UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08743
Van Kampen Senior Income Trust
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(Exact name of registrant as specified in charter)
522 Fifth Avenue, New York, New York 10036
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(Address of principal executive offices) (Zip code)
Ronald Robison
522 Fifth Avenue, New York, New York 10036
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(Name and address of agent for service)
Registrant's telephone number, including area code: 212-762-4000
Date of fiscal year end: 7/31
Date of reporting period: 1/31/08
Item 1. Reports to Shareholders.
The Trust's semi-annual report transmitted to shareholders pursuant to Rule
30e-1 under the Investment Company Act of 1940 is as follows:
Welcome, Shareholder
In this report, you'll learn about how your investment in Van Kampen
Senior Income Trust performed during the semiannual period. The portfolio
management team will provide an overview of the market conditions and
discuss some of the factors that affected investment performance during
the reporting period. In addition, this report includes the trust's
financial statements and a list of trust investments as of January 31,
2008.
MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO
PASS. THERE IS NO ASSURANCE THAT THE TRUST WILL ACHIEVE ITS INVESTMENT
OBJECTIVE. TRUSTS ARE SUBJECT TO MARKET RISK, WHICH IS THE POSSIBILITY
THAT THE MARKET VALUES OF SECURITIES OWNED BY THE TRUST WILL DECLINE AND
THAT THE VALUE OF THE TRUST SHARES MAY THEREFORE BE LESS THAN WHAT YOU
PAID FOR THEM. ACCORDINGLY, YOU CAN LOSE MONEY INVESTING IN THIS TRUST.
AN INVESTMENT IN SENIOR LOANS IS SUBJECT TO CERTAIN RISKS SUCH AS LOAN
DEFAULTS AND ILLIQUIDITY DUE TO INSUFFICIENT COLLATERAL BACKING.
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NOT FDIC INSURED OFFER NO BANK GUARANTEE MAY LOSE VALUE
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NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY NOT A DEPOSIT
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Performance Summary as of 1/31/08
SENIOR INCOME TRUST
SYMBOL: VVR
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AVERAGE ANNUAL BASED ON BASED ON
TOTAL RETURNS NAV MARKET PRICE
Since Inception (6/23/98) 4.03% 3.48%
5-year 5.26 5.99
1-year -9.63 -17.00
6-month -7.68 -11.47
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PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF
FUTURE RESULTS, AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES
SHOWN. FOR THE MOST RECENT MONTH-END PERFORMANCE FIGURES, PLEASE VISIT
VANKAMPEN.COM OR SPEAK WITH YOUR FINANCIAL ADVISOR. INVESTMENT RETURNS AND
PRINCIPAL VALUE WILL FLUCTUATE AND TRUST SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THEIR ORIGINAL COST.
The NAV per share is determined by dividing the value of the Trust's portfolio
securities, cash and other assets, less all liabilities and preferred shares, by
the total number of common shares outstanding. The common share market price is
the price the market is willing to pay for shares of the trust at a given time.
Common share market price is influenced by a range of factors, including supply
and demand and market conditions. Total return assumes an investment at the
beginning of the period, reinvestment of all distributions for the period in
accordance with the trust's dividend reinvestment plan, and sale of all shares
at the end of the period.
1
Trust Report
FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2008
MARKET CONDITIONS
U.S. economic growth, as measured by gross domestic product (GDP), rose 4.9
percent in the third quarter of 2007, well above the 3.8 percent posted during
the second quarter. However, advance estimates at the end of the reporting
period show GDP expanded just 0.6 percent in the fourth quarter. The economic
slowdown translated into slower earnings growth for many corporate borrowers
within the senior loan market.
The six-month period under review was challenging for the senior loan market, as
it was for virtually all non-government bond sectors. The turmoil and
uncertainty that began in early summer persisted throughout the period as
dislocations stemming from the problems in the subprime mortgage arena permeated
the fixed income markets, leading to a significant contraction in credit and
liquidity. In an effort to spur the economy and ease the liquidity crunch, the
Federal Open Market Committee (the "Fed") lowered the target federal funds rate
a total of 2.25 percentage points during the reporting period, bringing the rate
to 3.00 percent as of the end of January. Although the Fed's moves did bring
some stability to the markets, it was relatively short-lived and riskier assets
continued to struggle as investors fled to high-quality securities.
The broad reassessment of risk pricing in the credit markets, coupled with the
significant decline in market liquidity, put considerable pressure on senior
loan prices. Although the market experienced a brief respite in September and
October, when loan values rose, a subsequent significant decline in demand and
rise in supply pushed loan values lower again. Demand for collateralized loan
obligations (CLOs) in particular, which had until recently accounted for up to
60 percent of purchases in the senior loan market, evaporated almost entirely in
the latter half of the year. At the same time, following the run up of prices in
October, a significant amount of new deals were launched. This technical
demand/supply imbalance in the market, coupled with the tightening of lending
standards, have in our view been the primary drivers of the volatility in the
senior loan market over the past several months. Increased selling by retail and
relative value investors has also pressured loan prices. Nonetheless, default
rates remain well below the historical average, though they have trended upward
slightly in recent weeks, and the overall fundamentals of the senior loan
market, in our opinion remain intact.
2
PERFORMANCE ANALYSIS
The Trust's return can be calculated based upon either the market price or the
net asset value (NAV) of its shares. NAV per share is determined by dividing the
value of the Trust's portfolio securities, cash and other assets, less all
liabilities and preferred shares, by the total number of common shares
outstanding, while market price reflects the supply and demand for the shares.
As a result, the two returns can differ, as they did during the reporting
period. For the six months ended January 31, 2008, the Trust returned -11.47%
percent on a market price basis and -7.68% percent on an NAV basis.
TOTAL RETURN FOR THE SIX-MONTH PERIOD ENDED JANUARY 31, 2008
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BASED ON
BASED ON NAV MARKET PRICE
-7.68% -11.47%
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Performance data quoted represents past performance, which is no guarantee of
future results, and current performance may be lower or higher than the figures
shown. Investment return, net asset value and common share market price will
fluctuate and Trust shares, when sold, may be worth more or less than their
original cost. See Performance Summary for additional performance information.
Although the past several months have certainly been challenging for investors,
we have not seen a meaningful decline in the credit quality of the portfolio and
we continue to see relatively strong earnings from the companies in which we
have invested. We continue to adhere to our research-intensive investment
process, employing a bottom-up asset selection process driven by thorough
analysis of individual company fundamentals, and have not relaxed our rigorous
credit standards. In fact, our team refused to participate in over 65 percent of
all the deals that were syndicated during 2006 and 2007, when a number of highly
leveraged, aggressively structured senior loans were syndicated. We believe this
has contributed to the Trust's very low default rate, which was at an all-time
low for the Trust at the end of 2007 and well below the industry average. We do
think that defaults in the senior loan market are likely to rise in the coming
months, but we believe the deals that we turned down are the ones most likely to
experience problems should the economy continue to decline.
We continued to position the portfolio defensively, generally avoiding sectors
or industries that we believe are vulnerable to cyclical economic downturns. For
example, we remain cautious about auto and airline industries because of their
susceptibility to high fuel prices. Given the decline in the residential housing
market, we have also generally avoided investments in the building and real
estate sectors. We have been very selective regarding investments in the health
care industry, particularly those assets with inherent reimbursement and
regulatory risks, but have found pockets of attractive opportunities in sub-
sectors that are not exposed to these risks. In general, we made relatively few
changes to the portfolio, and as of the end of the reporting period, the Trust's
3
largest sector weightings were printing and publishing, healthcare, and
beverage, food and tobacco.
The Trust remained fully invested in senior secured loans, and used a modest
amount of leverage which may allow us to enhance the Trust's yield while keeping
credit standards high. Leverage involves borrowing at a floating short-term rate
and reinvesting the proceeds at a higher rate. Unlike other fixed-income asset
classes, using leverage in conjunction with senior loans does not involve the
same degree of risk from rising short-term interest rates since the income from
senior loans adjusts to changes in interest rates, as do the rates which
determine the Trust's borrowing costs. (Similarly, should short-term rates fall,
borrowing costs would also decline. Of course, the fund's portfolio, though,
also will generate less income when interest rates decline.) We might reduce
leverage in periods of weaker credit quality conditions to prevent magnifying
erosion of the Trust's net asset value.
While we believe this portfolio structure (fully invested, modest leverage) adds
value for shareholders over a full cycle, it has been a drag on performance in
the short term. Because the recent market volatility has been driven by
technical factors, rather than a change in underlying fundamentals, we have not
altered the use of leverage in the Trust as we believe it is very difficult to
"time" technical events in the market. The use of leverage may, though, increase
the Fund's volatility. Therefore, portfolio construction continues to be driven
by fundamental credit research.
Although it has been a very difficult period, it has created certain
opportunities. Loans coming to market today are offering better spreads and
stronger credit structures than we have seen in the past few years. These more
investor-friendly terms may lead to attractive risk/reward characteristics for
investors going forward. In addition, merger and acquisition activity continues,
which has historically meant greater opportunities for senior secured lenders.
The emergence of a large number of non-public funds seeking to acquire portions
of loans currently held by banks is encouraging as well, as it may serve to
reduce the supply overhang and therefore relieve some of the downward pressure
on prices in the market. We will continue to focus on maintaining a high
quality, portfolio of issuers with stable cash flows and strong management
teams.
The Trust's procedure for reinvesting all dividends and distributions in common
shares is through purchases in the open market. This method helps support the
market value of the Trust's shares. In addition, we would like to remind you
that the Trustees have approved a procedure whereby the Trust may, when
appropriate, purchase shares in the open market or in privately negotiated
transactions at a price not above market value or net asset value, whichever is
lower at the time of purchase.
There is no guarantee that any sectors mentioned will continue to perform as
discussed herein or that securities in such sectors will be held by the Trust in
the future.
4
SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION AS OF 1/31/08
Printing & Publishing 9.9%
Healthcare 9.3
Beverage, Food & Tobacco 6.1
Entertainment & Leisure 5.2
Hotels, Motels, Inns & Gaming 4.1
Chemicals, Plastics & Rubber 4.0
Finance 3.9
Business Equipment & Services 3.6
Broadcasting--Cable 3.3
Buildings & Real Estate 3.3
Automotive 3.0
Containers, Packaging & Glass 3.0
Electronics 2.6
Broadcasting--Television 2.4
Retail--Stores 2.4
Insurance 2.3
Non-Durable Consumer Products 2.3
Aerospace/Defense 2.3
Construction Material 2.3
Restaurants & Food Service 2.2
Utilities 2.2
Medical Products & Services 2.0
Broadcasting--Radio 1.9
Education & Child Care 1.5
Paper & Forest Products 1.4
Ecological 1.1
Telecommunications--Local Exchange Carriers 1.1
Textiles & Leather 1.0
Health & Beauty 0.9
Diversified Manufacturing 0.9
Home & Office Furnishings, Housewares & Durable Consumer
Products 0.9
Personal & Miscellaneous Services 0.9
Natural Resources 0.8
Broadcasting--Diversified 0.7
Retail--Specialty 0.6
Banking 0.6
Machinery 0.6
Telecommunications--Wireless 0.5
Transportation--Rail Manufacturing 0.4
Grocery 0.3
Telecommunications--Long Distance 0.3
Mining, Steel, Iron & Non-Precious Metals 0.3
Transportation--Cargo 0.3
Pharmaceuticals 0.2
Durable Consumer Products 0.2
Transportation--Personal 0.1
Retail--Oil & Gas 0.1
Farming & Agriculture 0.1
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Total Long-Term Investments 99.4
Short-Term Investments 0.6
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Total Investments 100.0%
Subject to change daily. Provided for informational purposes only and should not
be deemed as a recommendation to buy or sell the securities mentioned or
securities in the sectors shown above. Summary of investments by industry
classification percentages are as a percentage of total investments. Securities
are classified by sectors that represent broad groupings of related industries.
Van Kampen is a wholly owned subsidiary of a global securities firm which is
engaged in a wide range of financial services including, for example, securities
trading and brokerage activities, investment banking, research and analysis,
financing and financial advisory services.
5
FOR MORE INFORMATION ABOUT PORTFOLIO HOLDINGS
Each Van Kampen trust provides a complete schedule of portfolio holdings
in its semiannual and annual reports within 60 days of the end of the
trust's second and fourth fiscal quarters. The semiannual reports and the
annual reports are filed electronically with the Securities and Exchange
Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Van Kampen
also delivers the semiannual and annual reports to fund shareholders, and
makes these reports available on its public Web site, www.vankampen.com.
In addition to the semiannual and annual reports that Van Kampen delivers
to shareholders and makes available through the Van Kampen public Web
site, each fund files a complete schedule of portfolio holdings with the
SEC for the trust's first and third fiscal quarters on Form N-Q. Van
Kampen does not deliver the reports for the first and third fiscal
quarters to shareholders, nor are the reports posted to the Van Kampen
public Web site. You may, however, obtain the Form N-Q filings (as well
as the Form N-CSR and N-CSRS filings) by accessing the SEC's Web site,
http://www.sec.gov. You may also review and copy them at the SEC's Public
Reference Room in Washington, D.C. Information on the operation of the
SEC's Public Reference Room may be obtained by calling the SEC at (800)
SEC-0330. You can also request copies of these materials, upon payment of
a duplicating fee, by electronic request at the SEC's e-mail address
(publicinfo@sec.gov) or by writing the Public Reference section of the
SEC, Washington, DC 20549-0102.
You may obtain copies of a trust's fiscal quarter filings by contacting
Van Kampen Client Relations at (800) 341-2929.
PROXY VOTING POLICY AND PROCEDURES AND PROXY VOTING RECORD
You may obtain a copy of the Trust's Proxy Voting Policy and Procedures
without charge, upon request, by calling toll free (800) 341-2929 or by
visiting our Web site at www.vankampen.com. It is also available on the
Securities and Exchange Commission's Web site at http://www.sec.gov.
You may obtain information regarding how the Trust voted proxies relating
to portfolio securities during the most recent twelve-month period ended
June 30 without charge by visiting our Web site at www.vankampen.com.
This information is also available on the Securities and Exchange
Commission's Web site at http://www.sec.gov.
6
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED)
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
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VARIABLE RATE** SENIOR LOAN INTERESTS 177.3%
AEROSPACE/DEFENSE 4.2%
$ 9,685 Alion Science and
Technology Corp., Term
Loan...................... 7.33% 08/02/09 $ 8,958,407
2,830 Apptis, Inc., Term Loan... 6.53 to 8.10 12/20/12 2,546,799
2,181 Atlantic Marine Services,
Term Loan................. 7.94 to 8.63 03/22/14 2,169,983
3,341 DeCrane Aircraft Holdings,
Inc., Term Loan........... 7.40 02/21/13 3,224,377
4,410 DynCorp International,
LLC, Term Loan............ 6.88 02/11/11 4,159,901
703 Hawker Beechraft
Acquisition Co., Revolving
Credit Agreement.......... 6.93 03/26/14 648,404
8,243 Hawker Beechraft
Acquisition Co., Term
Loan...................... 6.83 03/26/14 7,605,488
8,568 IAP Worldwide Services,
Inc., Term Loan........... 11.13 to 16.63 12/30/12 to 06/30/13 7,358,859
4,896 ILC Industries, Inc., Term
Loan...................... 7.09 02/24/12 4,553,280
2,691 Primus International,
Inc., Term Loan........... 7.04 06/07/12 2,556,205
3,667 Sequa Corp., Term Loan.... 8.08 12/03/14 3,504,721
1,092 Tri-Star Electronics
International, Term
Loan...................... 7.83 to 8.31 02/02/13 1,053,539
4,714 Vangent, Inc., Term
Loan...................... 7.27 02/14/13 4,219,366
625 Wesco Aircraft Hardware
Corp., Term Loan.......... 10.58 03/28/14 610,938
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53,170,267
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AUTOMOTIVE 5.4%
3,661 Accuride Corp., Term Loan
(a)....................... 7.56 01/31/12 3,530,705
1,975 Acument Global
Technologies, Inc., Term
Loan...................... 8.33 08/11/13 1,896,000
19,058 Ford Motor Co., Term
Loan...................... 8.00 12/15/13 16,735,953
3,292 Heartland Automotive
Holdings, Inc., Term Loan
(b) (c)................... 10.75 02/27/12 2,304,240
9,023 MetoKote Corp., Term
Loan...................... 6.25 to 7.84 11/27/11 8,210,965
2,180 Navistar International
Corp., Revolving Credit
Agreement................. 6.50 to 8.32 01/19/12 1,980,166
See Notes to Financial Statements 7
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
AUTOMOTIVE (CONTINUED)
$ 5,995 Navistar International
Corp., Term Loan.......... 6.50% 01/19/12 $ 5,445,456
8,866 Oshkosh Truck Corp., Term
Loan...................... 6.90 12/06/13 8,235,645
611 Performance Transportation
Services, Inc., Revolving
Credit Agreement (c)...... 10.32 01/26/12 565,626
420 Performance Transportation
Services, Inc., Term Loan
(c)....................... 10.75 01/26/12 388,411
6,965 Polypore, Inc., Term
Loan...................... 5.52 07/03/14 6,564,513
1,455 Precision Partners, Inc.,
Term Loan................. 8.33 10/27/13 1,323,778
7,392 Sensata Technologies,
Inc., Term Loan........... 5.06 04/27/13 6,663,769
4,878 Veyance Technologies,
Inc., Term Loan........... 5.78 to 7.46 07/31/14 4,414,766
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68,259,993
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BANKING 1.0%
13,523 Dollar Financial Corp.,
Term Loan................. 7.58 to 7.95 10/30/12 13,049,989
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BEVERAGE, FOOD & TOBACCO 10.9%
9,308 Advantage Sales &
Marketing, LLC, Term
Loan...................... 5.28 to 6.83 03/29/13 8,656,079
3,159 BE Foods Investments,
Inc., Term Loan (d)....... 9.70 07/11/12 2,890,100
7,088 Birds Eye Foods, Inc.,
Term Loan................. 6.58 03/22/13 6,662,837
8,482 Coleman Natural Foods,
LLC, Term Loan............ 9.50 08/22/12 7,612,371
3,541 Coleman Natural Foods,
LLC, Term Loan (d)........ 13.50 08/22/13 2,992,509
7,450 Culligan International
Co., Term Loan............ 5.56 to 7.08 11/24/12 6,059,318
4,938 DCI Cheese Co., Term
Loan...................... 8.08 08/07/13 4,912,812
24,916 Dole Food Co., Inc., Term
Loan...................... 6.00 to 7.13 04/12/13 22,760,582
10,960 DS Waters of America,
Inc., Term Loan........... 5.52 10/25/12 10,412,209
4,950 DSW Holdings, Inc., Term
Loan...................... 8.60 03/07/12 4,653,000
10,009 Farley's & Sathers Candy
Co., Inc., Term Loan...... 8.43 to 12.91 06/15/10 to 03/24/11 9,871,180
8 See Notes to Financial Statements
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
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BEVERAGE, FOOD & TOBACCO (CONTINUED)
$ 5,918 FSB Holdings, Inc., Term
Loan...................... 7.00 to 10.94% 09/29/13 to 03/29/14 $ 5,577,412
1,075 Mafco Worldwide Corp.,
Term Loan................. 5.99 to 6.96 12/08/11 1,045,128
6,500 Michelina's, Inc., Term
Loan...................... 6.31 to 7.63 04/02/11 6,354,075
6,243 OSI Group, LLC, Term
Loan...................... 6.84 09/02/11 5,883,766
6,874 PBM Products, LLC, Term
Loan...................... 5.78 09/29/12 6,221,155
8,608 Pierre Foods, Inc., Term
Loan...................... 8.88 06/30/10 8,027,154
19,556 Pinnacle Foods Finance,
LLC, Term Loan............ 7.48 to 7.59 04/02/14 17,698,264
1,093 Smart Balance, Inc., Term
Loan...................... 8.09 05/18/14 1,052,188
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139,342,139
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BROADCASTING--CABLE 5.9%
4,206 Cequel Communications,
LLC, Term Loan............ 6.65 to 7.00 11/05/13 3,677,954
51,500 Charter Communications
Operating, LLC, Term
Loan...................... 5.26 to 7.34 03/06/14 to 09/06/14 44,672,015
748 CW Media Holdings, Inc.,
(Canada), Term Loan....... 8.08 02/15/15 725,681
3,303 Discovery Communications
Holding, LLC, Term Loan... 6.83 05/14/14 3,145,938
6,418 Knology, Inc., Term
Loan...................... 6.95 06/30/12 5,872,242
11,348 MCC Iowa, LLC, Term Loan.. 4.88 to 5.88 03/31/10 to 01/31/15 10,165,689
2,376 Mediacom Illinois, LLC,
Term Loan................. 5.07 to 5.74 01/31/15 2,118,884
4,975 RCN Corp., Term Loan...... 7.13 05/25/14 4,617,422
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74,995,825
--------------
BROADCASTING--DIVERSIFIED 1.3%
8,700 Alpha Topco, Ltd., (United
Kingdom), Term Loan (a)... 7.09 to 8.22 12/31/13 to 06/30/14 8,082,656
4,909 Cumulus Media, Inc., Term
Loan...................... 5.02 to 6.07 06/11/14 4,417,800
3,628 NEP II, Inc., Term Loan... 7.11 02/16/14 3,431,103
--------------
15,931,559
--------------
BROADCASTING--RADIO 3.5%
5,000 Citadel Broadcasting
Corp., Term Loan.......... 4.91 to 6.46 06/12/14 4,293,750
6,816 CMP KC, LLC, Term Loan.... 8.38 to 8.56 05/03/11 6,236,471
See Notes to Financial Statements 9
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
BROADCASTING--RADIO (CONTINUED)
$ 12,250 CMP Susquehanna Corp.,
Term Loan................. 5.30 to 6.44% 05/05/13 $ 10,825,730
4,622 Emmis Operating Co., Term
Loan...................... 6.84 to 6.85 11/01/13 4,209,060
1,768 LBI Media, Inc., Term
Loan...................... 4.77 03/31/12 1,618,177
4,923 Multicultural Radio
Broadcasting, Inc., Term
Loan...................... 7.90 to 10.90 12/18/12 to 06/18/13 4,848,938
5,128 NextMedia Operating, Inc.,
Term Loan................. 5.99 to 7.77 11/15/12 to 11/15/13 4,737,091
2,723 Regent Broadcasting, LLC,
Term Loan................. 7.09 11/21/13 2,423,025
5,382 Spanish Broadcasting
System, Inc., Term Loan... 6.58 06/11/12 4,897,188
--------------
44,089,430
--------------
BROADCASTING--TELEVISION 4.3%
1,975 Barrington Broadcasting,
LLC, Term Loan............ 7.08 to 7.13 08/12/13 1,817,000
4,156 NV Broadcasting, LLC, Term
Loan...................... 8.13 11/01/13 4,062,735
4,838 Sunshine Acquisition,
Ltd., Term Loan........... 6.60 03/20/12 4,377,941
53,322 Univision Communications,
Inc., Term Loan........... 5.49 to 5.77 03/29/09 to 09/29/14 44,605,172
--------------
54,862,848
--------------
BUILDINGS & REAL ESTATE 5.8%
2,435 California Coastal
Communities, Inc., Term
Loan...................... 7.20 09/15/11 2,386,496
2,500 El Ad IDB Las Vegas, LLC,
Term Loan................. 7.16 08/10/08 2,350,000
1,500 Forestar Real Estate
Group, Inc., Term Loan.... 8.32 12/01/10 1,485,000
14,846 Ginn LA CS Borrower, LLC,
Term Loan................. 8.23 to 8.33 06/08/11 12,062,143
6,000 Ginn LA CS Borrower, LLC,
Term Loan (d)............. 12.33 06/08/12 3,619,998
5,351 Kuilima Resort Co., Term
Loan (b).................. 11.50 09/30/11 1,551,805
5,200 Kyle Acquisition Group,
LLC, Term Loan............ 6.81 07/20/09 to 07/20/11 3,783,000
602 Lake at Las Vegas Joint
Venture, LLC, Revolving
Credit Agreement (d)...... 15.10 06/20/12 281,867
10 See Notes to Financial Statements
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
BUILDINGS & REAL ESTATE (CONTINUED)
$ 5,548 Lake at Las Vegas Joint
Venture, LLC, Term Loan
(d)....................... 11.00 to 15.30% 03/17/08 to 06/20/12 $ 3,130,163
3,928 Landsource Communities
Development, LLC, Term
Loan...................... 9.75 to 9.77 02/27/13 3,066,465
4,800 LNR Property Corp., Term
Loan...................... 7.63 07/12/11 4,440,000
1,351 London Arena & Waterfront
Finance, LLC, (United
Kingdom), Term Loan....... 7.63 03/08/12 1,304,188
4,214 NLV Holdings, LLC, Term
Loan...................... 7.27 to 11.52 05/09/11 to 05/30/12 2,021,131
7,462 Realogy Corp., Term
Loan...................... 7.45 to 7.51 10/10/13 6,291,820
3,555 Shea Capital I, LLC, Term
Loan...................... 6.83 10/27/11 2,888,438
1,546 Shea Mountain House, LLC,
Term Loan................. 5.27 05/11/11 1,252,325
3,872 South Edge, LLC, Term
Loan...................... 5.06 to 5.31 10/31/08 to 10/31/09 3,289,953
540 Standard Pacific Corp.,
Term Loan................. 6.66 05/05/13 390,150
5,946 Tamarack Resort, LLC, Term
Loan...................... 8.18 to 10.25 05/19/11 5,202,750
10,125 WCI Communities, Inc, Term
Loan...................... 9.66 12/23/10 8,964,847
5,287 Yellowstone Development,
LLC, Term Loan............ 5.65 09/30/10 4,818,020
--------------
74,580,559
--------------
BUSINESS EQUIPMENT & SERVICES 6.5%
9,246 Affiliated Computer
Services, Inc., Term Loan
(a)....................... 5.28 to 6.41 03/20/13 8,874,452
2,128 AlixPartners, LLP, Term
Loan...................... 6.38 10/12/13 2,060,338
1,646 Audio Visual Services
Corp., Term Loan.......... 5.52 02/28/14 1,530,664
1,241 BakerCorp, Term Loan...... 5.52 to 7.19 05/08/14 1,191,000
5,738 Cellnet Group, Inc., Term
Loan...................... 6.86 to 7.11 07/22/11 5,382,688
2,645 Contec, LLC, Term Loan.... 6.75 06/15/12 2,473,190
7,630 Crawford & Co., Term
Loan...................... 7.58 10/30/13 7,133,793
5,483 Edwards (Cayman Islands
II), Ltd., Term Loan...... 7.08 to 10.83 05/31/14 to 11/30/14 4,367,888
4,156 First American Payment
Systems, LP, Term Loan.... 6.56 10/06/13 4,051,856
See Notes to Financial Statements 11
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
BUSINESS EQUIPMENT & SERVICES (CONTINUED)
$ 4,975 HydroChem Industrial
Services, Inc., Term
Loan...................... 7.12 to 7.25% 07/12/13 $ 4,900,375
2,315 Information Resources,
Inc., Term Loan........... 5.04 to 6.80 05/16/14 2,095,439
3,365 InfoUSA, Inc., Term
Loan...................... 6.83 02/14/12 3,280,885
2,596 KAR Holdings, Inc., Term
Loan...................... 7.08 10/20/13 2,279,076
3,403 Katun Corp., Term Loan.... 9.59 06/30/09 3,352,176
8,168 NCO Financial Systems,
Term Loan................. 7.83 to 8.00 05/15/13 7,725,091
4,975 RGIS Services, LLC, Term
Loan...................... 5.74 to 5.77 04/30/14 4,353,125
1,990 SMG Holdings, Inc., Term
Loan...................... 7.73 to 8.31 07/27/14 1,930,300
1,179 Valassis Communications,
Inc., Term Loan........... 6.58 03/02/14 1,055,588
15,544 VNU, Inc., Term Loan...... 6.66 to 7.15 08/09/13 14,408,739
--------------
82,446,663
--------------
CHEMICALS, PLASTICS & RUBBER 7.3%
1,092 Arizona Chemical Co., Term
Loan...................... 7.08 02/28/13 938,905
2,764 Becker-Underwood, Inc.,
Term Loan................. 8.34 to 8.59 03/31/10 to 09/30/11 2,722,858
2,488 Bond US Holdings, Inc.,
Term Loan................. 7.65 07/10/14 2,226,313
11,400 Brenntag Holdings GmbH &
Co. KG, (Germany), Term
Loan...................... 5.79 to 7.79 01/17/14 to 07/17/15 10,584,003
1,000 Cristal Inorganic
Chemicals US, Inc., Term
Loan...................... 7.08 05/15/14 895,000
7,546 Ferro Corp., Term Loan.... 6.73 to 6.83 06/06/12 7,319,519
4,140 Fibervisions Delaware
Corp., Term Loan.......... 9.08 03/31/13 3,498,501
2,435 Foamex LP, Term Loan...... 6.27 to 6.51 02/12/13 2,126,823
3,182 Georgia Gulf Corp., Term
Loan...................... 5.77 to 7.04 10/03/13 2,964,797
14,219 Hexion Specialty
Chemicals, Inc., Term
Loan...................... 7.00 to 7.13 05/05/13 13,391,819
5 Huntsman International,
LLC, Term Loan............ 5.04 04/19/14 4,602
8,562 Ineos Holdings, Ltd.,
(United Kingdom), Term
Loan...................... 7.36 to 7.86 12/16/13 to 12/23/14 7,937,915
7,463 ISP Chemco, Inc., Term
Loan...................... 6.44 to 6.94 06/04/14 6,963,445
12 See Notes to Financial Statements
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
CHEMICALS, PLASTICS & RUBBER (CONTINUED)
$ 13,187 Kraton Polymers, LLC, Term
Loan...................... 6.75% 05/12/13 $ 12,247,379
3,203 McDermid, Inc., Term
Loan...................... 6.83 04/12/14 2,971,119
2,985 OMNOVA Solutions, Inc.,
Term Loan................. 5.77 to 7.58 05/22/14 2,686,500
5,000 Univar, Inc., Term Loan... 7.89 10/11/14 4,862,500
4,497 Valley National Gases,
Inc., Term Loan........... 5.52 to 7.08 02/28/14 4,159,677
7,950 Wellman, Inc., Term
Loan...................... 8.91 to 11.66 02/10/09 to 02/10/10 4,232,002
--------------
92,733,677
--------------
CONSTRUCTION MATERIAL 3.3%
11,760 AXIA, Inc., Term Loan..... 10.00 12/21/12 10,584,000
4,345 Beacon Sales Acquisition,
Inc., Term Loan........... 6.73 to 7.08 09/30/13 3,953,950
16,363 Building Materials Corp.
of America, Term Loan..... 6.69 to 9.56 03/15/14 to 09/15/14 12,934,329
5,382 Building Materials
Holdings Corp., Term
Loan...................... 8.83 11/10/13 4,480,411
4,861 Contech Construction
Products, Inc., Term
Loan...................... 5.28 to 6.54 01/31/13 4,599,680
1,500 Custom Building Products,
Inc., Term Loan........... 9.72 04/29/12 1,350,000
1,179 Nortek, Inc., Term Loan... 5.53 to 7.25 08/27/11 1,090,279
2,993 Panolam Industries
International, Inc.
(Canada), Term Loan....... 7.59 09/30/12 2,619,148
794 Sensus Metering Systems,
Inc., Term Loan........... 5.93 to 7.04 12/17/10 758,668
--------------
42,370,465
--------------
CONTAINERS, PACKAGING & GLASS 5.3%
2,364 Altivity Packaging, LLC,
Term Loan (a)............. 5.65 to 7.08 06/30/13 2,301,522
2,494 Berlin Packaging, LLC,
Term Loan................. 8.00 to 8.35 08/17/14 2,456,344
5,409 Berry Plastics Group,
Inc., Term Loan (d)....... 7.16 04/03/15 4,689,376
865 Captive Plastics, Inc.,
Term Loan................. 6.02 08/18/11 843,503
11,492 Consolidated Container
Co., LLC, Term Loan....... 5.50 to 10.58 03/28/14 to 09/28/14 8,563,669
9,271 Graham Packaging Co., Term
Loan...................... 6.81 to 7.75 10/07/11 8,620,722
6,223 Graphic Packaging
International Corp., Term
Loan...................... 5.33 to 6.73 05/16/14 5,729,247
See Notes to Financial Statements 13
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
CONTAINERS, PACKAGING & GLASS (CONTINUED)
$ 792 Kranson Industries, Inc.,
Revolving Credit
Agreement................. 6.69 to 7.25% 07/31/13 $ 774,208
13,481 Kranson Industries, Inc.,
Term Loan................. 7.09 07/31/13 12,941,465
5,915 Packaging Dynamics, Term
Loan...................... 6.83 06/09/13 5,589,627
4,045 Pertus Sechzehnte GmbH,
(Germany), Term Loan...... 5.65 to 5.90 06/13/15 to 06/13/16 2,952,832
4,602 Smurfit-Stone Container
Corp., Revolving Credit
Agreement................. 5.69 to 7.25 11/01/09 4,463,940
623 Solo Cup, Inc., Term
Loan...................... 8.13 to 8.54 02/27/11 604,481
5,788 Tegrant Holding Corp.,
Term Loan................. 7.60 to 10.35 03/08/14 to 03/08/15 4,766,562
2,563 Unifrax Corp., Term
Loan...................... 5.56 05/02/13 2,441,076
--------------
67,738,574
--------------
DIVERSIFIED MANUFACTURING 1.6%
2,675 Arnold Magnectic
Technologies Corp., Term
Loan...................... 8.25 to 9.90 03/06/11 to 03/06/12 2,664,332
4,500 Euramax International,
Inc., Term Loan........... 12.65 06/29/13 3,366,000
3,483 Jason, Inc., Term Loan.... 6.52 04/30/10 3,308,375
6,224 MW Industries, Inc., Term
Loan...................... 7.83 11/01/13 6,254,948
2,732 Wire Rope Corp. of
America, Inc., Term
Loan...................... 7.08 02/08/14 2,581,487
1,995 X-Rite, Inc., Term Loan... 8.38 to 8.69 10/24/12 1,997,494
--------------
20,172,636
--------------
DURABLE CONSUMER PRODUCTS 0.3%
4,073 Brown Jordan
International, Inc., Term
Loan...................... 9.00 to 9.28 04/30/12 4,014,882
--------------
ECOLOGICAL 2.0%
1,343 Big Dumpster Acquisition,
Inc., Term Loan........... 7.08 02/05/13 1,218,370
3,954 Casella Waste Systems,
Inc., Term Loan........... 5.71 to 6.63 04/28/10 3,637,417
4,503 Energy Solutions, LLC,
Term Loan................. 6.24 to 7.10 06/07/11 to 06/07/13 4,143,138
1,751 Environmental Systems
Products Holdings, Term
Loan...................... 10.13 to 11.70 09/12/12 1,676,319
4,317 LVI Services, Inc., Term
Loan...................... 7.99 to 9.58 11/16/11 4,133,479
14 See Notes to Financial Statements
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
ECOLOGICAL (CONTINUED)
$ 3,836 Synagro Technologies,
Inc., Term Loan........... 6.83 to 9.64% 04/02/14 to 10/02/14 $ 3,356,519
7,919 Waste Services, Inc., Term
Loan...................... 7.40 03/31/11 7,444,146
--------------
25,609,388
--------------
EDUCATION & CHILD CARE 2.7%
14,963 Cengage Learning Holdings
II, LP, Term Loan......... 6.03 to 7.58 07/05/14 13,507,816
3,134 Educate, Inc., Term
Loan...................... 7.08 to 10.08 06/14/13 to 06/14/14 2,957,871
6,203 Education Management, LLC,
Term Loan................. 6.63 06/01/13 5,749,376
12,469 Nelson Education, Ltd.,
(Canada), Term Loan....... 7.33 07/05/14 11,541,387
--------------
33,756,450
--------------
ELECTRONICS 4.6%
4,666 AMI Semiconductor, Inc.,
Term Loan................. 6.85 04/01/12 4,642,895
13,118 Dealer Computer Services,
Inc., Term Loan........... 6.84 to 10.34 10/26/12 to 10/26/13 12,200,950
1,500 Deutsche Connector Group,
(France), Term Loan....... 7.40 to 7.65 06/22/14 to 06/22/15 1,395,625
990 H3C Holdings, Ltd.,
(Cayman Islands), Term
Loan...................... 8.14 09/28/12 950,400
4,938 Infor Enterprise Solutions
Holdings, Inc., Term
Loan...................... 8.58 07/28/12 4,493,125
1,382 Intergraph Corp., Term
Loan...................... 5.27 to 7.08 05/28/14 1,326,411
7,409 Kronos, Inc., Term Loan... 7.08 06/11/14 6,612,469
2,758 Network Solutions, LLC,
Term Loan................. 5.78 to 7.33 03/07/14 2,468,601
2,475 Nuance Communications,
Inc., Term Loan........... 7.35 03/31/13 2,343,337
9,945 Open Solutions, Inc., Term
Loan...................... 5.85 01/23/14 9,186,276
3,902 Open Text Corp., Term
Loan...................... 5.52 10/02/13 3,811,908
591 Stratus Technologies,
Inc., Term Loan........... 8.58 03/29/11 535,840
2,599 Sungard Data Systems,
Inc., Term Loan........... 6.90 02/28/14 2,415,566
7,038 Verint Systems, Inc., Term
Loan...................... 7.38 05/25/14 6,299,423
--------------
58,682,826
--------------
See Notes to Financial Statements 15
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
ENTERTAINMENT & LEISURE 9.4%
$ 7,382 Bombardier Capital, Inc.,
Term Loan................. 6.43% 06/28/13 $ 7,007,015
4,092 Cedar Fair, LP, Term
Loan...................... 5.27 to 7.00 08/30/12 3,837,876
2,410 Cinemark USA, Inc., Term
Loan...................... 6.07 to 6.98 10/05/13 2,210,861
8,771 Fender Musical Instruments
Corp., Term Loan.......... 6.97 to 7.16 06/09/14 7,981,307
2,723 Gibson Guitar Corp., Term
Loan...................... 7.33 12/29/13 2,668,050
6,000 Hicks Sports Group, LLC,
Term Loan................. 5.75 12/22/10 5,730,000
288 Metro-Goldwyn-Mayer
Studios, Inc., Revolving
Credit Agreement.......... 7.38 04/08/10 268,089
48,503 Metro-Goldwyn-Mayer
Studios, Inc., Term
Loan...................... 8.11 04/08/12 43,344,416
4,900 Mets, LP, Term Loan....... 5.38 07/25/10 4,802,000
5,699 Panavision, Inc., Term
Loan...................... 6.74 to 8.44 03/30/11 5,043,728
2,067 Playcore Holdings, Inc.,
Term Loan................. 7.33 to 7.50 02/21/14 1,984,085
20,255 Regal Cinemas, Inc., Term
Loan...................... 6.33 10/27/13 18,804,191
3,900 Tigers Ballpark, LLC, Term
Loan...................... 6.94 08/15/10 3,900,000
750 True Temper Sports, Inc.,
Revolving Credit
Agreement................. 8.12 03/15/09 734,758
12,478 True Temper Sports, Inc.,
Term Loan................. 8.10 to 10.51 03/15/11 to 06/30/11 11,287,172
--------------
119,603,548
--------------
FARMING & AGRICULTURE 0.2%
3,000 Wm. Bolthouse Farms, Inc.,
Term Loan................. 10.33 12/16/13 2,775,000
--------------
FINANCE 6.9%
3,530 DCS Business Services,
Inc., Term Loan........... 9.02 to 11.77 02/04/11 to 08/04/11 3,066,294
15,960 First Data Corp., Term
Loan...................... 7.58 to 7.63 09/24/14 14,464,377
2,804 Grosvenor Capital
Management Holdings, LLP,
Term Loan................. 6.57 to 7.12 12/05/13 2,677,385
6,197 iPayment, Inc., Term
Loan...................... 5.28 to 6.83 05/10/13 5,453,225
16 See Notes to Financial Statements
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
FINANCE (CONTINUED)
$ 11,567 LPL Holdings, Inc., Term
Loan...................... 6.83% 06/28/13 $ 10,916,278
3,500 Metavante Corp., Term Loan
B......................... 6.66 11/01/14 3,336,666
1,799 Munder Capital Management,
Term Loan................. 5.24 to 5.27 12/29/12 1,736,457
10,505 National Processing Co.
Group, Term Loan.......... 7.57 to 11.19 09/29/12 to 09/29/14 9,523,800
3,333 Nuveen Investments, Inc.,
Term Loan................. 7.83 11/13/14 3,235,677
8,365 Outsourcing Solutions,
Inc., Term Loan........... 9.50 09/30/10 8,281,344
10,391 Oxford Acquisition III,
Ltd., (United Kingdom),
Term Loan................. 5.64 05/11/14 9,334,740
4,218 Riskmetrics Group
Holdings, LLC, Term
Loan...................... 7.08 01/11/14 4,070,491
7,488 RJO Holdings Corp., Term
Loan...................... 6.28 to 10.03 07/12/14 to 07/12/15 6,002,531
7,316 Transfirst Holdings, Inc.,
Term Loan................. 7.58 to 10.83 06/15/14 to 06/15/15 6,411,119
--------------
88,510,384
--------------
GROCERY 0.6%
8,096 Roundy's Supermarkets,
Inc., Term Loan........... 7.91 11/03/11 7,797,865
--------------
HEALTH & BEAUTY 1.7%
7,647 American Safety Razor Co.,
Term Loan................. 5.75 to 11.69 07/31/13 to 01/30/14 7,502,075
1,421 Bare Escentuals Beauty,
Inc., Term Loan........... 6.57 02/18/12 1,364,495
6,619 Marietta Intermediate
Holdings Corp., Term Loan
(d)....................... 9.03 to 14.65 12/17/10 to 12/17/11 5,320,671
4,264 Philosophy, Inc., Term
Loan...................... 5.26 to 5.29 03/16/14 3,709,599
3,507 Prestige Brands Holdings,
Inc., Term Loan........... 6.97 to 7.09 04/06/11 3,408,732
--------------
21,305,572
--------------
HEALTHCARE 16.7%
8,582 American Medical Systems,
Inc., Term Loan........... 7.06 to 7.56 07/20/12 7,809,181
19,650 Capella Healthcare, Inc.,
Term Loan................. 7.34 to 10.34 11/30/12 to 11/30/13 19,354,918
7,463 Cardinal Health, Inc.,
Term Loan................. 7.08 04/10/14 6,660,281
See Notes to Financial Statements 17
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
HEALTHCARE (CONTINUED)
$ 214 Cardinal Health, Inc.,
Revolving Credit
Agreement................. 6.27% 04/10/14 $ 185,893
23,067 Community Health Systems,
Inc., Term Loan........... 7.33 07/25/14 21,345,404
2,239 Concentra, Inc., Term
Loan...................... 7.08 06/25/14 2,093,231
5,374 CRC Health Group, Inc.,
Term Loan................. 7.09 to 7.45 02/06/13 5,199,344
8,869 DSI Renal, Inc., Term
Loan...................... 7.13 03/31/13 7,987,432
1,045 Emdeon Business Services,
LLC, Term Loan............ 6.83 to 7.20 11/16/13 995,640
1,046 Genoa Healthcare Group,
LLC, Term Loan............ 8.00 to 8.11 08/10/12 1,006,666
545 Golden Living, Term
Loan...................... 6.02 03/14/11 523,132
8,210 Harlan Sprague Dawley,
Inc., Term Loan........... 6.82 to 7.50 07/11/14 7,923,089
33,969 HCA, Inc., Term Loan...... 6.83 to 7.08 11/17/12 to 11/17/13 31,441,511
13,994 Health Management
Associates, Inc., Term
Loan...................... 5.02 to 6.58 02/28/14 12,348,176
4,042 HealthCare Partners, LLC,
Term Loan................. 6.58 10/31/13 3,738,586
5,597 Iasis Healthcare, LLC,
Term Loan................. 5.24 to 7.15 03/15/14 5,116,203
10,945 Inverness Medical
Innovations, Inc., Term
Loan...................... 6.84 06/26/14 10,124,125
11,773 Lifepoint Hospitals, Inc.,
Term Loan................. 6.72 04/15/12 11,022,373
7,500 Manor Care, Inc., Term
Loan...................... 6.04 11/09/14 7,012,500
807 Matria Healthcare, Inc.,
Term Loan................. 6.83 to 7.00 01/19/12 786,347
24,943 Multiplan, Inc., Term
Loan...................... 5.77 04/12/13 23,882,601
1,310 Select Medical Corp.,
Revolving Credit
Agreement................. 6.94 to 7.65 02/24/11 1,231,400
2,956 Sterigenics International,
Inc., Term Loan........... 7.25 to 7.76 11/21/13 2,763,761
2,433 Sun Healthcare Group,
Inc., Term Loan........... 5.38 to 6.93 04/12/14 2,287,374
18 See Notes to Financial Statements
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
HEALTHCARE (CONTINUED)
$ 336 Surgical Care Affiliates,
LLC, Revolving Credit
Agreement................. 7.08% 06/29/13 $ 305,760
11,940 Surgical Care Affiliates,
LLC, Term Loan............ 7.08 12/29/14 10,447,500
5,793 United Surgical Partners
International, Inc., Term
Loan...................... 5.49 to 7.43 04/19/14 5,278,819
4,478 Viant Holdings, Inc., Term
Loan...................... 7.08 06/25/14 4,057,734
--------------
212,928,981
--------------
HOME & OFFICE FURNISHINGS, HOUSEWARES &
DURABLE CONSUMER PRODUCTS 1.5%
7,860 Generation Brands, LLC,
Term Loan................. 7.64 to 10.97 12/20/12 to 06/20/13 6,673,397
292 Hunter Fan Co., Revolving
Credit Agreement.......... 5.27 to 7.50 04/16/13 262,500
2,248 Hunter Fan Co., Term
Loan...................... 7.38 to 11.63 04/16/14 to 10/16/14 1,883,556
496 Lenox, Inc., Term Loan.... 7.75 to 7.78 04/20/13 414,369
11,100 National Bedding Co., LLC,
Term Loan................. 8.26 08/31/12 9,157,500
1,375 Sealy Mattress Co.,
Revolving Credit
Agreement................. 5.77 04/06/10 1,306,250
--------------
19,697,572
--------------
HOTELS, MOTELS, INNS & GAMING 7.4%
7,610 BLB Worldwide Holdings,
Inc., Term Loan........... 5.78 to 9.72 08/23/11 to 07/18/12 6,748,295
7,328 Cannery Casino Resorts,
LLC, Term Loan............ 6.20 to 7.40 05/18/13 7,071,718
955 Golden Nugget, Inc., Term
Loan...................... 5.32 to 5.96 06/30/14 859,091
8,776 Greektown Casino, LLC,
Term Loan................. 7.19 to 8.00 12/03/12 8,205,369
4,733 Green Valley Ranch Gaming,
LLC, Term Loan............ 6.84 to 7.08 02/16/14 4,212,259
1,633 Greenwood Racing, Inc.,
Term Loan................. 5.53 11/28/11 1,510,987
9,364 Herbst Gaming, Inc., Term
Loan...................... 9.22 to 9.64 12/02/11 8,614,458
3,984 Isle of Capri Casinos,
Inc., Term Loan........... 5.04 to 6.58 07/26/14 3,505,506
13,587 Las Vegas Sands,
LLC/Venetian Casino, Term
Loan...................... 6.58 05/23/14 12,071,115
See Notes to Financial Statements 19
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
HOTELS, MOTELS, INNS & GAMING (CONTINUED)
$ 3,700 Magnolia Hill, LLC, Term
Loan...................... 6.53% 10/30/13 $ 3,478,000
7,500 MGM Mirage, Term Loan..... 4.41 to 6.50 10/03/11 6,810,938
948 Scientific Games Corp.,
Revolving Credit
Agreement................. 5.28 to 6.38 12/23/09 933,780
12,300 Venetian Macau, Ltd., Term
Loan...................... 7.08 05/25/12 to 05/25/13 11,496,232
8,766 Wimar OpCo LLC, Term
Loan...................... 9.25 01/03/12 8,690,837
10,189 Yonkers Racing Corp., Term
Loan...................... 9.25 08/12/11 9,832,816
--------------
94,041,401
--------------
INSURANCE 4.2%
5,652 Alliant Holdings I,
Inc.,Term Loan............ 7.83 11/01/14 5,341,613
9,950 AmWins Group, Inc., Term
Loan...................... 7.59 to 8.07 06/08/13 7,960,000
4,938 Applied Systems, Inc.,
Term Loan................. 5.74 to 7.40 09/26/13 4,690,625
2,389 Audatex North America,
Inc., Term Loan........... 7.06 05/16/14 2,281,610
7,853 HMSC Holdings Corp., Term
Loan...................... 6.25 to 9.50 04/03/14 to 10/03/14 6,759,953
8,434 Mitchell International,
Inc., Term Loan........... 6.84 to 10.13 03/28/14 to 03/28/15 7,527,650
900 USI Holdings Corp.,
Revolving Credit
Agreement................. 5.77 05/05/13 832,500
6,633 USI Holdings Corp., Term
Loan...................... 7.58 05/05/14 6,152,417
12,909 Vertafore, Inc., Term
Loan...................... 7.52 to 11.02 01/31/12 to 01/31/13 12,124,366
--------------
53,670,734
--------------
MACHINERY 1.0%
2,391 Alliance Laundry Holdings,
LLC, Term Loan............ 7.63 01/27/12 2,307,718
3,510 Gleason, Inc., Term
Loan...................... 6.25 to 6.88 06/30/13 3,285,941
2,993 Mold-Masters Luxembourg
Holdings SA, Term Loan.... 8.13 10/11/14 2,865,319
4,475 Stolle Machinery Co., LLC,
Term Loan................. 7.94 to 11.38 09/29/12 to 09/29/13 4,382,875
--------------
12,841,853
--------------
20 See Notes to Financial Statements
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
MEDICAL PRODUCTS & SERVICES 3.5%
$ 2,352 Accellent, Inc., Term
Loan...................... 7.79% 11/22/12 $ 2,010,960
3,722 Advanced Medical Optics,
Inc., Term Loan........... 5.06 to 6.65 04/02/14 3,479,953
8,170 AGA Medical Corp., Term
Loan...................... 6.42 to 7.17 04/28/13 7,536,879
18,240 Biomet, Inc., Term Loan... 7.86 03/25/15 17,744,620
7,376 Carestream Health, Inc.,
Term Loan................. 5.24 to 6.83 04/30/13 6,546,047
8,500 VWR Funding, Inc., Term
Loan...................... 7.33 06/29/14 7,830,625
--------------
45,149,084
--------------
MINING, STEEL, IRON & NON-PRECIOUS METALS 0.5%
952 John Maneely Co., Term
Loan...................... 7.69 to 8.13 12/08/13 818,362
6,633 Novelis Corp., Term
Loan...................... 6.83 07/06/14 6,110,959
--------------
6,929,321
--------------
NATURAL RESOURCES 1.5%
468 Boston Generating, LLC,
Revolving Credit
Agreement................. 7.08 12/20/13 415,888
9,156 Boston Generating, LLC,
Term Loan................. 7.08 12/20/13 8,131,789
4,200 CDX Funding, LLC, Term
Loan...................... 11.39 03/31/13 3,864,000
2,946 Dresser, Inc., Term
Loan...................... 5.77 to 7.45 05/04/14 2,648,029
1,471 Hudson Products Holdings,
Inc., Term Loan........... 6.30 to 7.88 12/05/13 1,426,979
997 Kinder Morgan, Inc., Term
Loan...................... 4.78 05/30/14 988,461
2,257 Western Refining, Inc.,
Term Loan................. 4.99 05/30/14 2,068,761
--------------
19,543,907
--------------
NON-DURABLE CONSUMER PRODUCTS 4.2%
13,972 Aearo Technologies, Inc.,
Term Loan................. 7.08 to 10.33 09/24/13 to 06/01/14 13,931,951
4,069 Amscan Holdings, Inc.,
Term Loan................. 5.63 to 7.35 05/25/13 3,723,363
2,250 Bausch & Lomb, Inc., Term
Loan...................... 6.51 to 8.08 04/27/15 2,199,375
9,352 Huish Detergents, Inc.,
Term Loan................. 6.83 to 9.08 04/26/14 to 10/26/14 7,390,976
2,553 JohnsonDiversey, Inc.,
Term Loan................. 6.88 12/16/11 2,463,384
8,788 KIK Custom Products, Inc.,
Term Loan................. 7.11 to 9.84 05/31/14 to 11/30/14 5,734,340
See Notes to Financial Statements 21
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
NON-DURABLE CONSUMER PRODUCTS (CONTINUED)
$ 2,630 Mattress Holdings Corp.,
Inc., Term Loan........... 5.50% 01/18/14 $ 2,104,127
1,755 Mega Brands, Inc.,
(Canada), Term Loan....... 5.50 07/26/12 1,548,787
501 Spectrum Brands, Inc.,
Revolving Credit
Agreement................. 4.48 03/30/13 466,231
9,974 Spectrum Brands, Inc.,
Term Loan................. 8.44 to 8.90 03/30/13 9,280,410
2,200 Targus Group
International, Inc., Term
Loan...................... 13.35 05/22/13 1,897,500
3,231 Yankee Candle Co., Inc.,
Term Loan................. 5.29 to 6.86 02/06/14 2,928,495
--------------
53,668,939
--------------
PAPER & FOREST PRODUCTS 2.4%
3,000 Ainsworth Lumber Co.,
Ltd., Term Loan (a)....... 6.29 06/26/14 2,790,000
16,615 Georgia-Pacific Corp.,
Term Loan................. 6.58 to 6.90 12/20/12 to 12/29/12 15,379,633
2,534 Tidi Products, LLC, Term
Loan...................... 7.83 to 9.33 12/31/11 2,521,259
7,645 White Birch Paper Co.,
(Canada), Term Loan....... 7.58 05/08/14 5,687,803
4,028 Xerium Technologies, Inc.,
Term Loan................. 7.58 05/18/12 3,655,783
--------------
30,034,478
--------------
PERSONAL & MISCELLANEOUS SERVICES 1.5%
7,680 Affinion Group, Inc., Term
Loan (a).................. 6.46 to 7.48 10/17/12 7,206,337
2,395 Omniflight Helicopters,
Inc., Term Loan........... 7.75 to 8.63 06/30/11 to 09/30/12 2,358,883
10,573 Sedgwick CMS Holdings,
Inc., Term Loan B......... 7.08 01/31/13 10,070,653
--------------
19,635,873
--------------
PHARMACEUTICALS 0.4%
2,723 Stiefel Laboratories,
Inc., Term Loan........... 6.69 12/28/13 2,613,600
3,248 Warner Chilcott Holdings
Co., Term Loan............ 5.27 to 6.88 01/18/12 3,101,657
--------------
5,715,257
--------------
PRINTING & PUBLISHING 17.7%
4,975 Advanstar Communications,
Inc., Term Loan........... 7.09 05/31/14 4,104,375
4,950 American Media Operations,
Inc., Term Loan........... 8.16 to 8.34 01/31/13 4,653,000
22 See Notes to Financial Statements
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
PRINTING & PUBLISHING (CONTINUED)
$ 1,985 Ascend Media Holdings,
LLC, Term Loan............ 8.85 to 9.14% 01/31/12 $ 848,785
1,939 Black Press Group, Ltd.,
(Canada), Term Loan....... 7.08 08/02/13 1,814,938
6,571 Canon Communications, LLC,
Term Loan................. 6.27 05/31/11 6,472,879
1,696 Caribe Information
Investment, Inc., Term
Loan...................... 5.52 to 7.31 03/31/13 1,577,187
10,739 Cygnus Business Media,
Inc., Term Loan........... 8.36 to 8.44 07/13/09 10,578,161
998 DRI Holdings, Inc., Term
Loan...................... 6.27 to 7.83 07/03/14 953,434
11,298 Endurance Business Media,
Inc., Term Loan........... 6.03 to 10.53 07/26/13 to 01/26/14 9,546,592
2,300 FSC Acquisition, LLC, Term
Loan...................... 6.31 to 6.98 03/08/14 1,820,150
11,776 F&W Publications, Inc.,
Term Loan................. 7.13 to 9.16 02/05/13 to 08/05/13 10,866,928
1,475 Gatehouse Media, Inc.,
Revolving Credit
Agreement................. 5.28 to 6.38 02/28/14 1,091,500
11,125 Gatehouse Media, Inc.,
Term Loan................. 6.45 to 7.07 08/28/14 8,900,000
10,030 Haights Cross Operating
Co., Term Loan............ 8.37 to 9.37 08/20/08 9,925,688
5,445 Idearc, Inc., Term Loan... 6.83 11/17/14 4,977,225
1,906 Intermedia Outdoor, Inc.,
Term Loan................. 7.83 01/31/13 1,572,244
1,995 Knowledgepoint360 Group,
LLC, Term Loan............ 8.13 to 11.88 04/26/14 to 04/26/15 1,907,725
3,478 MC Communications, LLC,
Term Loan................. 5.78 to 7.85 12/31/10 3,269,340
5,010 MediaNews Group, Inc.,
Term Loan................. 6.64 to 7.08 12/30/10 to 08/02/13 4,284,615
2,716 MediMedia USA, Inc., Term
Loan...................... 7.08 to 7.63 10/05/13 2,620,578
13,411 Merrill Communications,
LLC, Term Loan............ 5.52 to 9.77 05/15/11 to 11/15/13 12,509,336
5,985 Network Communications,
Inc., Term Loan........... 5.49 to 7.37 11/30/12 5,745,600
8,518 Penton Media, Inc., Term
Loan...................... 5.52 to 8.27 02/01/13 to 02/01/14 7,471,969
478 Proquest CSA, LLC, Term
Loan...................... 5.69 to 7.35 02/09/14 457,605
See Notes to Financial Statements 23
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
PRINTING & PUBLISHING (CONTINUED)
$ 3,721 Questex Media Group, Inc.,
Term Loan................. 7.79 to 8.13% 05/04/14 $ 3,628,219
8,784 Reader's Digest
Association, Inc., Term
Loan...................... 7.13 03/02/14 7,703,968
1,124 SGS International, Inc.,
Term Loan................. 7.22 to 7.65 12/30/11 1,096,042
2,452 Source Media, Inc., Term
Loan...................... 7.08 11/08/11 2,329,319
1,496 Summit Business Media
Intermediate, Term Loan... 6.03 07/06/14 1,428,919
3,795 Thomas Nelson Publishers,
Term Loan................. 5.52 to 7.54 06/12/12 3,595,730
96,517 Tribune Co., Term Loan.... 7.91 to 9.43 12/20/08 to 05/19/14 77,177,298
11,375 Yell Group, PLC, (United
Kingdom), Term Loan....... 4.77 to 5.27 04/30/11 to 02/10/13 10,654,904
--------------
225,584,253
--------------
RESTAURANTS & FOOD SERVICE 4.1%
5,817 Acosta Sales Co., Inc.,
Term Loan (a)............. 5.53 07/28/13 5,439,335
17,188 Aramark Corp., Term Loan
(a)....................... 6.71 to 7.00 01/26/14 15,877,643
7,373 Arby's, LLC, Term Loan
(a)....................... 5.49 to 7.08 07/25/12 7,064,347
1,000 CBRL Group, Inc., Term
Loan...................... 6.40 04/27/13 942,500
3,184 Center Cut Hospitality,
Inc., Term Loan........... 6.46 07/06/14 3,072,560
3,273 NPC International, Inc.,
Term Loan................. 5.00 to 6.63 05/03/13 3,023,182
558 OSI Restaurant Partners,
LLC, Revolving Credit
Agreement................. 7.49 06/14/13 471,678
6,678 OSI Restaurant Partners,
LLC, Term Loan............ 5.56 06/14/13 5,649,453
2,459 Sagittarius Restaurants,
LLC, Term Loan............ 7.08 03/29/13 2,212,841
3,077 Sbarro, Inc., Term Loan... 7.41 to 7.58 01/31/14 2,803,688
1,367 Volume Services America,
Inc., Revolving Credit
Agreement................. 7.50 04/01/10 1,326,419
3,890 Volume Services America,
Inc., Term Loan........... 7.18 to 7.25 10/01/10 3,792,750
--------------
51,676,396
--------------
24 See Notes to Financial Statements
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
RETAIL--OIL & GAS 0.3%
$ 3,486 The Pantry, Inc., Term
Loan...................... 5.03% 05/15/14 $ 3,189,252
--------------
RETAIL--SPECIALTY 1.2%
15,269 Nebraska Book Co., Inc.,
Term Loan................. 7.65 03/04/11 14,830,411
--------------
RETAIL--STORES 4.2%
2,955 Csk Auto, Inc., Term
Loan...................... 11.63 06/29/12 2,556,301
20,000 Dollar General Corp., Term
Loan...................... 5.99 07/06/14 17,743,760
6,551 General Nutrition Centers,
Inc., Term Loan........... 6.98 to 7.08 09/16/13 5,603,953
9,500 Guitar Center, Inc., Term
Loan...................... 7.28 10/09/14 8,265,000
13,646 Michael's Stores, Inc.,
Term Loan................. 6.00 to 7.63 10/31/13 11,717,253
5,793 Sally Holdings, Inc., Term
Loan...................... 7.52 11/16/13 5,485,517
2,827 Savers, Inc., Term Loan... 7.58 08/11/12 2,741,715
--------------
54,113,499
--------------
TELECOMMUNICATIONS--LOCAL EXCHANGE CARRIERS 1.7%
5,000 Fairpoint Communications,
Inc., Term Loan........... 6.63 02/08/12 4,933,750
4,289 Global Tel*Link Corp.,
Term Loan................. 8.33 02/14/13 4,160,720
1,442 Hargray Acquisition Co.,
Term Loan................. 7.08 06/29/14 1,380,787
3,085 NuVox Transition
Subsidiary, LLC, Term
Loan...................... 8.24 05/31/14 2,949,553
1,548 Orius Corp., LLC, Term
Loan (b) (c) (e).......... 9.50 to 10.00 01/23/09 to 01/23/10 193,562
2,892 Paetec Holding Corp., Term
Loan...................... 5.77 02/28/13 2,734,168
5,177 Sorenson Communications,
Inc., Term Loan........... 7.38 to 11.83 02/16/14 to 04/27/14 5,081,825
--------------
21,434,365
--------------
TELECOMMUNICATIONS--LONG DISTANCE 0.6%
1,650 Intelsat, Ltd., (Bermuda)
Term Loan................. 7.13 02/01/14 1,616,312
6,000 Level 3 Communications,
Inc., Term Loan........... 6.57 to 6.63 03/13/14 5,565,000
--------------
7,181,312
--------------
See Notes to Financial Statements 25
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
TELECOMMUNICATIONS--WIRELESS 0.9%
$ 10,000 Asurion Corp., Term Loan
(a)....................... 7.88% 07/03/14 $ 9,125,000
1,806 Centennial Cellular, Inc.,
Term Loan................. 6.83 02/09/11 1,751,293
--------------
10,876,293
--------------
TEXTILES & LEATHER 1.7%
6,017 Gold Toe Investment Corp.,
Term Loan................. 6.01 to 9.26 10/30/13 to 04/30/14 5,494,390
6,150 HBI Branded Apparel Ltd.,
Inc., Term Loan........... 6.99 09/05/14 6,101,311
3,850 Levi Strauss & Co., Term
Loan...................... 7.57 03/27/14 3,108,875
3,894 St. John Knits
International, Inc., Term
Loan...................... 7.84 03/21/12 3,836,014
3,461 Varsity Brands, Inc., Term
Loan...................... 7.50 to 8.13 02/22/14 3,392,117
--------------
21,932,707
--------------
TRANSPORTATION--CARGO 0.5%
1,092 Cardinal Logistics
Management, Inc., Term
Loan...................... 7.02 09/23/13 1,058,957
4,975 JHCI Acquisitions, Inc.,
Term Loan................. 5.82 to 6.46 06/19/14 3,756,125
2,092 Kenan Advantage Group,
Inc., Term Loan........... 7.58 12/16/11 1,966,481
--------------
6,781,563
--------------
TRANSPORTATION--PERSONAL 0.3%
3,508 Coach America Holdings,
Inc., Term Loan........... 7.48 to 7.68 04/20/14 2,806,323
500 US Airways Group, Inc.,
Term Loan................. 5.79 03/24/14 441,250
--------------
3,247,573
--------------
TRANSPORTATION--RAIL MANUFACTURING 0.7%
6,797 Helm Holding Corp., Term
Loan...................... 5.53 to 7.33 07/08/11 6,389,554
2,368 Standard Steel, LLC, Term
Loan...................... 5.79 to 7.50 06/30/12 2,296,960
--------------
8,686,514
--------------
UTILITIES 3.9%
1,200 Astoria Generating Co.,
LP, Term Loan (a)......... 8.66 08/23/13 1,146,750
3,863 Bicent Power, LLC, Term
Loan...................... 6.83 06/30/14 3,746,963
13,470 First Light Power
Resources, Inc., Term
Loan...................... 7.38 to 9.44 11/01/13 to 05/01/14 12,372,651
26 See Notes to Financial Statements
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
PRINCIPAL
AMOUNT STATED
(000) BORROWER COUPON MATURITY* VALUE
-----------------------------------------------------------------------------------------------
UTILITIES (CONTINUED)
$ 2,568 InfrastruX Group, Inc.,
Term Loan (d)............. 7.77% 11/03/12 $ 2,298,078
4,891 Longview Power, LLC, Term
Loan...................... 5.56 to 7.25 02/28/14 4,585,625
170 Mirant North America, LLC,
Revolving Credit
Agreement................. 6.00 01/03/12 158,966
4,652 NRG Energy, Inc., Term
Loan...................... 6.58 02/01/13 4,285,106
2,180 NSG Holdings, LLC, Term
Loan...................... 6.56 06/15/14 1,961,957
6,300 Primary Energy Operating,
LLC, Term Loan............ 8.92 08/24/09 6,079,500
2,328 Texas Competitive Electric
Holdings, Co., LLC, Term
Loan...................... 8.40 10/10/14 2,146,325
7,484 TPF Generation Holdings,
LLC, Term Loan............ 6.83 to 9.08 12/15/13 to 12/15/14 6,731,109
4,975 USPF Holdings, LLC, Term
Loan...................... 6.29 to 6.96 04/11/14 4,577,000
--------------
50,090,030
--------------
TOTAL VARIABLE RATE** SENIOR LOAN INTERESTS 177.3%................ 2,259,282,107
--------------
DESCRIPTION VALUE
------------------------------------------------------------------------------------------------
NOTES 1.1%
Builders FirstSource, Inc. ($8,700,000 par, 9.12% coupon, maturing 02/15/12)
(f)........................................................................... $ 7,123,125
Compression Polymers Corp. ($2,700,000 par, 11.47% coupon, maturing 07/01/12)
(f)........................................................................... 2,416,500
Qwest Corp. ($3,500,000 par, 8.24% coupon, maturing 06/15/13) (f)............... 3,430,000
Verso Paper Holdings, LLC ($1,500,000 par, 6.99% coupon, maturing 08/01/14) (f)
(g)........................................................................... 1,432,500
--------------
TOTAL NOTES..................................................................... 14,402,125
--------------
EQUITIES 0.1%
Aladdin Gaming Holdings, LLC (7.84% ownership interest, Acquired 09/03/04, Cost
$470,400) (h) (i)............................................................. 15,250
Comdisco Holdings Co., Inc. (399 common shares, Acquired from 03/02/05 to
08/15/07, Cost $0) (h) (i).................................................... 2,637
Environmental Systems Products Holdings, Inc. (9,333 common shares, Acquired
09/26/07, Cost $0) (h) (i).................................................... 0
See Notes to Financial Statements 27
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
DESCRIPTION VALUE
------------------------------------------------------------------------------------------------
EQUITIES (CONTINUED)
Environmental Systems Products Holdings, Inc. (9,333 preferred shares, Acquired
06/26/07, Cost $449,153) (h) (i).............................................. $ 233,325
Gentek, Inc. (Canada) (1,600 common shares, Acquired 09/19/06, Cost $0) (h)
(i)........................................................................... 44,400
Gentek, Inc. (Canada) (Warrants for 2,501 common shares, Expiration date ranging
from 10/31/08 to 10/31/10, Acquired 09/19/06, Cost $0) (h) (i)................ 60,389
IDT Corp. (22,898 common shares) (h)............................................ 158,912
Railworks Corp. (Warrants for 865 common shares, Expiration date 06/14/11,
Acquired 02/10/03, Cost $2,135,664) (h) (i)................................... 0
Rotech Medical Corp. (48,485 common shares, Acquired 06/12/02, Cost $193,940)
(h) (i)....................................................................... 0
Safelite Realty (28,448 common shares, Acquired 10/26/00, Cost $0) (h) (i)...... 0
--------------
TOTAL EQUITIES 0.1%............................................................ 514,913
--------------
TOTAL LONG-TERM INVESTMENTS 178.5%
(Cost $2,517,552,907)......................................................... 2,274,199,145
--------------
SHORT-TERM INVESTMENTS 1.1%
REPURCHASE AGREEMENT 0.6%
State Street Bank & Trust Co. ($8,000,000 par collateralized by U.S. Government
obligations in a pooled cash account, interest rate of 2.48%, dated 01/31/08,
to be sold on 02/01/08 at $8,000,551) (a)..................................... 8,000,000
TIME DEPOSIT 0.5%
State Street Bank & Trust Corp. ($5,764,580 par, 2.20% coupon, dated 01/31/08,
to be sold on 02/01/08 at $5,764,932) (a)..................................... 5,764,580
--------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $13,764,580)............................................................ 13,764,580
--------------
TOTAL INVESTMENTS 179.6%
(Cost $2,531,317,487)......................................................... 2,287,963,725
BORROWINGS (24.5%)............................................................. (312,000,000)
PREFERRED SHARES (INCLUDING ACCRUED DISTRIBUTIONS) (55.0%)..................... (700,296,296)
LIABILITIES IN EXCESS OF OTHER ASSETS (0.1%)................................... (1,531,052)
--------------
NET ASSETS APPLICABLE TO COMMON SHARES 100.0%.................................. $1,274,136,377
==============
Percentages are calculated as a percentage of net assets applicable to common
shares.
(a) All or a portion of this security is designated in connection with unfunded
loan commitments.
(b) This Senior Loan interest is non-income producing.
28 See Notes to Financial Statements
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
(c) This borrower has filed for protection in federal bankruptcy court.
(d) Payment-in-kind security.
(e) This borrower is currently in liquidation.
(f) Variable rate security. Interest rate shown is that in effect at January 31,
2008.
(g) 144A-Private Placement security which is exempt from registration under Rule
144A of the Securities Act of 1933, as amended. This security may only be
resold in transactions exempt from registration which are normally those
transactions with qualified institutional buyers.
(h) Non-income producing security as the stock or warrant currently does not
declare income dividends.
(i) Restricted security. Securities were acquired through the restructuring of
senior loans. These securities are restricted as they are not allowed to be
deposited via the Depository Trust Company. If at a later point in time, the
company wishes to register, the issuer will bear the costs associated with
registration. The aggregate value of restricted securities represents less
than 0.1% of the net assets applicable to common shares of the Trust.
* Senior Loans in the Trust's portfolio generally are subject to mandatory
and/or optional prepayment. Because of these mandatory prepayment conditions
and because there may be significant economic incentives for a Borrower to
prepay, prepayments of Senior Loans in the Trust's portfolio may occur. As a
result, the actual remaining maturity of Senior Loans held in the Trust's
portfolio may be substantially less than the stated maturities shown.
Although the Trust is unable to accurately estimate the actual remaining
maturity of individual Senior Loans, the Trust estimates that the actual
average maturity of the Senior Loans held in its portfolio will be
approximately 18-24 months.
** Senior Loans in which the Trust invests generally pay interest at rates
which are periodically redetermined by reference to a base lending rate plus
a premium. These base lending rates are generally (i) the lending rate
offered by one or more major European banks, such as the London Inter-Bank
Offered Rate ("LIBOR"), (ii) the prime rate offered by one or more major
United States banks or (iii) the certificate of deposit rate. Senior Loans
are generally considered to be restricted in that the Trust ordinarily is
contractually obligated to receive approval from the Agent Bank and/or
Borrower prior to the disposition of a Senior Loan.
RATINGS ALLOCATION AS OF 1/31/08
AA/Aa....................................................... 0.1%
BBB/Baa..................................................... 0.2%
BB/Ba....................................................... 47.0%
B/B......................................................... 30.6%
CCC/Caa..................................................... 2.9%
Non-Rated................................................... 19.2%
RATINGS ALLOCATIONS ARE AS A PERCENTAGE OF LONG-TERM DEBT OBLIGATIONS. RATINGS
ALLOCATIONS BASED UPON RATINGS AS ISSUED BY STANDARD AND POOR'S AND MOODY'S,
RESPECTIVELY. BANK LOANS RATED BELOW BBB BY STANDARD AND POOR'S OR BAA BY
MOODY'S ARE CONSIDERED TO BE BELOW INVESTMENT GRADE.
See Notes to Financial Statements 29
VAN KAMPEN SENIOR INCOME TRUST
PORTFOLIO OF INVESTMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
SWAP AGREEMENTS OUTSTANDING AS OF JANUARY 31, 2008:
CREDIT DEFAULT SWAPS
PAY/
RECEIVE NOTIONAL
REFERENCE BUY/SELL FIXED EXPIRATION AMOUNT UPFRONT
COUNTERPARTY ENTITY PROTECTION RATE DATE (000) PAYMENTS VALUE
Goldman Sachs Credit Standard Pacific
Partners, L.P...... Corp. Sell 3.40% 03/20/14 $2,500 $0 $ (876,505)
Goldman Sachs Credit Standard Pacific
Partners, L.P...... Corp. Sell 3.70 06/20/14 2,500 0 (865,805)
Goldman Sachs Credit K. Hovnanian
Partners, L.P...... Enterprises, Inc. Sell 2.15 06/20/09 1,500 0 (271,635)
Goldman Sachs Credit K. Hovnanian
Partners, L.P...... Enterprises, Inc. Sell 3.75 06/20/12 1,500 0 (422,969)
-------- -----------
TOTAL CREDIT DEFAULT SWAPS............................................................. $0 $(2,436,914)
======== ===========
30 See Notes to Financial Statements
VAN KAMPEN SENIOR INCOME TRUST
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
January 31, 2008 (Unaudited)
ASSETS:
Total Unaffiliated Investments (Cost $2,531,317,487)........ $2,287,963,725
Restricted Cash............................................. 2,560,000
Receivables:
Investments Sold.......................................... 30,387,745
Interest and Fees......................................... 18,566,206
Other....................................................... 109,818
--------------
Total Assets............................................ 2,339,587,494
--------------
LIABILITIES:
Payables:
Borrowings................................................ 312,000,000
Investments Purchased..................................... 39,219,213
Investment Advisory Fee................................... 1,722,836
Administration Fee........................................ 405,198
Income Distributions--Common Shares....................... 262,201
Distributor and Other Affiliates.......................... 223,471
Unfunded Commitments........................................ 5,714,582
Swap Contracts.............................................. 2,436,914
Accrued Interest Expense.................................... 1,575,196
Accrued Expenses............................................ 972,220
Trustees' Deferred Compensation and Retirement Plans........ 622,990
--------------
Total Liabilities....................................... 365,154,821
Preferred Shares (including accrued distributions).......... 700,296,296
--------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $1,274,136,377
==============
NET ASSET VALUE PER COMMON SHARE ($1,274,136,377 divided by
180,010,000 shares outstanding)........................... $ 7.08
==============
NET ASSETS CONSIST OF:
Common Shares ($.01 par value with an unlimited number of
shares authorized, 180,010,000 shares issued and
outstanding).............................................. $ 1,800,100
Paid in Surplus............................................. 1,788,748,292
Accumulated Undistributed Net Investment Income............. (2,631,715)
Net Unrealized Depreciation................................. (251,505,258)
Accumulated Net Realized Loss............................... (262,275,042)
--------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $1,274,136,377
==============
PREFERRED SHARES ($.01 par value, authorized 28,000 shares,
28,000 issued with liquidation preference of $25,000 per
share).................................................... $ 700,000,000
==============
NET ASSETS INCLUDING PREFERRED SHARES....................... $1,974,136,377
==============
See Notes to Financial Statements 31
VAN KAMPEN SENIOR INCOME TRUST
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended January 31, 2008 (Unaudited)
INVESTMENT INCOME:
Interest from Unaffiliated Investments...................... $ 107,176,427
Dividends................................................... 36,990
Other....................................................... 3,228,929
-------------
Total Income............................................ 110,442,346
-------------
EXPENSES:
Investment Advisory Fee..................................... 10,753,240
Administration Fee.......................................... 2,529,999
Credit Line................................................. 1,024,427
Preferred Share Maintenance................................. 919,264
Custody..................................................... 317,046
Professional Fees........................................... 236,022
Accounting & Administrative Expenses........................ 132,909
Reports to Shareholders..................................... 106,802
Transfer Agent.............................................. 12,675
Trustees' Fees and Related Expenses......................... 6,721
Other....................................................... 115,926
-------------
Total Operating Expense................................. 16,155,031
Interest Expense........................................ 11,489,314
-------------
Total Expenses.......................................... 27,644,345
-------------
NET INVESTMENT INCOME....................................... $ 82,798,001
=============
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Unaffiliated Investments.................................. $ (15,473,837)
Affiliated Investments.................................... (1,074,607)
Swap Contracts............................................ 135,217
-------------
Net Realized Loss........................................... (16,413,227)
-------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... (92,918,730)
-------------
End of the Period:
Unaffiliated Investments................................ (243,353,762)
Swap Contracts.......................................... (2,436,914)
Unfunded Commitments.................................... (5,714,582)
-------------
(251,505,258)
-------------
Net Unrealized Depreciation During the Period............... (158,586,528)
-------------
NET REALIZED AND UNREALIZED LOSS............................ $(174,999,755)
=============
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS..................... $ (19,468,021)
=============
NET DECREASE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM
OPERATIONS................................................ $(111,669,775)
=============
32 See Notes to Financial Statements
VAN KAMPEN SENIOR INCOME TRUST
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets (Unaudited)
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
JANUARY 31, 2008 JULY 31, 2007
----------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income.................................. $ 82,798,001 $ 166,683,679
Net Realized Loss...................................... (16,413,227) (7,600,277)
Net Unrealized Depreciation During the Period.......... (158,586,528) (77,965,886)
Distributions to Preferred Shareholders:
Net Investment Income................................ (19,468,021) (36,203,219)
-------------- --------------
Change in Net Assets Applicable to Common Shares from
Operations........................................... (111,669,775) 44,914,297
Distributions to Common Shareholders:
Net Investment Income................................ (64,263,572) (137,725,653)
-------------- --------------
TOTAL DECREASE IN NET ASSETS APPLICABLE TO COMMON
SHARES............................................... (175,933,347) (92,811,356)
NET ASSETS APPLICABLE TO COMMON SHARES:
Beginning of the Period................................ 1,450,069,724 1,542,881,080
-------------- --------------
End of the Period (Including accumulated undistributed
net investment income of $(2,631,715) and
$(1,698,123), respectively).......................... $1,274,136,377 $1,450,069,724
============== ==============
See Notes to Financial Statements 33
VAN KAMPEN SENIOR INCOME TRUST
FINANCIAL STATEMENTS continued
Statement of Cash Flows
For the Six Months Ended January 31, 2008 (Unaudited)
CHANGE IN NET ASSETS FROM OPERATIONS (INCLUDING PREFERRED
SHARE DISTRIBUTIONS)...................................... $(111,669,775)
-------------
Adjustments to Reconcile the Change in Net Assets from
Operations to Net Cash Provided by Operating Activities:
Purchases of Investments.................................. (562,508,913)
Principal Repayments/Sales of Investments................. 719,403,580
Net Purchases of Short-Term Investments................... 11,720,338
Amortization of Loan Fees................................. (89,332)
Net Loan Fees Received.................................... 20,974,697
Accretion of Discounts.................................... (613,488)
Net Realized Gain/Loss on Investments..................... 16,548,444
Net Change in Unrealized Depreciation on Investments...... 155,532,806
Increase in Restricted Cash............................... (1,557,698)
Decrease in Receivables for Investments Sold.............. 25,436,022
Decrease in Interest and Fees Receivables and Other
Assets.................................................. 2,575,933
Decrease in Payable for Investments Purchased............. (23,420,511)
Decrease in Accrued Expenses and Other Payables........... (1,015,905)
Net Change in Unrealized Depreciation on Swap Contracts... 1,360,632
Net Change in Unfunded Commitments........................ 1,693,090
Decrease in Trustees' Deferred Compensation and Retirement
Plans................................................... (8,408)
-------------
Total Adjustments....................................... 366,031,287
-------------
NET CASH PROVIDED BY OPERATING ACTIVITIES................... 254,361,512
-------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in Bank Borrowings................................... (190,000,000)
Cash Distributions Paid..................................... (64,361,512)
-------------
Net Cash Used for Financing Activities.................. (254,361,512)
-------------
NET INCREASE IN CASH........................................ -0-
Cash at Beginning of the Period............................. -0-
-------------
CASH AT THE END OF THE PERIOD............................... $ -0-
=============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash Paid During the Year for Interest...................... $ 12,425,899
=============
34 See Notes to Financial Statements
VAN KAMPEN SENIOR INCOME TRUST
FINANCIAL HIGHLIGHTS (UNAUDITED)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE
TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
SIX
MONTHS
ENDED YEAR ENDED JULY 31,
JAN. 31, ------------------------------------------------------
2008 2007 2006 2005 2004 2003
------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD................................. $ 8.06 $ 8.57 $ 8.67 $ 8.63 $ 8.10 $ 7.94
-------- -------- -------- -------- -------- --------
Net Investment Income.................. .46(a) .93(a) .79(a) .60 .42 .46
Net Realized and Unrealized
Gain/Loss............................ (.97) (.47) (.10) .01 .57 .14
Common Share Equivalent of
Distributions Paid to Preferred
Shareholders:
Net Investment Income................ (.11) (.20) (.17) (.10) (.02) -0-
-------- -------- -------- -------- -------- --------
Total from Investment Operations........ (.62) .26 .52 .51 .97 .60
-------- -------- -------- -------- -------- --------
Distributions Paid to Common
Shareholders:
Net Investment Income.................. (.36) (.77) (.62) (.47) (.40) (.44)
Dilutive Impact from the Offering of
Money Market Cumulative Preferred
Shares................................. -0- -0- -0- -0- (.04) -0-
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF THE PERIOD...... $ 7.08 $ 8.06 $ 8.57 $ 8.67 $ 8.63 $ 8.10
======== ======== ======== ======== ======== ========
Common Share Market Price at End of the
Period................................. $ 6.73 $ 7.98 $ 8.38 $ 8.19 $ 8.84 $ 7.84
Total Return (b)........................ -11.47%* 3.94% 10.41% -2.03% 18.13% 25.06%
Net Assets Applicable to Common Shares
at End of the Period (In millions)..... $1,274.1 $1,450.1 $1,542.9 $1,560.7 $1,554.1 $1,458.6
Ratios to Average Net Assets Applicable
to Common Shares excluding Borrowings:
Operating Expense (c).................. 2.29% 2.35% 2.31% 2.26% 1.91% 1.59%
Interest Expense (c)................... 1.63% 1.95% 1.63% .82% .31% .62%
Gross Expense (c)...................... 3.93% 4.30% 3.94% 3.08% 2.22% 2.21%
Net Investment Income (c).............. 11.76% 10.80% 9.17% 6.87% 5.06% 5.98%
Net Investment Income (d).............. 8.99% 8.46% 7.23% 5.75% 4.80% N/A
Portfolio Turnover (e).................. 23%* 85% 75% 94% 84% 78%
SUPPLEMENTAL RATIOS:
Ratios to Average Net Assets Including
Preferred Shares and Borrowings:
Operating Expense (c).................. 1.28% 1.30% 1.28% 1.27% 1.30% 1.19%
Interest Expense (c)................... .91% 1.08% .90% .46% .21% .46%
Gross Expense (c)...................... 2.19% 2.37% 2.18% 1.73% 1.51% 1.65%
Net Investment Income (c).............. 6.55% 5.95% 5.06% 3.86% 3.44% 4.47%
Net Investment Income (d).............. 5.01% 4.66% 3.99% 3.23% 3.26% N/A
SENIOR INDEBTEDNESS:
Total Preferred Shares Outstanding..... 28,000 28,000 28,000 28,000 28,000 N/A
Asset Coverage Per Preferred Share
(f).................................. $ 70,515 $ 76,803 $ 80,119 $ 80,750 $ 80,509 N/A
Involuntary Liquidating Preference Per
Preferred Share...................... $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 N/A
Average Market Value Per Preferred
Share................................ $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 N/A
Total Borrowing Outstanding (In
thousands)........................... $312,000 $502,000 $557,000 $524,000 $450,000 $401,000
Asset Coverage Per $1,000 Unit of
Senior Indebtedness (g).............. $ 7,328 $ 5,284 $ 5,028 $ 5,315 $ 6,009 $ 4,637
* Non-Annualized
(a)Based on average shares outstanding.
(b)Total return based on common share market price assumes an investment at the
common share market price at the beginning of the period indicated,
reinvestment of all distributions for the period in accordance with the
Trust's dividend reinvestment plan, and sale of all shares at the closing
common share market price at the end of the period indicated.
(c)Ratios do not reflect the effect of distributions to preferred shareholders.
(d)Ratios reflect the effect of distributions to preferred shareholders.
(e)Calculation includes the proceeds from principal repayments and sales of
senior loan interests.
(f)Calculated by subtracting the Trust's total liabilities (not including the
preferred shares) from the Trust's total assets and dividing this by the
number of preferred shares outstanding.
(g)Calculated by subtracting the Trust's total liabilities (not including the
preferred shares and the borrowings) from the Trust's total assets and
dividing by the total number of senior indebtedness units, where one unit
equals $1,000 of senior indebtedness.
N/A=Not Applicable
See Notes to Financial Statements 35
VAN KAMPEN SENIOR INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- JANUARY 31, 2008 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Senior Income Trust (the "Trust") is registered as a non-diversified,
closed-end management investment company under the Investment Company Act of
1940 (the "1940 Act"), as amended. The Trust's investment objective is to seek
to provide a high level of current income, consistent with preservation of
capital. The Trust seeks to achieve its objective by investing primarily in a
portfolio of interests in floating or variable rate senior loans to
corporations, partnerships and other entities which operate in a variety of
industries and geographical regions. The Trust borrows money for investment
purposes which will create the opportunity for enhanced return, but also should
be considered a speculative technique and may increase the Trust's volatility.
The Trust commenced investment operations on June 23, 1998.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
A. SECURITY VALUATION The Trust's Senior Loans and notes are valued by the Trust
following valuation guidelines established and periodically reviewed by the
Trust's Board of Trustees. Under the valuation guidelines, Senior Loans and
notes for which reliable market quotes are readily available are valued at the
mean of such bid and ask quotes. Where reliable market quotes are not readily
available, Senior Loans and notes are valued, where possible, using independent
market indicators provided by independent pricing sources approved by the Board
of Trustees. Other Senior Loans and notes are valued by independent pricing
sources approved by the Board of Trustees based upon pricing models developed,
maintained and operated by those pricing sources or valued by Van Kampen Asset
Management (the "Adviser") by considering a number of factors including
consideration of market indicators, transactions in instruments which the
Adviser believes may be comparable (including comparable credit quality,
interest rate, interest rate redetermination period and maturity), the credit
worthiness of the Borrower, the current interest rate, the period until next
interest rate redetermination and the maturity of such Senior Loan.
Consideration of comparable instruments may include commercial paper, negotiable
certificates of deposit and short-term variable rate securities which have
adjustment periods comparable to the Senior Loans in the Trust's portfolio. The
fair value of Senior Loans are reviewed and approved by the Trust's Valuation
Committee and the Board of Trustees.
Credit default swaps are valued using market quotations obtained from
brokers.
Equity securities are valued on the basis of prices furnished by pricing
services or as determined in good faith by the Adviser under the direction of
the Board of Trustees.
Short-term securities with remaining maturities of 60 days or less are
valued at amortized cost, which approximates market value. Short-term loan
participations are valued at cost in the absence of any indication of
impairment.
B. SECURITY TRANSACTIONS Investment transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
Legal expenditures that are
36
VAN KAMPEN SENIOR INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
expected to result in the restructuring of a plan of reorganization for an
investment are recorded as realized losses. The Trust may purchase and sell
securities on a "when-issued" or "delayed delivery" basis, with settlement to
occur at a later date. The value of the security so purchased is subject to
market fluctuations during this period. The Trust will segregate assets with the
custodian having an aggregate value at least equal to the amount of the
when-issued or delayed delivery purchase commitments until payment is made. At
January 31, 2008, the Trust had no when-issued or delayed delivery purchase
commitments.
The Trust may invest in repurchase agreements, which are short-term
investments in which the Trust acquires ownership of a debt security and the
seller agrees to repurchase the security at a future time and specified price.
Repurchase agreements are fully collateralized by the underlying debt security.
The Trust will make payment for such securities only upon physical delivery or
evidence of book entry transfer to the account of the custodian bank. The seller
is required to maintain the value of the underlying security at not less than
the repurchase proceeds due the Trust.
C. INVESTMENT INCOME Dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis. Facility fees received are
treated as market discounts. Market premiums are amortized and discounts are
accreted over the stated life of each applicable senior loan, note, or other
fixed income security. Other income is comprised primarily of amendment fees
which are recorded when received. Amendment fees are earned as compensation for
agreeing to changes in loan agreements.
D. FEDERAL INCOME TAXES It is the Trust's policy to comply with the requirements
of Subchapter M of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no provision for federal income taxes is required. The
Trust adopted the provisions of the Financial Accounting Standards Board
("FASB") Interpretation No. 48 ("FIN 48") Accounting for Uncertainty in Income
Taxes on January 31, 2008. FIN 48 sets forth a minimum threshold for financial
statement recognition of the benefit of a tax position taken or expected to be
taken in a tax return. The implementation of FIN 48 did not result in any
unrecognized tax benefits in the accompanying financial statements. If
applicable, the Trust recognizes interest accrued related to unrecognized tax
benefits in "Interest Expense" and penalties in "Other" expenses on the
Statement of Operations. The Trust files tax returns with the U.S. Internal
Revenue Service and various states. Generally, each of the tax years in the four
year period ended July 31, 2007, remains subject to examination by taxing
authorities.
The Trust intends to utilize provisions of the federal income tax laws which
allow it to carry a realized capital loss forward for eight years following the
year of the loss and offset such losses against any future realized capital
gains. At July 31, 2007, the Trust had an accumulated capital loss carryforward
for tax purposes of $230,073,119 which will expire according to the following
schedule.
AMOUNT EXPIRATION
$ 4,851,995................................................ July 31, 2009
122,716,095................................................ July 31, 2010
52,014,750................................................ July 31, 2011
29,634,358................................................ July 31, 2012
2,190,907................................................ July 31, 2013
6,730,384................................................ July 31, 2014
11,934,630................................................ July 31, 2015
37
VAN KAMPEN SENIOR INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
At January 31, 2008, the cost and related gross unrealized appreciation and
depreciation are as follows:
Cost of investments for tax purposes........................ $2,532,257,428
==============
Gross tax unrealized appreciation........................... $ 7,175,644
Gross tax unrealized depreciation........................... (251,469,347)
--------------
Net tax unrealized depreciation on investments.............. $ (244,293,703)
==============
E. DISTRIBUTION OF INCOME AND GAINS The Trust intends to declare and pay monthly
dividends from net investment income to common shareholders. Net realized gains,
if any, are distributed at least annually to common shareholders. Distributions
from net realized gains for book purposes may include short-term capital gains,
which are included as ordinary income for tax purposes.
The tax character of distributions paid for the year ended July 31, 2007
were as follows:
Distributions paid from:
Ordinary income........................................... $173,875,890
Long-term capital gain.................................... -0-
------------
$173,875,890
============
As of July 31, 2007, the components of distributable earnings on a tax basis
were as follows:
Undistributed ordinary income............................... $948,827
Net realized gains or losses may differ for financial reporting and tax
purposes primarily as a result of the deferral of losses resulting from wash
sale transactions.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Trust's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Trust for an annual fee of .85%
of the average daily managed assets. Managed assets are defined as the gross
asset value of the Trust minus the sum of accrued liabilities, other than the
aggregate amount of borrowings undertaken by the Trust. In addition, the Trust
will pay a monthly administrative fee to Van Kampen Investments Inc., the
Trust's Administrator, at an annual rate of .20% of the average daily managed
assets of the Trust. The administrative services provided by the Administrator
include monitoring the provisions of the loan agreements and any agreements with
respect to participations and assignments, record keeping responsibilities with
respect to interests in Variable Rate Senior Loans in the Trust's portfolio and
providing certain services to the holders of the Trust's securities.
For the six months ended January 31, 2008, the Trust recognized expenses of
approximately $69,600 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom LLP, of which a trustee of the Trust is a partner of such
firm and he and his law firm provide legal services as legal counsel to the
Trust.
38
VAN KAMPEN SENIOR INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
Under separate Legal Services and Chief Compliance Officer (CCO) Employment
agreements, the Adviser provides legal services and the CCO provides compliance
services to the Trust. The costs of these services are allocated to each trust.
For the six months ended January 31, 2008, the Trust recognized expenses of
approximately $46,500 representing Van Kampen Investments Inc.'s or its
affiliates' (collectively "Van Kampen") cost of providing legal services to the
Trust, as well as the salary, benefits and related costs of the CCO and related
support staff paid by Van Kampen. Services provided pursuant to the Legal
Services agreement are reported as part of "Professional Fees" on the Statement
of Operations. Services provided pursuant to the CCO Employment agreement are
reported as part of "Accounting and Administrative Expenses" on the Statement of
Operations.
Certain officers and trustees of the Trust are also officers and directors
of Van Kampen. The Trust does not compensate its officers or trustees who are
also officers of Van Kampen.
The Trust provides deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. Under the deferred compensation
plan, trustees may elect to defer all or a portion of their compensation to a
later date. Benefits under the retirement plan are payable upon retirement for a
ten-year period and are based upon each trustee's years of service to the Trust.
The maximum annual benefit per trustee under the plan is $2,500.
As of January 31, 2008, the Trust did not own shares of affiliated
companies. Affiliated companies are defined by the 1940 Act, as amended, as
those companies in which a fund holds 5% or more of the outstanding voting
securities.
Affiliate transactions during the six months ended January 31, 2008 were as
follows:
PAR/SHARES PAR/SHARES REALIZED
AS OF GROSS GROSS AS OF GAIN/
NAME 7/31/07 ADDITIONS REDUCTIONS 1/31/08 (LOSS)
Neoplan USA Corp., Revolving
Credit Agreement........... $589,367 $-0- $589,367 $-0- $ -0-
Neoplan USA Corp., Common
Stock...................... 8,517 -0- 8,517 -0- (85)
Neoplan USA Corp., Preferred
Stock C.................... 532 -0- 532 -0- (533)
Neoplan USA Corp., Preferred
Stock D.................... 1,730 -0- 1,730 -0- (1,073,989)
-----------
$(1,074,607)
===========
3. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from investments sold and
repaid, excluding short-term investments, were $562,508,913 and $719,403,580,
respectively.
4. COMMITMENTS
Pursuant to the terms of certain Senior Loan agreements, the Trust had unfunded
loan commitments of approximately $85,451,200 as of January 31, 2008. The Trust
intends to reserve against such contingent obligations by designating cash,
liquid securities and liquid Senior Loans as a reserve. The unrealized
depreciation on these commitments of $5,714,582
39
VAN KAMPEN SENIOR INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
as of January 31, 2008 is reported as "Unfunded Commitments" on the Statement of
Assets and Liabilities.
5. DERIVATIVE FINANCIAL INSTRUMENTS
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.
The Trust may use derivative instruments for a variety of reasons, such as
to attempt to protect the Trust against possible changes in the market value of
its portfolio or to generate potential gain. All of the Trust's portfolio
holdings, including derivative instruments, are marked to market each day with
the change in value reflected in unrealized appreciation/depreciation. Risks may
arise as a result of the potential inability of the counterparties to meet the
terms of their contracts.
The Trust may enter into credit default swap contracts for hedging purposes
or to gain exposure to a credit in which the Trust may otherwise invest. A
credit default swap is an agreement between two parties to exchange the credit
risk of an issuer. A buyer of a credit default swap is said to buy protection by
paying periodic fees in return for a contingent payment from the seller if the
issuer has a credit event such as bankruptcy, a failure to pay outstanding
obligations or deteriorating credit while the swap is outstanding. A seller of a
credit default swap is said to sell protection and thus collects the periodic
fees and profits if the credit of the issuer remains stable or improves while
the swap is outstanding but the seller in a credit default swap contract would
be required to pay an agreed-upon amount, which approximates the notional amount
of the swap as disclosed in the table following the Portfolio of Investments, to
the buyer in the event of an adverse credit event of the issuer. The Trust
accrues for the periodic fees on credit default swaps on a daily basis with the
net amount accrued recorded within unrealized appreciation/depreciation of swap
contracts. Upon cash settlement of the periodic fees, the net amount is recorded
as realized gain/loss on swap contracts on the Statements of Operations. Net
unrealized gains are recorded as an asset or net unrealized losses are reported
as a liability on the Statement of Assets and Liabilities. The change in value
of the swap contracts is reported as unrealized gains or losses on the Statement
of Operations. Payments received or made upon entering into a credit default
swap contract, if any, are recorded as realized gain or loss on the Statement of
Operations upon termination or maturity of the swap. Credit default swaps may
involve greater risks than if the Trust had invested in the issuer directly.
Credit default swaps are subject to general market risk, counterparty risk and
credit risk.
If there is a default by the counterparty, the Trust will have contractual
remedies pursuant to the agreements related to the transaction. Counterparties
are required to pledge collateral daily (based on the valuation of each swap) on
behalf of the Trust with a value approximately equal to the amount of any
unrealized gain. Cash collateral, when received by the Trust, is recorded with
an offsetting liability shown on the Statement of Assets and Liabilities.
Reciprocally, when the Trust has an unrealized loss on swap contract, the Trust
has instructed the custodian to pledge cash or liquid securities as collateral
with a value approximately equal to the amount of the unrealized loss.
Collateral pledges are monitored and subsequently adjusted if and when the swap
valuations fluctuate. Restricted cash, if any, for segregating purposes is shown
on the Statement of Assets and Liabilities.
40
VAN KAMPEN SENIOR INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
6. SENIOR LOAN PARTICIPATION COMMITMENTS
The Trust invests primarily in participations, assignments, or acts as a party
to the primary lending syndicate of a Variable Rate Senior Loan interest to
United States and foreign corporations, partnerships, and other entities. When
the Trust purchases a participation of a Senior Loan interest, the Trust
typically enters into a contractual agreement with the lender or other third
party selling the participation, but not with the borrower directly. As such,
the Trust assumes the credit risk of the borrower, selling participant or other
persons interpositioned between the Trust and the borrower.
At January 31, 2008, the following sets forth the selling participants with
respect to interests in Senior Loans purchased by the Trust on a participation
basis.
PRINCIPAL
AMOUNT VALUE
SELLING PARTICIPANT (000) (000)
General Electric Capital Corp. ............................. $ 5,000 $ 4,934
Merrill Lynch............................................... 20,000 16,400
JP Morgan Chase............................................. 20,000 16,400
Citicorp North America...................................... 16,667 13,667
Bank of America, NA......................................... 10,000 8,200
------- -------
$71,667 $59,601
======= =======
7. BORROWINGS
The Trust may utilize financial leverage to the maximum extent allowable under
the 1940 Act, as amended. Under the 1940 Act, as amended, a Trust generally may
not (i) borrow money greater than 33 1/3% of the Trust's total assets or (ii)
issue preferred shares greater than 50% of the Trust's total assets. In using a
combination of borrowing money and issuing preferred shares, the maximum
allowable leverage is somewhere between 33 1/3% and 50% (but in no event more
than 50%) of the Trust's total assets based on the relative amounts borrowed or
preferred shares issued.
The Trust has entered into a $700 million revolving credit and security
agreement. This revolving credit agreement is secured by the assets of the
Trust. In connection with this agreement, for the six months ended January 31,
2008, the Trust incurred fees of approximately $1,024,427. For the six months
ended January 31, 2008, the average daily balance of borrowings under the
Amended and Restated Revolving Credit and Security Agreement was $415,744,565
with a weighted average interest rate of 5.42%.
8. PREFERRED SHARES ISSUANCE
The Trust has outstanding 5,600 shares each of Series M, Series T, Series W,
Series TH and Series F Auction Preferred Shares (APS), $.01 Par Value, $25,000
liquidation preference, for a total issuance of $700 million. Dividends are
cumulative and the dividend rates are generally reset every seven days through
an auction process. If the preferred shares are unable to be remarketed on a
remarketing date, the Trust would be required to pay the maximum applicable rate
on APS to holders of such shares for successive divided periods until such time
when the shares are successfully remarketed. The maximum rate on APS is equal to
150% of the London Inter-Bank Offered Rate (LIBOR) on that date. The average
rate in
41
VAN KAMPEN SENIOR INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- JANUARY 31, 2008 (UNAUDITED) continued
effect on January 31, 2008 was 4.464%. During the six months ended January 31,
2008, the rates ranged from 4.360% to 6.300%.
The Trust pays annual fees equivalent to .25% of the preferred share
liquidation value for the remarketing efforts associated with the preferred
auctions. These fees are included as a component of the "Preferred Share
Maintenance" expense on the Statement of Operations.
The APS are redeemable at the option of the Trust in whole or in part at the
liquidation value of $25,000 per share plus accumulated and unpaid dividends.
The Trust is subject to certain asset coverage tests and the APS are subject to
mandatory redemption if the tests are not met.
9. INDEMNIFICATIONS
The Trust enters into contracts that contain a variety of indemnifications. The
Trust's maximum exposure under these arrangements is unknown. However, the Trust
has not had prior claims or losses pursuant to these contracts and expects the
risk of loss to be remote.
10. ACCOUNTING PRONOUNCEMENT
In September 2006, Statement of Financial Accounting Standards No. 157, Fair
Value Measurements (SFAS 157), was issued and is effective for fiscal years
beginning after November 15, 2007. SFAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. As of January 31, 2008, the Adviser does not believe the adoption
of SFAS 157 will impact the amounts reported in the financial statements,
however, additional disclosures will be required about the inputs used to
develop the measurements of fair value and the effect of certain measurements
reported on the Statement of Operations for a fiscal period.
11. SUBSEQUENT EVENT--AUCTION PREFERRED SHARES (APS)
Beginning on February 12, 2008 and continuing through March 18, 2008 (the most
recent auction prior to the printing of this report), the following series of
preferred shares of the Trust were not successfully remarketed. As a result, the
dividend rates of these preferred shares were reset to the maximum applicable
rate on APS.
AVERAGE RATE
FROM
2/12/08 TO 3/18/08
Series M.................................................... 4.569%
Series T.................................................... 4.580%
Series W.................................................... 4.648%
Series TH................................................... 4.640%
Series F.................................................... 4.607%
42
VAN KAMPEN SENIOR INCOME TRUST
BOARD OF TRUSTEES, OFFICERS AND IMPORTANT ADDRESSES
BOARD OF TRUSTEES
DAVID C. ARCH
JERRY D. CHOATE
ROD DAMMEYER
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
HOWARD J KERR
JACK E. NELSON
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY
OFFICERS
RONALD E. ROBISON
President and Principal Executive Officer
AMY R. DOBERMAN
Vice President
STEFANIE V. CHANG
Vice President and Secretary
JOHN L. SULLIVAN
Chief Compliance Officer
STUART N. SCHULDT
Chief Financial Officer and Treasurer
CHRISTINA JAMIESON
Vice President
INVESTMENT ADVISER
VAN KAMPEN ASSET MANAGEMENT
522 Fifth Avenue
New York, New York 10036
CUSTODIAN
STATE STREET BANK
AND TRUST COMPANY
One Lincoln Street
Boston, Massachusetts 02111
TRANSFER AGENT
COMPUTERSHARE TRUST COMPANY, N.A.
C/O COMPUTERSHARE INVESTOR SERVICES
P.O. Box 43078
Providence, Rhode Island 02940-3078
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
DELOITTE & TOUCHE LLP
111 South Wacker Drive
Chicago, Illinois 60606
* "Interested persons" of the Trust, as defined in the Investment Company Act
of 1940, as amended.
43
Van Kampen Senior Income Trust
An Important Notice Concerning Our U.S. Privacy Policy
We are required by federal law to provide you with a copy of our Privacy
Policy annually.
The following Policy applies to current and former individual clients of Van
Kampen Investments Inc., Van Kampen Asset Management, Van Kampen Advisors
Inc., Van Kampen Funds Inc., Van Kampen Investor Services Inc. and Van
Kampen Exchange Corp., as well as current and former individual investors in
Van Kampen mutual funds, unit investment trusts, and related companies.
This Policy is not applicable to partnerships, corporations, trusts or other
non-individual clients or account holders, nor is this Policy applicable to
individuals who are either beneficiaries of a trust for which we serve as
trustee or participants in an employee benefit plan administered or advised
by us. This Policy is, however, applicable to individuals who select us to
be a custodian of securities or assets in individual retirement accounts,
401(k) accounts, 529 Educational Savings Accounts, accounts subject to the
Uniform Gifts to Minors Act, or similar accounts.
Please note that we may amend this Policy at any time, and will inform you
of any changes to this Policy as required by law.
WE RESPECT YOUR PRIVACY
We appreciate that you have provided us with your personal financial
information. We strive to maintain the privacy of such information while we
help you achieve your financial objectives. This Policy describes what
non-public personal information we collect about you, why we collect it, and
when we may share it with others.
We hope this Policy will help you understand how we collect and share
non-public personal information that we gather about you. Throughout this
Policy, we refer to the non-public information that personally identifies
you or your accounts as "personal information."
1. WHAT PERSONAL INFORMATION DO WE COLLECT ABOUT YOU?
To serve you better and manage our business, it is important that we collect
and maintain accurate information about you. We may obtain this information
from applications and other forms you submit to us, from your dealings with
us, from consumer reporting agencies, from our Web sites and from third
parties and other sources.
(continued on next page)
Van Kampen Senior Income Trust
An Important Notice Concerning Our U.S. Privacy Policy continued
For example:
-- We may collect information such as your name, address, e-mail address,
telephone/fax numbers, assets, income and investment objectives through
applications and other forms you submit to us.
-- We may obtain information about account balances, your use of
account(s) and the types of products and services you prefer to receive
from us through your dealings and transactions with us and other
sources.
-- We may obtain information about your creditworthiness and credit
history from consumer reporting agencies.
-- We may collect background information from and through third-party
vendors to verify representations you have made and to comply with
various regulatory requirements.
-- If you interact with us through our public and private Web sites, we
may collect information that you provide directly through online
communications (such as an e-mail address). We may also collect
information about your Internet service provider, your domain name,
your computer's operating system and Web browser, your use of our Web
sites and your product and service preferences, through the use of
"cookies." "Cookies" recognize your computer each time you return to
one of our sites, and help to improve our sites' content and
personalize your experience on our sites by, for example, suggesting
offerings that may interest you. Please consult the Terms of Use of
these sites for more details on our use of cookies.
2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?
To provide you with the products and services you request, to serve you
better and to manage our business, we may disclose personal information we
collect about you to our affiliated companies and to non-affiliated third
parties as required or permitted by law.
A. INFORMATION WE DISCLOSE TO OUR AFFILIATED COMPANIES. We do not disclose
personal information that we collect about you to our affiliated companies
except to enable them to provide services on our behalf or as otherwise
required or permitted by law.
B. INFORMATION WE DISCLOSE TO THIRD PARTIES. We do not disclose personal
information that we collect about you to non-affiliated third parties except
to enable them to provide services on our behalf, to perform joint marketing
agreements with
(continued on back)
Van Kampen Senior Income Trust
An Important Notice Concerning Our U.S. Privacy Policy continued
other financial institutions, or as otherwise required or permitted by law.
For example, some instances where we may disclose information about you to
non-affiliated third parties include: for servicing and processing
transactions, to offer our own products and services, to protect against
fraud, for institutional risk control, to respond to judicial process or to
perform services on our behalf. When we share personal information with
these companies, they are required to limit their use of personal
information to the particular purpose for which it was shared and they are
not allowed to share personal information with others except to fulfill that
limited purpose.
3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL
INFORMATION WE COLLECT ABOUT YOU?
We maintain physical, electronic and procedural security measures to help
safeguard the personal information we collect about you. We have internal
policies governing the proper handling of client information. Third parties
that provide support or marketing services on our behalf may also receive
personal information, and we require them to adhere to confidentiality
standards with respect to such information.
Van Kampen Funds Inc.
1 Parkview Plaza - Suite 100
P.O. Box 5555
Oakbrook Terrace, IL 60181-5555
www.vankampen.com
Copyright (C)2008 Van Kampen Funds Inc.
All rights reserved. Member FINRA/SIPC.
VVRSAN 3/08
(VAN KAMPEN INVESTMENTS LOGO) IU08-01391P-Y01/08
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semi-annual reports.
Item 6. Schedule of Investments.
Please refer to Item #1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable for semi-annual reports.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable for semi-annual reports.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. Controls and Procedures
(a) The Trust's principal executive officer and principal financial officer have
concluded that the Trust's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Trust in this Form
N-CSRS was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the second fiscal quarter of the period covered
by this report that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.
Item 12. Exhibits.
(1) Code of Ethics -- Not applicable for semi-annual reports.
(2)(a) A certification for the Principal Executive Officer of the registrant is
attached hereto as part of EX-99.CERT.
(2)(b) A certification for the Principal Financial Officer of the registrant is
attached hereto as part of EX-99.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Van Kampen Senior Income Trust
By: /s/ Ronald E. Robison
----------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: March 20, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
By: /s/ Ronald E. Robison
----------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: March 20, 2008
By: /s/ Stuart N. Schuldt
----------------------
Name: Stuart N. Schuldt
Title: Principal Financial Officer
Date: March 20, 2008