unrealized Appreciation/Depreciation:
|
|
|
|
|
|
|
Beginning of the Period
|
|
|
(324,613,324
|
)
|
|
|
|
|
|
|
|
|
|
End of the Period:
|
|
|
|
|
|
|
Investments
|
|
|
(177,864,342
|
)
|
|
|
Forward Foreign Currency Contracts
|
|
|
11,689,808
|
|
|
|
Swap Contracts
|
|
|
7,899,152
|
|
|
|
Foreign Currency Translation
|
|
|
(612,151
|
)
|
|
|
Unfunded Commitments
|
|
|
(3,765,846
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(162,653,379
|
)
|
|
|
|
|
|
|
|
|
|
Net Unrealized Appreciation During the Period
|
|
|
161,959,945
|
|
|
|
|
|
|
|
|
|
|
Net Realized and Unrealized Gain
|
|
$
|
127,885,973
|
|
|
|
|
|
|
|
|
|
|
Net Increase in Net Assets From Operations
|
|
$
|
158,031,701
|
|
|
|
|
|
|
|
|
|
|
33
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Financial
Statements continued
Statements
of Changes in Net Assets (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
For the
|
|
For the
|
|
|
|
|
Six Months
Ended
|
|
Year Ended
|
|
|
|
|
January 31,
2010
|
|
July 31,
2009
|
|
|
|
|
|
|
From Investment Activities:
|
|
|
|
|
|
|
|
|
|
|
Operations:
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income
|
|
$
|
30,145,728
|
|
|
$
|
79,395,508
|
|
|
|
Net Realized Loss
|
|
|
(34,073,972
|
)
|
|
|
(202,553,963
|
)
|
|
|
Net Unrealized Appreciation/Depreciation During the Period
|
|
|
161,959,945
|
|
|
|
(123,657,658
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Net Assets from Operations
|
|
|
158,031,701
|
|
|
|
(246,816,113
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Distributions from Net Investment Income
|
|
|
(40,608,931
|
)
|
|
|
(100,106,883
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Change in Net Assets from Investment Activities
|
|
|
117,422,770
|
|
|
|
(346,922,996
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
From Capital Transactions:
|
|
|
|
|
|
|
|
|
|
|
Repurchase of Shares
|
|
|
(322,626
|
)
|
|
|
-0-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Increase/Decrease in Net Assets
|
|
|
117,100,144
|
|
|
|
(346,922,996
|
)
|
|
|
Net Assets:
|
|
|
|
|
|
|
|
|
|
|
Beginning of the Period
|
|
|
814,400,785
|
|
|
|
1,161,323,781
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
End of the Period (Including accumulated undistributed net
investment income of $(14,254,655) and $(3,791,452),
respectively)
|
|
$
|
931,500,929
|
|
|
$
|
814,400,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Financial
Statements continued
Statement
of Cash Flows
For the Six Months Ended
January 31, 2010 (Unaudited)
|
|
|
|
|
|
|
Change in Net Assets from Operations
|
|
$
|
158,031,701
|
|
|
|
|
|
|
|
|
|
|
Adjustments to Reconcile the Change in Net Assets from
Operations to Net Cash Provided by Operating Activities:
|
|
|
|
|
|
|
Purchases of Investments
|
|
|
(361,530,902
|
)
|
|
|
Principal Repayments/Sales of Investments
|
|
|
309,187,924
|
|
|
|
Net Sales of Short-Term Investments
|
|
|
9,956,330
|
|
|
|
Purchases of Foreign Currency
|
|
|
(2,449,347,300
|
)
|
|
|
Sales of Foreign Currency
|
|
|
2,441,224,500
|
|
|
|
Amortization of Loan Fees
|
|
|
1,586,149
|
|
|
|
Net Loan Fees
|
|
|
(16,667
|
)
|
|
|
Accretion of Discount
|
|
|
(9,004,035
|
)
|
|
|
Net Realized Loss on Investments
|
|
|
39,277,062
|
|
|
|
Net Realized Loss on Foreign Currency Transactions
|
|
|
2,951,388
|
|
|
|
Net Realized Gain on Forward Foreign Currency Contracts
|
|
|
(1,864,975
|
)
|
|
|
Net Change in Unrealized Appreciation on Investments
|
|
|
(131,248,667
|
)
|
|
|
Net Change in Unrealized Appreciation on Foreign Currency
Transactions
|
|
|
64,896
|
|
|
|
Net Change in Unrealized Depreciation on Forward Foreign
Currency Contracts
|
|
|
(14,291,262
|
)
|
|
|
Increase in Interest Receivables
|
|
|
(1,422,647
|
)
|
|
|
Increase in Other Assets
|
|
|
(223,398
|
)
|
|
|
Decrease in Accrued Expenses
|
|
|
(201,330
|
)
|
|
|
Decrease in Other Affiliates Payables
|
|
|
(150,012
|
)
|
|
|
Increase in Investment Advisory Payable Fees
|
|
|
185,069
|
|
|
|
Increase in Deferred Compensation and Retirement Plans
|
|
|
33,842
|
|
|
|
Decrease in Accrued Interest Expenses
|
|
|
(32,601
|
)
|
|
|
Net Change in Swap Contracts
|
|
|
(1,207,395
|
)
|
|
|
Net Change in Upfront Payments on Swap Contracts
|
|
|
(109,000
|
)
|
|
|
Net Change in Unfunded Commitments
|
|
|
(1,540,820
|
)
|
|
|
|
|
|
|
|
|
|
Total Adjustments
|
|
|
(167,723,851
|
)
|
|
|
|
|
|
|
|
|
|
Net Cash Used for Operating Activities
|
|
|
(9,692,150
|
)
|
|
|
|
|
|
|
|
|
|
Cash Flows From Financing Activities
|
|
|
|
|
|
|
Cash Distributions Paid
|
|
|
(40,807,850
|
)
|
|
|
Proceeds from and Repayments of Borrowings
|
|
|
50,500,000
|
|
|
|
|
|
|
|
|
|
|
Net Cash Provided by Financing Activities
|
|
|
9,692,150
|
|
|
|
|
|
|
|
|
|
|
Net Decrease in Cash
|
|
|
0
|
|
|
|
Cash at the Beginning of the Period
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
Cash at the End of the Period
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosures of Cash Flow Information
|
|
|
|
|
|
|
Cash Paid During the Period for Interest
|
|
$
|
385,028
|
|
|
|
|
|
|
|
|
|
|
35
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Financial
Highlights (Unaudited)
The
following schedule presents financial highlights for one common
share of the Fund outstanding throughout the periods
indicated.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
|
|
|
|
June 26, 2007
|
|
|
Ended
|
|
|
|
|
|
(Commencement
|
|
|
January 31,
|
|
Year Ended July
31,
|
|
of Operations)
to
|
|
|
2010
|
|
2009
|
|
2008
|
|
July 31,
2007
|
|
|
|
|
Net Asset Value, Beginning of the Period
|
|
$
|
11.00
|
|
|
$
|
15.69
|
|
|
$
|
18.65
|
|
|
$
|
19.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Investment Income (a)
|
|
|
0.41
|
|
|
|
1.07
|
|
|
|
1.44
|
|
|
|
0.08
|
|
Net Realized and Unrealized Gain/Loss
|
|
|
1.73
|
|
|
|
(4.41
|
)
|
|
|
(2.82
|
)
|
|
|
(0.53
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total from Investment Operations
|
|
|
2.14
|
|
|
|
(3.34
|
)
|
|
|
(1.38
|
)
|
|
|
(0.45
|
)
|
Less Distributions from Net Investment Income
|
|
|
(0.55
|
)
|
|
|
(1.35
|
)
|
|
|
(1.58
|
)
|
|
|
-0-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Asset Value, End of the Period
|
|
$
|
12.59
|
|
|
$
|
11.00
|
|
|
$
|
15.69
|
|
|
$
|
18.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Share Market Price at End of the Period
|
|
$
|
12.55
|
|
|
$
|
10.00
|
|
|
$
|
13.30
|
|
|
$
|
19.75
|
|
Total Return (b)
|
|
|
31.71%
|
*
|
|
|
11.84%
|
|
|
|
25.46%
|
|
|
|
1.25%
|
*
|
Net Assets at End of Period (In millions)
|
|
$
|
931.5
|
|
|
$
|
814.4
|
|
|
$
|
1,161.3
|
|
|
$
|
1,379.8
|
|
Ratio to Average Net Assets excluding Borrowings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expense
|
|
|
2.21%
|
|
|
|
2.97%
|
|
|
|
1.79%
|
|
|
|
1.54%
|
|
Interest Expense
|
|
|
0.09%
|
|
|
|
0.79%
|
|
|
|
0.99%
|
|
|
|
N/A
|
|
Gross Expense
|
|
|
2.29%
|
|
|
|
3.76%
|
|
|
|
2.78%
|
|
|
|
1.54%
|
|
Net Investment Income
|
|
|
6.77%
|
|
|
|
10.42%
|
|
|
|
8.38%
|
|
|
|
4.58%
|
|
Portfolio Turnover (c)
|
|
|
22%
|
*
|
|
|
36%
|
|
|
|
43%
|
|
|
|
0%
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio to Average Net Assets including Borrowings:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expense
|
|
|
1.73%
|
|
|
|
2.08%
|
|
|
|
1.36%
|
|
|
|
N/A
|
|
Interest Expense
|
|
|
0.07%
|
|
|
|
0.56%
|
|
|
|
0.75%
|
|
|
|
N/A
|
|
Gross Expense
|
|
|
1.80%
|
|
|
|
2.63%
|
|
|
|
2.11%
|
|
|
|
N/A
|
|
Net Investment Income
|
|
|
5.32%
|
|
|
|
7.30%
|
|
|
|
6.37%
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior Indebtedness:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Borrowing Outstanding (In thousands)
|
|
$
|
264,500
|
|
|
$
|
214,000
|
|
|
$
|
510,000
|
|
|
$
|
-0-
|
|
Asset Coverage per $1,000 Unit of Senior Indebtedness (d)
|
|
$
|
4,522
|
|
|
$
|
4,806
|
|
|
$
|
3,277
|
|
|
|
N/A
|
|
|
|
|
*
|
|
Non-Annualized
|
|
(a)
|
|
Based
on average shares outstanding.
|
|
(b)
|
|
Total
return based on common share market price assumes an investment
at the common share market price at the beginning of the period
indicated, reinvestment of all distributions for the period in
accordance with the Funds dividend reinvestment plan, and
sale of all shares at the closing common share market price at
the end of the period indicated.
|
|
(c)
|
|
Calculation
includes the proceeds from principal repayments and sales of
variable rate senior loan interests.
|
|
(d)
|
|
Calculated
by subtracting the Funds total liabilities (not including
the borrowings) from the Funds total assets and dividing
by the total number of senior indebtedness units, where one unit
equals $1,000 of senior indebtedness.
|
N/A = Not
Applicable
36
See Notes to Financial
Statements
Van Kampen
Dynamic Credit Opportunities Fund
Notes to Financial
Statements n January 31,
2010 (Unaudited)
1. Significant
Accounting Policies
Van Kampen Dynamic Credit Opportunities Fund (the
Fund) is a statutory trust organized under the laws
of the State of Delaware pursuant to an Agreement and
Declaration of Trust dated March 15, 2007. The Fund is
registered as a diversified, closed-end management investment
company under the Investment Company Act of 1940, as amended
(the 1940 Act). The Funds investment objective
is to seek a high level of current income, with a secondary
objective of capital appreciation. The Fund seeks to achieve its
investment objectives by opportunistically investing primarily
in credit securities of issuers which operate in a variety of
industries and geographic regions located throughout the world.
The Fund will invest in a combination of (i) senior secured
floating rate and fixed rate loans; (ii) second lien or
other subordinated or unsecured floating rate loans or debt;
(iii) other debt obligations, including high yield, high
risk obligations; and (iv) structured products including
collateralized debt and loan obligations. The Fund intends to
borrow money for investment purposes which will create the
opportunity for enhanced return, but also should be considered a
speculative technique and may increase the Funds
volatility.
The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its
financial statements. The preparation of financial statements in
conformity with U.S. generally accepted accounting
principles (GAAP) requires management to make estimates and
assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
In June 2009, the Financial Accounting Standards Board (FASB)
established the FASB Accounting Standards
CodificationTM
(ASC) as the single source of authoritative accounting
principles recognized by the FASB in the preparation of
financial statements in conformity with GAAP. The ASC supersedes
existing non-grandfathered, non-SEC accounting and reporting
standards. The ASC did not change GAAP but rather organized it
into a hierarchy where all guidance within the ASC carries an
equal level of authority. The ASC became effective for financial
statements issued for interim and annual periods ending after
September 15, 2009. The Fund appropriately updated relevant
GAAP references to reflect the new ASC.
A. Security Valuation The Funds
loans and debt obligations are valued by the Fund following
valuation guidelines established and periodically reviewed by
the Funds Board of Trustees. Under the valuation
guidelines, loans and debt obligations for which reliable market
quotes are readily available are valued at the mean of such bid
and ask quotes. Where reliable market quotes are not readily
available, loans and debt obligations are valued, where
possible, using independent market indicators provided by
independent pricing sources approved by the Board of Trustees.
Other loans and debt obligations are valued by independent
pricing sources approved by the Board of Trustees based upon
pricing models developed, maintained and operated by those
pricing sources or valued by Van Kampen Asset Management
(the Adviser) by considering a number of factors
including consideration of market indicators, transactions in
instruments which the Adviser believes may be comparable
(including comparable credit quality, interest rate, interest
rate redetermination period and maturity), the credit worthiness
of the Borrower, the current interest rate, the period until
next interest rate redetermination and the maturity of such
loan. Consideration of comparable instruments may include
commercial paper, negotiable certificates of deposit and
short-term variable rate
37
Van Kampen
Dynamic Credit Opportunities Fund
Notes
to Financial
Statements n January 31,
2010 (Unaudited) continued
securities which have adjustment
periods comparable to the loans in the Funds portfolio.
The fair value of loans are reviewed and approved by the
Funds Valuation Committee and the Board of Trustees.
Forward foreign currency contracts are valued using quoted
foreign exchange rates. Credit default swaps are valued using
quotations obtained from brokers.
Short-term securities with remaining maturities of 60 days
or less are valued at amortized cost, which approximates market
value. Short-term loan participations are valued at cost in the
absence of any indication of impairment.
B. Fair Value Measurements FASB ASC 820,
Fair Value Measurements and Disclosures (ASC 820)
(formerly known as FAS 157), defines fair value as the
price that the Fund would receive, to sell an investment or pay
to transfer a liability in an orderly transaction with an
independent buyer in the principal market, or in the absence of
a principal market the most advantageous market for the
investment or liability. ASC 820 establishes a three-tier
hierarchy to distinguish between (1) inputs that reflect
the assumptions market participants would use in pricing an
asset or liability developed based on market data obtained from
sources independent of the reporting entity (observable inputs)
and (2) inputs that reflect the reporting entitys own
assumptions about the assumptions market participants would use
in pricing an asset or liability developed based on the best
information available in the circumstances (unobservable inputs)
and to establish classification of fair value measurements for
disclosure purposes. Various inputs are used in determining the
value of the Funds investments. The inputs are summarized
in the three broad levels listed below.
|
|
Level 1
|
quoted prices in active markets for identical investments
|
Level 2
|
other significant observable inputs (including quoted prices for
similar investments, interest rates, prepayment speeds, credit
risk, etc.)
|
Level 3
|
significant unobservable inputs (including the Funds own
assumptions in determining the fair value of investments)
|
The inputs or methodology used for valuing securities are not
necessarily an indication of the risk associated with investing
in those securities.
C. Security Transactions Investment
transactions are recorded on a trade date basis. Realized gains
and losses are determined on an identified cost basis. Legal
expenditures that are expected to result in the restructuring of
or a plan of reorganization for an investment are recorded as
realized losses. The Fund may purchase and sell securities on a
when-issued or delayed delivery basis,
with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during
this period. The Fund will segregate assets with the custodian
having an aggregate value at least equal to the amount of the
when-issued or delayed delivery until payment is made. At
January 31, 2010, the Fund had no when-issued or delayed
delivery purchase commitments.
The Fund may invest in repurchase agreements, which are
short-term investments in which the Fund acquires ownership of a
debt security and the seller agrees to repurchase the security
at a future time and specified price. Repurchase agreements are
fully collateralized by the underlying debt security. The Fund
will make payment for such securities only upon physical
delivery or evidence of book entry transfer to the account of
the custodian bank. The seller is required to maintain the value
of the underlying security at not less than the
38
Van Kampen
Dynamic Credit Opportunities Fund
Notes
to Financial
Statements n January 31,
2010 (Unaudited) continued
repurchase proceeds due the Fund.
At January 31, 2010, the Fund had no repurchase agreements.
D. Investment Income Dividend income is
recorded on the ex-dividend date and interest income is recorded
on an accrual basis. Facility fees received are treated as
market discounts. Market premiums are amortized and discounts
are accreted over the stated life of each applicable loan or
other debt obligation. Other income is comprised primarily of
amendment fees which are recorded when received. Amendment fees
are earned as compensation for agreeing to changes in loan
agreements.
E. Federal Income Taxes It is the
Funds policy to comply with the requirements of Subchapter
M of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no provision for
federal income taxes is required. The Fund may be subject to
taxes imposed by countries in which it invests. Such taxes are
generally based on income earned or gains realized or
repatriated. Taxes are accrued and applied to net investment
income, net realized capital gains and net unrealized
appreciation, as applicable as the income is earned or capital
gains are recorded. Management has concluded there are no
significant uncertain tax positions that would require
recognition in the financial statements. If applicable, the Fund
recognizes interest accrued related to unrecognized tax benefits
in Interest Expense and penalties in
Other expenses on the Statement of Operations. The
Fund files tax returns with the U.S. Internal Revenue
Service. Generally, each of the tax years in the three year
period ended July 31, 2009, remains subject to examination
by taxing authorities.
The Fund intends to utilize provisions of the federal income tax
laws which allow it to carry a realized capital loss forward for
eight years following the year of the loss and offset these
losses against any future realized capital gains. At
July 31, 2009, the Fund had an accumulated capital loss
carryforward for tax purposes of $77,214,579 which will expire
according to the following schedule:
|
|
|
|
|
Amount
|
|
Expiration
|
|
$ 431,578
|
|
|
July 31, 2016
|
|
76,783,001
|
|
|
July 31, 2017
|
|
At January 31, 2010, the cost and related gross unrealized
appreciation and depreciation are as follows:
|
|
|
|
|
Cost of investments for tax purposes
|
|
$
|
1,401,323,842
|
|
|
|
|
|
|
Gross tax unrealized appreciation
|
|
$
|
143,773,346
|
|
Gross tax unrealized depreciation
|
|
|
(321,426,688
|
)
|
|
|
|
|
|
Net tax unrealized depreciation on investments
|
|
$
|
(177,653,342
|
)
|
|
|
|
|
|
F. Distribution of Income and Gains The
Fund intends to declare and pay monthly dividends from net
investment income. Net realized gains, if any, are distributed
at least annually to its shareholders. Distributions from net
realized gains for book purposes may include short term
39
Van Kampen
Dynamic Credit Opportunities Fund
Notes
to Financial
Statements n January 31,
2010 (Unaudited) continued
capital gains, which are included
as ordinary income for tax purposes. The tax character of
distributions paid during the year ended July 31, 2009 was
as follows:
|
|
|
|
|
Distributions paid from:
|
|
|
|
|
Ordinary income
|
|
$
|
100,610,355
|
|
|
|
|
|
|
As of July 31, 2009, the components of distributable
earnings on a tax basis were as follows:
|
|
|
|
|
Undistributed ordinary income
|
|
$
|
57,056,025
|
|
Net realized gains or losses may differ for financial reporting
and tax purposes primarily as a result of gains and losses
recognized on securities for tax purposes but not for book
purposes.
G. Foreign Currency Translation and Foreign
Investments Assets and liabilities denominated in
foreign currencies and commitments under forward foreign
currency contracts are translated into U.S. dollars at the
mean of the last quoted bid and asked prices of such currencies
against the U.S. dollar. Purchases and sales of portfolio
securities are translated at the rate of exchange prevailing
when such securities were acquired or sold. Income and expense
are translated at rates prevailing when accrued. Unrealized
gains and losses on securities resulting from changes in
exchange rates and the unrealized gains or losses on
translations of other assets or liabilities denominated in
foreign currencies are included in foreign currency translation
on the Statement of Operations. Realized gains and losses on
securities resulting from changes in exchange rates and the
realized gains or losses on translations of other assets or
liabilities denominated in foreign currencies are included in
foreign currency transactions on the Statement of Operations.
The Fund invests in issuers located in foreign markets. There
are certain risks inherent in these securities not typically
associated with issuers in the United States, including the
smaller size of the markets themselves, lesser liquidity,
greater volatility, and potentially less publicly available
information. Foreign markets may be subject to a greater degree
of government involvement in the economy and greater economic
and political uncertainty, which has the potential to extend to
government imposed restrictions on exchange traded transactions
and currency transactions. These restrictions may impact the
Funds ability to buy or sell certain securities or to
repatriate certain currencies to U.S. dollars.
Additionally, changes in currency exchange rates will affect the
value of and investment income from such securities.
H. Reporting Subsequent
Events Management has evaluated the impact of any
subsequent events through March 26, 2010, the date the
financial statements were effectively issued. Management has
determined that there are no material events or transactions
that would affect the Funds financial statements or
require disclosure in the Funds financial statements
through this date.
2. Investment
Advisory Agreement and Other Transactions with
Affiliates
Under the terms of the Funds Investment Advisory
Agreement, the Adviser will provide certain
day-to-day
investment management services to the Fund for an annual fee of
1.25% of
40
Van Kampen
Dynamic Credit Opportunities Fund
Notes
to Financial
Statements n January 31,
2010 (Unaudited) continued
the average daily managed assets.
Average daily managed assets are defined as the average daily
total asset value of the Fund minus the sum of accrued
liabilities other than the aggregate amount of borrowings for
investment purposes. The Adviser has entered into a subadvisory
agreement with Avenue Europe International Management, L.P. (the
Subadviser). Under the subadvisory agreement, the
Adviser retains the Subadviser to manage that portion of the
Funds assets that are allocated to the Subadviser. The
Adviser pays the Subadviser on a monthly basis a portion of the
net advisory fees the Adviser receives from the Fund.
For the six months ended January 31, 2010, the Fund
recognized expenses of approximately $21,000 representing legal
services provided by Skadden, Arps, Slate, Meagher &
Flom LLP, of which a trustee of the Fund is a partner of such
firm and he and his law firm provide legal services as legal
counsel to the Fund.
Under separate Legal Services, Accounting Services and Chief
Compliance Officer (CCO) Employment agreements, the Adviser
provides accounting and legal services and the CCO provides
compliance services to the Fund. The costs of these services are
allocated to each fund. For the six months ended
January 31, 2010, the Fund recognized expenses of
approximately $54,000 representing Van Kampen Investments
Inc.s or its affiliates (collectively
Van Kampen) cost of providing accounting and
legal services to the Fund as well as the salary, benefits and
related costs of the CCO and related support staff paid by
Van Kampen. Services provided pursuant to the Legal
Services agreement are reported as part of Professional
Fees on the Statement of Operations. Services provided
pursuant to the Accounting and CCO Employment agreements are
reported as part of Accounting and Administrative
Expenses on the Statement of Operations.
Certain officers and trustees of the Fund are also officers and
directors of Van Kampen. The Fund does not compensate its
officers or trustees who are also officers of Van Kampen.
The Fund provides deferred compensation and retirement plans for
its Trustees who are not officers of Van Kampen. Under the
deferred compensation plan, Trustees may elect to defer all or a
portion of their compensation to a later date. Benefits under
the retirement plan are payable for a ten-year period and are
based upon each Trustees years of service to the Fund. The
maximum annual benefit per Trustee under the plan is $2,500.
At January 31, 2010, Van Kampen Investments Inc., an
affiliate of the Adviser, owned 5,236 shares of common
stock at an aggregate purchase price of $100,000.
3. Capital
Transactions
The Board of Trustees have approved a share repurchase program
whereby the Fund may, when appropriate, repurchase its shares in
the open market or in privately negotiated transactions at a
price not above market value or NAV, whichever is lower at the
time of purchase.
41
Van Kampen
Dynamic Credit Opportunities Fund
Notes
to Financial
Statements n January 31,
2010 (Unaudited) continued
For the six months ended January 31, 2010, the transactions
in common shares were as follows:
|
|
|
|
|
|
|
Six Months
Ended
|
|
|
January 31,
2010
|
|
Beginning Shares
|
|
|
74,005,236
|
|
Shares Issued Through Dividend Reinvestment
|
|
|
-0-
|
|
Shares Repurchased*
|
|
|
(30,000
|
)
|
|
|
|
|
|
Ending Shares
|
|
|
73,975,236
|
|
|
|
|
|
|
|
|
|
*
|
|
The
Fund has a share repurchase program for purposes of enhancing
stockholder value and reducing the discount at which the
Funds shares trade from its net asset value. For the six
months ended January 31, 2010, the Fund repurchased 30,000
of its shares, at an average discount of 11.20% from net asset
value per share. The Fund expects to continue to repurchase its
outstanding shares at such time and in such amounts as it
believes such activity will further the accomplishment of the
foregoing objectives, subject to the review of the Trustees.
|
4. Investment
Transactions
During the period, the cost of purchases and proceeds from
investments sold and repaid, excluding short-term investments,
were $361,530,902 and $244,202,385, respectively.
5. Commitments
Pursuant to the terms of certain loan agreements, the Fund had
unfunded loan commitments of approximately $28,608,100 as of
January 31, 2010. The Fund intends to reserve against such
contingent obligations by designating cash, liquid securities
and liquid loans as a reserve. The unrealized depreciation on
these commitments of $3,765,846 as of January 31, 2010 and
is reported as Unfunded Commitments on the Statement
of Assets and Liabilities.
|
|
|
|
|
|
|
|
|
|
|
Description
|
|
Type
|
|
Commitment
|
|
App/(Dep)
|
|
Bright Horizons Family Solutions, Inc.
|
|
Revolver
|
|
$
|
2,080,000
|
|
|
$
|
(124,800
|
)
|
Community Health Systems, Inc.
|
|
Revolver
|
|
|
10,000,000
|
|
|
|
(1,400,000
|
)
|
Graphic Packaging International, Inc.
|
|
Revolver
|
|
|
5,000,000
|
|
|
|
(450,000
|
)
|
Lyondell Basell Cam Exchange
|
|
Revolving Credit Loan
|
|
|
13,718
|
|
|
|
(3,704
|
)
|
Lyondell Chemical Company
|
|
DIP Term Loan
|
|
|
264,389
|
|
|
|
12,658
|
|
Surgical Care Affiliates, Inc.
|
|
Revolver
|
|
|
6,250,000
|
|
|
|
(937,500
|
)
|
LJVH Holdings, Inc.
|
|
Revolver
|
|
|
5,000,000
|
|
|
|
(862,500
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
28,608,107
|
|
|
$
|
(3,765,846
|
)
|
|
|
|
|
|
|
|
|
|
|
|
6. Borrowings
The Fund may utilize financial leverage to the maximum extent
allowable under the 1940 Act. Under the 1940 Act, a fund
generally may not borrow money greater than
331/3%
of the Funds total assets.
The Fund had entered into a $400 million revolving credit
and security agreement. The revolving credit agreement was
secured by the assets of the Fund. In connection with this
agreement, for the six months ended January 31, 2010, the
Fund incurred fees of approximately $2,018,500, as disclosed on
the Statement of Operations. For the six months ended
42
Van Kampen
Dynamic Credit Opportunities Fund
Notes
to Financial
Statements n January 31,
2010 (Unaudited) continued
January 31, 2010, the average
daily balance of borrowings under the revolving credit and
security agreement was $241,192,935 with a weighted average
interest rate of 0.31%.
7. Derivative
Financial Instruments
A derivative financial instrument in very general terms refers
to a security whose value is derived from the value
of an underlying asset, reference rate or index.
The Fund may use derivative instruments for a variety of
reasons, such as to attempt to protect the Fund against possible
changes in the market value of its portfolio, to manage the
portfolios effective yield, maturity and duration, or
generate potential gain. All of the Funds portfolio
holdings, including derivative instruments, are marked to market
each day with the change in value reflected in unrealized
appreciation/depreciation. Upon disposition, a realized gain or
loss is generally recognized.
Summarized below are the specific types of derivative financial
instruments used by the Fund.
A. Forward Foreign Currency Contracts A
forward foreign currency contract is a commitment to purchase or
sell a foreign currency at a future date at a negotiated forward
rate. The Fund may enter into forward foreign currency contracts
to attempt to protect securities and related receivables and
payables against changes in future foreign currency exchange
rates. The market value of the contract will fluctuate with
changes in currency exchange rates. The contract is
marked-to-market
daily and the change in market value is recorded by the Fund as
unrealized appreciation/depreciation on foreign currency
translation on the Statement of Operations. The gain or loss
arising from the difference between the original value of the
contract and the closing value of such contract is included as
component of realized gain/loss on foreign currency
transactions. Risks may arise upon entering into these contracts
from the potential inability of counterparties to meet the terms
of their contracts. Risks may also arise from the unanticipated
movements in the value of a foreign currency relative to the
U.S. dollar.
During the six months ended January 31, 2010, the cost of
purchases and the proceeds from sales of forward foreign
currency contracts were $1,757,067,805 and $1,776,418,818,
respectively.
B. Credit Default Swaps The Fund is
subject to credit risk in the normal course of pursuing its
investment objectives. The Fund may enter into credit default
swaps to manage its exposure to the market or certain sectors of
the market, to reduce its risk exposure to defaults of corporate
and sovereign issuers, or to create exposure to corporate or
sovereign issuers to which it is not otherwise exposed. A credit
default swap is an agreement between two parties to exchange the
credit risk of an issuer or index of issuers. A buyer of a
credit default swap is said to buy protection by paying periodic
fees in return for a contingent payment from the seller if the
issuer has a credit event such as bankruptcy, a failure to pay
outstanding obligations or deteriorating credit while the swap
is outstanding. A seller of a credit default swap is said to
sell protection and thus collects the periodic fees and profits
if the credit of the issuer remains stable or improves while the
swap is outstanding. The seller in a credit default swap
contract would be required to pay an
agreed-upon
amount, to the buyer in the event of an adverse credit event of
the issuer. This
agreed-upon
amount approximates the notional amount of the swap as disclosed
in the table following the Portfolio of Investments and is
estimated to be the maximum potential future payment that the
seller could be required to
43
Van Kampen
Dynamic Credit Opportunities Fund
Notes
to Financial
Statements n January 31,
2010 (Unaudited) continued
make under the credit default swap
contract. For the six months ended January 31, 2010, the
average notional amounts of credit default swap contracts
entered into by the Fund acting as a buyer or seller of
protection were $0 and $248,045,000, respectively. In the event
of an adverse credit event, the seller generally does not have
any contractual remedies against the issuer or any other third
party. However, if a physical settlement is elected, the seller
would receive the defaulted credit and, as a result, become a
creditor of the issuer.
The current credit rating of each individual issuer is listed in
the table following the Portfolio of Investments and serves as
an indicator of the current status of the payment/ performance
risk of the credit derivative. Alternatively, for credit default
swaps on an index of credits, the quoted market prices and
current values serve as an indicator of the current status of
the payment/performance risk of the credit derivative.
Generally, lower credit ratings and increasing market values, in
absolute terms, represent a deterioration of the credit and a
greater likelihood of an adverse credit event of the issuer.
The Fund accrues for the periodic fees on credit default swaps
on a daily basis with the net amount accrued recorded within
unrealized appreciation/depreciation of swap contracts. Upon
cash settlement of the periodic fees, the net amount is recorded
as realized gain/loss on swap contracts on the Statement of
Operations. Net unrealized gains are recorded as an asset or net
unrealized losses are reported as a liability on the Statement
of Assets and Liabilities. The change in value of the swap
contracts is reported as unrealized gains or losses on the
Statement of Operations. Payments received or made upon entering
into a credit default swap contract, if any, are recorded as
realized gain or loss on the Statement of Operations upon
termination or maturity of the swap. Credit default swaps may
involve greater risks than if a fund had invested in the issuer
directly. The Funds maximum risk or loss from counterparty
risk, either as the protection seller or as the protection
buyer, is the fair value of the contract. This risk is mitigated
by having a master netting arrangement between the Fund and the
counterparty and by the posting of collateral by the
counterparty to the Fund to cover the Funds exposure to
the counterparty.
The Fund may sell credit default swaps which expose it to risk
of loss from credit risk related events specified in the
contract. Although contract-specific, credit events are
generally defined as bankruptcy, failure to pay, restructuring,
obligation acceleration, obligation default, or
repudiation/moratorium. As disclosed in the table following the
Portfolio of Investments, the aggregate fair value of credit
default swaps in a net liability position as of January 31,
2010 was $5,244,531. The aggregate fair value of assets posted
as collateral, net of assets received as collateral, for these
swaps was $6,981,000. If a defined credit event had occurred as
of January 31, 2010, the swaps credit-risk-related
contingent features would have been triggered and the Fund would
have been required to pay $225,620,000 less the value of the
contracts related reference obligations.
Swap agreements are not entered into or traded on exchanges and
there is no central clearing or guaranty function for swaps.
Therefore, swaps are subject to the risk of default or
non-performance by the counterparty. If there is a default by
the counterparty to a swap agreement, the Fund will have
contractual remedies pursuant to the agreements related to the
transaction. Counterparties are required to pledge collateral
daily (based on the valuation of each swap) on behalf of the
Fund with a value approximately equal to the amount of any
unrealized gain. Reciprocally, when the Fund has an unrealized
loss on a swap contract, the Fund has instructed the custodian
to pledge cash or liquid securities as collateral with a value
approximately equal to the amount of the unrealized loss.
Collateral pledges are monitored and subsequently adjusted if
and when the swap valuations fluctuate. Cash collateral is
44
Van Kampen
Dynamic Credit Opportunities Fund
Notes
to Financial
Statements n January 31,
2010 (Unaudited) continued
disclosed in the table following
the Portfolio of Investments. Cash collateral has been offset
against open swap contracts under the provisions of FASB ASC
210-20,
Offsetting (formerly known as FASB Interpretation
No. 39) and are included within Swap
Contracts on the Statement of Assets and Liabilities. For
cash collateral received, the Fund pays a monthly fee to the
counterparty based on the effective rate for Federal Funds. This
fee, when paid, is included within realized loss on swap
contracts on the Statement of Operations.
The Fund adopted FASB ASC 815, Derivatives and Hedging
(ASC 815) (formerly known as FAS 161), effective
February 1, 2009. ASC 815 is intended to improve financial
reporting about derivative instruments by requiring enhanced
disclosures to enable investors to better understand how and why
the Fund uses derivative instruments, how these derivative
instruments are accounted for and their effects on the
Funds financial position and results of operations.
The following table sets forth the fair value of the Funds
derivative contracts by primary risk exposure as of
January 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset
Derivatives
|
|
Liability
Derivatives
|
Primary Risk
|
|
Balance Sheet
|
|
|
|
Balance Sheet
|
|
|
Exposure
|
|
Location
|
|
Fair
Value
|
|
Location
|
|
Fair
Value
|
|
Currency Contracts
|
|
Forward Foreign
|
|
|
|
|
|
Forward Foreign
|
|
|
|
|
|
|
Currency Contracts
|
|
$
|
11,753,563
|
|
|
Currency Contracts
|
|
$
|
(63,755
|
)
|
Credit Contracts
|
|
Swap Contracts
|
|
|
1,706,933
|
|
|
Swap Contracts
|
|
|
(5,244,531
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
13,460,496
|
|
|
|
|
$
|
(5,308,286
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables set forth by primary risk exposure the
Funds realized gains/losses and change in unrealized
appreciation/depreciation by type of derivative contract for the
six months ended January 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of
Realized Gain/Loss on Derivative Contracts
|
|
|
Forwards
Foreign
|
|
|
|
|
Primary Risk
Exposure
|
|
Currency
Contracts
|
|
Swaps
|
|
Total
|
|
Currency Contracts
|
|
$
|
1,864,975
|
|
|
$
|
-0-
|
|
|
$
|
1,864,975
|
|
Credit Contracts
|
|
|
-0-
|
|
|
|
6,289,503
|
|
|
|
6,289,503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
1,864,975
|
|
|
$
|
6,289,503
|
|
|
$
|
8,154,478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
Unrealized Appreciation/Depreciation
|
on Derivative
Contracts
|
|
|
Forwards
Foreign
|
|
|
|
|
Primary Risk
Exposure
|
|
Currency
Contracts
|
|
Swaps
|
|
Total
|
|
Currency Contracts
|
|
$
|
14,291,262
|
|
|
$
|
-0-
|
|
|
$
|
14,291,262
|
|
Credit Contracts
|
|
|
-0-
|
|
|
|
16,691,395
|
|
|
|
16,691,395
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
14,291,262
|
|
|
$
|
16,691,395
|
|
|
$
|
30,982,657
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45
Van Kampen
Dynamic Credit Opportunities Fund
Notes
to Financial
Statements n January 31,
2010 (Unaudited) continued
8. Indemnifications
The Fund enters into contracts that contain a variety of
indemnifications. The Funds maximum exposure under these
arrangements is unknown. However, the Fund has not had prior
claims or losses pursuant to these contracts and expects the
risk of loss to be remote.
9. Significant
Event
On October 19, 2009, Morgan Stanley, the parent company of
Van Kampen Investments, Inc., announced that it has reached
a definitive agreement to sell substantially all of its retail
asset management business to Invesco Ltd. (the
Transaction). The Transaction includes a sale of the
part of the asset management business that advises funds,
including the Van Kampen family of funds. The Transaction
is subject to certain approvals and other conditions, and is
currently expected to close in mid-2010.
Under the Investment Company Act of 1940, the closing of the
Transaction will cause the current investment advisory agreement
with Van Kampen Asset Management, a subsidiary of
Van Kampen Investments Inc., to terminate. In connection
with the Transaction, the Funds Board of Trustees has
approved a new investment advisory agreement (which includes a
master subadvisory agreement) with Invesco Advisers, Inc., a
subsidiary of Invesco Ltd. The new advisory agreement for the
Fund (the Agreement) is subject to shareholder
approval. The Agreement will be presented to shareholders of the
Fund at a special meeting of shareholders.
10. Accounting
Pronouncement
On January 21, 2010, the FASB issued an Accounting
Standards Update, Fair Value Measurements and Disclosures
(Topic 820): Improving Disclosures about Fair Value
Measurements, which provides guidance on how investment
assets and liabilities are to be valued and disclosed.
Specifically, the amendment requires reporting entities to
disclose i) the input and valuation techniques used to
measure fair value for both recurring and nonrecurring fair
value measurements, for Level 2 or Level 3 positions
ii) transfers between all levels (including Level 1
and Level 2) will be required to be disclosed on a
gross basis (i.e. transfers out must be disclosed separately
from transfers in) as well as the reason(s) for the transfer and
ii) purchases, sales, issuances and settlements must be
shown on a gross basis in the Level 3 rollforward rather
than as one net number. The effective date of the amendment is
for interim and annual periods beginning after December 15,
2009. However, the requirement to provide the Level 3
activity for purchases, sales, issuances and settlements on a
gross basis will be effective for interim and annual periods
beginning after December 15, 2010. At this time, management
is evaluating the implications of the amendment to ASC 820 and
the impact it will have on financial statement disclosures.
11. Legal
Matters
The Fund is one of numerous defendants (Lenders)
that have been named in an adversary proceeding pending in the
Bankruptcy Court of the Southern District of Florida (the
Court). The action, entitled In re Tousa Inc., et
al., was filed on July 15, 2008, by the Official
Committee of Unsecured Creditors of home building companies to
which the Lenders loaned money through different lending
facilities. An amended complaint was filed on October 17,
2008. Plaintiff alleges that monies used to repay the Lenders
should be avoided as fraudulent and preferential transfers under
the bankruptcy laws. More specifically, Plaintiff alleges that
subsidiaries of the home building companies were allegedly
forced to become co-borrowers
46
Van Kampen
Dynamic Credit Opportunities Fund
Notes
to Financial
Statements n January 31,
2010 (Unaudited) continued
and guarantors of the monies used
to repay the Lenders, and that the subsidiaries did not receive
fair consideration or reasonably equivalent value when they
transferred the proceeds to repay the Lenders. Plaintiff seeks
to avoid the transfers and other equitable relief. The Fund and
the other Lenders are named as defendants in two separate
lending capacities; first, as lenders in a credit agreement (the
Credit Lenders); and second, as lenders in a term
loan (the Term Loan Lenders). The Fund, as Credit
Lender, moved to dismiss the amended complaint. The Court denied
the motion to dismiss on December 4, 2008. The Fund and the
other Credit Lenders filed a motion for leave to appeal the
dismissal, which was denied on February 23, 2009. Plaintiff
thereafter filed a Second Amended Complaint that was superseded
by a Third Amended Complaint. The Fund filed two answers to the
Third Amended Complaint in its respective capacities as a Credit
Lender and a Term Loan Lender. A court-ordered mediation took
place in March 2009, but no resolution was reached. The case
went to trial, which concluded in August 2009. On
October 13, 2009, the Court found in favor of Plaintiff and
ordered the Credit Lenders and Term Loan Lenders to disgorge any
principal received on the loans, plus interest, as well as any
attorneys fees. Additionally, the Court ordered that
defendants post a bond for 110% of the ordered disgorged
amounts, which was posted in December 2009. The respective
Credit Lenders and Term Loan Lenders have appealed the judgment.
The outcome of the appeal process is not expected until at least
the fall of 2010. In managements opinion, there is no
material impact to the Fund as a result of this legal matter.
47
Van
Kampen Dynamic Credit Opportunities Fund
Board of Trustees, Officers and Important Addresses
|
|
|
Board
of Trustees
David C. Arch
Jerry D. Choate
Rod Dammeyer
Linda Hutton Heagy
R. Craig Kennedy
Howard J Kerr
Jack E. Nelson
Hugo F. Sonnenschein
Wayne W. Whalen* Chairman
Suzanne H. Woolsey
Officers
Edward C. Wood III
President and Principal Executive Officer
Kevin Klingert
Vice President
Stefanie V. Chang Yu
Vice President and Secretary
John L. Sullivan
Chief Compliance Officer
Stuart N. Schuldt
Chief Financial Officer and Treasurer
|
|
Investment
Adviser
Van Kampen Asset Management
522 Fifth Avenue
New York, New York 10036
Subadviser
Avenue-Europe International Management, L.P.
535 Madison Avenue, 15th Floor
New York, New York 10022
Custodian
State Street Bank
and Fund Company
One Lincoln Street
Boston, Massachusetts 02111
Transfer
Agent
Computershare Fund Company, N.A.
c/o Computershare Investor Services
P.O. Box 43078
Providence, Rhode Island
02940-3078
Legal
Counsel
Skadden, Arps, Slate,
Meagher & Flom LLP
155 North Wacker Drive
Chicago, Illinois 60606
Independent
Registered
Public Accounting FirmDeloitte & Touche LLP
111 South Wacker Drive
Chicago, Illinois
60606-4301
|
|
|
|
*
|
|
Interested
persons of the Fund, as defined in the Investment Company
Act of 1940, as amended.
|
48
Van
Kampen Dynamic Credit Opportunities Fund
An Important Notice Concerning Our
U.S.
Privacy Policy
We are required by
federal law to provide you with a copy of our privacy policy
(Policy) annually.
This Policy applies
to current and former individual clients of Van Kampen
Funds Inc., and Van Kampen Investor Services Inc., as well
as current and former individual investors in Van Kampen
mutual funds and related companies.
This Policy is not
applicable to partnerships, corporations, trusts or other
non-individual clients or account holders, nor is this Policy
applicable to individuals who are either beneficiaries of a
trust for which we serve as trustee or participants in an
employee benefit plan administered or advised by us. This Policy
is, however, applicable to individuals who select us to be a
custodian of securities or assets in individual retirement
accounts, 401(k) accounts, 529 Educational Savings
Accounts, accounts subject to the Uniform Gifts to Minors Act,
or similar accounts. We may amend this Policy at any time, and
will inform you of any changes to this Policy as required by
law.
We Respect Your
Privacy
We appreciate that
you have provided us with your personal financial information
and understand your concerns about safeguarding such
information. We strive to maintain the privacy of such
information while we help you achieve your financial objectives.
This Policy describes what nonpublic personal information we
collect about you, how we collect it, when we may share it with
others, and how others may use it. It discusses the steps you
may take to limit our sharing of information about you with
affiliated Van Kampen companies (affiliated
companies). It also discloses how you may limit our
affiliates use of shared information for marketing
purposes. Throughout this Policy, we refer to the nonpublic
information that personally identifies you or your accounts as
personal information.
1. What
Personal Information Do We Collect About
You?
To better serve you
and manage our business, it is important that we collect and
maintain accurate information about you. We obtain this
information from applications and other forms you submit to us,
from your dealings with us, from consumer reporting agencies,
from our websites and from third parties and other sources. For
example:
|
|
|
|
|
|
We collect
information such as your name, address,
e-mail
address, telephone/fax numbers, assets, income and investment
objectives through application forms you submit to us.
|
|
(continued
on next page)
Van
Kampen Dynamic Credit Opportunities Fund
An Important Notice Concerning Our
U.S. Privacy Policy continued
|
|
|
|
|
|
We may obtain
information about account balances, your use of account(s) and
the types of products and services you prefer to receive from us
through your dealings and transactions with us and other sources.
|
|
|
|
|
We may obtain
information about your creditworthiness and credit history from
consumer reporting agencies.
|
|
|
|
|
We may collect
background information from and through third-party vendors to
verify representations you have made and to comply with various
regulatory requirements.
|
|
|
|
|
If you interact with
us through our public and private Web sites, we may collect
information that you provide directly through online
communications (such as an
e-mail
address). We may also collect information about your Internet
service provider, your domain name, your computers
operating system and Web browser, your use of our Web sites and
your product and service preferences, through the use of
cookies. Cookies recognize your computer
each time you return to one of our sites, and help to improve
our sites content and personalize your experience on our
sites by, for example, suggesting offerings that may interest
you. Please consult the Terms of Use of these sites for more
details on our use of cookies.
|
|
2. When Do
We Disclose Personal Information We Collect About
You?
To provide you with
the products and services you request, to better serve you, to
manage our business and as otherwise required or permitted by
law, we may disclose personal information we collect about you
to other affiliated companies and to nonaffiliated third
parties.
a. Information
We Disclose to Our Affiliated
Companies. In
order to manage your account(s) effectively, including servicing
and processing your transactions, to let you know about products
and services offered by us and affiliated companies, to manage
our business, and as otherwise required or permitted by law, we
may disclose personal information about you to other affiliated
companies. Offers for products and services from affiliated
companies are developed under conditions designed to safeguard
your personal information.
b. Information
We Disclose to Third
Parties. We
do not disclose personal information that we collect about you
to nonaffiliated third parties except to enable them to provide
marketing services on our behalf, to perform joint marketing
agreements with other financial institutions, and as otherwise
required or permitted by law. For example, some instances where
we may disclose information about you to third
(continued
on next page)
Van
Kampen Dynamic Credit Opportunities Fund
An Important Notice Concerning Our
U.S. Privacy Policy continued
parties include: for
servicing and processing transactions, to offer our own products
and services, to protect against fraud, for institutional risk
control, to respond to judicial process or to perform services
on our behalf. When we share personal information with a
nonaffiliated third party, they are required to limit their use
of personal information about you to the particular purpose for
which it was shared and they are not allowed to share personal
information about you with others except to fulfill that limited
purpose or as may be required by law.
3. How Do We
Protect The Security and Confidentiality Of Personal Information
We Collect About
You?
We maintain
physical, electronic and procedural security measures to help
safeguard the personal information we collect about you. We have
internal policies governing the proper handling of client
information. Third parties that provide support or marketing
services on our behalf may also receive personal information
about you, and we require them to adhere to confidentiality
standards with respect to such information.
4. How Can
You Limit Our Sharing Of Certain Personal Information About You
With Our Affiliated Companies For Eligibility
Determination?
We respect your
privacy and offer you choices as to whether we share with our
affiliated companies personal information that was collected to
determine your eligibility for products and services such as
credit reports and other information that you have provided to
us or that we may obtain from third parties (eligibility
information). Please note that, even if you direct us not
to share certain eligibility information with our affiliated
companies, we may still share your personal information,
including eligibility information, with those companies under
circumstances that are permitted under applicable law, such as
to process transactions or to service your account. We may also
share certain other types of personal information with
affiliated companiessuch as your name, address, telephone
number,
e-mail
address and account number(s), and information about your
transactions and experiences with us.
5. How Can
You Limit the Use of Certain Personal Information About You by
our Affiliated Companies for
Marketing?
You may limit our
affiliated companies from using certain personal information
about you that we may share with them for marketing their
products or services to you. This information includes our
transactions and other experiences with you such as your
(continued
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Van
Kampen Dynamic Credit Opportunities Fund
An Important Notice Concerning Our
U.S. Privacy Policy continued
assets and account
history. Please note that, even if you choose to limit our
affiliated companies from using certain personal information
about you that we may share with them for marketing their
products and services to you, we may still share such personal
information about you with them, including our transactions and
experiences with you, for other purposes as permitted under
applicable law.
6. How Can
You Send Us an Opt-Out
Instruction?
If you wish to limit
our sharing of certain personal information about you with our
affiliated companies for eligibility purposes and
for our affiliated companies use in marketing products and
services to you as described in this notice, you may do so by:
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Calling us at
(800) 847-2424
Monday-Friday between 8 a.m. and 8 p.m. (EST)
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Writing to us at the
following address:
Van Kampen Privacy Department
Harborside Financial Center, Plaza Two, 3rd Floor
Jersey City, NJ 07311
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If you choose to
write to us, your written request should include: your name,
address, telephone number and account number(s) to which the
opt-out applies and should not be sent with any other
correspondence. In order to process your request, we require
that the request be provided by you directly and not through a
third party. Once you have informed us about your privacy
preferences, your opt-out preference will remain in effect with
respect to this Policy (as it may be amended) until you notify
us otherwise. If you are a joint account owner, we will accept
instructions from any one of you and apply those instructions to
the entire account. Please allow approximately 30 days from
our receipt of your opt-out for your instructions to become
effective.
Please understand
that if you opt-out, you and any joint account holders may not
receive certain Van Kampen or our affiliated
companies products and services that could help you manage
your financial resources and achieve your investment objectives.
If you have more
than one account with us or our affiliates, you may receive
multiple privacy policies from us, and would need to follow the
directions stated in each particular policy for each account you
have with us.
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Van
Kampen Dynamic Credit Opportunities Fund
An Important Notice Concerning Our
U.S. Privacy Policy continued
SPECIAL NOTICE TO
RESIDENTS OF
VERMONT
This section
supplements our Policy with respect to our individual clients
who have a Vermont address and supersedes anything to the
contrary in the above Policy with respect to those clients
only.
The State of Vermont
requires financial institutions to obtain your consent prior to
sharing personal information that they collect about you with
affiliated companies and nonaffiliated third parties other than
in certain limited circumstances. Except as permitted by law, we
will not share personal information we collect about you with
nonaffiliated third parties or other affiliated companies unless
you provide us with your written consent to share such
information (opt-in).
If you wish to
receive offers for investment products and services offered by
or through other affiliated companies, please notify us in
writing at the following address:
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Van Kampen
Privacy Department
Harborside Financial Center, Plaza Two, 3rd Floor
Jersey City, NJ 07311
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Your authorization
should include: your name, address, telephone number and account
number(s) to which the opt-in applies and should not be sent
with any other correspondence. In order to process your
authorization, we require that the authorization be provided by
you directly and not through a third-party.
522
Fifth Avenue
New
York, New York 10036
www.vankampen.com
Copyright
©2010
Van Kampen Funds Inc.
All
rights reserved. Member FINRA/SIPC
VTASAN
03/10
IU10-01327P-Y01/10
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semi-annual reports.
Item 6. Schedule of Investments.
(a) Please refer to Item #1.
(b) Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment
Companies.
Not applicable for semi-annual reports.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated
Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures
(a) The Funds principal executive officer and principal financial officer have concluded that the
Funds disclosure controls and procedures are sufficient to ensure that information required to be
disclosed by the Fund in this Form N-CSRS was recorded, processed, summarized and reported within
the time periods specified in the Securities and Exchange Commissions rules and forms, based upon
such officers evaluation of these controls and procedures as of a date within 90 days of the
filing date of the report.
(b) There were no changes in the registrants internal control over financial reporting that
occurred during the second fiscal quarter of the period covered by this report that has materially
affected, or is reasonably likely to materially affect, the registrants internal control over
financial reporting.
Item 12. Exhibits.
(1) Code of Ethics Not applicable for semi-annual reports.
(2)(a) A certification for the Principal Executive Officer of the registrant is attached hereto as
part of EX-99.CERT.
(2)(b) A certification for the Principal Financial Officer of the registrant is attached hereto as
part of EX-99.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act
of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
(Registrant) Van Kampen Dynamic Credit Opportunities Fund
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By:
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/s/ Edward C. Wood III
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Name: |
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Edward C. Wood III |
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Title: |
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Principal Executive Officer |
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Date: |
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March 23, 2010 |
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act
of 1940, this report has been signed by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
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By:
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/s/ Edward C. Wood III
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Name: |
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Edward C. Wood III |
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Title: |
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Principal Executive Officer |
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Date: |
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March 23, 2010 |
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By:
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/s/ Stuart N. Schuldt |
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Name: |
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Stuart N. Schuldt |
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Title: |
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Principal Financial Officer |
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Date: |
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March 23, 2010 |
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