Ivy High Income Opportunties Fund

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-22800

Ivy High Income Opportunities Fund

(Exact name of registrant as specified in charter)

6300 Lamar Avenue, Overland Park, Kansas 66202

(Address of principal executive offices) (Zip code)

Mara D. Herrington

6300 Lamar Avenue

Overland Park, Kansas 66202

(Name and address of agent for service)

Registrant’s telephone number, including area code: 913-236-2000

Date of fiscal year end: September 30

Date of reporting period: December 31, 2014

ITEM 1.    SCHEDULE OF INVESTMENTS.

Insert Schedule of Investments file here: Ivy High Income Opportunities Fund.

SCHEDULE OF INVESTMENTS

Ivy High Income Opportunities Fund (in thousands)

    DECEMBER 31, 2014 (UNAUDITED)

 

CORPORATE DEBT SECURITIES    Principal        Value  

Consumer Discretionary

  

Advertising – 0.4%

  

Acosta, Inc.,

        

7.750%, 10–1–22 (A)

    $ 200         $ 203   

Lamar Media Corp.,

        

5.375%, 1–15–24 (B)

      977           1,006   
       

 

 

  
          1,209   
       

 

 

  

Apparel Retail – 1.2%

  

Chinos Intermediate Holdings A, Inc.,

        

7.750%, 5–1–19 (A)(D)

      276           244   

Gymboree Corp. (The),

        

9.125%, 12–1–18

      488           188   

Hot Topic, Inc.,

        

9.250%, 6–15–21 (A)(B)

      976           1,044   

Nine West Holdings, Inc.,

        

8.250%, 3–15–19 (A)

      2,610           2,180   
       

 

 

  
          3,656   
       

 

 

  

Auto Parts & Equipment – 1.4%

  

IDQ Holdings, Inc.,

        

11.500%, 4–1–17 (A)(B)

      132           140   

Schaeffler Finance B.V.:

        

4.250%, 5–15–21 (A)(B)

      886           864   

6.750%, 11–15–22 (A)(B)(D)

      277           289   

Schaeffler Holding Finance B.V.,

        

6.875%, 8–15–18 (A)(C)(D)

    EUR 2,275           2,863   
       

 

 

  
          4,156   
       

 

 

  

Automobile Manufacturers – 0.5%

  

Group 1 Automotive, Inc.,

        

5.000%, 6–1–22 (A)(B)

    $ 695           679   

Navistar International Corp.,

        

8.250%, 11–1–21 (B)

      947           934   
       

 

 

  
          1,613   
       

 

 

  

Automotive Retail – 0.6%

  

Asbury Automotive Group, Inc.,

        

6.000%, 12–15–24 (A)(B)

      868           883   

Sonic Automotive, Inc.,

        

5.000%, 5–15–23 (B)

      919           892   
       

 

 

  
          1,775   
       

 

 

  

Broadcasting – 3.9%

  

CBS Outdoor Americas, Inc.:

        

5.250%, 2–15–22 (A)(B)

      481           485   

5.625%, 2–15–24 (A)(B)

      350           352   

Clear Channel Worldwide Holdings, Inc., Series A,

        

7.625%, 3–15–20 (B)

      119           123   

Clear Channel Worldwide Holdings, Inc., Series B,

        

7.625%, 3–15–20 (B)

      10,000           10,525   
       

 

 

  
          11,485   
       

 

 

  

 

Cable & Satellite – 12.9%

  

Altice S.A.:

        

7.250%, 5–15–22 (A)(C)

    EUR 152           186   

7.750%, 5–15–22 (A)(B)

    $ 1,390           1,393   

Cablevision Systems Corp.,

        

5.875%, 9–15–22 (B)

      10,000           10,125   

CCO Holdings LLC and CCO Holdings Capital Corp.:

        

5.250%, 3–15–21 (B)

      206           208   

5.250%, 9–30–22 (B)

      276           275   

5.125%, 2–15–23 (B)

      276           270   

5.750%, 9–1–23 (B)

      69           70   

5.750%, 1–15–24 (B)

      276           279   

CCOH Safari LLC:

        

5.500%, 12–1–22 (B)

      1,030           1,045   

5.750%, 12–1–24 (B)

      1,546           1,563   

DISH DBS Corp.:

        

6.750%, 6–1–21 (B)

      7,500           8,063   

5.875%, 7–15–22 (B)

      2,000           2,050   

Numericable Group S.A.,

        

6.000%, 5–15–22 (A)

      625           628   

Sirius XM Radio, Inc.:

        

5.875%, 10–1–20 (A)(B)

      905           932   

5.750%, 8–1–21 (A)(B)

      2,513           2,570   

4.625%, 5–15–23 (A)(B)

      4,586           4,288   

VTR Finance B.V.,

        

6.875%, 1–15–24 (A)

      3,584           3,656   

Wave Holdco LLC and Wave Holdco Corp.,

        

8.250%, 7–15–19 (A)(D)

      299           300   
       

 

 

  
          37,901   
       

 

 

  

Casinos & Gaming – 1.6%

  

Gateway Casinos & Entertainment Ltd.,

        

8.500%, 11–26–20 (A)(C)

    CAD 904           765   

MCE Finance Ltd.,

        

5.000%, 2–15–21 (A)(B)

    $ 2,390           2,235   

Wynn Macau Ltd.,

        

5.250%, 10–15–21 (A)(B)

      1,931           1,815   
       

 

 

  
          4,815   
       

 

 

  

Distributors – 0.9%

  

Pinnacle Operating Corp.,

        

9.000%, 11–15–20 (A)

      2,618           2,697   
       

 

 

  

Leisure Facilities – 0.3%

  

Regal Entertainment Group,

        

5.750%, 2–1–25 (B)

      950           874   
       

 

 

  

Movies & Entertainment – 1.1%

  

AMC Entertainment, Inc.,

        

5.875%, 2–15–22 (B)

      250           254   

Cinemark USA, Inc.:

        

5.125%, 12–15–22 (B)

      533           521   

4.875%, 6–1–23 (B)

      1,651           1,560   

WMG Acquisition Corp.:

        

5.625%, 4–15–22 (A)(B)

      161           156   

6.750%, 4–15–22 (A)

      712           648   
       

 

 

  
          3,139   
       

 

 

  
 

Specialized Consumer Services – 3.9%

  

AA Bond Co. Ltd.,

        

9.500%, 7–31–19 (A)(C)

    GBP 931           1,595   

B–Corp Merger Sub, Inc.,

        

8.250%, 6–1–19

    $ 4,000           3,620   

Carlson Travel Holdings,

        

7.500%, 8–15–19 (A)(D)

      800           806   

Carlson Wagonlit B.V.,

        

6.875%, 6–15–19 (A)(B)

      107           112   

Lansing Trade Group,

        

9.250%, 2–15–19 (A)(B)

      1,170           1,094   

Nielsen Finance,

        

5.500%, 10–1–21 (A)(B)

      1,396           1,424   

Nielsen Finance LLC and Nielsen Finance Co.,

        

5.000%, 4–15–22 (A)(B)

      2,677           2,690   
       

 

 

  
          11,341   
       

 

 

  

Specialty Stores – 1.4%

  

Jo–Ann Stores Holdings, Inc.,

        

9.750%, 10–15–19 (A)(D)

      1,046           889   

Jo–Ann Stores, Inc.,

        

8.125%, 3–15–19 (A)

      81           75   

Michaels Stores, Inc.,

        

5.875%, 12–15–20 (A)(B)

      240           243   

New Academy Finance Co. LLC,

        

8.000%, 6–15–18 (A)(D)

      2,000           1,980   

PC Nextco Holdings LLC and PC Nextco Finance, Inc.,

        

8.750%, 8–15–19 (D)

      826           830   
       

 

 

  
          4,017   
       

 

 

  

Total Consumer Discretionary – 30.1%

  

        88,678   

Consumer Staples

  

Agricultural Products – 1.8%

        

American Seafoods Group LLC,

        

10.750%, 5–15–16 (A)

      5,787           5,179   
       

 

 

  

Food Distributors – 0.8%

  

Diamond Foods, Inc.,

        

7.000%, 3–15–19 (A)

      1,457           1,493   

Simmons Foods, Inc.,

        

7.875%, 10–1–21 (A)

      1,000           983   
       

 

 

  
          2,476   
       

 

 

  

Packaged Foods & Meats – 1.0%

  

JBS USA LLC and JBS USA Finance, Inc.,

        

5.875%, 7–15–24 (A)(B)

      2,496           2,452   

Post Holdings, Inc.,

        

7.375%, 2–15–22 (B)

      515           515   
       

 

 

  
          2,967   
       

 

 

  

Tobacco – 0.5%

  

Prestige Brands, Inc.,

        

5.375%, 12–15–21 (A)

      1,630           1,602   
       

 

 

  

Total Consumer Staples – 4.1%

  

        12,224   

Energy

  

Coal & Consumable Fuels – 0.8%

  

Foresight Energy LLC and Foresight Energy Finance Corp.,

        

7.875%, 8–15–21 (A)

      2,427           2,397   
       

 

 

  

Oil & Gas Drilling – 0.2%

  

KCA DEUTAG UK Finance plc,

        

7.250%, 5–15–21 (A)(B)

      617           436   
       

 

 

  

Oil & Gas Equipment & Services – 0.1%

  

Seventy Seven Energy, Inc.,

        

6.500%, 7–15–22 (B)

      360           211   
       

 

 

  

Oil & Gas Exploration & Production – 0.5%

  

Chesapeake Energy Corp.:

        

3.481%, 4–15–19 (B)(E)

      338           331   

4.875%, 4–15–22 (B)

      614           597   

Rice Energy, Inc.,

        

6.250%, 5–1–22 (A)(B)

      69           64   

RSP Permian, Inc.,

        

6.625%, 10–1–22 (A)(B)

      508           473   
       

 

 

  
          1,465   
       

 

 

  

Oil & Gas Refining & Marketing – 4.2%

  

Offshore Drilling Holding S.A.,

        

8.375%, 9–20–20 (A)

      3,074           2,674   

Offshore Group Investment Ltd.,

        

7.500%, 11–1–19 (B)

      2,006           1,494   

Samson Investment Co.,

        

9.750%, 2–15–20 (E)

      5,000           2,072   

Shelf Drilling Holdings Ltd.,

        

8.625%, 11–1–18 (A)(B)

      7,608           6,239   
       

 

 

  
          12,479   
       

 

 

  

Total Energy – 5.8%

  

        16,988   

Financials

  

Consumer Finance – 2.4%

  

Creditcorp,

        

12.000%, 7–15–18 (A)(B)

      5,248           5,091   

Speedy Cash Intermediate Holdings Corp.,

        

10.750%, 5–15–18 (A)

      2,033           1,992   
       

 

 

  
          7,083   
       

 

 

  

Diversified Capital Markets – 2.9%

  

Mobile Challenger Intermediate Group S.A.:

        

8.750%, 3–15–19 (A)(C)(D)

    EUR   2,000           2,450   

8.750%, 3–15–19 (A)(C)(D)

    CHF 2,000           2,033   

Patriot Merger Corp.,

        

9.000%, 7–15–21 (A)(B)

    $ 3,827           4,009   
       

 

 

  
          8,492   
       

 

 

  

Other Diversified Financial Services – 1.2%

  

AAF Holdings LLC and AAF Finance Co.,

        

12.000%, 7–1–19 (A)(D)

      896           869   

Abengoa Finance SAU,

        

7.750%, 2–1–20 (A)(B)

      163           144   
 

Balboa Merger Sub, Inc.,

        

11.375%, 12–1–21 (A)

      237           229   

Greektown Holdings LLC and Greektown Mothership Corp.,

        

8.875%, 3–15–19 (A)(B)

      1,925           1,920   

New Cotai LLC and New Cotai Capital Corp.,

        

10.625%, 5–1–19 (A)(B)(D)

      263           274   
       

 

 

  
          3,436   
       

 

 

  

Property & Casualty Insurance – 0.4%

  

Hockey Merger Sub 2 Inc.,

        

7.875%, 10–1–21 (A)

      1,300           1,294   
       

 

 

  

Real Estate Development – 0.3%

  

Hub Holdings LLC and Hub Holdings Finance, Inc.,

        

8.125%, 7–15–19 (A)(D)

      970           960   
       

 

 

  

Real Estate Services – 1.2%

  

Stearns Holdings, Inc.,

        

9.375%, 8–15–20 (A)(B)

      3,571           3,571   
       

 

 

  

Specialized Finance – 3.3%

  

Consolidated Communications Finance II Co.,

        

6.500%, 10–1–22 (A)

      812           814   

Flexi–Van Leasing, Inc.,

        

7.875%, 8–15–18 (A)(B)

      5,208           5,156   

TMX Finance LLC and TitleMax Finance Corp.,

        

8.500%, 9–15–18 (A)(B)

      4,625           3,885   
       

 

 

  
          9,855   
       

 

 

  

Specialized REITs – 1.9%

  

Aircastle Ltd.,

        

5.125%, 3–15–21

      1,719           1,719   

CNL Lifestyles Properties, Inc.,

        

7.250%, 4–15–19 (B)

      3,669           3,752   
       

 

 

  
          5,471   
       

 

 

  

Thrifts & Mortgage Finance – 2.5%

  

Provident Funding Associates L.P. and PFG Finance Corp.,

        

6.750%, 6–15–21 (A)(B)

      7,500           7,275   
       

 

 

  

Total Financials – 16.1%

  

        47,437   

Health Care

        

Health Care Equipment – 0.2%

  

Mallinckrodt International Finance S.A. and Mallinckrodt CB LLC,

        

5.750%, 8–1–22 (A)(B)

      687           706   
       

 

 

  

Health Care Facilities – 9.5%

  

AmSurg Corp.,

        

5.625%, 11–30–20 (B)

      485           496   

AmSurg Escrow Corp.,

        

5.625%, 7–15–22 (A)

      751           770   

Capsugel S.A.,

        

7.000%, 5–15–19 (A)(D)

      991           1,001   

Catamaran Corp.,

        

4.750%, 3–15–21

      645           645   

ConvaTec Finance International S.A.,

        

8.250%, 1–15–19 (A)(D)

      1,236           1,254   

FWCT–2 Escrow Corp.,

        

6.875%, 2–1–22 (B)

      1,229           1,302   

HCA Holdings, Inc.,

        

6.250%, 2–15–21 (B)

      8,335           8,877   

HCA, Inc.,

        

7.500%, 2–15–22 (B)

      5,500           6,284   

MPH Acquisition Holdings LLC,

        

6.625%, 4–1–22 (A)

      1,314           1,343   

Tenet Healthcare Corp.:

        

6.000%, 10–1–20 (B)

      1,042           1,119   

8.125%, 4–1–22 (B)

      4,337           4,847   
       

 

 

  
          27,938   
       

 

 

  

Health Care Services – 1.8%

        

MedImpact Holdings, Inc.,

        

10.500%, 2–1–18 (A)

      5,000           5,250   
       

 

 

  

Pharmaceuticals – 0.3%

        

Salix Pharmaceuticals Ltd.,

        

6.000%, 1–15–21 (A)(B)

      785           800   
       

 

 

  

Total Health Care – 11.8%

  

        34,694   

Industrials

        

Aerospace & Defense – 2.3%

        

Silver II Borrower SCA and Silver II U.S. Holdings,

        

7.750%, 12–15–20 (A)

      6,000           5,670   

TransDigm, Inc.,

        

6.500%, 7–15–24

      1,019           1,024   
       

 

 

  
          6,694   
       

 

 

  

Air Freight & Logistics – 0.3%

        

TRAC Intermodal LLC and TRAC Intermodal Corp.,

        

11.000%, 8–15–19 (B)

      979           1,057   
       

 

 

  

Building Products – 1.4%

        

CPG Merger Sub LLC,

        

8.000%, 10–1–21 (A)

      1,311           1,340   

Ply Gem Industries, Inc.:

        

6.500%, 2–1–22

      1,302           1,224   

6.500%, 2–1–22 (A)

      716           666   

Roofing Supply Group LLC and Roofing Supply Finance, Inc.,

        

10.000%, 6–1–20 (A)

      908           901   
       

 

 

  
          4,131   
       

 

 

  

Diversified Support Services – 4.6%

        

Algeco Scotsman Global Finance plc,

        

8.500%, 10–15–18 (A)(B)

      10,575           10,205   

Nexeo Solutions LLC,

        

8.375%, 3–1–18

      3,481           3,377   
       

 

 

  
          13,582   
       

 

 

  

Industrial Machinery – 0.1%

        

Dynacast International LLC and Dynacast Finance, Inc.,

        

9.250%, 7–15–19 (B)

      293           314   
       

 

 

  
 

Railroads – 0.7%

        

Florida East Coast Holdings Corp. and Florida East Coast Industries LLC:

        

6.750%, 5–1–19 (A)

      1,462           1,447   

9.750%, 5–1–20 (A)

      607           604   
       

 

 

  
          2,051   
       

 

 

  

Total Industrials – 9.4%

  

        27,829   

Information Technology

        

Application Software – 0.8%

        

ACI Worldwide, Inc.,

        

6.375%, 8–15–20 (A)(B)

      971           1,015   

Infor Software Parent LLC and Infor Software Parent, Inc.,

        

7.125%, 5–1–21 (A)(D)

      1,306           1,280   
       

 

 

  
          2,295   
       

 

 

  

Communications Equipment – 1.4%

  

Eagle Midco, Inc.,

        

9.000%, 6–15–18 (A)(D)

      4,000           4,090   
       

 

 

  

Data Processing & Outsourced Services – 0.6%

  

Alliance Data Systems Corp.,

        

5.375%, 8–1–22 (A)

      1,853           1,830   
       

 

 

  

Electronic Manufacturing Services – 0.5%

  

KEMET Corp.,

        

10.500%, 5–1–18

      1,440           1,480   
       

 

 

  

IT Consulting & Other Services – 1.4%

        

iGATE Corp.,

        

4.750%, 4–15–19 (B)

      1,667           1,667   

NCR Escrow Corp.:

        

5.875%, 12–15–21 (B)

      1,154           1,186   

6.375%, 12–15–23 (B)

      1,233           1,282   
       

 

 

  
          4,135   
       

 

 

  

Semiconductors – 1.3%

  

Micron Technology, Inc.:

        

5.875%, 2–15–22 (A)(B)

      1,798           1,888   

5.500%, 2–1–25 (A)(B)

      1,857           1,875   
       

 

 

  
          3,763   
       

 

 

  

Technology Distributors – 0.0%

  

Sophia L.P. and Sophia Finance, Inc.,

        

9.625%, 12–1–18 (A)(D)

      107           107   
       

 

 

  

Total Information Technology – 6.0%

  

        17,700   

Materials

        

Aluminum – 1.3%

        

Constellium N.V.:

        

8.000%, 1–15–23 (A)

      1,642           1,634   

5.750%, 5–15–24 (A)(B)

      260           226   

Wise Metals Intermediate Holdings,

        

9.750%, 6–15–19 (A)(D)

      1,774           1,885   
       

 

 

  
          3,745   
       

 

 

  

Construction Materials – 0.4%

  

Hillman Group, Inc. (The),

        

6.375%, 7–15–22 (A)

      1,220           1,171   
       

 

 

  

Diversified Metals & Mining – 4.8%

  

Artsonig Pty Ltd.,

        

11.500%, 4–1–19 (A)(D)

      1,436           1,264   

Compass Minerals International, Inc.,

        

4.875%, 7–15–24 (A)(B)

      1,500           1,455   

Crystal Merger Sub, Inc.,

        

7.625%, 10–15–21 (A)(B)

      391           408   

FMG Resources Pty Ltd.:

        

8.250%, 11–1–19 (A)(B)

      2,350           2,138   

6.875%, 4–1–22 (A)(B)

      9,064           7,546   

Lundin Mining Corp.:

        

7.500%, 11–1–20 (A)(B)

      715           708   

7.875%, 11–1–22 (A)(B)

      681           681   
       

 

 

  
          14,200   
       

 

 

  

Metal & Glass Containers – 1.8%

  

Ardagh Finance Holdings,

        

8.625%, 6–15–19 (A)(D)

      1,443           1,421   

Ardagh Packaging Finance plc and Ardagh Holdings USA, Inc.,

        

6.000%, 6–30–21 (A)(B)

      200           191   

Consolidated Container Co. LLC and Consolidated Container Capital, Inc.,

        

10.125%, 7–15–20 (A)

      1,812           1,685   

Signode Industrial Group,

        

6.375%, 5–1–22 (A)

      1,955           1,906   
       

 

 

  
          5,203   
       

 

 

  

Precious Metals & Minerals – 1.0%

  

Prince Mineral Holding Corp.,

        

11.500%, 12–15–19 (A)(E)

      3,000           3,060   
       

 

 

  

Total Materials – 9.3%

  

        27,379   

Telecommunication Services

        

Alternative Carriers – 0.9%

        

Level 3 Communications, Inc.,

        

5.750%, 12–1–22 (A)

      2,694           2,711   
       

 

 

  

Integrated Telecommunication Services – 10.8%

  

BCP (Singapore) VI Cayman Financing Co. Ltd.,

        

8.000%, 4–15–21 (A)(B)

      403           404   

CenturyLink, Inc.:

        

5.625%, 4–1–20 (B)

      349           362   

5.800%, 3–15–22 (B)

      13,000           13,487   

Frontier Communications Corp.:

        

6.250%, 9–15–21 (B)

      811           815   

7.125%, 1–15–23 (B)

      682           694   

6.875%, 1–15–25 (B)

      649           649   

Level 3 Escrow II, Inc.,

        

5.375%, 8–15–22 (A)(B)

      1,709           1,718   

Sprint Corp.:

        

7.250%, 9–15–21 (B)

      9,458           9,375   

7.875%, 9–15–23 (B)

      4,459           4,402   
       

 

 

  
          31,906   
       

 

 

  
 

Wireless Telecommunication Service – 2.3%

  

DigitalGlobe, Inc.,

        

5.250%, 2–1–21 (A)(B)

      1,388           1,319   

Telecom Italia S.p.A.,

        

5.303%, 5–30–24 (A)(B)

      769           779   

T–Mobile USA, Inc.:

        

6.464%, 4–28–19 (B)

      728           757   

6.542%, 4–28–20 (B)

      788           814   

6.633%, 4–28–21 (B)

      1,120           1,149   

6.125%, 1–15–22 (B)

      372           378   

6.731%, 4–28–22 (B)

      158           163   

6.000%, 3–1–23 (B)

      597           598   

6.500%, 1–15–24 (B)

      221           226   

6.375%, 3–1–25 (B)

      487           495   
       

 

 

  
          6,678   
       

 

 

  

Total Telecommunication Services – 14.0%

  

        41,295   

Utilities

        

Renewable Electricity – 0.4%

  

Abengoa Yield plc,

        

7.000%, 11–15–19 (A)

      1,108           1,091   
       

 

 

  

Total Utilities – 0.4%

  

        1,091   

TOTAL CORPORATE DEBT SECURITIES – 107.0%

  

      $ 315,315   

(Cost: $327,262)

        

LOANS(E)

                    

Consumer Discretionary

        

Advertising – 0.2%

        

Advantage Sales & Marketing, Inc.,

        

7.500%, 7–25–22

      745           735   
       

 

 

  

Apparel Retail – 4.9%

        

Hoffmaster Group, Inc.,

        

10.000%, 5–6–21

      1,222           1,197   

True Religion Apparel, Inc.:

        

5.875%, 7–29–19

      7,013           6,399   

5.875%, 7–30–19

      7,500           6,844   
       

 

 

  
          14,440   
       

 

 

  

Auto Parts & Equipment – 2.0%

        

Direct ChassisLink, Inc.,

        

8.250%, 11–7–19

      6,112           5,797   
       

 

 

  

Casinos & Gaming – 0.2%

        

Gateway Casinos & Entertainment Ltd.:

        

6.250%, 11–4–19 (C)

    CAD 2           2   

5.650%, 11–26–19 (C)

      734           625   
       

 

 

  
          627   
       

 

 

  

General Merchandise Stores – 2.0%

  

BJ’s Wholesale Club, Inc.,

        

8.500%, 3–31–20

    $ 1,275           1,250   

Orchard Acquisition Co. LLC,

        

7.000%, 2–8–19

      4,641           4,577   
       

 

 

  
          5,827   
       

 

 

  

Housewares & Specialties – 0.9%

        

KIK Custom Products, Inc.:

        

5.500%, 5–17–19

      1,871           1,827   

9.500%, 11–17–19

      781           776   
       

 

 

  
          2,603   
       

 

 

  

Movies & Entertainment – 4.1%

        

Formula One Holdings Ltd. and Delta Two S.a.r.l.:

        

4.750%, 7–15–21

      775           755   

7.750%, 7–29–22

      500           485   

Yonkers Racing Corp.,

        

8.750%, 8–20–20

      15,889           10,924   
       

 

 

  
          12,164   
       

 

 

  

Restaurants – 0.4%

        

TGI Friday’s, Inc.:

        

5.250%, 6–20–20

      27           27   

5.250%, 6–20–20

      3           3   

6.590%, 6–20–20

      70           70   

9.250%, 6–20–21

      1,063           1,042   
       

 

 

  
          1,142   
       

 

 

  

Specialized Consumer Services – 0.3%

        

Wand Intermediate I L.P.:

        

4.750%, 9–2–21

      487           481   

8.250%, 9–2–22

      487           486   
       

 

 

  
          967   
       

 

 

  

Total Consumer Discretionary – 15.0%

  

        44,302   

Consumer Staples

        

Hypermarkets & Super Centers – 0.3%

        

GOBP Holdings, Inc.,

        

9.250%, 10–15–22

      979           967   
       

 

 

  

Packaged Foods & Meats – 0.3%

        

Shearer’s Foods LLC,

        

7.750%, 6–19–22

      748           730   
       

 

 

  

Total Consumer Staples – 0.6%

  

        1,697   

Energy

        

Coal & Consumable Fuels – 0.3%

  

Westmoreland Coal Co.,

        

7.500%, 12–16–20

      966           947   
       

 

 

  

Oil & Gas Drilling – 0.4%

        

KCA Deutag Alpha Ltd.,

        

6.250%, 5–13–20

      1,378           963   
       

 

 

  

Oil & Gas Equipment & Services – 0.3%

  

Regent Purchaser Investment, Inc.,

        

6.000%, 7–22–21

      1,141           899   
       

 

 

  

Oil & Gas Refining & Marketing – 1.2%

  

Fieldwood Energy LLC,

        

8.375%, 9–30–20

      1,684           1,223   

Shelf Drilling Midco Ltd.,

        

10.000%, 10–8–18 (D)

      3,209           2,391   
       

 

 

  
          3,614   
       

 

 

  
 

Oil & Gas Storage & Transportation – 1.2%

  

Bowie Resources Holdings LLC:

        

6.750%, 8–12–20

      2,435           2,399   

11.750%, 2–16–21

      1,224           1,199   
       

 

 

  
          3,598   
       

 

 

  

Total Energy – 3.4%

  

        10,021   

Financials

        

Consumer Finance – 0.3%

        

TransFirst, Inc.:

        

5.500%, 10–16–21

      257           255   

9.000%, 10–16–22

      692           682   
       

 

 

  
          937   
       

 

 

  

Other Diversified Financial Services – 0.5%

  

WP Mustang Holdings LLC,

        

8.500%, 5–29–22

      1,500           1,440   
       

 

 

  

Total Financials – 0.8%

  

        2,377   

Health Care

        

Health Care Facilities – 1.0%

        

Surgery Center Holdings, Inc.:

        

5.250%, 7–24–20

      1,553           1,510   

8.500%, 7–24–21

      1,553           1,495   
       

 

 

  
          3,005   
       

 

 

  

Life Sciences Tools & Services – 0.6%

  

Atrium Innovations, Inc.,

        

7.750%, 7–29–21

      1,740           1,622   
       

 

 

  

Total Health Care – 1.6%

  

        4,627   

Industrials

        

Air Freight & Logistics – 0.1%

        

DAE Aviation Holdings, Inc.,

        

7.750%, 7–29–19

      229           222   
       

 

 

  

Building Products – 1.4%

        

GYP Holdings III Corp.:

        

4.750%, 3–27–21

      479           464   

7.750%, 3–27–22

      2,012           1,992   

Hampton Rubber Co. & SEI Holding Corp.,

        

9.000%, 3–24–22

      1,719           1,547   
       

 

 

  
          4,003   
       

 

 

  

Construction & Engineering – 0.3%

  

Tensar International Corp.:

        

5.750%, 7–9–21

      446           399   

9.500%, 7–9–22

      604           477   
       

 

 

  
          876   
       

 

 

  

Industrial Machinery – 0.7%

        

Accudyne Industries LLC,

        

4.000%, 12–13–19

      89           83   

Capital Safety North America Holdings, Inc.,

        

6.500%, 3–26–22

      1,769           1,672   

NN, Inc.,

        

6.000%, 7–18–21

      400           398   
       

 

 

  
          2,153   
       

 

 

  

Research & Consulting Services – 1.7%

  

Larchmont Resources LLC,

        

8.250%, 8–7–19

      5,226           5,030   
       

 

 

  

Total Industrials – 4.2%

  

        12,284   

Information Technology

        

Application Software – 1.5%

        

Misys plc and Magic Newco LLC,

        

12.000%, 6–12–19

      2,400           2,593   

TIBCO Software, Inc.,

        

6.500%, 11–25–20

      1,748           1,690   
       

 

 

  
          4,283   
       

 

 

  

Data Processing & Outsourced Services – 0.4%

  

Sedgwick Claims Management Services, Inc.,

        

6.750%, 1–27–22

      1,412           1,324   
       

 

 

  

IT Consulting & Other Services – 1.7%

  

Active Network, Inc. (The):

        

5.500%, 11–15–20

      1,310           1,279   

9.500%, 11–15–21

      2,147           2,056   

Triple Point Group Holdings, Inc.,

        

5.250%, 7–13–20

      1,761           1,598   
       

 

 

  
          4,933   
       

 

 

  

Total Information Technology – 3.6%

  

        10,540   

Materials

        

Construction Materials – 1.1%

        

Quickrete Holdings, Inc.,

        

7.000%, 3–19–21

      261           259   

U.S. LBM Holdings LLC:

        

8.000%, 4–25–20

      1,794           1,754   

8.000%, 4–25–20

      1,355           1,324   
       

 

 

  
          3,337   
       

 

 

  

Diversified Metals & Mining – 0.4%

  

EP Minerals LLC:

        

5.500%, 7–24–20

      554           548   

8.500%, 7–24–21

      545           542   
       

 

 

  
          1,090   
       

 

 

  

Metal & Glass Containers – 0.2%

        

Consolidated Container Co. LLC,

        

7.750%, 1–3–20

      451           430   
       

 

 

  

Paper Packaging – 1.1%

  

FPC Holdings, Inc.,

        

9.250%, 5–27–20

      2,500           2,400   

Ranpak (Rack Merger),

        

8.250%, 9–22–22

      873           868   
       

 

 

  
          3,268   
       

 

 

  

Specialty Chemicals – 0.2%

        

Chromaflo Technologies Corp.,

        

8.250%, 6–2–20

      706           692   
       

 

 

  

Total Materials – 3.0%

  

        8,817   
 

Telecommunication Services

        

Alternative Carriers – 0.2%

        

Cable & Wireless Communications,

        

0.000%, 11–6–16 (F)

      700           696   
       

 

 

  

Total Telecommunication Services – 0.2%

  

        696   

Utilities

        

Independent Power Producers & Energy Traders – 1.4%

  

Alinta Energy Finance PTY Ltd.:

        

0.000%, 8–13–19 (F)

      192           191   

6.375%, 8–13–19

      3,971           3,941   
       

 

 

  
          4,132   
       

 

 

  

Total Utilities – 1.4%

  

        4,132   

TOTAL LOANS – 33.8%

  

      $ 99,493   

(Cost: $108,327)

        
SHORT–TERM SECURITIES                  

Commercial Paper(G) – 1.8%

        

Exxon Mobil Corp.,

        

0.010%, 1–2–15

      4,201           4,201   

Mondelez International, Inc.,

        

0.350%, 1–2–15

      1,323           1,323   
       

 

 

  
          5,524   
       

 

 

  

Master Note – 0.2%

        

Toyota Motor Credit Corp.,

        

0.126%, 1–7–15 (H)

      541           541   
       

 

 

  

TOTAL SHORT-TERM SECURITIES – 2.0%

  

      $ 6,065   

(Cost: $6,065)

        

TOTAL INVESTMENT SECURITIES – 142.8%

  

      $ 420,873   

(Cost: $441,654)

        

BORROWINGS(I) – (45.6)%

  

        (134,500 ) 

CASH AND OTHER ASSETS,
NET OF LIABILITIES – 2.8%

   

        8,293   

NET ASSETS – 100.0%

  

      $ 294,666   

 

    

 

Notes to Schedule of Investments

 

(A) Securities were purchased pursuant to Rule 144A under the Securities Act of 1933 and may be resold in transactions exempt from registration, normally to qualified institutional buyers. At December 31, 2014 the total value of these securities amounted to $188,804 or 64.1% of net assets.

 

(B) All or a portion of securities with an aggregate value of $145,294 have been pledged as collateral on open borrowings.

 

(C) Principal amounts are denominated in the indicated foreign currency, where applicable (CAD - Canadian Dollar, CHF - Swiss Franc, EUR - Euro and GBP - British Pound).

 

(D) Payment-in-kind bonds.

 

(E) Variable rate security. Interest rate disclosed is that which is in effect at December 31, 2014.

 

(F) All or a portion of this position has not settled. Full contract rates do not take effect until settlement date.

 

(G) Rate shown is the yield to maturity at December 31, 2014.

 

(H) Variable rate security. Interest rate disclosed is that which is in effect at December 31, 2014. Date shown represents the date that the variable rate resets.

 

(I) Borrowings Payable as a percentage of Total Investments is 32.0%.

The following forward foreign currency contracts were outstanding at December 31, 2014:

 

      Currency to be
Delivered		            Currency to be
Received		   

Settlement

Date

    Counterparty   

Unrealized

Appreciation

     

Unrealized

Depreciation

  

British Pound

   

1,023

     

U.S. Dollar

    1,604    1-14-15    Morgan Stanley International    $ 10       $ —   

Euro

   

4,546

     

U.S. Dollar

    5,649    1-14-15    Morgan Stanley International      148         —   

Swiss Franc

   

2,060

     

U.S. Dollar

    2,131    1-14-15    Morgan Stanley International      59         —   
                    $ 217       $ —   

The Fund’s investments are reported at fair value. Fair value is defined as the price that the Fund would receive upon selling an asset or would pay upon satisfying a liability in an orderly transaction between market participants at the measurement date.

Accounting standards establish a framework for measuring fair value and a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the factors that market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Reoccurring fair value measurements of Level 3 securities shall include a reconciliation of the beginning to ending balances for reported fair market values. A fair value hierarchy and Level 3 reconciliation, if applicable, have been included in the Notes to Schedule of Investments for the Fund.

An individual investment’s fair value measurement is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized as follows:

Level 1 – Observable input such as quoted prices, available in active markets, for identical assets or liabilities.

Level 2 – Significant other observable inputs, which may include, but are not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market corroborated inputs.

Level 3 – Significant unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available, which may include assumptions made by the Board or persons acting at their direction that are used in determining the fair market value of investments.

The following table is a summary of the valuation of the Fund’s investments by the fair value hierarchy levels as of December 31, 2014:

 

     Level 1      Level 2      Level 3  

Assets

        

Investments in Securities

        

Corporate Debt Securities

   $ —       $ 309,799       $ 5,516   

Loans

     —         75,837         23,656   

Short-Term Securities

     —         6,065         —   
 

 

 

  

Total

   $ —       $ 391,701       $ 29,172   
 

 

 

  

Forward Foreign Currency Contracts

   $ —       $ 217       $ —   
 

 

 

  

Liabilities

        

Payable for Borrowing

   $ —       $ 134,500       $ —   
 

 

 

  

The following table is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:

 

     Corporate Debt
Securities		     Loans  

Beginning Balance 10-1-14

   $ 286      $ 45,648   

Net realized gain (loss)

     —        (775 ) 

Net change in unrealized appreciation (depreciation)

     (354 )      (870 ) 

Purchases

     252        5,079   

Sales

     —        (4,616 ) 

Amortization/Accretion of premium/discount

     —        57   

Transfers into Level 3 during the period

     5,618        7,774   

Transfers out of Level 3 during the period

     (286 )      (28,641 ) 

Ending Balance 12-31-14

   $ 5,516      $ 23,656   

Net change in unrealized appreciation (depreciation) for all Level 3 investments still held as of 12-31-14

   $ (354 )    $ (833 ) 

Transfers from Level 2 to Level 3 occurred primarily due to the lack of observable market data due to decreased market activity or information for these securities. Transfers from Level 3 to Level 2 occurred primarily due to the increased availability of observable market data due to increased market activity or information. As shown above, transfers in and out of Level 3 represent the values as of the beginning of the reporting period. During the period ended December 31, 2014, there were no transfers between Levels 1 and 2.

Information about Level 3 fair value measurements:

 

    

Fair Value at

12-31-14

      Valuation Technique(s)    Unobservable Input(s)

Assets

        

    Corporate Debt Securities

   $ 5,516       Third-party valuation service    Broker quotes

    Loans

   $ 23,656       Third-party valuation service    Broker quotes

 

The following acronym is used throughout this schedule:

REIT = Real Estate Investment Trust

For Federal income tax purposes, cost of investments owned at December 31, 2014 and the related unrealized appreciation (depreciation) were as follows:

 

Cost

    $ 441,654   
  

 

 

  

Gross unrealized appreciation

      3,575   

Gross unrealized depreciation

      (24,356 ) 
  

 

 

  

Net unrealized depreciation

    $ (20,781 ) 

    

 

ITEM 2.    CONTROLS AND PROCEDURES.

 

(a) The Registrant’s Principal Executive Officer and Principal Financial Officer, or persons performing similar functions, based on their evaluation of the Registrant’s disclosure controls and procedures as of a date within 90 days of the filing date of this report, have concluded that such controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended) are effective and adequately designed to ensure that information required to be disclosed by the Registrant in its reports that it files or submits 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 significant changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940, as amended) that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

ITEM 3.    EXHIBITS.

A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)).

Attached hereto as Exhibit 99.CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Ivy High Income Opportunities Fund
(Registrant)
By       /s/ Mara D. Herrington
  Mara D. Herrington, Vice President and Secretary

Date: February 27, 2015

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       /s/ Henry J. Herrmann
  Henry J. Herrmann, Principal Executive Officer

Date: February 27, 2015

 

By       /s/ Joseph W. Kauten
  Joseph W. Kauten, Principal Financial Officer

Date: February 27, 2015