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 811-5567
Colonial Intermediate High Income Fund
--------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
One Financial Center, Boston, Massachusetts 02111
--------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
James R. Bordewick, Jr., Esq.
Columbia Management Advisors, LLC
One Financial Center
Boston, MA 02111
--------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 1-617-426-3750
Date of fiscal year end: November 30, 2006
Date of reporting period: May 31, 2006
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. Section 3507.
Item 1. Reports to Stockholders
[GRAPHIC]
[GRAPHIC]
COLONIAL INTERMEDIATE HIGH INCOME FUND
SEMIANNUAL REPORT
MAY 31, 2006
[LOGO] Not FDIC Insured May Lose Value
No Bank Guarantee
[GRAPHIC]
Dear Shareholder:
The US stock and bond markets delivered positive, but modest, returns during
the six month period ended May 31, 2006. After a weak fourth quarter, economic
growth turned sharply higher in 2006 and job growth was steady, although
somewhat slower at the end of the period. Confident consumers continued to pump
dollars into US retail markets, despite higher energy prices, which boosted
inflation. The housing market continued to cool as mortgage rates moved higher,
but housing-market indicators--such as housing starts, sales of existing homes,
and house prices--remained strong by historical measures.
In this environment, the US fixed income markets faced the challenge of rising
interest rates, especially within the short-and intermediate-maturity ranges
and was generally flat for the period. The Federal Reserve Board, in an effort
to balance economic growth and the forces of inflation, raised short-term
interest rates by one full percentage point during the reporting period. The
yield on the 10-year US Treasury note, a bellwether for the bond market, moved
up from 4.5% to 5.1%. Lower quality bonds did better than higher quality bonds.
In fact, high-yield bonds did better than either stocks or investment-grade
bonds. A strong economy favored corporate high-yield bonds, as default rates
remained low and corporate profits surprised investors with
better-than-expected results. However, that trend showed signs of shifting near
the end of the six-month period. The municipal sector generated respectable
gains as economic growth helped buoy revenues and stabilize budgets in many
states and municipalities. Within the municipal market, high-yield also
outperformed high-grade bonds for the period.
In the pages that follow, your fund's manager discusses key factors that
influenced performance during this six-month reporting period. We urge you to
read this report carefully and to discuss any questions you might have with
your financial advisor.
As always, we thank you for choosing Colonial Funds. We look forward to
continuing to help you build toward your financial goals.
Sincerely,
/s/ Christopher L. Wilson
Christopher L. Wilson
President, Columbia Funds
Past performance is no guarantee of future results.
Investments in high-yield or "junk" bonds offer the potential for higher income
than investments in investment-grade bonds, but also have a higher degree of
risk. Changes in economic conditions or other circumstances may adversely
effect a high-yield bond issuer's ability to make timely principal and interest
payments.
The views expressed in the President's Letter and Portfolio Managers' Report
reflect the current views of the respective parties. These views are not
guarantees of future performance and involve certain risks, uncertainties and
assumptions that are difficult to predict so actual outcomes and results may
differ significantly from the views expressed. These views are subject to
change at any time based upon economic, market or other conditions and the
respective parties disclaim any responsibility to update such views. These
views may not be relied on as investment advice and, because investment
decisions for a Colonial Fund are based on numerous factors, may not be relied
on as an indication of trading intent on behalf of any particular Colonial
Fund. References for specific company securities should not be construed as a
recommendation or investment advice.
[GRAPHIC]
Price per share as of 05/31/06 ($)
Market price 3.26
--------------------
Net asset value 3.54
--------------------
6-month (cumulative) total return as of 05/31/06 (%)*
Market price 9.44
------------------------------------
Net asset value 3.67
------------------------------------
Lipper High Current Yield Funds
(Leveraged) Category average 5.53
------------------------------------
Performance is historical, assumes reinvestment of all dividends and capital
gains, and does not guarantee future results. Investment return and principal
value fluctuate with changing market conditions so that, when sold, shares may
be worth more or less than their original cost. Current performance may be
lower or higher than the performance data quoted. Please call 800-730-6001 for
the fund's most recent performance.
Total return based on net asset value reflects changes in the fund's net asset
value during each period. Total return based on market value reflects changes
to market value. These figures will differ depending on the level of any
discount from or premium to during the period.
Distributions declared
per share 12/01/05-05/31/06 ($)
0.19
--------
Quality breakdown
as of 05/31/06 (%)
BBB 1.4
-----------------------------
BB 21.8
-----------------------------
B 50.8
-----------------------------
CCC 13.8
-----------------------------
CC 1.0
-----------------------------
Non-rated 0.6
-----------------------------
Equity, Preferred Stocks 2.8
-----------------------------
Cash equivalents 7.8
-----------------------------
Quality breakdown is calculated as a percentage of total investments. Ratings
shown in the quality breakdown represent the rating assigned to a particular
bond by one of the following nationally recognized rating agencies: Standard &
Poor's, a division of The McGraw-Hill Companies, Inc., Moody's Investors
Service, Inc. or Fitch Ratings, Ltd. Ratings are relative and subjective and
are not absolute standards of quality. The fund's credit quality does not
remove market risk.
Top 10 corporate issuers
as of 05/31/06 (%)
El Paso** 2.1
----------------------------------
Qwest 2.1
----------------------------------
General Motors 1.6
----------------------------------
Allied Waste North America 1.2
----------------------------------
Charter Communications 1.1
----------------------------------
Williams Companies 1.0
----------------------------------
Dow Jones CDX High Yield Index 1.0
----------------------------------
Dobson Cellular Systems 1.0
----------------------------------
CSC Holdings 0.9
----------------------------------
Owens-Brockway Glass Container 0.9
----------------------------------
Corporate issuers are calculated as a percentage of total investments.
Portfolio characteristics and holdings are subject to change periodically and
may not be representative of current characteristics and holdings.
SUMMARY
.. For the six-month period ended May 31, 2006, Colonial Intermediate High
Income Fund returned 9.44%, based on its market price. During the period,
the fund returned 3.67% based on investment at net asset value. The average
return of the Lipper High Current Yield Funds (Leveraged) Category was
5.53%./1/ We believe that the fund may have had more emphasis than its
peers on higher quality high-yield bonds, which detracted from relative
performance.
.. The fund's emphasis on lower quality bonds early in the period benefited
performance, with investments in utilities, energy and wireless
telecommunications producing some of the biggest gains. However, we reduced
exposure to lower quality bonds as the yield spread between lower and
higher quality securities narrowed. This repositioning allowed us to lock
in profits, but the timing of the change turned out to be premature as
lower quality bonds continued to lead the market.
.. We believe that several factors could be positive for corporate profits and
cash flows, including continued economic growth, an orderly softening of
the housing market and the possibility that the Federal Reserve Board could
be near the end of its rate-rising cycle. However, we also believe that
many high-yield issues, particularly those of lower quality, have been
afforded excessive valuations and that the yield advantage that lower
quality bonds offer, may not provide sufficient compensation for risk.
Against this backdrop, the fund's shift in focus to higher quality has the
potential to be rewarded if our assessment of market conditions is correct.
However, we plan to continue to monitor economic data, and if our outlook
changes, we would alter our investment focus accordingly.
PORTFOLIO MANAGEMENT
Gregg R. Smalley, CFA, has managed Colonial Intermediate High Income Fund since
June 2000.
Kevin L. Cronk, CFA, has co-managed the fund since February 2003.
Thomas A. LaPointe, CFA, has co-managed the fund since February 2003.
Shares of closed-end funds frequently trade at a discount to net asset value.
The price of the fund's shares is determined by a number of factors, several of
which are beyond the control of the fund. Therefore, the fund cannot predict
whether its shares will trade at, below or above net asset value.
Performance data quoted represents past performance and current performance may
be lower or higher. Past performance is no guarantee of future results.
Investing in fixed-income securities may involve certain risks, including the
credit quality of individual issuers, possible prepayments, market or economic
developments and yield and share price fluctuations due to changes in interest
rates. When interest rates go up, bond prices typically drop, and vice versa.
Investing in high-yield or "junk" bonds offers the potential for higher income
than investments in investment-grade bonds but also have a higher degree of
risk. Changes in economic conditions or other circumstances may adversely
affect a high-yield bond issuer's ability to make timely principal and interest
payments.
-----------
/1/Lipper Inc., a widely respected data provider in the industry, calculates an
average total return (assuming reinvestment of distributions) for mutual
funds with investment objectives similar to those of the fund. Lipper makes
no adjustment for the effect of sales loads.
*See Page 17 for long term returns based on market price.
**Includes affiliated companies.
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PORTFOLIO MANAGERS' REPORT
1
[GRAPHIC]
INVESTMENT PORTFOLIO
May 31, 2006 (Unaudited)
CORPORATE FIXED-INCOME
BONDS & NOTES - 119.5% PAR ($) VALUE ($)
---------------------------------------------------
BASIC MATERIALS - 9.5%
CHEMICALS - 6.1%
AGRICULTURAL CHEMICALS - 1.7%
IMC Global, Inc.
10.875% 08/01/13 310,000 349,525
Terra Capital, Inc.
12.875% 10/15/08 420,000 480,900
UAP Holding Corp.
(a) 07/15/12
(10.750% 01/15/08) 295,000 284,675
United Agri Products
8.250% 12/15/11 121,000 130,438
---------
1,245,538
---------
CHEMICALS - DIVERSIFIED - 3.7%
BCP Crystal US Holdings Corp.
9.625% 06/15/14 215,000 236,500
EquiStar Chemicals LP
10.625% 05/01/11 315,000 341,775
Huntsman International LLC
8.125% 01/01/15 (b) 310,000 299,150
Huntsman LLC
11.500% 07/15/12 115,000 130,525
Ineos Group Holdings PLC
7.875% 02/15/16 (b) EUR220,000 268,518
8.500% 02/15/16 (b) USD265,000 249,431
Innophos Investments Holdings,
Inc. PIK,
13.170% 02/15/15 (c) 204,857 205,369
Lyondell Chemical Co.
9.625% 05/01/07 390,000 401,213
NOVA Chemicals Corp.
6.500% 01/15/12 440,000 407,000
8.405% 11/15/13 (c) 205,000 208,075
---------
2,747,556
---------
CHEMICALS - SPECIALTY - 0.7%
Chemtura Corp.
6.875% 06/01/16 140,000 136,500
Rhodia SA
8.875% 06/01/11 416,000 419,640
---------
556,140
---------
Chemicals Total 4,549,234
---------
FOREST PRODUCTS & PAPER - 2.7%
PAPER & RELATED PRODUCTS - 2.7%
Abitibi-Consolidated, Inc.
8.375% 04/01/15 260,000 248,300
Boise Cascade LLC
7.125% 10/15/14 190,000 172,900
7.943% 10/15/12 (c) 315,000 317,363
Buckeye Technologies, Inc.
8.500% 10/01/13 60,000 58,950
PAR ($) VALUE ($)
-------------------------------------------------
Georgia-Pacific Corp.
8.000% 01/15/24 530,000 514,100
Neenah Paper, Inc.
7.375% 11/15/14 130,000 120,900
NewPage Corp.
10.000% 05/01/12 250,000 266,875
12.000% 05/01/13 105,000 113,400
Norske Skog
8.625% 06/15/11 190,000 189,050
---------
2,001,838
---------
Forest Products & Paper Total 2,001,838
---------
IRON/STEEL - 0.5%
STEEL - PRODUCERS - 0.2%
Steel Dynamics, Inc.
9.500% 03/15/09 160,000 166,800
---------
166,800
---------
STEEL - SPECIALTY - 0.3%
UCAR Finance, Inc.
10.250% 02/15/12 215,000 228,975
---------
228,975
---------
Iron/Steel Total 395,775
---------
METALS & MINING - 0.2%
MINING SERVICES - 0.2%
Hudson Bay Mining & Smelting
Co., Ltd.
9.625% 01/15/12 105,000 115,500
---------
115,500
---------
Metals & Mining Total 115,500
---------
BASIC MATERIALS TOTAL 7,062,347
---------
-------------------------------------------------
COMMUNICATIONS - 26.3%
MEDIA - 10.5%
BROADCAST SERVICES/PROGRAMS - 0.6%
Fisher Communications, Inc.
8.625% 09/15/14 190,000 198,075
XM Satellite Radio, Inc.
9.750% 05/01/14 (b) 260,000 241,800
---------
439,875
---------
CABLE TV - 4.5%
Atlantic Broadband Finance LLC
9.375% 01/15/14 305,000 292,800
Charter Communications Holdings
II LLC
10.250% 09/15/10 550,000 551,375
Charter Communications Holdings
LLC
9.920% 04/01/14 855,000 525,825
See Accompanying Notes to Financial Statements.
2
[GRAPHIC]
INVESTMENT PORTFOLIO (CONTINUED)
May 31, 2006 (Unaudited)
CORPORATE FIXED-INCOME
BONDS & NOTES (CONTINUED) PAR ($) VALUE ($)
------------------------------------------------
COMMUNICATIONS (CONTINUED)
MEDIA (CONTINUED)
CABLE TV (CONTINUED)
CSC Holdings, Inc.
7.250% 04/15/12 (b) 525,000 518,437
7.625% 04/01/11 430,000 434,300
EchoStar DBS Corp.
6.625% 10/01/14 470,000 445,325
Insight Midwest LP
9.750% 10/01/09 275,000 281,875
Telenet Group Holding NV
(a) 06/15/14
(11.500% 12/15/08) (b) 368,000 309,120
---------
3,359,057
---------
MULTIMEDIA - 1.3%
Advanstar Communications, Inc.
15.000% 10/15/11 310,000 325,888
Lamar Media Corp.
6.625% 08/15/15 310,000 296,825
Quebecor Media, Inc.
7.750% 03/15/16 (b) 330,000 333,300
---------
956,013
---------
PUBLISHING - NEWSPAPERS - 0.4%
Hollinger, Inc.
11.875% 03/01/11 (b) 122,000 122,000
12.875% 03/01/11 (b) 177,000 184,301
---------
306,301
---------
PUBLISHING - PERIODICALS - 2.6%
Dex Media West LLC
9.875% 08/15/13 624,000 681,720
Dex Media, Inc.
(a) 11/15/13
(9.000% 11/15/08) 250,000 211,250
PriMedia, Inc.
8.000% 05/15/13 500,000 450,000
RH Donnelley Corp.
8.875% 01/15/16 (b) 290,000 290,725
WDAC Subsidiary Corp.
8.375% 12/01/14 (b) 310,000 304,188
---------
1,937,883
---------
RADIO - 0.5%
CMP Susquehanna Corp.
9.875% 05/15/14 (b) 325,000 316,875
---------
316,875
---------
TELEVISION - 0.6%
LIN Television Corp.
6.500% 05/15/13 195,000 182,812
Sinclair Broadcast Group, Inc.
8.750% 12/15/11 255,000 266,794
---------
449,606
---------
Media Total 7,765,610
---------
PAR ($) VALUE ($)
----------------------------------------------------
TELECOMMUNICATION SERVICES - 15.8%
CELLULAR TELECOMMUNICATIONS - 6.1%
Digicel Ltd.
9.250% 09/01/12 (b) 440,000 463,650
Dobson Cellular Systems, Inc.
8.375% 11/01/11 400,000 415,500
9.875% 11/01/12 510,000 553,350
Horizon PCS, Inc.
11.375% 07/15/12 190,000 215,413
iPCS Escrow Co.
11.500% 05/01/12 170,000 191,675
Nextel Communications, Inc.
7.375% 08/01/15 315,000 325,064
Nextel Partners, Inc.
8.125% 07/01/11 390,000 411,937
Rogers Cantel, Inc.
9.750% 06/01/16 385,000 448,525
Rogers Wireless, Inc.
8.000% 12/15/12 225,000 232,875
Rural Cellular Corp.
8.250% 03/15/12 320,000 331,600
9.750% 01/15/10 65,000 65,975
10.899% 11/01/12 (b)(c) 285,000 298,181
US Unwired, Inc.
10.000% 06/15/12 500,000 558,078
---------
4,511,823
---------
SATELLITE TELECOMMUNICATIONS - 2.2%
Hughes Network Systems LLC/HNS
Finance Corp.
9.500% 04/15/14 (b) 130,000 131,300
Inmarsat Finance II PLC
(a) 11/15/12
(10.375% 11/15/08) 460,000 395,600
Intelsat Bermuda, Ltd.
8.250% 01/15/13 640,000 636,800
PanAmSat Corp.
9.000% 08/15/14 226,000 235,040
Zeus Special Subsidiary Ltd.
(a) 02/01/15
(9.250% 02/01/10) (b) 330,000 237,600
---------
1,636,340
---------
TELECOMMUNICATION EQUIPMENT - 0.4%
Lucent Technologies, Inc.
6.450% 03/15/29 360,000 314,100
---------
314,100
---------
TELECOMMUNICATION SERVICES - 1.9%
Embarq Corp.
7.082% 06/01/16 165,000 165,514
7.995% 06/01/36 165,000 166,011
Nordic Telephone Co. Holdings ApS
8.250% 05/01/16 (b) 240,000 315,993
8.875% 05/01/16 (b) 100,000 104,000
Syniverse Technologies, Inc.
7.750% 08/15/13 260,000 259,350
Time Warner Telecom Holdings, Inc.
9.250% 02/15/14 395,000 421,663
---------
1,432,531
---------
See Accompanying Notes to Financial Statements.
3
[GRAPHIC]
INVESTMENT PORTFOLIO (CONTINUED)
May 31, 2006 (Unaudited)
CORPORATE FIXED-INCOME
BONDS & NOTES (CONTINUED) PAR ($) VALUE ($)
------------------------------------------------------
COMMUNICATIONS (CONTINUED)
MEDIA (CONTINUED)
TELEPHONE - INTEGRATED - 4.7%
Axtel SA de CV
11.000% 12/15/13 73,000 82,034
Cincinnati Bell, Inc.
7.000% 02/15/15 585,000 567,450
Citizens Communications Co.
9.000% 08/15/31 515,000 538,819
Qwest Capital Funding, Inc.
6.875% 07/15/28 710,000 623,025
Qwest Communications International,
Inc.
7.500% 02/15/14 440,000 435,050
Qwest Corp.
7.500% 06/15/23 505,000 484,800
8.875% 03/15/12 525,000 563,062
US LEC Corp.
13.620% 10/01/09 (c) 225,000 241,594
----------
3,535,834
----------
WIRELESS EQUIPMENT - 0.5%
American Towers, Inc.
7.250% 12/01/11 335,000 343,375
----------
343,375
----------
Telecommunication Services Total 11,774,003
----------
COMMUNICATIONS TOTAL 19,539,613
----------
------------------------------------------------------
CONSUMER CYCLICAL - 21.8%
AIRLINES - 0.6%
AIRLINES - 0.6%
Continental Airlines, Inc.
7.568% 12/01/06 475,000 475,000
----------
475,000
----------
Airlines Total 475,000
----------
APPAREL - 1.7%
APPAREL MANUFACTURERS - 1.7%
Broder Brothers Co.
11.250% 10/15/10 235,000 222,663
Levi Strauss & Co.
9.750% 01/15/15 550,000 570,625
Phillips-Van Heusen Corp.
7.250% 02/15/11 370,000 371,850
8.125% 05/01/13 60,000 62,100
----------
1,227,238
----------
Apparel Total 1,227,238
----------
AUTO MANUFACTURERS - 0.3%
AUTO - CARS/LIGHT TRUCKS - 0.3%
General Motors Corp.
8.375% 07/15/33 265,000 201,400
----------
201,400
----------
Auto Manufacturers Total 201,400
----------
PAR ($) VALUE ($)
----------------------------------------------------
AUTO PARTS & EQUIPMENT - 2.1%
AUTO/TRUCK PARTS & EQUIPMENT - ORIGINAL - 0.5%
TRW Automotive, Inc.
9.375% 02/15/13 320,000 345,600
---------
345,600
---------
AUTO/TRUCK PARTS & EQUIPMENT -
REPLACEMENT - 0.7%
Commercial Vehicle Group
8.000% 07/01/13 310,000 305,350
Rexnord Corp.
10.125% 12/15/12 200,000 220,000
---------
525,350
---------
RUBBER - TIRES - 0.9%
Goodyear Tire & Rubber Co.
9.000% 07/01/15 695,000 708,900
---------
708,900
---------
Auto Parts & Equipment Total 1,579,850
---------
DISTRIBUTION/WHOLESALE - 0.3%
DISTRIBUTION/WHOLESALE - 0.3%
Buhrmann US, Inc.
7.875% 03/01/15 230,000 230,575
---------
230,575
---------
Distribution/Wholesale Total 230,575
---------
ENTERTAINMENT - 1.9%
GAMBLING (NON-HOTEL) - 0.5%
Global Cash Access LLC
8.750% 03/15/12 332,000 351,920
---------
351,920
---------
MUSIC - 0.8%
Steinway Musical Instruments, Inc.
7.000% 03/01/14 (b) 260,000 254,475
Warner Music Group
7.375% 04/15/14 390,000 386,100
---------
640,575
---------
RESORTS/THEME PARKS - 0.6%
Six Flags, Inc.
9.625% 06/01/14 430,000 426,775
---------
426,775
---------
Entertainment Total 1,419,270
---------
HOME BUILDERS - 1.3%
BUILDING - RESIDENTIAL/COMMERCIAL - 1.3%
D.R. Horton, Inc.
9.750% 09/15/10 415,000 463,982
K. Hovnanian Enterprises, Inc.
6.375% 12/15/14 310,000 280,937
8.875% 04/01/12 170,000 175,738
Standard Pacific Corp.
9.250% 04/15/12 75,000 76,500
---------
997,157
---------
Home Builders Total 997,157
---------
See Accompanying Notes to Financial Statements.
4
[GRAPHIC]
INVESTMENT PORTFOLIO (CONTINUED)
May 31, 2006 (Unaudited)
CORPORATE FIXED-INCOME
BONDS & NOTES (CONTINUED) PAR ($) VALUE ($)
---------------------------------------------------
CONSUMER CYCLICAL (CONTINUED)
HOME FURNISHINGS - 0.5%
HOME FURNISHINGS - 0.5%
Sealy Mattress Co.
8.250% 06/15/14 330,000 344,850
---------
344,850
---------
Home Furnishings Total 344,850
---------
LEISURE TIME - 0.8%
LEISURE & RECREATIONAL PRODUCTS - 0.3%
K2, Inc.
7.375% 07/01/14 245,000 241,325
---------
241,325
---------
RECREATIONAL CENTERS - 0.5%
Town Sports International, Inc.
(a) 02/01/14
(11.000% 02/01/09) 440,000 349,250
---------
349,250
---------
Leisure Time Total 590,575
---------
LODGING - 8.5%
CASINO HOTELS - 8.1%
CCM Merger, Inc.
8.000% 08/01/13 (b) 480,000 462,000
Chukchansi Economic Development
Authority
8.780% 11/15/12 (b)(c) 275,000 280,500
Circus & Eldorado/Silver Legacy
Capital Corp.
10.125% 03/01/12 300,000 318,750
Eldorado Casino Shreveport
10.000% 08/01/12 761,933 609,546
Galaxy Entertainment Finance Co.,
Ltd.
9.875% 12/15/12 (b) 290,000 301,600
Greektown Holdings LLC
10.750% 12/01/13 (b) 385,000 408,100
Hard Rock Hotel, Inc.
8.875% 06/01/13 520,000 564,200
Inn of the Mountain Gods Resort &
Casino
12.000% 11/15/10 150,000 161,625
Kerzner International Ltd.
6.750% 10/01/15 475,000 501,125
MGM Mirage
6.000% 10/01/09 270,000 264,600
6.750% 09/01/12 480,000 472,200
8.500% 09/15/10 115,000 121,756
Mohegan Tribal Gaming Authority
6.125% 02/15/13 210,000 199,763
Pinnacle Entertainment, Inc.
8.250% 03/15/12 575,000 589,375
PAR ($) VALUE ($)
-------------------------------------------------
Station Casinos, Inc.
6.000% 04/01/12 390,000 372,450
Wynn Las Vegas LLC
6.625% 12/01/14 450,000 428,625
----------
6,056,215
----------
HOTELS & MOTELS - 0.4%
Hilton Hotels Corp.
7.500% 12/15/17 260,000 270,441
----------
270,441
----------
Lodging Total 6,326,656
----------
RETAIL - 3.5%
RETAIL - AUTOMOBILES - 0.8%
Asbury Automotive Group, Inc.
8.000% 03/15/14 360,000 358,650
AutoNation, Inc.
7.000% 04/15/14 (b) 140,000 138,600
7.045% 04/15/13 (b)(c) 85,000 86,275
----------
583,525
----------
RETAIL - DRUG STORES - 0.4%
Rite Aid Corp.
7.500% 01/15/15 270,000 265,275
----------
265,275
----------
RETAIL - HOME FURNISHINGS - 0.5%
Tempur-Pedic, Inc.
10.250% 08/15/10 382,000 409,695
----------
409,695
----------
RETAIL - PROPANE DISTRIBUTORS - 1.1%
AmeriGas Partners LP
7.125% 05/20/16 280,000 269,500
Ferrellgas Partners LP
8.750% 06/15/12 300,000 305,250
Inergy LP/Inergy Finance Corp.
8.250% 03/01/16 240,000 246,000
----------
820,750
----------
RETAIL - RESTAURANTS - 0.7%
Dave & Buster's, Inc.
11.250% 03/15/14 (b) 230,000 232,300
Landry's Restaurants, Inc.
7.500% 12/15/14 305,000 287,462
----------
519,762
----------
Retail Total 2,599,007
----------
TEXTILES - 0.3%
TEXTILE - PRODUCTS - 0.3%
INVISTA
9.250% 05/01/12 (b) 235,000 249,100
----------
249,100
----------
Textiles Total 249,100
----------
CONSUMER CYCLICAL TOTAL 16,240,678
----------
See Accompanying Notes to Financial Statements.
5
[GRAPHIC]
INVESTMENT PORTFOLIO (CONTINUED)
May 31, 2006 (Unaudited)
CORPORATE FIXED-INCOME
BONDS & NOTES (CONTINUED) PAR ($) VALUE ($)
--------------------------------------------------
CONSUMER NON-CYCLICAL - 18.9%
AGRICULTURE - 0.7%
TOBACCO - 0.7%
Alliance One International, Inc.
11.000% 05/15/12 265,000 252,744
Reynolds American, Inc.
7.625% 06/01/16 (b)(d) 235,000 234,412
---------
487,156
---------
Agriculture Total 487,156
---------
BEVERAGES - 0.7%
BEVERAGES - NON-ALCOHOLIC - 0.4%
Cott Beverages, Inc.
8.000% 12/15/11 270,000 270,675
---------
270,675
---------
BEVERAGES - WINE/SPIRITS - 0.3%
Constellation Brands, Inc.
8.125% 01/15/12 245,000 253,575
---------
253,575
---------
Beverages Total 524,250
---------
BIOTECHNOLOGY - 0.5%
MEDICAL-BIOMEDICAL/GENE - 0.5%
Bio-Rad Laboratories, Inc.
7.500% 08/15/13 375,000 379,688
---------
379,688
---------
Biotechnology Total 379,688
---------
COMMERCIAL SERVICES - 5.9%
COMMERCIAL SERVICES - 0.5%
Iron Mountain, Inc.
7.750% 01/15/15 350,000 350,000
---------
350,000
---------
COMMERCIAL SERVICES - FINANCE - 0.3%
Dollar Financial Group, Inc.
9.750% 11/15/11 190,000 204,250
---------
204,250
---------
CONSULTING SERVICES - 0.3%
FTI Consulting
7.625% 06/15/13 200,000 204,000
---------
204,000
---------
FUNERAL SERVICES & RELATED ITEMS - 0.6%
Service Corp. International/US
6.750% 04/01/16 230,000 217,638
7.700% 04/15/09 240,000 244,800
---------
462,438
---------
PRINTING-COMMERCIAL - 0.7%
Quebecor World Capital Corp.
8.750% 03/15/16 (b) 330,000 309,658
PAR ($) VALUE ($)
----------------------------------------------------
Sheridan Group
10.250% 08/15/11 210,000 214,200
---------
523,858
---------
PRIVATE CORRECTIONS - 0.9%
Corrections Corp. of America
6.250% 03/15/13 360,000 342,000
GEO Group, Inc.
8.250% 07/15/13 355,000 362,987
---------
704,987
---------
RENTAL AUTO/EQUIPMENT - 2.6%
Ashtead Holdings PLC
8.625% 08/01/15 (b) 350,000 356,562
Avis Budget Car Rental LLC
7.625% 05/15/14 (b) 210,000 212,100
7.750% 05/15/16 (b) 145,000 146,450
Hertz Corp.
8.875% 01/01/14 (b) 330,000 345,675
NationsRent, Inc.
9.500% 10/15/10 435,000 467,625
United Rentals North America, Inc.
6.500% 02/15/12 295,000 283,938
7.750% 11/15/13 150,000 148,125
---------
1,960,475
---------
Commercial Services Total 4,410,008
---------
COSMETICS/PERSONAL CARE - 0.8%
COSMETICS & TOILETRIES - 0.8%
DEL Laboratories, Inc.
8.000% 02/01/12 290,000 242,875
Elizabeth Arden, Inc.
7.750% 01/15/14 360,000 361,800
---------
604,675
---------
Cosmetics/Personal Care Total 604,675
---------
FOOD - 1.7%
FOOD - CONFECTIONERY - 0.2%
Merisant Co.
9.500% 07/15/13 215,000 147,275
---------
147,275
---------
FOOD - MISCELLANEOUS/DIVERSIFIED - 1.4%
Dole Food Co., Inc.
8.625% 05/01/09 372,000 366,420
Pinnacle Foods Holding Corp.
8.250% 12/01/13 470,000 465,300
Reddy Ice Holdings, Inc.
(a) 11/01/12
(10.500% 11/01/08) 230,000 192,050
---------
1,023,770
---------
See Accompanying Notes to Financial Statements.
6
[GRAPHIC]
INVESTMENT PORTFOLIO (CONTINUED)
May 31, 2006 (Unaudited)
CORPORATE FIXED-INCOME
BONDS & NOTES (CONTINUED) PAR ($) VALUE ($)
------------------------------------------------
CONSUMER NON-CYCLICAL (CONTINUED)
FOOD (CONTINUED)
FOOD - RETAIL - 0.1%
Stater Brothers Holdings, Inc.
8.125% 06/15/12 130,000 130,000
---------
130,000
---------
Food Total 1,301,045
---------
HEALTHCARE SERVICES - 3.6%
DIALYSIS CENTERS - 0.4%
DaVita, Inc.
7.250% 03/15/15 325,000 317,687
---------
317,687
---------
MEDICAL - HMO - 0.5%
Coventry Health Care, Inc.
8.125% 02/15/12 340,000 355,284
---------
355,284
---------
MEDICAL - HOSPITALS - 1.4%
HCA, Inc.
7.875% 02/01/11 370,000 383,848
Tenet Healthcare Corp.
9.875% 07/01/14 630,000 641,025
---------
1,024,873
---------
MEDICAL - OUTPATIENT/HOME MEDICAL - 0.2%
Select Medical Corp.
7.625% 02/01/15 205,000 182,963
---------
182,963
---------
MRI/MEDICAL DIAGNOSTIC IMAGING - 0.3%
MedQuest, Inc.
11.875% 08/15/12 145,000 131,225
MQ Associates, Inc.
(a) 08/15/12
(12.250% 08/15/08) 210,000 81,900
---------
213,125
---------
PHYSICIAN PRACTICE MANAGEMENT - 0.8%
US Oncology Holdings, Inc.
10.320% 03/15/15 (c) 145,000 147,356
US Oncology, Inc.
9.000% 08/15/12 390,000 411,450
---------
558,806
---------
Healthcare Services Total 2,652,738
---------
HOUSEHOLD PRODUCTS/WARES - 1.9%
CONSUMER PRODUCTS - MISCELLANEOUS - 1.5%
American Greetings Corp.
7.375% 06/01/16 180,000 182,250
Amscan Holdings, Inc.
8.750% 05/01/14 320,000 290,400
Jostens IH Corp.
7.625% 10/01/12 300,000 295,500
PAR ($) VALUE ($)
--------------------------------------------------
Scotts Miracle-Gro Co., Class A
6.625% 11/15/13 380,000 370,975
----------
1,139,125
----------
OFFICE SUPPLIES & FORMS - 0.4%
ACCO Brands Corp.
7.625% 08/15/15 270,000 258,525
----------
258,525
----------
Household Products/Wares Total 1,397,650
----------
PHARMACEUTICALS - 3.1%
MEDICAL - DRUGS - 1.1%
Elan Finance PLC
7.750% 11/15/11 505,000 496,162
Warner Chilcott Corp.
8.750% 02/01/15 300,000 300,750
----------
796,912
----------
MEDICAL - GENERIC DRUGS - 0.6%
Mylan Laboratories, Inc.
6.375% 08/15/15 445,000 429,425
----------
429,425
----------
MEDICAL - WHOLESALE DRUG DISTRIBUTION - 0.9%
AmerisourceBergen Corp.
5.875% 09/15/15 (b) 225,000 217,162
Nycomed A/S, PIK,
11.750% 09/15/13 (b) 341,257 456,153
----------
673,315
----------
PHARMACY SERVICES - 0.2%
Omnicare, Inc.
6.750% 12/15/13 170,000 164,900
----------
164,900
----------
VITAMINS & NUTRITION PRODUCTS - 0.3%
NBTY, Inc.
7.125% 10/01/15 265,000 254,400
----------
254,400
----------
Pharmaceuticals Total 2,318,952
----------
CONSUMER NON-CYCLICAL TOTAL 14,076,162
----------
--------------------------------------------------
ENERGY - 11.8%
COAL - 1.2%
COAL - 1.2%
Arch Western Finance LLC
6.750% 07/01/13 415,000 404,625
Massey Energy Co.
6.875% 12/15/13 (b) 535,000 512,262
----------
916,887
----------
Coal Total 916,887
----------
See Accompanying Notes to Financial Statements.
7
[GRAPHIC]
INVESTMENT PORTFOLIO (CONTINUED)
May 31, 2006 (Unaudited)
CORPORATE FIXED-INCOME
BONDS & NOTES (CONTINUED) PAR ($) VALUE ($)
--------------------------------------------------
ENERGY (CONTINUED)
OIL & GAS - 4.5%
OIL & GAS DRILLING - 0.3%
Pride International, Inc.
7.375% 07/15/14 220,000 224,950
---------
224,950
---------
OIL COMPANIES - EXPLORATION & PRODUCTION - 3.4%
Chesapeake Energy Corp.
6.375% 06/15/15 145,000 136,663
7.500% 06/15/14 370,000 377,400
Compton Petroleum Corp.
7.625% 12/01/13 310,000 302,250
Delta Petroleum Corp.
7.000% 04/01/15 110,000 101,200
Forest Oil Corp.
8.000% 12/15/11 220,000 229,900
Magnum Hunter Resources, Inc.
9.600% 03/15/12 283,000 302,102
Newfield Exploration Co.
6.625% 04/15/16 255,000 244,162
Pogo Producing Co.
6.625% 03/15/15 225,000 213,750
Quicksilver Resources, Inc.
7.125% 04/01/16 205,000 196,288
Whiting Petroleum Corp.
7.250% 05/01/12 450,000 441,562
---------
2,545,277
---------
OIL REFINING & MARKETING - 0.8%
Premcor Refining Group, Inc.
7.500% 06/15/15 235,000 244,400
Tesoro Corp.
6.625% 11/01/15 (b) 325,000 313,625
---------
558,025
---------
Oil & Gas Total 3,328,252
---------
OIL & GAS SERVICES - 0.8%
OIL-FIELD SERVICES - 0.8%
Hornbeck Offshore Services, Inc.
Series B,
6.125% 12/01/14 365,000 338,538
Newpark Resources, Inc.
8.625% 12/15/07 270,000 270,000
---------
608,538
---------
Oil & Gas Services Total 608,538
---------
PIPELINES - 5.3%
PIPELINES - 5.3%
Atlas Pipeline Partners LP
8.125% 12/15/15 (b) 235,000 241,462
Colorado Interstate Gas Co.
6.800% 11/15/15 (b) 460,000 462,300
El Paso Corp.
7.625% 09/01/08 (b) 215,000 218,763
PAR ($) VALUE ($)
------------------------------------------------------
Northwest Pipeline Corp.
8.125% 03/01/10 130,000 136,663
Pacific Energy Partners LP/Pacific
Energy Finance Corp.
6.250% 09/15/15 410,000 381,300
Sonat, Inc.
7.625% 07/15/11 1,160,000 1,175,950
Southern Natural Gas Co.
8.875% 03/15/10 250,000 265,937
Williams Companies, Inc.
6.375% 10/01/10 (b) 860,000 861,075
8.125% 03/15/12 165,000 174,694
---------
3,918,144
---------
Pipelines Total 3,918,144
---------
ENERGY TOTAL 8,771,821
---------
------------------------------------------------------
FINANCIALS - 6.2%
DIVERSIFIED FINANCIAL SERVICES - 5.1%
FINANCE - AUTO LOANS - 2.7%
Ford Motor Credit Co.
7.375% 02/01/11 630,000 567,830
General Motors Acceptance Corp.
6.875% 09/15/11 685,000 644,747
8.000% 11/01/31 865,000 813,100
---------
2,025,677
---------
FINANCE - INVESTMENT BANKER/BROKER - 1.0%
E*Trade Financial Corp.
8.000% 06/15/11 365,000 378,687
LaBranche & Co., Inc.
11.000% 05/15/12 345,000 378,638
---------
757,325
---------
SPECIAL PURPOSE ENTITY - 1.4%
Dow Jones CDX High Yield Index
8.750% 12/29/10 (b) 970,000 1,008,090
---------
1,008,090
---------
Diversified Financial Services Total 3,791,092
---------
REAL ESTATE INVESTMENT TRUSTS - 1.1%
REITS - HOTELS - 0.7%
Host Marriott LP
6.750% 06/01/16 (b) 510,000 497,250
---------
497,250
---------
REITS - REGIONAL MALLS - 0.4%
Rouse Co. LP/TRC Co-Issuer, Inc.
6.750% 05/01/13 (b) 325,000 322,910
---------
322,910
---------
Real Estate Investment Trusts Total 820,160
---------
FINANCIALS TOTAL 4,611,252
---------
See Accompanying Notes to Financial Statements.
8
[GRAPHIC]
INVESTMENT PORTFOLIO (CONTINUED)
May 31, 2006 (Unaudited)
CORPORATE FIXED-INCOME
BONDS & NOTES (CONTINUED) PAR ($) VALUE ($)
--------------------------------------------------
INDUSTRIALS - 18.1%
AEROSPACE & DEFENSE - 1.9%
AEROSPACE/DEFENSE - EQUIPMENT - 1.4%
BE Aerospace, Inc.
8.500% 10/01/10 375,000 398,437
Sequa Corp.
8.875% 04/01/08 185,000 193,325
9.000% 08/01/09 160,000 169,600
TransDigm, Inc.
8.375% 07/15/11 250,000 265,625
---------
1,026,987
---------
ELECTRONICS - MILITARY - 0.5%
L-3 Communications Corp.
5.875% 01/15/15 105,000 96,075
6.375% 10/15/15 285,000 270,038
---------
366,113
---------
Aerospace & Defense Total 1,393,100
---------
BUILDING MATERIALS - 1.3%
BUILDING & CONSTRUCTION
PRODUCTS - MISCELLANEOUS - 0.5%
Nortek, Inc.
8.500% 09/01/14 200,000 201,000
NTK Holdings, Inc.
(a) 03/01/14
(10.750% 09/01/09) 235,000 178,012
---------
379,012
---------
BUILDING PRODUCTS - AIR & HEATING -
0.4%
Goodman Global Holding Co., Inc.
7.875% 12/15/12 290,000 283,475
---------
283,475
---------
BUILDING PRODUCTS - CEMENT/AGGREGATION - 0.4%
RMCC Acquisition Co.
9.500% 11/01/12 (b) 265,000 275,600
---------
275,600
---------
Building Materials Total 938,087
---------
ELECTRONICS - 0.4%
ELECTRONIC COMPONENTS - MISCELLANEOUS - 0.4%
Flextronics International Ltd.
6.250% 11/15/14 305,000 290,513
---------
290,513
---------
Electronics Total 290,513
---------
ENGINEERING & CONSTRUCTION - 0.6%
BUILDING & CONSTRUCTION - MISCELLANEOUS - 0.6%
J. Ray McDermott SA
11.500% 12/15/13 (b) 365,000 433,328
---------
433,328
---------
Engineering & Construction Total 433,328
---------
PAR ($) VALUE ($)
--------------------------------------------------
ENVIRONMENTAL CONTROL - 1.7%
NON-HAZARDOUS WASTE DISPOSAL - 1.6%
Allied Waste North America, Inc.
7.125% 05/15/16 (b) 585,000 570,375
7.875% 04/15/13 590,000 603,275
---------
1,173,650
---------
RECYCLING - 0.1%
Aleris International, Inc.
9.000% 11/15/14 120,000 125,400
---------
125,400
---------
Environmental Control Total 1,299,050
---------
MACHINERY - CONSTRUCTION & MINING - 0.4%
MACHINERY - CONSTRUCTION & MINING - 0.4%
Terex Corp.
7.375% 01/15/14 330,000 333,300
---------
333,300
---------
Machinery - Construction & Mining Total 333,300
---------
MACHINERY - DIVERSIFIED - 0.9%
MACHINERY - GENERAL INDUSTRY - 0.5%
Douglas Dynamics LLC
7.750% 01/15/12 (b) 240,000 230,400
Manitowoc Co., Inc.
7.125% 11/01/13 165,000 167,888
---------
398,288
---------
MACHINERY - MATERIAL HANDLING - 0.4%
Columbus McKinnon Corp.
8.875% 11/01/13 255,000 263,925
---------
263,925
---------
Machinery - Diversified Total 662,213
---------
METAL FABRICATE/HARDWARE - 0.9%
METAL PROCESSORS & FABRICATION - 0.9%
Mueller Group, Inc.
10.000% 05/01/12 225,000 245,531
Mueller Holdings, Inc.
(a) 04/15/14
(14.750% 04/15/09) 270,000 226,800
TriMas Corp.
9.875% 06/15/12 205,000 196,800
---------
669,131
---------
Metal Fabricate/Hardware Total 669,131
---------
MISCELLANEOUS MANUFACTURING - 2.8%
DIVERSIFIED MANUFACTURING OPERATORS - 2.0%
Bombardier, Inc.
6.300% 05/01/14 (b) 640,000 578,400
J.B. Poindexter & Co.
8.750% 03/15/14 270,000 225,450
Koppers Industries, Inc.
9.875% 10/15/13 236,000 259,600
See Accompanying Notes to Financial Statements.
9
[GRAPHIC]
INVESTMENT PORTFOLIO (CONTINUED)
May 31, 2006 (Unaudited)
CORPORATE FIXED-INCOME
BONDS & NOTES (CONTINUED) PAR ($) VALUE ($)
----------------------------------------------------
INDUSTRIALS (CONTINUED)
MISCELLANEOUS MANUFACTURING (CONTINUED)
DIVERSIFIED MANUFACTURING OPERATORS (CONTINUED)
Trinity Industries, Inc.
6.500% 03/15/14 445,000 425,531
---------
1,488,981
---------
MISCELLANEOUS MANUFACTURING - 0.8%
Nutro Products, Inc.
10.750% 04/15/14 (b) 350,000 357,875
Samsonite Corp.
8.875% 06/01/11 265,000 277,919
---------
635,794
---------
Miscellaneous Manufacturing Total 2,124,775
---------
PACKAGING & CONTAINERS - 3.8%
CONTAINERS - METAL/GLASS - 2.0%
Crown Americas LLC & Crown
Americas Capital Corp.
7.750% 11/15/15 (b) 410,000 413,075
Owens-Brockway Glass Container,
Inc.
8.250% 05/15/13 900,000 914,625
Owens-Illinois, Inc.
7.500% 05/15/10 140,000 139,125
---------
1,466,825
---------
CONTAINERS - PAPER/PLASTIC - 1.8%
Consolidated Container Co., LLC
(a) 06/15/09
(10.750% 06/15/07) 240,000 225,000
Jefferson Smurfit Corp.
8.250% 10/01/12 450,000 425,250
PIK,
11.500% 10/01/15 (b) EUR268,197 347,120
MDP Acquisitions PLC
9.625% 10/01/12 USD365,000 382,337
---------
1,379,707
---------
Packaging & Containers Total 2,846,532
---------
TRANSPORTATION - 3.4%
TRANSPORTATION - MARINE - 1.5%
Ship Finance International Ltd.
8.500% 12/15/13 560,000 528,500
Stena AB
7.500% 11/01/13 555,000 548,062
---------
1,076,562
---------
TRANSPORTATION - RAILROAD - 0.7%
TFM SA de CV
9.375% 05/01/12 375,000 401,719
12.500% 06/15/12 100,000 110,125
---------
511,844
---------
PAR ($) VALUE ($)
------------------------------------------------
TRANSPORTATION - SERVICES - 0.9%
CHC Helicopter Corp.
7.375% 05/01/14 450,000 444,937
PHI, Inc.
7.125% 04/15/13 (b) 260,000 253,500
----------
698,437
----------
TRANSPORTATION - TRUCKS - 0.3%
QDI LLC
9.000% 11/15/10 225,000 213,188
----------
213,188
----------
Transportation Total 2,500,031
----------
INDUSTRIALS TOTAL 13,490,060
----------
------------------------------------------------
TECHNOLOGY - 1.1%
OFFICE/BUSINESS EQUIPMENT - 0.6%
OFFICE AUTOMATION & EQUIPMENT - 0.6%
Xerox Corp.
6.400% 03/15/16 100,000 96,375
7.125% 06/15/10 345,000 354,056
----------
450,431
----------
Office/Business Equipment Total 450,431
----------
SEMICONDUCTORS - 0.5%
ELECTRONIC COMPONENTS - SEMICONDUCTORS - 0.5%
Amkor Technology, Inc.
9.250% 06/01/16 200,000 192,750
Freescale Semiconductor, Inc.
6.875% 07/15/11 200,000 202,750
----------
395,500
----------
Semiconductors Total 395,500
----------
TECHNOLOGY TOTAL 845,931
----------
------------------------------------------------
UTILITIES - 5.8%
ELECTRIC - 5.8%
ELECTRIC - GENERATION - 1.6%
AES Corp.
9.000% 05/15/15 (b) 110,000 118,525
9.500% 06/01/09 460,000 492,200
Edison Mission Energy
7.730% 06/15/09 585,000 600,356
----------
1,211,081
----------
ELECTRIC - INTEGRATED - 1.8%
CMS Energy Corp.
6.875% 12/15/15 200,000 194,750
8.500% 04/15/11 125,000 131,563
Nevada Power Co.
9.000% 08/15/13 120,000 131,305
10.875% 10/15/09 221,000 236,609
Sierra Pacific Resources
6.750% 08/15/17 355,000 347,900
See Accompanying Notes to Financial Statements.
10
[GRAPHIC]
INVESTMENT PORTFOLIO (CONTINUED)
May 31, 2006 (Unaudited)
CORPORATE FIXED-INCOME
BONDS & NOTES (CONTINUED) PAR ($) VALUE ($)
----------------------------------------------------------
UTILITIES (CONTINUED)
ELECTRIC (CONTINUED)
ELECTRIC - INTEGRATED (CONTINUED)
TECO Energy, Inc.
7.000% 05/01/12 255,000 258,825
----------
1,300,952
----------
INDEPENDENT POWER PRODUCER - 2.4%
Dynegy Holdings, Inc.
6.875% 04/01/11 300,000 287,625
7.125% 05/15/18 140,000 124,600
Mirant North America LLC
7.375% 12/31/13 (b) 480,000 471,600
MSW Energy Holdings LLC
7.375% 09/01/10 170,000 171,063
8.500% 09/01/10 325,000 338,406
NRG Energy, Inc.
7.250% 02/01/14 225,000 225,281
7.375% 02/01/16 200,000 200,250
----------
1,818,825
----------
Electric Total 4,330,858
----------
UTILITIES TOTAL 4,330,858
----------
TOTAL CORPORATE FIXED-INCOME BONDS & NOTES
(cost of $89,375,814) 88,968,722
----------
PREFERRED STOCKS - 2.6% SHARES
----------------------------------------------------------
COMMUNICATIONS - 1.0%
MEDIA - 1.0%
RADIO - 1.0%
Spanish Broadcasting System, Inc., PIK,
10.750% 692 768,812
----------
768,812
----------
Media Total 768,812
----------
COMMUNICATIONS TOTAL 768,812
----------
----------------------------------------------------------
FINANCIALS - 1.6%
REAL ESTATE INVESTMENT TRUSTS - 1.6%
REITS - DIVERSIFIED - 1.6%
iStar Financial, Inc.:
7.800% 13,000 320,938
7.875% 15,007 367,671
Sovereign Real Estate Investment
Corp.
12.000% (b) 365,000 492,750
----------
1,181,359
----------
Real Estate Investment Trusts Total 1,181,359
----------
FINANCIALS TOTAL 1,181,359
----------
TOTAL PREFERRED STOCKS
(cost of $1,966,480) 1,950,171
----------
COMMON STOCKS - 1.2% SHARES VALUE ($)
------------------------------------------------------
CONSUMER DISCRETIONARY - 0.2%
HOTELS, RESTAURANTS & LEISURE - 0.1%
Shreveport Gaming Holdings, Inc. (f) 4,862 41,327
---------
Hotels, Restaurants & Leisure Total 41,327
---------
MEDIA - 0.1%
Sinclair Broadcast Group, Inc.,
Class A 15,000 127,650
---------
Media Total 127,650
---------
CONSUMER DISCRETIONARY TOTAL 168,977
---------
------------------------------------------------------
INDUSTRIALS - 0.0%
COMMERCIAL SERVICES & SUPPLIES - 0.0%
Fairlane Management Corp. (e)(f)(g) 8,000 --
---------
Commercial Services & Supplies Total --
---------
INDUSTRIALS TOTAL --
---------
------------------------------------------------------
MATERIALS - 0.2%
CHEMICALS - 0.2%
Lyondell Chemical Co. 5,000 121,000
---------
Chemicals Total 121,000
---------
MATERIALS TOTAL 121,000
---------
------------------------------------------------------
TELECOMMUNICATION SERVICES - 0.5%
DIVERSIFIED TELECOMMUNICATION SERVICES - 0.3%
Embarq Corp. (f) 393 16,362
NTL, Inc. (f) 7,355 196,232
---------
Diversified Telecommunication Services Total 212,594
---------
WIRELESS TELECOMMUNICATION SERVICES - 0.2%
Sprint Nextel Corp. 7,853 166,562
---------
Wireless Telecommunication Services Total 166,562
---------
TELECOMMUNICATION SERVICES
TOTAL 379,156
---------
------------------------------------------------------
UTILITIES - 0.3%
INDEPENDENT POWER PRODUCERS & ENERGY
TRADERS - 0.3%
Dynegy, Inc., Class A (f) 13,000 68,640
Mirant Corp. (f) 4,780 118,926
---------
Independent Power Producers & Energy Traders
Total 187,566
---------
UTILITIES TOTAL 187,566
---------
TOTAL COMMON STOCKS
(cost of $970,532) 856,699
---------
See Accompanying Notes to Financial Statements.
11
[GRAPHIC]
INVESTMENT PORTFOLIO (CONTINUED)
May 31, 2006 (Unaudited)
CONVERTIBLE BONDS - 1.1% PAR ($) VALUE ($)
---------------------------------------------------
COMMUNICATIONS - 1.1%
TELECOMMUNICATION SERVICES - 1.1%
TELECOMMUNICATION EQUIPMENT - 0.8%
Nortel Networks Corp.
4.250% 09/01/08 645,000 610,331
---------
610,331
---------
TELEPHONE-INTEGRATED - 0.3%
NTL Cable PLC
8.750% 04/15/14 160,000 211,175
---------
211,175
---------
Telecommunication Services Total 821,506
---------
COMMUNICATIONS TOTAL 821,506
---------
TOTAL CONVERTIBLE BONDS
(cost of $805,935) 821,506
---------
MUNICIPAL BOND (TAXABLE) - 0.8%
---------------------------------------------------
CALIFORNIA - 0.8%
CA Cabazon Band Mission Indians
13.000% 10/01/11 575,000 567,864
---------
CALIFORNIA TOTAL 567,864
---------
TOTAL MUNICIPAL BOND (TAXABLE)
(cost of $575,000) 567,864
---------
WARRANTS - 0.0% UNITS
---------------------------------------------------
COMMUNICATIONS - 0.0%
MEDIA - 0.0%
BROADCAST SERVICES/PROGRAMS - 0.0%
XM Satellite Radio Holdings, Inc.
Expires 03/15/10 (b)(f) 600 6,540
---------
6,540
---------
Media Total 6,540
---------
TELECOMMUNICATION SERVICES - 0.0%
CELLULAR TELECOMMUNICATIONS - 0.0%
UbiquiTel, Inc.
Expires 04/15/10 (b)(f) 525 5
---------
5
---------
TELECOMMUNICATION SERVICES - 0.0%
Jazztel PLC
Expires 07/15/10 (e)(f)(g) 350 --
---------
--
---------
Telecommunication Services Total 5
---------
COMMUNICATIONS TOTAL 6,545
---------
UNITS VALUE ($)
----------------------------------------------------------
INDUSTRIALS - 0.0%
TRANSPORTATION - 0.0%
TRANSPORTATION-TRUCKS - 0.0%
QDI LLC
Expires 01/15/07 (b)(e)(f) 2,041 21,859
-----------
21,859
-----------
Transportation Total 21,859
-----------
INDUSTRIALS TOTAL 21,859
-----------
TOTAL WARRANTS
(cost of $97,124) 28,404
-----------
SHORT-TERM OBLIGATION - 10.6% PAR ($)
----------------------------------------------------------
Repurchase agreement with State
Street Bank & Trust Co., dated
05/31/06, due 06/01/06 at 4.770%,
collateralized by a U.S. Treasury
Bond maturing 12/15/10, market
value of $8,059,500 (repurchase
proceeds $7,900,047) 7,899,000 7,899,000
-----------
TOTAL SHORT-TERM OBLIGATION
(cost of $7,899,000) 7,899,000
-----------
TOTAL INVESTMENTS - 135.8%
(cost of $101,689,885) (h) 101,092,366
OTHER ASSETS & LIABILITIES, NET - (35.8)% (26,666,397)
-----------
NET ASSETS - 100.0% 74,425,969
-----------
NOTES TO INVESTMENT PORTFOLIO:
--------------------------------------------------------------------------------
(a)Step bond. This security is currently not paying coupon. Shown
parenthetically is the next interest rate to be paid and the date the Fund
will begin accruing at this rate.
(b)Security exempt from registration pursuant to Rule 144A under the Securities
Act of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At May 31, 2006,
these securities, which do not include any illiquid securities, except for
the following, amounted to $18,701,985, which represents 25.1% of net assets.
Acquisition
Security Date Par/Units Cost Value
--------------------------------------------------------
Hollinger, Inc.: 03/05/03 $177,000 $175,897 $184,301
09/30/04 122,000 122,000 122,000
QDI LLC 06/01/02 2,041 -- 21,859
UbiquiTel, Inc. 04/11/00 525 26,600 5
--------
$328,165
--------
(c)The interest rate shown on floating rate or variable rate securities
reflects the rate at May 31, 2006.
(d)Security purchased on a delayed delivery basis.
(e)Represents fair value as determined in good faith under procedures approved
by the Board of Trustees.
(f)Non-income producing security.
(g)Security has no value.
(h)Cost for federal income tax purposes is $101,778,918.
See Accompanying Notes to Financial Statements.
12
[GRAPHIC]
INVESTMENT PORTFOLIO (CONTINUED)
May 31, 2006 (Unaudited)
At May 31, 2006, the Fund had entered into the following forward currency
exchange contracts:
Forward
Currency
Contracts to Aggregate Settlement Unrealized
Sell Value Face Value Date Depreciation
--------------------------------------------------------
EUR $625,118 $602,526 06/26/06 $(22,592)
EUR 430,123 418,981 06/30/06 (11,142)
EUR 526,420 515,444 06/30/06 (10,976)
--------
$(44,710)
--------
At May 31, 2006, the asset allocation of the Fund is as follows:
% OF
ASSET ALLOCATION NET ASSETS
-----------------------------------------------
Corporate Fixed-Income Bonds & Notes 119.5%
Preferred Stocks 2.6
Common Stocks 1.2
Convertible Bonds 1.1
Municipal Bond (Taxable) 0.8
Warrants 0.0 *
Short-Term Obligation 10.6
Other Assets & Liabilities, Net (35.8)
-----
100.0%
-----
*Rounds to less than 0.1%
Acronym Name
----------------------------------------
EUR Euro
PIK Payment-In-Kind
REIT Real Estate Investment Trust
USD United States Dollar
See Accompanying Notes to Financial Statements.
13
[GRAPHIC]
STATEMENT OF ASSETS AND LIABILITIES
May 31, 2006 (Unaudited)
ASSETS:
Investments, at cost $101,689,885
------------
Investments, at value 101,092,366
Foreign currency (cost of $2,938) 2,960
Receivable for:
Investments sold 1,107,264
Interest 1,932,691
Dividends 14,093
Foreign tax reclaims 1,427
Deferred Trustees' compensation plan 13,715
------------
Total Assets 104,164,516
------------
LIABILITIES:
Payable to custodian bank 165,043
Net unrealized depreciation on foreign forward
currency contracts 44,710
Payable for:
Investments purchased on a delayed
delivery basis 119,700
Distributions 546,091
Investment advisory fee 27,965
Transfer agent fee 11,447
Pricing and bookkeeping fees 18,159
Custody fee 5,665
Reports to shareholders 33,129
Interest 153,334
Chief compliance officer expenses 662
Deferred Trustees' fees 13,715
Notes payable -- short-term 15,000,000
Notes payable -- long-term 13,500,000
Other liabilities 98,927
------------
Total Liabilities 29,738,547
------------
Net Assets $ 74,425,969
------------
COMPOSITION OF NET ASSETS
Paid-in capital $141,302,035
Overdistributed net investment income (185,036)
Accumulated net realized loss (66,049,621)
Net unrealized appreciation (depreciation) on:
Investments (597,519)
Foreign currency translations (43,890)
------------
Net Assets $ 74,425,969
------------
Shares outstanding 21,003,496
------------
Net asset value per share $ 3.54
------------
[GRAPHIC]
STATEMENT OF OPERATIONS
For the Six Months Ended May 31, 2006 (Unaudited)
INVESTMENT INCOME:
Interest $ 4,145,716
Dividends 71,787
-----------
Total Investment Income
(net of foreign taxes withheld of $952) 4,217,503
EXPENSES:
Investment advisory fee 327,069
Transfer agent fee 21,679
Pricing and bookkeeping fees 47,729
Trustees' fees 5,593
Custody fee 7,930
Audit fee 20,917
Reports to shareholders 22,776
Chief compliance officer expenses (See Note 4) 2,052
Other expenses 31,368
-----------
Total Operating Expenses 487,113
Interest expense 739,928
-----------
Total Expenses 1,227,041
Fees and expenses waived or reimbursed by
Investment Advisor (82,416)
Custody earnings credit (1,205)
-----------
Net Expenses 1,143,420
-----------
Net Investment Income 3,074,083
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain (loss) on:
Investments (1,669,705)
Foreign currency transactions (47,165)
-----------
Net realized loss (1,716,870)
-----------
Net change in unrealized
appreciation (depreciation) on:
Investments 1,475,132
Foreign currency translations (77,369)
-----------
Net change in unrealized
appreciation (depreciation) 1,397,763
-----------
Net Loss (319,107)
-----------
Net Increase in Net Assets from Operations $ 2,754,976
-----------
See Accompanying Notes to Financial Statements.
14
[GRAPHIC]
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)
SIX MONTHS YEAR ENDED
INCREASE (DECREASE) IN NET ENDED NOVEMBER 30,
ASSETS: MAY 31, 2006 2005
---------------------------------------------------------
OPERATIONS
Net investment income $ 3,074,083 $ 6,919,330
Net realized loss on
investments and foreign
currency transactions (1,716,870) (941,970)
Net change in unrealized
appreciation (depreciation)
on investments and foreign
currency translations 1,397,763 (4,781,563)
----------- -----------
Net Increase from Operations 2,754,976 1,195,797
----------- -----------
DISTRIBUTIONS DECLARED
TO SHAREHOLDERS:
From net investment income (3,990,664) (6,763,126)
----------- -----------
Total Decrease in Net Assets (1,235,688) (5,567,329)
----------- -----------
NET ASSETS
Beginning of period 75,661,657 81,228,986
----------- -----------
End of period $74,425,969 $75,661,657
----------- -----------
Undistributed (overdistributed)
net investment income at end
of period $ (185,036) $ 731,545
----------- -----------
See Accompanying Notes to Financial Statements.
15
[GRAPHIC]
STATEMENT OF CASH FLOWS
For the Six Months Ended May 31, 2006 (Unaudited)
INCREASE (DECREASE) IN CASH
---------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net investment income $ 3,074,083
------------
Adjustments to reconcile net investment income to
net cash provided by operating activities:
Purchase of investment securities (25,874,074)
Proceeds from disposition of investment
securities 26,792,351
Proceeds from disposition of short-term
investments, net 305,000
Net realized loss due to foreign currency
transactions (47,165)
Decrease in dividend and interest receivable 7,886
Increase in other assets (3,127)
Increase in receivable for investments sold (115,124)
Decrease in payable for investments purchased (514,353)
Increase in accrued expenses and other
liabilities 25,550
Net amortization/accretion of income 182,157
------------
Net cash provided by operating activities 3,833,184
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in interest payable (77,349)
Distributions paid in cash (3,990,664)
------------
Net cash used by financing activities (4,068,013)
------------
Net decrease in cash (234,829)
CASH:
Beginning of period 69,786
------------
End of period $ (165,043)
------------
See Accompanying Notes to Financial Statements.
16
[GRAPHIC]
FINANCIAL HIGHLIGHTS
Selected data for a share outstanding throughout each period is as follows:
(UNAUDITED)
SIX MONTHS ONE MONTH
ENDED YEAR ENDED NOVEMBER 30, ENDED YEAR ENDED OCTOBER 31,
MAY 31, ----------------------- NOVEMBER 30, ----------------------------
2006 2005 2004 2003 (A) 2003 2002 2001
----------------------------------------- ------------------------- ------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 3.60 $ 3.87 $ 3.57 $ 3.51 $ 2.79 $ 3.51 $ 4.83
------- ------- ------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (b) 0.15 0.33 0.34 0.02 0.29 0.38(c) 0.51
Net realized and unrealized gain (loss)
on investments and foreign currency (0.02) (0.28) 0.26 0.07 0.75 (0.73)(c) (1.26)
------- ------- ------- ------- ------- ------- -------
Total from Investment Operations 0.13 0.05 0.60 0.09 1.04 (0.35) (0.75)
------- ------- ------- ------- ------- ------- -------
LESS DISTRIBUTIONS DECLARED TO
SHAREHOLDERS:
From net investment income (0.19) (0.32) (0.30) (0.03) (0.30) (0.36) (0.55)
Return of capital -- -- -- -- (0.02) (0.01) (0.02)
------- ------- ------- ------- ------- ------- -------
Total Distributions Declared to
Shareholders (0.19) (0.32) (0.30) (0.03) (0.32) (0.37) (0.57)
------- ------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 3.54 $ 3.60 $ 3.87 $ 3.57 $ 3.51 $ 2.79 $ 3.51
------- ------- ------- ------- ------- ------- -------
Market price per share $ 3.26 $ 3.15 $ 3.51 $ 3.50 $ 3.65 $ 2.79 $ 3.49
------- ------- ------- ------- ------- ------- -------
Total return -- based on market
value (d) 9.44%(e) (1.63)% 9.24% (3.40)%(e) 44.56% (10.43)% (14.26)%
------- ------- ------- ------- ------- ------- -------
RATIOS TO AVERAGE NET ASSETS/
SUPPLEMENTAL DATA:
Operating expenses (f) 1.07%(g) 1.37% 1.48% 1.63%(g) 1.35% 1.25% 1.31%
Interest and amortization of deferred
debt issuance expenses 1.97%(g) 1.42% 1.18% 1.38%(g) 2.00% 2.73% 2.98%
Total expenses (f) 3.04%(g) 2.79% 2.66% 3.01%(g) 3.35% 3.98% 4.29%
Net investment income (f) 8.17%(g) 8.79% 9.25% 7.82%(g) 9.18% 11.38%(c) 11.96%
Waiver/reimbursement 0.22%(g) 0.02% -- -- -- -- --
Portfolio turnover rate 28%(e) 66% 80% 7%(e) 64% 54% 52%
Net assets, end of period (000's) $74,426 $75,662 $81,229 $74,952 $73,623 $58,134 $72,353
(a)The Fund changed its fiscal year end from October 31 to November 30.
(b)Per share data was calculated using average shares outstanding during the
period.
(c)Effective November 1, 2001, the Fund adopted the provisions of the AICPA
Audit and Accounting Guide for Investment Companies and began amortizing
premium and accreting discount on all debt securities. The effect of this
change for the year ended October 31, 2002 was to increase the net
investment income per share by $0.02, increase the net realized and
unrealized loss per share by $0.02 and increase the ratio of net investment
income to average net assets from 10.92% to 11.38%. Per share data and
ratios for periods prior to October 31, 2002 have not been restated to
reflect this change in presentation.
(d)Total return at market value assuming all distributions reinvested at prices
calculated in accordance with the Dividend Reinvestment Plan.
(e)Not annualized.
(f)The benefits derived from custody credits had an impact of less than 0.01%.
(g)Annualized.
See Accompanying Notes to Financial Statements.
17
[GRAPHIC]
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share outstanding throughout each period is as follows:
YEAR ENDED OCTOBER 31,
-------------------------------------------------
2000 1999 1998 1997 1996
---------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 5.97 $ 6.20 $ 7.27 $ 6.89 $ 6.62
------- -------- -------- -------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.67 0.70 0.70 0.70 0.70
Net realized and unrealized gain (loss) on investments and
foreign currency (1.10) (0.23) (1.08) 0.38 0.26
------- -------- -------- -------- -------
Total from Investment Operations (0.43) 0.47 (0.38) 1.08 0.96
------- -------- -------- -------- -------
LESS DISTRIBUTIONS DECLARED TO SHAREHOLDERS:
From net investment income (0.69) (0.70) (0.69) (0.70) (0.69)
In excess of net investment income (0.02) -- -- -- --
------- -------- -------- -------- -------
Total Distributions Declared to Shareholders (0.71) (0.70) (0.69) (0.70) (0.69)
------- -------- -------- -------- -------
NET ASSET VALUE, END OF PERIOD $ 4.83 $ 5.97 $ 6.20 $ 7.27 $ 6.89
------- -------- -------- -------- -------
Market price per share $ 4.63 $ 5.63 $ 6.81 $ 7.56 $ 7.13
------- -------- -------- -------- -------
Total return -- based on market value (a) (6.12)% (7.89)% (0.74)% 16.97% 14.62%
------- -------- -------- -------- -------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA:
Operating expenses (b) 0.92% 0.89% 0.88% 0.89% 0.98%
Interest and amortization of deferred debt issuance expenses 2.79% 2.48% 2.11% 1.96% 2.07%
Total expenses (b) 3.71% 3.37% 2.99% 2.85% 3.05%
Net investment income (b) 11.88% 10.82% 9.70% 9.63% 10.11%
Portfolio turnover rate 42% 44% 69% 92% 92%
Net assets, end of period (000's) $98,333 $121,018 $124,480 $107,774 $99,925
(a)Total return at market value assuming all distributions reinvested at prices
calculated in accordance with the Dividend Reinvestment Plan.
(b)The benefits derived from custody credits had an impact of less than 0.01%,
except for the year ended October 31, 1997 which had a 0.01% impact.
18
See Accompanying Notes to Financial Statements.
[GRAPHIC]
NOTES TO FINANCIAL STATEMENTS
May 31, 2006 (Unaudited)
NOTE 1. ORGANIZATION
Colonial Intermediate High Income Fund (the "Fund") is a Massachusetts business
trust registered under the Investment Company Act of 1940, as amended, as a
diversified, closed-end management investment company.
INVESTMENT GOAL
The Fund seeks high current income and total return by investing primarily in
high yield fixed income securities in lower-rated categories.
FUND SHARES
The Fund may issue an unlimited number of shares.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America ("GAAP") requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenue and
expenses during the reporting period. Actual results could differ from those
estimates. The following is a summary of significant accounting policies
consistently followed by the Fund in the preparation of its financial
statements.
SECURITY VALUATION
Debt securities generally are valued by pricing services approved by the Fund's
Board of Trustees, based upon market transactions for normal,
institutional-size trading units of similar securities. The services may use
various pricing techniques which take into account appropriate factors such as
yield, quality, coupon rate, maturity, type of issue, trading characteristics
and other data, as well as broker quotes. Debt securities for which quotations
are readily available are valued at an over-the-counter or exchange bid
quotation. Certain debt securities, which tend to be more thinly traded and of
lesser quality, are priced based on fundamental analysis of the financial
condition of the issuer and the estimated value of any collateral. Valuations
developed through pricing techniques may vary from the actual amounts realized
upon sale of the securities, and the potential variation may be greater for
those securities valued using fundamental analysis.
Equity securities are valued at the last sale price on the principal exchange
on which they trade, except for securities traded on the NASDAQ, which are
valued at the NASDAQ official close price. Unlisted securities or listed
securities for which there were no sales during the day are valued at the
closing bid price on such exchanges or over-the-counter markets.
Short-term debt obligations maturing within 60 days are valued at amortized
cost, which approximates market value.
Forward currency exchange contracts are valued at the prevailing forward
exchange rate of the underlying currencies.
Foreign securities are generally valued at the last sale price on the foreign
exchange or market on which they trade. If any foreign share prices are not
readily available as a result of limited share activity, the securities are
valued at the last sale price of the local shares in the principal market in
which such securities are normally traded.
Generally, trading in foreign securities is substantially completed each day at
various times prior to the close of the New York Stock Exchange ("NYSE"). The
values of such securities used in computing the net asset value of the Fund's
shares are determined as of such times. Foreign currency exchange rates are
generally determined at 4:00 p.m. Eastern (U.S.) time. Events affecting the
values of such foreign securities and such exchange rates may occur between the
times at which they are determined and the close of the customary trading
session of the NYSE, which would not be reflected in the computation of the
Fund's net asset value. If events materially affecting the values of such
foreign securities occur and it is determined that market quotations are not
reliable, then these foreign securities will be valued at their fair value
using procedures approved by the Board of Trustees. If a security is valued at
"fair value", such value is likely to be different from the last quoted market
price for the security.
Investments for which market quotations are not readily available, or that have
quotations which management believes are not appropriate, are valued at fair
value as determined in good faith under consistently applied procedures
established by and under the general supervision of the Board of Trustees.
SECURITY TRANSACTIONS
Security transactions are accounted for on the trade date. Cost is determined
and gains (losses) are based upon the specific identification method for both
financial statement and federal income tax purposes.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS
Forward foreign currency exchange contracts are agreements to exchange one
currency for another at a
19
[GRAPHIC]
NOTES TO FINANCIAL STATEMENTS (continued)
May 31, 2006 (Unaudited)
future date at a specified price. These contracts are used to minimize the
exposure to foreign exchange rate fluctuations during the period between trade
and settlement date of the contracts. The Fund may utilize forward foreign
currency exchange contracts in connection with the settlement of purchases and
sales of securities. The Fund may also enter into these contracts to hedge
certain other foreign currency denominated assets. Contracts to buy generally
are used to acquire exposure to foreign currencies, while contracts to sell are
used to hedge the Fund's investments against currency fluctuations. Forward
currency contracts are valued daily at the current exchange rate of the
underlying currency, resulting in unrealized gains (losses) which become
realized at the time the foreign currency contracts are closed or mature.
Realized and unrealized gains (losses) arising from such transactions are
included in net realized and unrealized gains (losses) on foreign currency
transactions. The use of forward currency contracts does not eliminate
fluctuations in the prices of the Fund's portfolio securities. While the
maximum potential loss from such contracts is the aggregate face value in U.S.
dollars at the time the contract was opened, exposure is typically limited to
the change in value of the contract (in U.S. dollars) over the period it
remains open. The Fund could also be exposed to risk if the counterparties of
the contracts are unable to fulfill the terms of the contracts.
REPURCHASE AGREEMENTS
The Fund may engage in repurchase agreement transactions with institutions that
the Fund's investment advisor has determined are creditworthy. The Fund,
through its custodian, receives delivery of underlying securities
collateralizing a repurchase agreement. Collateral is at least equal, at all
times, to the value of the repurchase obligation including interest. A
repurchase agreement transaction involves certain risks in the event of default
or insolvency of the counterparty. These risks include possible delays or
restrictions upon the Fund's ability to dispose of the underlying securities
and a possible decline in the value of the underlying securities during the
period while the Fund seeks to assert its rights.
DELAYED DELIVERY SECURITIES
The Fund may trade securities on other than normal settlement terms, including
securities purchased or sold on a "when-issued" basis. This may increase the
risk if the other party to the transaction fails to deliver and causes the Fund
to subsequently invest at less advantageous prices. The Fund identifies cash or
liquid portfolio securities as segregated with the custodian in an amount equal
to the delayed delivery commitment.
INCOME RECOGNITION
Interest income is recorded on the accrual basis. Premium and discount are
amortized and accreted, respectively, on all debt securities. Corporate actions
and dividend income are recorded on the ex-date, except for certain foreign
securities which are recorded as soon after ex-date as the Fund becomes aware
of such, net of non-reclaimable tax withholdings. The value of additional
securities received as an income payment is recorded as income and as the cost
basis of such securities.
FOREIGN CURRENCY TRANSACTIONS
The values of all assets and liabilities quoted in foreign currencies are
translated into U.S. dollars at that day's exchange rates. Net realized and
unrealized gains (losses) on foreign currency transactions include gains
(losses) arising from the fluctuation in exchange rates between trade and
settlement dates on securities transactions, gains (losses) arising from the
disposition of foreign currency and currency gains (losses) between the accrual
and payment dates on dividends, interest income and foreign withholding taxes.
For financial statement purposes, the Fund does not distinguish that portion of
gains (losses) on investments which is due to changes in foreign exchange rates
from that which is due to changes in market prices of the investments. Such
fluctuations are included with the net realized and unrealized gains (losses)
on investments.
FEDERAL INCOME TAX STATUS
The Fund intends to qualify each year as a "regulated investment company" under
Subchapter M of the Internal Revenue Code, as amended, and will distribute
substantially all of its taxable income, if any, for its tax year, and as such
will not be subject to federal income taxes. In addition, the Fund intends to
distribute in each calendar year substantially all of its net investment
income, capital gains and certain other amounts, if any, such that the Fund
should not be subject to federal excise tax. Therefore, no federal income or
excise tax provision is recorded.
DISTRIBUTIONS TO SHAREHOLDERS
Distributions to shareholders are recorded on ex-date. Net realized capital
gains, if any, are distributed at least annually.
STATEMENT OF CASH FLOWS
Information on financial transactions which have been settled through the
receipt or disbursement of cash is presented in the Statement of Cash Flows.
The cash amount shown in the Statement of Cash Flows is the
See Accompanying Notes to Financial Statements.
20
[GRAPHIC]
NOTES TO FINANCIAL STATEMENTS (continued)
May 31, 2006 (Unaudited)
amount included within the Fund's Statement of Assets and Liabilities and
includes cash on hand at its custodian bank and does not include any short-term
investments.
NOTE 3. FEDERAL TAX INFORMATION
The tax character of distributions paid during the year ended November 30, 2005
was as follows:
NOVEMBER 30,
2005
------------
Distributions paid from:
Ordinary Income $6,763,126
Long-Term Capital Gains --
Unrealized appreciation and depreciation at May 31, 2006, based on cost of
investments for federal income tax purposes, was:
Unrealized appreciation $ 2,113,076
Unrealized depreciation (2,799,628)
-----------
Net unrealized depreciation $ (686,552)
-----------
The following capital loss carryforwards, determined as of November 30, 2005,
may be available to reduce taxable income arising from future net realized
gains on investments, if any, to the extent permitted by the Internal Revenue
Code:
YEAR OF CAPITAL LOSS
EXPIRATION CARRYFORWARD
------------ --------------
2006.... $ 410,216
2007.... 10,437,671
2008.... 22,694,029
2009.... 23,203,433
2010.... 6,431,055
2013.... 796,437
-----------
$63,972,841
-----------
NOTE 4. FEES AND COMPENSATION PAID TO AFFILIATES
INVESTMENT ADVISORY FEE
Columbia Management Advisors, LLC ("Columbia"), an indirect, wholly-owned
subsidiary of Bank of America Corporation ("BOA"), is the investment advisor to
the Fund and provides administrative and other services. Columbia receives a
monthly investment advisory fee at the annual rate of 0.65% of the Fund's
average weekly net assets.
In addition, the Fund shall pay Columbia a monthly fee of 20% of the Fund's
monthly "leverage income" (as that term is defined in the management contract).
Columbia has voluntarily agreed to waive this fee. In the event that the Fund's
monthly leverage income is less than zero, then Columbia shall pay the Fund 20%
of the Fund's monthly leverage income.
PRICING AND BOOKKEEPING FEES
Columbia is responsible for providing pricing and bookkeeping services to the
Fund under a pricing and bookkeeping agreement. Under a separate agreement (the
"Outsourcing Agreement"), Columbia has delegated those functions to State
Street Corporation ("State Street"). As a result, Columbia pays State Street
the total fees collected under the pricing and bookkeeping agreement.
Under its pricing and bookkeeping agreement with the Fund, Columbia receives an
annual fee of $38,000 paid monthly plus an additional monthly fee based on the
level of average daily net assets for the month; provided that during any
12-month period, the aggregate fee, exclusive of out-of-pocket expenses and
charges, shall not exceed $140,000.
The Fund also reimburses Columbia and State Street for out-of-pocket expenses
and charges, including fees payable to third parties for pricing the Fund's
portfolio securities and direct internal costs incurred by Columbia in
connection with providing fund accounting oversight and monitoring and certain
other services. For the six months ended May 31, 2006, the annualized effective
pricing and bookkeeping fee rate for the Fund, inclusive of out-of-pocket
expenses, was 0.127% of the Fund's average daily net assets.
CUSTODY CREDITS
The Fund has an agreement with its custodian bank under which custody fees may
be reduced by balance credits. These credits are recorded as a reduction of
total expenses on the Statement of Operations. The Fund could have invested a
portion of the assets utilized in connection with the expense offset
arrangement in an income-producing asset if it had not entered into such an
agreement.
FEES PAID TO OFFICERS AND TRUSTEES
All officers of the Fund, with the exception of the Fund's Chief Compliance
Officer, are employees of Columbia or its affiliates and receive no
compensation from the Fund. The Board of Trustees has appointed a Chief
Compliance Officer to the Fund in accordance with federal securities
regulations. The Fund, along with other affiliated funds, pays its pro-rata
share of the expenses associated with the Chief Compliance Officer. The Fund's
expenses for the Chief Compliance Officer will not exceed $15,000 per year.
The Fund's Trustees may participate in a deferred compensation plan which may
be terminated at any time. Obligations of the plan will be paid solely out of
the Fund's assets.
21
[GRAPHIC]
NOTES TO FINANCIAL STATEMENTS (continued)
May 31, 2006 (Unaudited)
OTHER
Columbia provides certain services to the Fund related to Sarbanes-Oxley
compliance. For the six months ended May 31, 2006, the Fund paid $1,205 to
Columbia for such services. This amount is included in "Other expenses" on the
Statement of Operations.
NOTE 5. PORTFOLIO INFORMATION
For the six months ended May 31, 2006, the cost of purchases and proceeds from
sales of securities, excluding short-term obligations, were $25,874,074 and
$26,792,351, respectively.
NOTE 6. LOAN AGREEMENT
At May 31, 2006, the Fund had term loans and a revolving loan outstanding with
State Street, totaling $28,500,000. The term loans are comprised of a
$15,000,000 loan which bears interest at 5.08% per annum, due August 25, 2006
and a $7,000,000 loan which bears interest at 5.20% per annum, due August 24,
2007. The revolving loan is a $6,500,000 floating rate loan, maturing on
August 25, 2006. Interest is charged at a rate per annum equal to the London
Interbank Offered Rate plus 0.80%. The interest rate at May 31, 2006 was 5.42%.
For the six months ended May 31, 2006, the average daily loan balance was
$28,500,000 at a weighted average interest rate of 5.26%. The Fund is subject
to certain covenants including, but not limited to, requirements with respect
asset coverage, portfolio diversification and liquidity.
NOTE 7. DISCLOSURE OF SIGNIFICANT RISKS AND CONTINGENCIES
FOREIGN SECURITIES
There are certain additional risks involved when investing in foreign
securities that are not inherent with investments in domestic securities. These
risks may involve foreign currency exchange rate fluctuations, adverse
political and economic developments and the possible prevention of currency
exchange or other foreign governmental laws or restrictions. In addition, the
liquidity of foreign securities may be more limited than that of domestic
securities.
HIGH-YIELD SECURITIES
Investing in high-yield securities may involve greater credit risk and
considerations not typically associated with investing in U.S. government bonds
and other higher quality fixed income securities. These securities are
non-investment grade securities, often referred to as "junk" bonds. Economic
downturns may disrupt the high yield market and impair the ability of issuers
to repay principal and interest. Also, an increase in interest rates would
likely have an adverse impact on the value of such obligations. Moreover,
high-yield securities may be less liquid to the extent that there is no
established secondary market.
INDUSTRY FOCUS
The Fund may focus its investments in certain industries, subjecting it to
greater risk than a fund that is more diversified.
LEGAL PROCEEDINGS
On February 9, 2005, Columbia Management Advisors, Inc. (which has since merged
into Banc of America Capital Management, LLC (now named Columbia Management
Advisors, LLC)) ("Columbia") and Columbia Funds Distributor, Inc. (which has
been renamed Columbia Management Distributors, Inc.) (the "Distributor")
(collectively, the "Columbia Group") entered into an Assurance of
Discontinuance with the New York Attorney General ("NYAG") (the "NYAG
Settlement") and consented to the entry of a cease-and-desist order by the
Securities and Exchange Commission ("SEC") (the "SEC Order"). The SEC Order and
the NYAG Settlement are referred to collectively as the "Settlements". The
Settlements contain substantially the same terms and conditions as outlined in
the agreements in principle which Columbia Group entered into with the SEC and
NYAG in March 2004.
Under the terms of the SEC Order, the Columbia Group agreed, among other
things, to pay $70 million in disgorgement and $70 million in civil money
penalties; cease and desist from violations of the antifraud provisions and
certain other provisions of the federal securities laws; maintain certain
compliance and ethics oversight structures; retain an independent consultant to
review the Columbia Group's applicable supervisory, compliance, control and
other policies and procedures; and retain an independent distribution
consultant (see below). The Columbia Funds have also voluntarily undertaken to
implement certain governance measures designed to maintain the independence of
their boards of trustees. The NYAG Settlement also, among other things,
requires Columbia and its affiliates to reduce management fees for certain
Columbia Funds (including the former Nations Funds) and other mutual funds
collectively by $32 million per year for five years, for a projected total of
$160 million in management fee reductions.
Pursuant to the procedures set forth in the SEC order, the $140 million in
settlement amounts described above will be distributed in accordance with a
distribution plan developed by an independent distribution consultant and
22
[GRAPHIC]
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
May 31, 2006 (Unaudited)
approved by the SEC. The independent distribution consultant has been in
consultation with the staff of the SEC and has submitted a proposed plan of
distribution. The SEC has not yet approved a final plan of distribution.
As a result of these matters or any adverse publicity or other developments
resulting from them, the market price of the shares could decline.
A copy of the SEC Order is available on the SEC website at http://www.sec.gov.
A copy of the NYAG Settlement is available as part of the Bank of America
Corporation Form 8-K filing on February 10, 2005.
In connection with the events described in detail above, various parties have
filed suit against certain funds, the Trustees of the Columbia Funds,
FleetBoston Financial Corporation and its affiliated entities and/or Bank of
America and its affiliated entities.
On February 20, 2004, the Judicial Panel on Multidistrict Litigation
transferred these cases and cases against several other mutual fund companies
based on similar allegations to the United States District Court in Maryland
for consolidated or coordinated pretrial proceedings (the "MDL"). Subsequently,
additional related cases were transferred to the MDL. On September 29, 2004,
the plaintiffs in the MDL filed amended and consolidated complaints. One of
these amended complaints is a putative class action that includes claims under
the federal securities laws and state common law, and that names Columbia, the
Distributor, the Trustees of the Columbia Funds, Bank of America Corporation
and others as defendants. Another of the amended complaints is a derivative
action purportedly on behalf of the Columbia Funds that asserts claims under
federal securities laws and state common law.
On February 25, 2005, Columbia and other defendants filed motions to dismiss
the claims in the pending cases. On March 1, 2006, for reasons stated in the
court's memoranda dated November 3, 2005, the U.S. District Court for the
District of Maryland granted in part and denied in part the defendants' motions
to dismiss. The court dismissed all of the class action claims pending against
the Columbia Funds Trust and the Columbia Acorn Trust. As to Columbia and the
Distributor, the claims under the Securities Act of 1933, the claims under
Sections 34(b) and 36(a) of the Investment Company Act of 1940 ("ICA") and the
state law claims were dismissed. The claims under Sections 10(b) and 20(a) of
the Securities Exchange Act of 1934 and claims under Section 36(b) of the ICA
along with related claims under Section 36(a) of the ICA were not dismissed.
On March 21, 2006, a purported class action was filed in Massachusetts state
court alleging that the conduct, including market timing, entitles Class B
shareholders in certain Columbia funds to an exemption from contingent deferred
sales charges upon early redemption ("the CDSC Lawsuit"). The CDSC Lawsuit has
been removed to federal court in Massachusetts and the federal Judicial Panel
has transferred the CDSC Lawsuit to the MDL.
The MDL is ongoing. Accordingly, an estimate of the financial impact of this
litigation on any fund, if any, cannot currently be made.
In 2004, certain Columbia funds, the Trustees of the Columbia Funds, advisers
and affiliated entities were named as defendants in certain purported
shareholder class and derivative actions making claims, including claims under
the Investment Company and the Investment Advisers Acts of 1940 and state law.
The suits allege, inter alia, that the fees and expenses paid by the funds are
excessive and that the advisers and their affiliates inappropriately used fund
assets to distribute the funds and for other improper purpose. On March 2,
2005, the actions were consolidated in the Massachusetts federal court as In re
Columbia Entities Litigation. The plaintiffs filed a consolidated amended
complaint on June 9, 2005. On November 30, 2005, the judge dismissed all claims
by plaintiffs and ordered that the case be closed. The plaintiffs filed a
notice of appeal on December 30, 2005 and this appeal is pending.
23
[GRAPHIC]
LOAN AGREEMENT ASSET COVERAGE REQUIREMENTS
ASSET COVERAGE
TOTAL AMOUNT PER $1,000 OF
DATE OUTSTANDING INDEBTEDNESS
------------------------------------
05/31/06 $28,500,000 $3,611
11/30/05 28,500,000 3,655
11/30/04 29,500,000 3,754
11/30/03 28,500,000 3,630
10/31/03 28,500,000 3,583
10/31/02 24,500,000 3,373
10/31/01 30,500,000 3,372
10/31/00 47,300,000 3,079
10/31/99 47,300,000 3,558
10/31/98 47,300,000 3,632
10/31/97 27,400,000 4,933
10/31/96 27,400,000 4,647
24
[GRAPHIC]
SHAREHOLDER MEETING RESULTS
RESULTS OF THE ANNUAL MEETING OF SHAREHOLDERS
On May 24, 2006, the Annual Meeting of Shareholders of the Fund was held to
consider re-election of Trustees. On March 10, 2006, the record date for the
Meeting, the Fund had 21,003,496 common shares outstanding. The votes cast were
as follows:
ELECTION OF TRUSTEES:
The shareholders re-elected the following Trustees as follows:
For Withheld
----------------------------------------
Janet Langford Kelly 18,841,863 396,411
Douglas A. Hacker 18,845,577 392,697
John J. Neuhauser 18,836,834 401,440
The terms of office of Patrick J. Simpson, Thomas E. Stitzel, Thomas C.
Theobold, Anne-Lee Verville, Richard W. Lowry, William E. Mayer, Charles R.
Nelson and Richard L. Woolworth continued after the Meeting.
25
[GRAPHIC]
DIVIDEND REINVESTMENT PLAN
COLONIAL INTERMEDIATE HIGH INCOME FUND
The Fund generally distributes net investment income monthly and capital gains
annually. Under the Fund's Dividend Reinvestment Plan (the "Plan") all
distributions will be reinvested automatically in additional shares of the
Fund, unless the shareholder elects to receive cash or the shares are held in
broker or nominee name and a reinvestment service is not provided by the broker
or nominee. All cash distributions will be mailed by check directly to the
record holder by the dividend paying agent.
If the market price of the shares on the distribution payment date is equal to
or greater than the net asset value, Plan participants will be issued shares at
the higher of net asset value or 95% of the market price. The aggregate market
value of the shares may constitute income to shareholders for federal income
tax purposes. However, if the market price of the shares is less than the net
asset value, shares will be bought as soon as practicable (but no more than 30
days after the distribution, except as may be required to comply with federal
securities laws) in the open market for the accounts of Plan participants. If,
during this purchase period, the market price surpasses the net asset value,
the average per share price paid may exceed the asset value of the shares,
resulting in the acquisition of fewer shares than if the distribution had been
in newly-issued shares.
All Plan accounts receive written confirmations of all transactions. Shares
purchased under the Plan are held in uncertificated form. Each shareholder's
proxy includes shares purchased pursuant to the Plan. The automatic
reinvestment of distributions does not relieve participants of any income tax
payable on the distributions.
Fees and expenses of the Plan other than brokerage charges will be paid by the
Fund. No brokerage charges are incurred on shares issued directly by the Fund.
Participants will bear a pro-rata share of brokerage charges incurred on open
market purchases.
A Plan participant may terminate his or her participation by written notice to
the Plan agent. The Plan may be amended or terminated on 90 days written notice
to the Plan participants. Contact the Plan Agent for additional information
regarding the Plan. All correspondence concerning the Plan should be directed
to Computershare, the Plan agent, by mail at P.O. Box 43010, Providence, RI
02940-3010 or by phone at 1-800-730-6001.
26
[LOGO]
Transfer Agent
Important Information About This Report
The Transfer Agent for Colonial Intermediate High Income Fund is:
Computershare
P.O. Box 43010
Providence, RI 02940-3010
The fund mails one shareholder report to each shareholder address. Shareholders
can order additional reports by calling 800-730-6001. In addition,
representatives at that number can provide shareholders information about the
fund.
Financial advisors who want additional information about the fund may speak to
a representative at 800-426-3750.
A description of the fund's proxy voting policies and procedures is available
(i) at www.columbiamanagement.com; (ii) on the Securities and Exchange
Commission's website at www.sec.gov, and (iii) without charge, upon request, by
calling 800-730-6001. Information regarding how the fund voted proxies relating
to portfolio securities during the 12-month period ended June 30 is available
from the SEC's website. Information regarding how the fund voted proxies
relating to portfolio securities is also available
at www.columbiamanagement.com.
The fund files a complete schedule of portfolio holdings with the SEC for the
first and third quarters of each fiscal year on Form N-Q. The fund's Form N-Q
is available on the SEC's website at www.sec.gov and may be reviewed and copied
at the SEC's Public Reference Room in Washington, DC. Information on the
operation of the Public Reference Room may be obtained by calling
1-800-SEC-0330.
Annual Certifications -- As required, on June 21, 2006, the fund submitted to
the New York Stock Exchange ("NYSE") the annual certification of the fund's
Chief Executive Officer certifying that he is not aware of any violation of the
NYSE's Corporate Governance listing standards. The fund also has included the
certifications of the fund's Chief Executive Officer and Chief Financial
Officer required by Section 302 of the Sarbanes-Oxley Act of 2002 as exhibits
to the fund's Form N-CSR filed with the Securities and Exchange Commission for
the annual period.
This report has been prepared for shareholders of Colonial Intermediate High
Income Fund.
[GRAPHIC]
COLONIAL INTERMEDIATE HIGH INCOME FUND
SEMIANNUAL REPORT
SHC-44/111605-0506 (07/06) 06/26839
Item 2. Code of Ethics.
Not applicable at this time.
Item 3. Audit Committee Financial Expert.
Not applicable at this time.
Item 4. Principal Accountant Fees and Services.
Not applicable at this time.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. Schedule of Investments
The registrant's "Schedule I - Investments in securities of unaffiliated
issuers" (as set forth in 17 CFR 210.12-12) is included in Item 1 of this Form
N-CSR.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Registrant Purchases of Equity Securities*
-----------------------------------------------------------------
(c)
Total Number of (d)
(a) (b) Shares Purchased as Maximum Number of
Total Number Average Part of Publicly Shares that May Yet
of Shares Price Paid Announced Plans Be Purchased Under
Period Purchased Per Share or Programs the Plans or Programs
------ ------------ ---------- ------------------- ---------------------
12/01/05 through 12/31/05... 17,089 $3.20 17,089 N/A
01/01/06 through 01/31/06... 36,005 $3.46 36,005 N/A
02/01/06 through 02/28/06... 16,118 $3.36 16,118 N/A
03/01/06 through 03/31/06... 16,777 $3.24 16,777 N/A
04/01/06 through 04/30/06... 16,300 $3.33 16,300 N/A
05/01/06 through 05/31/06... 16,100 $3.35 16,100 N/A
------- ----- ------- ---
Total....................... 118,389 $3.34 118,389 N/A
------- ----- ------- ---
--------
* Includes shares purchased by the Dividend Reinvestment Agent pursuant to
the Registrant's Dividend Reinvestment Plan.
Item 10. Submission of Matters to a Vote of Security Holders.
There have not been any material changes to the procedures by which
shareholders may recommend nominees to the registrant's board of directors,
since those procedures were last disclosed in response to the requirements of
Item 7(d)(2)(ii)(G) of Schedule 14A or this Item.
Item 11. Controls and Procedures.
(a) The registrant's principal executive officer and principal financial
officers, based on their evaluation of the registrant's disclosure
controls and procedures as of a date within 90 days of the filing of
this report, have concluded that such controls and procedures are
adequately designed to ensure that information required to be
disclosed by the registrant in Form N-CSR is accumulated and
communicated to the registrant's management, including the principal
executive officer and principal financial officer, or persons
performing similar functions, as appropriate to allow timely decisions
regarding required disclosure.
(b) There were no changes in the registrant's internal control over
financial reporting that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 12. Exhibits.
(a)(1) Code of ethics required to be disclosed under Item 2 of Form N-CSR: Not
applicable at this time.
(a)(2) Certifications pursuant to Rule 30a-2(a) under the Investment Company
Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT.
(a)(3) Not applicable.
(b) Certification pursuant to Rule 30a-2(b) under the Investment Company Act of
1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT.
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) Colonial Intermediate High Income Fund
---------------------------------------------------
By (Signature and Title) /S/ Christopher L. Wilson
---------------------------------------
Christopher L. Wilson, President
Date July 27, 2006
-----------------------------------------------------------
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/ Christopher L. Wilson
---------------------------------------
Christopher L. Wilson, President
Date July 27, 2006
-----------------------------------------------------------
By (Signature and Title) /S/ J. Kevin Connaughton
---------------------------------------
J. Kevin Connaughton, Treasurer
Date July 27, 2006
-----------------------------------------------------------