UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number 811-5382
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CIM High Yield Securities
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(Exact name of registrant as specified in charter)
400 W. Market Street
Suite 3300
Louisville, KY 40202
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(Address of principal executive offices) (Zip code)
Cindy Hayes
INVESCO Institutional, (N.A.) Inc.
400 W. Market Street
Suite 3300
Louisville, KY 40202
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(Name and address of agent for service)
Registrant's telephone number, including area code: 502-561-3210
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Date of fiscal year end: December 31, 2003
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Date of reporting period: June 30, 2003
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
[GRAPHIC OMITTED]
INVESCCO
CIM HIGH YIELD SECURITIES - 2003 SEMI-ANNUAL REPORT
We are pleased to provide this annual report for CIM High Yield Securities
(the "Fund") as of June 30, 2003. The following pages contain a listing of the
Fund's holdings as well as the financial statements for the six months ended
June 30, 2003.
MARKET REVIEW
The high yield market showed continued strength in the first half of 2003.
With total returns of 17.88%* year to date, high yield remains one of the best
performing asset classes. Credit fundamentals continue to show improvement,
reflected in a decline in Moody's speculative grade default rates from 8.46% in
December 2002 to 6.03% in June 2003. In addition, positive technical momentum
was sustained with positive inflows to high yield mutual funds totaling
approximately $20 billion year to date. Against this backdrop of strong demand,
the new issue calendar was large but well received with approximately $50
billion in new issues priced. Despite these stronger market technicals,
corporate credit fundamentals remain under pressure due to continued economic
weakness and ongoing geopolitical risk. Indeed, while default statistics have
shown improvement, the ratings environment remains severe as downgrades continue
to outpace upgrades by a significant margin.
Given this market backdrop, the CIM High Yield Fund experienced significant
price appreciation in many of its holdings -- particularly in the cable, utility
and telecommunications sectors. For the year, the Fund's return at net asset
value was 23.63%, outpacing the Merrill Lynch U.S. High Yield Master IIIndex and
just behind its peer group (Lipper High Current Yield Leverage funds) average
return of 25.42%. On a market value basis, the Fund experienced a return of
33.36%. As a result of the improved market conditions, the dividend was
increased to $0.0375 in June of this year.
OUTLOOK
While the recent high yield performance has been impressive, we remain
cautious on the market given lingering uncertainty with respect to the global
economy and corporate profitability. While high yield companies will certainly
benefit from a more sustained economic turnaround, performance is likely to
remain volatile and bifurcated among individual industries and issuers.
Consequently, a selective approach to credit risk is still warranted despite
recent market improvements and we will look for opportunities to take profits in
names that have outperformed.
INVESCO Institutional (N.A.), Inc.
* Note: market return from Merrill Lynch U.S. High Yield Master II Index
Market value return is based on market price and assumes investment at market
price at the beginning of the period referenced, reinvestment of all
distributions for the period, and sale of all shares at the closing common stock
price at the end of the period referenced.
INVESCO PRIVACY NOTICE
At INVESCO 1, we recognize that you have entrusted with us your personal and
financial data and we recognize our obligation to keep this information secure.
Maintaining your privacy is important to us and we have established a policy to
maintain the privacy of the information you share with us.
PERSONAL INFORMATION WE COLLECT
In the normal course of serving clients, we collect personal information about
you, which may include:
o Information we receive from you (such as your name and address) from
your account application, investment management agreement or other
documents you may deliver to us.
o Information about your investment transactions with us.
PERSONAL INFORMATION WE MAY DISCLOSE
We do not sell any information to any third parties. However, we occasionally
disclose nonpublic personal information about you to affiliates and
non-affiliates only as permitted by law or regulation. Specifically, we may
disclose nonpublic personal information including:
o Information to service providers in order to process your account
transactions.
o Your name and address to companies that assist us with mailing
statements to you.
o Information in connection with legal proceedings, such as responding
to a subpoena.
The organizations that receive client information act on our behalf and use the
information only to provide the services that we have asked them to perform for
you and us. As emphasized above, we do not provide client or former client
information including names, addresses, or client lists to outside companies
except in furtherance of our business relationship with you, or as otherwise
permitted by law.
Access to nonpublic personal information is restricted to employees who need to
access that information to provide products or services to clients. To guard our
clients' nonpublic personal information, physical, electronic, and procedural
safeguards are in place that comply with federal standards. A client's right to
privacy extends to all forms of contact with us, including telephone, written
correspondence, and electronic media.
We consider privacy a fundamental right of clients and take seriously the
obligation to safeguard client information. We will adhere to the policies and
practices above for both current and former clients.
1 This Privacy Notice applies to members of INVESCO Institutional (N.A.), Inc.
of AMVESCAP PLC's family of investment adviser subsidiaries: INVESCO
Institutional (N.A.), Inc., INVESCO Private Capital, Inc., INVESCO Senior
Secured Management, Inc., and INVESCO Global Asset Management (N.A.), Inc.
CIM HIGH YIELD SECURITIES
PORTFOLIO OF INVESTMENTS
JUNE 30, 2003 (UNAUDITED)
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- -----------
CORPORATE BONDS AND NOTES -- 117.0%
CABLE AND SATELLITE TELEVISION -- 8.4%
$ 400,000 Charter Communications Holdings, Sr. Notes, 10.750%, 10/01/09 ................ $ 312,000
350,000 Charter Communications, Sr. Notes, 10.250%, 01/15/10 ......................... 266,000
2,000 CSC Holdings, Inc., Series H, Preferred Shares, 11.250%, 10/01/07 ............ 206,000
200,000 CSC Holdings, Inc., Sr. Notes, 7.250%, 07/15/08 .............................. 201,000
500,000 Insight Midwest, Sr. Notes, 10.500%, 11/01/10 ................................ 551,250
75,000 Lodgenet Entertainment Inc., Sr. Sub. Notes, 9.500%, 06/15/13 ................ 77,250
400,000 Mediacom LLC, Sr. Notes, 9.500%, 01/15/13 .................................... 425,000
150,000 Panamsat Corp., Sr. Notes, 8.500%, 02/01/12 .................................. 163,125
-----------
2,201,625
-----------
WIRELINE -- 8.0%
750,000 Level 3 Communications, Sr. Notes, 11.250%, 03/15/10 ......................... 712,500
300,000 Qwest Capital Funding, Sr. Notes, 7.900%, 08/15/10 ........................... 252,000
1,000,000 Qwest Capital Funding, Sr. Notes, 7.000%, 08/03/09 ........................... 827,500
100,000 Time Warner Telecommunications LLC, Sr. Notes, 9.750%, 07/15/08 .............. 97,000
200,000 Time Warner Telecommunications, Inc., Sr. Notes, 10.125%, 02/01/11 ........... 194,000
-----------
2,083,000
-----------
CHEMICALS AND PLASTICS -- 7.7%
200,000 Equistar Chemical Funding, Sr. Notes, 10.125%, 09/01/08 ...................... 207,000
150,000 Equistar Chemical Funding, Sr. Notes, 8.750%, 02/15/09 ....................... 146,250
100,000 HMP Equity Holdings Corp., Sr. Notes (Unit), 0.000%, 05/15/08****++ .......... 51,000
500,000 Huntsman ICI Chemicals Ltd., Sr. Sub. Notes, 10.125%, 07/01/09 ............... 482,500
400,000 Lyondell Chemical Co., Sr. Sub. Notes, 10.875%, 05/01/09 ..................... 374,000
275,000 OM Group, Inc., Sr. Sub. Notes, 9.250%, 12/15/11 ............................. 269,500
100,000 Polyone Corp., Sr. Notes, 10.625%, 05/15/10** ................................ 98,000
400,000 Sovereign Specialty Chemicals, Sr. Sub. Notes, 11.875%, 03/15/10 ............. 384,000
-----------
2,012,250
-----------
UTILITIES -- 7.0%
200,000 AES Corporation, Sr. Notes, 9.000%, 05/15/15** ............................... 210,000
104,000 AES Corporation, Sr. Notes, 8.750%, 06/15/08 ................................. 103,480
400,000 Allegheny Energy Supply, Sr. Notes, 8.750%, 04/15/12** ....................... 344,000
300,000 Aquila, Inc., Sr. Notes, 14.875%, 07/01/12** ................................. 321,000
300,000 Calpine Corp., Sr. Notes, 8.625%, 08/15/10 ................................... 226,500
250,000 CMS Energy Corp., Sr. Notes, 9.875%, 10/15/07 ................................ 267,812
150,000 Cogentrix Energy, Inc., Sr. Notes, Series B, 8.750%, 10/15/08 ................ 129,750
50,000 Nevada Power Co., Series E, Sr. Notes, 10.875%, 10/15/09 ..................... 56,250
150,000 Sierra Pacific Resources, Sr. Notes, 8.750%, 05/15/05 ........................ 156,375
-----------
1,815,167
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See Notes to Financial Statements.
3
CIM HIGH YIELD SECURITIES
PORTFOLIO OF INVESTMENTS
JUNE 30, 2003 (UNAUDITED)
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- -----------
CORPORATE BONDS AND NOTES -- (CONTINUED)
OIL AND GAS -- 6.9%
$ 525,000 Frontier Oil Corp., Sr. Notes, 11.750%, 11/15/09 ............................. $ 580,125
250,000 Sesi LLC, Sr. Notes, 8.875%, 05/15/11 ........................................ 270,000
600,000 Swift Energy Co., Sr. Sub. Notes, 10.250%, 08/01/09 .......................... 646,500
100,000 Tesoro Petroleum Corp., Sr. Sub. Notes, 9.625%, 04/01/12 ..................... 92,000
100,000 Tesoro Petroleum Corp., Sr. Sub. Notes, Series B, 9.625%, 11/01/08 ........... 93,000
150,000 Trico Marine Services, Inc., Sr. Notes, 8.875%, 05/15/12 ..................... 129,750
-----------
1,811,375
-----------
ELECTRONICS/ELECTRIC -- 6.9%
200,000 Amkor Technologies Inc., Sr. Sub. Notes, 10.500%, 05/01/09 ................... 203,000
200,000 Avaya, Inc., Sr. Notes, 11.125%, 04/01/09 .................................... 220,000
400,000 Chippac International Ltd., Sr. Sub. Notes, Series B, 12.750%, 08/01/09 ...... 452,000
150,000 Sanmina Corp., Sr. Notes, 10.375%, 01/15/10** ................................ 168,000
375,000 SCG Holding & Semiconductor Co., Sr. Sub. Notes, 12.000%, 08/01/09 ........... 324,375
150,000 Solectron Corp., Sr. Notes, 9.625%, 02/15/09 ................................. 159,750
300,000 Wesco Distribution, Inc., Sr. Sub. Notes, Series B, 9.125%, 06/01/08 ......... 281,250
-----------
1,808,375
-----------
LODGING AND CASINOS -- 6.9%
250,000 Ameristar Casinos, Inc., Sr. Sub. Notes, 10.750%, 02/15/09 ................... 284,688
200,000 Extended Stay America, Sr. Sub. Notes, 9.875%, 06/15/11 ...................... 216,000
300,000 Felcor Lodging LP, Sr. Notes, 9.500%, 09/15/08 ............................... 311,250
300,000 Host Marriott LP, Sr. Notes, Series G, 9.250%, 10/01/07 ...................... 324,000
200,000 Jacobs Entertainment, Sr. Notes, 11.875%, 02/01/09 ........................... 213,750
150,000 Resort International Casino, Sr. Notes, 11.500%, 03/15/09 .................... 143,250
100,000 Riviera Holdings Corp., Sr. Notes, 11.000%, 06/15/10 ......................... 96,000
200,000 Wheeling Island Gaming, Sr. Notes, 10.125%, 12/15/09 ......................... 202,250
-----------
1,791,188
-----------
PIPE LINES EX NATURAL GAS -- 6.7%
500,000 El Paso Corp., Sr. Notes, 7.875%, 06/15/12** ................................. 465,625
150,000 El Paso Energy LP, Sr. Sub. Notes, Series B, 8.500%, 06/01/11 ................ 161,250
200,000 Gemstone Investors LTD, Sr. Notes, 7.710%, 10/31/04** ........................ 200,000
150,000 Sonat, Inc., Sr. Notes, 7.625%, 07/15/11 ..................................... 137,250
300,000 Transmontaigne, Inc., Sr. Sub. Notes, 9.125%, 06/01/10** ..................... 317,625
300,000 William Co., Inc., Sr. Notes, 8.125%, 03/15/12 ............................... 309,000
150,000 William Co., Inc., Sr. Notes, 6.500%, 12/01/08 ............................... 147,000
-----------
1,737,750
-----------
See Notes to Financial Statements.
4
CIM HIGH YIELD SECURITIES
PORTFOLIO OF INVESTMENTS
JUNE 30, 2003 (UNAUDITED)
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- -----------
CORPORATE BONDS AND NOTES -- (CONTINUED)
BUILDING AND DEVELOPMENT -- 5.7%
$ 200,000 Associated Materials, Inc., Sr. Sub. Notes, 9.750%, 04/15/12 ................. $ 219,250
300,000 Atrium Companies, Inc., Sr. Sub. Notes, Series B, 10.500%, 05/01/09 .......... 322,500
400,000 Nortek, Inc., Sr. Sub. Notes, Series B, 9.875%, 06/15/11 ..................... 423,000
300,000 WCI Communities, Inc., Sr. Sub. Notes, 9.125%, 05/01/12 ...................... 321,000
200,000 William Lyon Homes, Sr. Notes, 10.750%, 04/01/13 ............................. 213,500
-----------
1,499,250
-----------
CONTAINERS/GLASS PRODUCTS -- 5.7%
200,000 Anchor Glass Container, Sr. Notes, 11.000%, 02/15/13** ....................... 219,500
200,000 Berry Plastic, Sr. Sub. Notes, 10.750%, 07/15/12 ............................. 221,000
150,000 Graham Packaging, Sr. Sub. Notes, 8.750%, 01/15/08** ......................... 150,000
200,000 Plastipak Holdings, Inc., Sr. Notes, 10.750%, 09/01/11 ....................... 215,000
500,000 Riverwood International Corp., Sr. Notes, 10.625%, 08/01/07 .................. 521,250
150,000 Tekni-Plex, Inc., Sr. Sub. Notes, Series B, 12.750%, 06/15/10 ................ 147,000
-----------
1,473,750
-----------
WIRELESS COMMUNICATIONS -- 5.6%
250,000 Crown Castle International Corp., Sr. Notes, 9.375%, 08/01/11 ................ 261,250
475,000 Nextel Communications, Sr. Notes, 9.375%, 11/15/09 ........................... 512,406
250,000 Nextel Partners, Inc., Sr. Notes, 12.500%, 11/15/09 .......................... 282,500
50,000 Nextel Partners, Inc., Sr. Notes, 8.125%, 07/01/11** ......................... 50,125
100,000 Spectrasite, Inc., Sr. Notes, 8.250%, 05/15/10** ............................. 104,500
150,000 Triton PCS, Inc., Sr. Sub. Notes, 9.375%, 02/01/11 ........................... 154,125
100,000 Triton PCS, Inc., Sr. Sub. Notes, 8.750%, 11/15/11 ........................... 100,250
-----------
1,465,156
-----------
FOOD SERVICE -- 4.3%
350,000 Buffets, Inc., Sr. Sub. Notes, 11.250%, 07/15/10 ............................. 348,250
200,000 Di Giorgio Corp., Sr. Notes, Series B, 10.000%, 06/15/07 ..................... 199,250
300,000 Friendly Ice Cream, Sr. Notes, 10.500%, 12/01/07 ............................. 308,250
300,000 Sbarro, Inc., Sr. Notes, 11.000%, 09/15/09 ................................... 258,000
-----------
1,113,750
-----------
AUTO PARTS & ACCESSORIES -- 4.1%
250,000 Collins and Aikman Products, Sr. Notes, 10.750%, 12/31/11 .................... 221,250
100,000 Dana Corp., Sr. Notes, 10.125%, 03/15/10 ..................................... 110,750
200,000 Delco Remy International, Inc., Sr. Sub. Notes, 11.000%, 05/01/09 ............ 137,000
300,000 Dura Operating Corp., Sr. Sub. Notes, Series D, 9.000%, 05/01/09 ............. 277,500
100,000 Navistar International, Sr. Sub. Notes, Series B, 8.000%, 02/01/08 ........... 100,500
150,000 TRW Automotive, Inc., Sr. Sub. Notes, 11.000%, 02/15/13** .................... 164,250
200,000 Venture Holdings Trust, Sr. Notes, 11.000%, 06/01/07+ ........................ 56,500
-----------
1,067,750
-----------
See Notes to Financial Statements.
5
CIM HIGH YIELD SECURITIES
PORTFOLIO OF INVESTMENTS
JUNE 30, 2003 (UNAUDITED)
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- -----------
CORPORATE BONDS AND NOTES -- (CONTINUED)
INDUSTRIAL MACHINERY/COMPONENTS -- 3.5%
$ 200,000 Case Credit Corp., Sr. Notes, 6.750%, 10/21/07 ............................... $ 194,000
150,000 Dresser, Inc., Sr. Sub. Notes, 9.375%, 04/15/11 .............................. 155,250
150,000 JLG Industries, Inc., Sr. Sub. Notes, 8.375%, 06/15/12 ....................... 137,250
150,000 Terex Corp., Sr. Sub. Notes, Series B, 10.375%, 04/01/11 ..................... 166,500
250,000 Trimas Corp. Sr. Sub. Notes, 9.875%, 06/15/12 ................................ 257,500
-----------
910,500
-----------
RAILROAD INDUSTRIES -- 3.0%
700,000 Railamerica Transport, Sr. Sub. Notes, 12.875%, 08/15/10 ..................... 781,375
-----------
PUBLISHING -- 2.8%
200,000 American Media Operation, Sr. Sub. Notes, Series B, 10.250%, 05/01/09 ........ 217,000
150,000 Hollinger, Inc., Sr. Notes, 11.875%, 03/01/11** .............................. 167,250
200,000 Houghton Mifflin Co., Sr. Sub. Notes, 9.875%, 02/01/13** ..................... 218,000
100,000 RH Donnelly Financial Corp., Sr. Sub. Notes, 10.875%, 12/15/12** ............. 117,000
-----------
719,250
-----------
OFFICE/BUSINESS EQUIPMENT -- 2.6%
100,000 Danka Business Systems, Sr. Notes, 11.000%, 06/15/10** ....................... 99,000
150,000 Mail-Well I Corp., Sr. Sub. Notes, 8.750%, 12/15/08 .......................... 142,500
100,000 Mail-Well I, Corp., Sr. Notes, 9.625%, 03/15/12 .............................. 105,750
300,000 Xerox Corp., Sr. Notes, 9.750%, 01/15/09 ..................................... 339,000
-----------
686,250
-----------
FOOD/DRUG RETAILERS -- 2.3%
200,000 Great Atlantic & Pacific Tea Co., Sr. Notes, 9.125%, 12/15/11 ................ 188,000
400,000 Stater Brothers Holdings, Sr. Notes, 10.750%, 08/15/06 ....................... 423,000
-----------
611,000
-----------
ECOLOGICAL SERVICES AND EQUIPMENT -- 2.0%
500,000 Allied Waste North America, Inc., Sr. Sub. Notes, 10.000%, 08/01/09 .......... 533,750
-----------
HEALTH CARE -- 1.9%
150,000 Alaris Medical, Inc., Sr. Notes, Series B, 11.625%, 12/01/06 ................. 183,000
300,000 Insight Health Services, Sr. Sub. Notes, 9.875%, 11/01/11 .................... 316,500
-----------
499,500
-----------
COSMETICS/PERSONAL CARE -- 1.6%
400,000 Elizabeth Arden, Inc., Sr. Notes, Series B, 10.375%, 05/15/07 ................ 413,000
-----------
PAPER FOREST PRODUCTS -- 1.5%
400,000 Fibermark, Inc., Sr. Notes, 10.750%, 04/15/11 ................................ 402,000
-----------
LEISURE GOODS, ACTIVITIES, MOVIE -- 1.5%
400,000 Six Flags, Inc., Sr. Notes, 9.750%, 06/15/07 ................................. 398,000
-----------
See Notes to Financial Statements.
6
CIM HIGH YIELD SECURITIES
PORTFOLIO OF INVESTMENTS
JUNE 30, 2003 (UNAUDITED)
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- -----------
CORPORATE BONDS AND NOTES -- (CONTINUED)
AIRLINES -- 1.3%
$ 150,000 Continental Airlines, Inc., Sr. Notes, 8.000%, 12/15/05 ...................... $ 135,000
150,000 Delta Airlines, Sr. Notes, 7.700%, 12/15/05 .................................. 132,000
100,000 Northwest Airlines, Inc., Sr. Notes, 9.875%, 03/15/07 ........................ 79,500
-----------
346,500
-----------
AEROSPACE -- 1.3%
300,000 K & F Industries, Sr. Sub Notes, Series B, 9.625%, 12/15/10 .................. 334,500
-----------
PROPERTY - CASUALTY INSURANCE -- 1.2%
300,000 Crum & Forster Holding Corp., Sr. Notes, 10.375%, 06/15/13** ................. 305,250
-----------
RETAIL -- 1.0%
250,000 Mothers Work, Inc., Sr. Notes, 11.250%, 08/01/10 ............................. 271,250
-----------
FOOD-MEAT PRODUCTS -- 0.9%
200,000 American Seafood, Sr. Sub. Notes, 10.125%, 04/15/10 .......................... 228,000
-----------
APPAREL MANUFACTURERS -- 0.9%
200,000 William Carter, Sr. Sub. Notes, Series B, 10.875%, 08/15/11 .................. 227,000
-----------
FINANCIAL INTERMEDIARIES -- 0.8%
200,000 Western Financial Bank, Sr. Sub. Notes, 9.625%, 05/15/12 ..................... 217,000
-----------
PERSONAL SERVICES -- 0.8%
100,000 Service Corp. International, Sr. Notes, Series *, 7.700%, 04/15/09 ........... 102,500
100,000 Service Corp. International, Sr. Notes, 7.700%, 04/15/09 ..................... 102,500
-----------
205,000
-----------
HOME FURNISHINGS -- 0.6%
150,000 Sealy Mattress Co., Sr. Sub. Notes, Series B, 9.875%, 12/15/07 ............... 150,000
-----------
EQUIPMENT LEASING -- 0.6%
150,000 United Rentals, Inc., Sr. Sub. Notes, Series B, 9.250%, 01/15/09 ............. 148,500
-----------
MARINE TRANSPORTATION -- 0.4%
100,000 General Maritime Corp., Sr. Notes, 10.000%, 03/15/13** ....................... 110,000
-----------
STEEL -- 0.3%
100,000 Ak Steel Corp. Sr. Notes, 7.875%, 02/15/09 ................................... 85,500
-----------
APPAREL & OTHER FINISHED PRODUCTS -- 0.3%
100,000 Levi Strauss & Co., Sr. Notes, 7.000%, 11/01/06 .............................. 81,250
-----------
TOTAL CORPORATE BONDS AND NOTES
(Cost $29,180,396) ......................................................... 30,544,761
-----------
See Notes to Financial Statements.
7
CIM HIGH YIELD SECURITIES
PORTFOLIO OF INVESTMENTS
JUNE 30, 2003 (UNAUDITED)
PRINCIPAL VALUE
AMOUNT (NOTE 1)
---------- -----------
FOREIGN BONDS -- 10.3%
FOREST PRODUCTS & PAPER -- 2.7%
$ 300,000 Kappa Beheer BV, Sr. Sub. Notes, 10.625%, 07/15/09 ........................... $ 322,875
350,000 Millar Western Forest, Sr. Notes, 9.875%, 05/15/08 ........................... 365,750
-----------
688,625
-----------
CHEMICALS AND PLASTICS -- 2.0%
150,000 Acetex Corp., Sr. Notes, 10.875%, 08/01/09 ................................... 167,437
400,000 Avecia Group PLC, Sr. Notes, 11.000%, 07/01/09 ............................... 364,000
-----------
531,437
-----------
UTILITIES -- 1.8%
600,000 Calpine Corp., Sr. Notes, 8.500%, 05/01/08 ................................... 471,000
-----------
PUBLISHING -- 1.1%
250,000 Yell Finance BV, Sr. Notes, 10.750%, 08/01/11 ................................ 289,375
-----------
CONTAINERS/GLASS PRODUCTS -- 1.1%
50,000 Crown Euro Holdings SA, 10.875%, 03/01/13** .................................. 54,750
200,000 Crown Euro Holdings SA, 9.500%, 03/01/11** ................................... 217,000
-----------
271,750
-----------
CABLE AND SATELLITE TELEVISION -- 1.0%
75,000 Shaw Communications, Inc., Sr. Notes, 8.250%, 04/11/10 ....................... 83,813
500,000 Telewest Communications PLC, Sr. Notes, 11.250%, 11/01/08+ ................... 183,750
-----------
267,563
-----------
WIRELESS COMMUNICATIONS -- 0.6%
150,000 Rogers Cantel, Inc., Sr. Notes, 9.375%, 06/01/08 ............................. 157,125
-----------
TOTAL FOREIGN BONDS
(Cost $2,846,974) .......................................................... 2,676,875
-----------
FOREIGN GOVERNMENT SECURITIES -- 2.3%
FOREIGN SOVEREIGN -- 2.3%
60,000 Federal Republic of Brazil, 14.500%, 10/15/09 ................................ 69,600
110,827 Federal Republic of Brazil, Series C, 8.000%, 04/15/14 ....................... 97,359
120,000 Republic of Colombia, 9.750%, 04/23/09 ....................................... 138,900
70,000 Republic of Ecuador, 12.000%, 11/15/12 ....................................... 55,931
130,000 Russian Federation, 5.000%, 03/31/30 ......................................... 126,425
120,000 Ukraine Government, 7.650%, 06/11/13 ......................................... 119,630
-----------
607,845
-----------
TOTAL FOREIGN GOVERNMENT SECURITIES
(Cost $525,362) ............................................................ 607,845
-----------
See Notes to Financial Statements.
8
CIM HIGH YIELD SECURITIES
PORTFOLIO OF INVESTMENTS
JUNE 30, 2003 (UNAUDITED)
NUMBER OF VALUE
SHARES (NOTE 1)
--------- -----------
WARRANTS -- 0.0%
WARRANTS -- 0.0%
100 HMP Equity Holdings Corp., 0.000%++ .......................................... $ --
-----------
TOTAL WARRANTS
(Cost $0) .................................................................. 0
-----------
SHORT TERM OBLIGATIONS -- 0.2%
$ 45,000 United States Treasury Bill, 0.920%***, 07/03/03 ............................. 44,998
-----------
TOTAL SHORT TERM OBLIGATIONS
(Cost $44,998) ............................................................. 44,998
-----------
TOTAL INVESTMENTS (Cost $32,597,730*) ............................................ 129.8% 33,874,479
LIABILITIES LESS OTHER ASSETS (NET) .............................................. (29.8)% (7,777,594)
------ -----------
NET ASSETS ....................................................................... 100.0% $26,096,885
====== ===========
<FN>
* Aggregate cost for Federal income tax purposes.
** Security purchased in a transaction exempt from registration under Rule
144A of the Securities Act of 1933. These securities may be resold in
transactions exempt from registration, normally to qualified institutional
buyers.
*** Rate represents annualized yield at date of purchase.
**** Non-income producing security.
+ Securities in default.
++ Bond and warrant represent 1 unit. Value of warrant is included with bond.
</FN>
At June 30, 2003, the Fund's credit quality allocation was as follows:
STANDARD & POOR'S CREDIT RATING (UNAUDITED)
BB ................................ 9.73%
B ................................. 68.38%
CCC ............................... 17.09%
CC ................................ 2.13%
C ................................. 0.55%
N.R. .............................. 2.12%
See Notes to Financial Statements.
9
CIM HIGH YIELD SECURITIES
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 2003 (UNAUDITED)
ASSETS:
Investments, at value (Cost $32,597,730) ..................................... $ 33,874,479
Cash ......................................................................... 64,784
Interest receivable .......................................................... 847,212
Receivable for investments sold .............................................. 723,973
Prepaid expenses ............................................................. 635
------------
Total Assets .............................................................. 35,511,083
LIABILITIES:
Notes payable (including accrued interest of $41,735) ........................ $8,751,735
Payable for securities purchased ............................................. 638,351
Investment advisory fee payable .............................................. 11,149
Administration fee payable ................................................... 3,379
Custodian fees payable ....................................................... 500
Accrued expenses and other payables .......................................... 9,084
----------
Total Liabilities ......................................................... 9,414,198
------------
NET ASSETS ........................................................................ $ 26,096,885
============
NET ASSETS consist of:
Shares of beneficial interest, $0.01 per share par value,
issued and outstanding 6,059,685 .......................................... 60,597
Paid-in capital in excess of par value ....................................... 45,924,794
Accumulated undistributed net investment income .............................. 114,463
Accumulated net realized loss on investments sold ............................ (21,279,718)
Unrealized appreciation of investments ....................................... 1,276,749
------------
Total Net Assets .......................................................... $ 26,096,885
============
NET ASSET VALUE PER SHARE
($26,096,885 / 6,059,685 shares of beneficial interest outstanding) ............ $ 4.31
============
MARKET VALUE PER SHARE ............................................................ $ 4.61
============
See Notes to Financial Statements.
10
CIM HIGH YIELD SECURITIES
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 (UNAUDITED)
INVESTMENT INCOME:
Interest ...................................................................... $1,696,486
----------
EXPENSES:
Interest expense ................................................................ $80,009
Investment advisory fee ......................................................... 59,511
Legal and audit fees ............................................................ 34,424
Miscellaneous ................................................................... 31,481
Trustees' fees and expenses ..................................................... 25,385
Administration fee .............................................................. 19,930
Shareholder servicing agent fees ................................................ 14,048
Custodian fees .................................................................. 4,563
-------
Total Expenses ............................................................. 269,351
----------
NET INVESTMENT INCOME .............................................................. 1,427,135
----------
REALIZED AND UNREALIZED GAIN/(LOSS) ON INVESTMENTS
Net realized loss on investments sold during the period ....................... (663,012)
Net change in unrealized appreciation/depreciation
of investments during the period ........................................... 4,360,960
----------
3,697,948
----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ............................................................... $5,125,083
==========
See Notes to Financial Statements.
11
CIM HIGH YIELD SECURITIES
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 (UNAUDITED)
NET INCREASE IN CASH:
Cash flows from operating activities:
Interest received ......................................................... $ 1,601,428
Operating expenses paid ................................................... (213,697)
-----------
Net cash provided by operating activities ...................................... $ 1,387,731
Cash flows from investing activities:
Increase in short-term securities, net .................................... 111,808
Purchases of long-term securities ......................................... (9,392,009)
Proceeds from sales of long-term securities ............................... 7,854,673
-----------
Net cash provided by investing activities ...................................... (1,425,528)
-----------
Net cash provided by operating and investing activities ........................ (37,797)
Cash flows from financing activities:
Interest payments on notes payable ........................................ (79,417)
Principal withdrawal on loan .............................................. 1,310,000
Distributions paid ........................................................ (1,139,452)
-----------
Net cash used in financing activities .......................................... 91,131
-----------
Net increase in cash .......................................................... 53,334
Cash -- beginning of period ................................................... 11,450
-----------
Cash -- end of period ......................................................... $ 64,784
===========
RECONCILIATION OF NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS TO NET CASH PROVIDED BY
OPERATING AND INVESTING ACTIVITIES:
Net increase in net assets resulting from operations .......................... $ 5,125,083
Interest expense ......................................................... 80,009
Increase in investments .................................................. (5,133,084)
Increase in interest receivable .......................................... (432)
Increase in prepaid expenses ............................................. (635)
Increase in investment advisory fee payable .............................. 1,709
Decrease in administration fees payable .................................. (16)
Decrease in accrued expenses and other payables .......................... (24,809)
Increase in payable for securities purchased ............................. 638,351
Increase in receivable for securities sold ............................... (723,973)
-----------
Total adjustments ................................................... (5,162,880)
-----------
Net cash provided by operating and investing activities ....................... $ (37,797)
===========
See Notes to Financial Statements.
12
CIM HIGH YIELD SECURITIES
STATEMENTS OF CHANGES IN NET ASSETS
SIX MONTHS
ENDED
JUNE 30, 2003 YEAR ENDED
(UNAUDITED) DECEMBER 31, 2002
------------ -----------------
Increase/(decrease) in net assets from operations:
Net investment income ......................................... $ 1,427,135 $ 2,846,501
Net realized loss on investments sold during the period ....... (663,012) (1,971,724)
Net change in unrealized appreciation/depreciation of
investments during the period ............................ 4,360,960 (1,479,336)
----------- -----------
Net increase/(decrease) in net assets resulting from operations 5,125,083 (604,559)
----------- -----------
Distributions to shareholders from:
Net investment income .................................... (1,312,672) (2,846,501)
Return of capital ........................................ -- (11,936)
----------- -----------
Total distributions ................................... (1,312,672) (2,858,437)
----------- -----------
Capital share transactions:
Shares issued as reinvestment of dividends ............... 173,219 281,261
----------- -----------
Net increase in net assets from Fund share transactions ....... 173,219 281,261
----------- -----------
Net increase/(decrease) in net assets ......................... 3,985,630 (3,181,735)
NET ASSETS:
Beginning of period ........................................... 22,111,255 25,292,990
----------- -----------
End of period ................................................. $26,096,885 $22,111,255
=========== ===========
See Notes to Financial Statements.
13
CIM HIGH YIELD SECURITIES
FINANCIAL HIGHLIGHTS
FOR A FUND SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR YEAR YEAR
6/30/03 ENDED ENDED ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 12/31/02 12/31/01 12/31/00 12/31/99 12/31/98* 12/31/97 12/31/96
----------- -------- -------- -------- -------- --------- -------- --------
Operating performance:
Net asset value, beginning
of period ............. $ 3.68 $ 4.25 $ 4.71 $ 6.53 $ 6.91 $ 7.96 $ 7.69 $ 7.32
------- ------- ------- ------- ------- ------- ------- -------
Net investment income ... 0.24 0.48 0.51 0.69 0.72 0.71 0.78 0.78
Net realized and
unrealized gain/(loss)
on investments ........ 0.61 (0.57) (0.46) (1.82) (0.39) (1.07) 0.30 0.36
------- ------- ------- ------- ------- ------- ------- -------
Net increase/(decrease)
in net assets resulting
from investment
operations ............ 0.85 (0.09) 0.05 (1.13) 0.33 (0.36) 1.08 1.14
Change in net asset value
from Fund share
transactions .......... -- -- -- -- -- -- -- --
Distributions:
Dividends from net
investment income ..... (0.22) (0.48) (0.51) (0.63) (0.71) (0.69) (0.78) (0.77)
Return of capital ....... -- --# --# (0.06) -- -- (0.03) --
------- ------- ------- ------- ------- ------- ------- -------
Total from distributions (0.22) (0.48) (0.51) (0.69) (0.71) (0.69) (0.81) (0.77)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of
period ................ $ 4.31 $ 3.68 $ 4.25 $ 4.71 $ 6.53 $ 6.91 $ 7.96 $ 7.69
======= ======= ======= ======= ======= ======= ======= =======
Market value, end of
period ................ $ 4.61 $ 3.64 $ 4.29 $ 4.87 $ 5.25 $ 7.19 $ 8.31 $ 8.12
======= ======= ======= ======= ======= ======= ======= =======
Total investment return
(net asset value) ..... 23.63% (2.06)% 0.72% (18.76)% 4.93% (4.95)% 14.50% 16.46%
======= ======= ======= ======= ======= ======= ======= =======
Total investment return
(market value) ........ 33.36% (4.12)% (1.78)% 4.58% (18.89)% (5.45)% 13.31% 14.38%
======= ======= ======= ======= ======= ======= ======= =======
Ratios to average net
assets/supplemental data:
Net assets, end of period
(in 000's) ............ $26,097 $22,111 $25,293 $27,707 $38,389 $40,567 $45,848 $43,495
Ratio of net investment
income to average
net assets ............ 11.99% 12.22% 11.11% 11.10% 10.76% 9.37% 10.08% 10.46%
Ratio of operating expenses
to average net assets (2) 1.59 1.55% 1.44% 1.22% 1.02% 1.02% 1.06% 1.10%
Portfolio turnover rate (1) 27.7% 40.2% 75.2% 118.8% 98.0% 62.4% 154.5% 172.2%
YEAR YEAR YEAR
ENDED ENDED ENDED
12/31/95 12/31/94 12/31/93
-------- -------- --------
Operating performance:
Net asset value, beginning
of period ............. $ 7.11 $ 8.02 $ 7.58
------- ------- -------
Net investment income ... 0.77 0.82 0.87
Net realized and
unrealized gain/(loss)
on investments ........ 0.23 (0.89) 0.71
------- ------- -------
Net increase/(decrease)
in net assets resulting
from investment
operations ............ 1.00 (0.07) 1.58
Change in net asset value
from Fund share
transactions .......... -- -- (0.31)
Distributions:
Dividends from net
investment income ..... (0.79) (0.84) (0.83)
Return of capital ....... -- -- --
------- ------- -------
Total from distributions (0.79) (0.84) (0.83)
------- ------- -------
Net asset value, end of
period ................ $ 7.32 $ 7.11 $ 8.02
======= ======= =======
Market value, end of
period ................ $ 7.87 $ 7.12 $ 7.87
======= ======= =======
Total investment return
(net asset value) ..... 14.31% (0.86)% 17.22%(3)
======= ======= =======
Total investment return
(market value) ........ 22.72% 0.99% 16.55%(3)
======= ======= =======
Ratios to average net
assets/supplemental data:
Net assets, end of period
(in 000's) ............ $40,636 $38,678 $42,901
Ratio of net investment
income to average
net assets ............ 10.32% 10.82% 11.17%
Ratio of operating expenses
to average net assets (2) 1.14% 0.95% 1.09%
Portfolio turnover rate (1) 79.9% 50.6% 114.3%
<FN>
- ----------
(1) This rate is, in general, the percentage computed by taking the lesser of
the cost of purchases or proceeds from the sales of portfolio securities for
a period and dividing it by the monthly average value of such securities
during the year, excluding short term securities.
(2) The annualized operating expense ratio excludes interest expense. The
annualized ratios including interest expense were 2.26%, 2.37%, 3.17%,
3.89%, 3.13%, 2.98%, 3.06%, 3.19%, 3.52%, 2.80% and 2.63% for the six months
ended June 30, 2003 and the years ended December 31, 2002, 2001, 2000, 1999,
1998, 1997, 1996, 1995, 1994 and 1993, respectively.
(3) The total market value return for the year ended December 31, 1993, adjusted
for the dilutive effect of the rights offering completed in August of 1993,
is 21.07%. The total net asset value return for the year ended December 31,
1993, adjusted for the dilutive effect of the rights offering completed in
August of 1993, is 21.89%.
* On May 29, 1998 the Fund entered into a new investment advisory agreement
with INVESCO (NY), Inc. (now known as INVESCO Institutional (N.A.), Inc.)
due to the acquisition of Chancellor LGT Asset Management, Inc. by AMVESCAP
PLC.
# Amount rounds to less than $0.005 per share.
</FN>
See Notes to Financial Statements.
14
CIM HIGH YIELD SECURITIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 2003
1. SIGNIFICANT ACCOUNTING POLICIES
CIM High Yield Securities (the "Fund") was organized under the laws of the
Commonwealth of Massachusetts on September 11, 1987 and is registered with the
Securities and Exchange Commission under the Investment Company Act of 1940, as
amended (the "1940 Act"), as a diversified, closed-end management investment
company. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements.
PORTFOLIO VALUATION: Fixed-income securities (other than short-term
obligations, but including listed issues) are valued based on prices obtained by
one or more of the independent pricing services approved by the Board of
Trustees. Such securities are valued at the mean of the closing bid and closing
ask prices on the exchange where primarily traded.
Securities (other than fixed-income securities) for which the principal
market is one or more securities exchanges are valued at the last reported sale
price (or if there has been no current sale, at the closing bid price) on the
primary exchange on which such securities are traded. If a securities exchange
is not the principal market for a security, such security will, if market
quotations are readily available, be valued at the closing bid price in the
over-the-counter market (or the NASDAQ Official Closing Price in the case of
securities reported on the NASDAQ national market system for which any sales
occurred during the day).
Portfolio securities for which there are no such valuations are valued at
fair value as determined in good faith by or at the direction of the Board of
Trustees. Short-term obligations with maturities of less than 60 days are valued
at amortized cost which approximates market value.
SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded as of the trade date. Realized gains and losses from securities
transactions are recorded on the identified cost basis. Interest income,
including, where applicable, amortization of premium and accretion of discount
on investments, is recorded on the accrual basis.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS: The Fund distributes monthly
to shareholders substantially all of its net investment income. Capital gains,
if any, net of capital losses, are distributed annually. Income distributions
and capital gain distributions are determined in accordance with income tax
regulations which may differ from accounting principles generally accepted in
the United States. These differences are primarily due to differing treatments
of income and gains on various investment securities held by the Fund, timing
differences and differing characterization of distributions made by the Fund.
FEDERAL INCOME TAXES: It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no Federal income tax should be payable by the Fund.
CASH FLOW INFORMATION: Cash, as used in the Statement of Cash Flows, is
the amount reported in the Statement of Assets and Liabilities. The Fund invests
in securities and distributes dividends from net investment income and net
realized gains (which are either paid in cash or reinvested at the discretion of
shareholders). These activities are reported in the Statement of Changes in Net
Assets. Information on cash payments is presented in the Statement of Cash
Flows. Accounting practices that do not affect reporting activities on a cash
basis include unrealized gain or loss on investment securities and accretion
income recognized on investment securities.
15
CIM HIGH YIELD SECURITIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
USE OF ESTIMATES: The preparation of financial statements in conformity
with accounting principles generally accepted in the United States 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 income and
expenses during the reported period. Actual results could differ from those
estimates.
2. INVESTMENT ADVISORY FEE, ADMINISTRATION FEE AND OTHER RELATED PARTY
TRANSACTIONS
The Fund has entered into an investment advisory agreement (the "Advisory
Agreement") with INVESCO (NY), Inc. (the "Adviser"). The Advisory Agreement
provides that the Fund will pay the Adviser a fee, computed and payable monthly,
at the annual rate of 0.50% of the Fund's average weekly net assets.
The Fund has also entered into an Administration and Support Agreement
with PFPC Inc. ("PFPC"), to provide all administrative services to the Fund
other than those related to the investment decisions. PFPC is paid a fee
computed and payable monthly at an annual rate of 0.09% of the Fund's average
weekly net assets, but no less than $40,000 per annum.
The Fund pays each Trustee not affiliated with the Adviser $6,000 per year
plus $1,000 per board meeting and committee meeting attended, and reimburses
each such Trustee for travel and out-of-pocket expenses relating to their
attendance at such meetings. The Fund pays the actual out-of-pocket expenses of
the Trustees affiliated with the Adviser relating to their attendance at such
meetings.
Boston Safe Deposit & Trust Company, an indirect wholly-owned subsidiary
of Mellon Bank Corporation, serves as the Fund's custodian. PFPC serves as the
Fund's shareholder servicing agent (transfer agent).
3. PURCHASE AND SALES OF SECURITIES
Cost of purchases and proceeds from sales of investment securities,
excluding U.S. Government and short-term investments, during the period ended
June 30, 2003, amounted to $9,830,554 and $8,580,521, respectively.
As of June 30, 2003, net unrealized appreciation was $1,276,749, of which
$2,229,196 related to unrealized appreciation of investments and $952,447
related to unrealized depreciation of investments. As of June 30, 2003, book
cost basis did not differ from tax cost basis.
4. FUND SHARES
The Fund has one class of shares of beneficial interest, par value $0.01
per share, of which an unlimited number of shares are authorized. Transactions
in shares of beneficial interest were as follows:
SIX MONTHS ENDED
JUNE 30, 2003
-----------------
SHARES AMOUNT
------ ------
Issued as reinvestment of dividends .................. 43,303 $173,219
------ --------
Net increase ......................................... 43,303 $173,219
====== ========
16
CIM HIGH YIELD SECURITIES
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
5. NOTES PAYABLE
The Fund currently has an $11 million ("commitment amount") line of credit
provided by Fleet National Bank (the "Bank") under an Amended and Restated
Credit Agreement (the "Agreement") dated as of September 18, 1992 and amended
and restated as of May 23, 2001, as amended, primarily to leverage its
investment portfolio. Under this Agreement, the Fund may borrow up to the lesser
of $11 million or 25% of its total assets. Interest is payable at either the
federal funds rate plus 0.75% or its applicable LIBOR rate plus 0.75%, as
selected by the Fund from time to time in its loan requests. The Fund is charged
a commitment fee of one tenth of one percent per annum of the average daily
unused commitment amount. At June 30, 2003, the Fund had borrowings of
$8,710,000 outstanding under this Agreement. During the six months ended June
30, 2003, the Fund had an average outstanding daily balance of $7,941,602 with
interest rates ranging from 1.87% to 2.13% and average debt per share of $1.32.
For the six months ended June 30, 2003, interest expense totaled $80,009 under
this Agreement.
6. CAPITAL LOSS CARRYFORWARD
Capital loss carryforwards are available to offset future realized capital
gains. To the extent that these carryforwards are used to offset future capital
gains, it is probable that the amount which is offset will not be distributed to
shareholders.
At December 31, 2002, the Fund had available for Federal tax purposes
unused capital loss carryforwards of $679,423, $253,172, $2,499,736, $133,391,
$4,838,652, $7,509,786, and $4,573,327 expiring in 2003, 2004, 2006, 2007, 2008,
2009, and 2010, respectively.
7. POST-OCTOBER LOSS
Post-October losses of $129,219 represent losses realized on investment
transactions from November 1, 2002 through December 31, 2002 that, in accordance
with Federal income tax regulations, the Fund has elected to defer and treat as
having arisen in the following fiscal year.
8. RISK FACTORS
The Fund invests in securities offering high current income which
generally will be in the lower rating categories of recognized ratings agencies
(below investment-grade bonds). These securities generally involve more credit
risk than securities in the higher rating categories. In addition, the trading
market for high yield securities may be relatively less liquid than the market
for higher-rated securities. The Fund will provide notice to shareholders at
least 60 days prior to any change in its policy of investing primarily (at least
80% of its total assets under normal circumstances) in "high yield", high risk
fixed income securities. The Fund's use of leverage also increases exposure to
capital risk. The Fund may invest 2-3% of its assets in emerging markets.
Emerging markets may be subject to a substantially greater degree of social,
political, and economic instability than is the case in domestic markets.
17
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[THIS PAGE INTENTIONALLY LEFT BLANK]
CIM
- --------------------------------------------------------------------------------
HIGH YIELD SECURITIES
SEMI-ANNUAL REPORT
JUNE 30, 2003
This report is sent to shareholders of CIM High Yield Securities for their
information. It is not a Prospectus, circular or representation intended for use
in the purchase or sale of shares of the Fund or any securities mentioned in the
report.
For Additional Information about
CIMHigh Yield Securities
Call 1-800-331-1710.
CIM 3192 6/03
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act
(17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17
CFR 270.30a-3(d)) that occurred during the registrant's last fiscal
half-year (the registrant's second fiscal half-year in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting.
ITEM 10. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 are attached hereto.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 are attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(registrant) CIM High Yield Securities
--------------------------------------------------------------------
By (Signature and Title)* /s/ George Baumann
-------------------------------------------------------
George Baumann, Chief Executive Officer
(principal executive officer)
Date SEPTEMBER 2, 2003
----------------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ George Baumann
-------------------------------------------------------
George Baumann, Chief Executive Officer
(principal executive officer)
Date SEPTEMBER 2, 2003
----------------------------------------------------------------------------
By (Signature and Title)* /s/ Cindy Hayes
-------------------------------------------------------
Cindy Hayes, Chief Financial Officer
(principal financial officer)
Date SEPTEMBER 2, 2003
----------------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.