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<SEC-DOCUMENT>0000928816-07-001316.txt : 20070905
<SEC-HEADER>0000928816-07-001316.hdr.sgml : 20070905
<ACCEPTANCE-DATETIME>20070905135438
ACCESSION NUMBER:		0000928816-07-001316
CONFORMED SUBMISSION TYPE:	N-CSRS
PUBLIC DOCUMENT COUNT:		12
CONFORMED PERIOD OF REPORT:	20070630
FILED AS OF DATE:		20070905
DATE AS OF CHANGE:		20070905
EFFECTIVENESS DATE:		20070905

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			HANCOCK JOHN INCOME SECURITIES TRUST /MA
		CENTRAL INDEX KEY:			0000759866
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		N-CSRS
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-04186
		FILM NUMBER:		071099292

	BUSINESS ADDRESS:	
		STREET 1:		C/O JOHN HANCOCK FUNDS
		STREET 2:		601 CONGRESS STREET
		CITY:			BOSTON
		STATE:			MA
		ZIP:			02210
		BUSINESS PHONE:		617-663-3000

	MAIL ADDRESS:	
		STREET 1:		C/O JOHN HANCOCK FUNDS
		STREET 2:		601 CONGRESS STREET
		CITY:			BOSTON
		STATE:			MA
		ZIP:			02210
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-CSRS
<SEQUENCE>1
<FILENAME>a_incsectrst.htm
<DESCRIPTION>JOHN HANCOCK INCOME SECURITIES TRUST
<TEXT>
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<P align=center><FONT face=Times-Roman,Arial,Helvetica,sans-serif>UNITED STATES </FONT><BR>
<FONT face=Times-Roman,Arial,Helvetica,sans-serif>SECURITIES AND EXCHANGE COMMISSION </FONT><BR>
<FONT face=Times-Roman,Arial,Helvetica,sans-serif>Washington, D.C. 20549</FONT><BR>
<BR>
<B><FONT face=Times-Bold,Arial,Helvetica,sans-serif>FORM N-CSR</FONT></B><BR>
<BR>
<B><FONT face=Times-Bold,Arial,Helvetica,sans-serif>CERTIFIED SHAREHOLDER REPORT OF REGISTERED</FONT></B><BR>
<BR>
<B><FONT face=Times-Bold,Arial,Helvetica,sans-serif>MANAGEMENT INVESTMENT COMPANIES</FONT></B><BR>
<BR>
<FONT face=Times-Roman,Arial,Helvetica,sans-serif>Investment Company Act file number </FONT><U><FONT face=Times-Roman,Arial,Helvetica,sans-serif>811- 4186</FONT></U><BR>
<BR>
<U><FONT face=Times-Roman,Arial,Helvetica,sans-serif>John Hancock Income Securities Trust</FONT></U><FONT face=Times-Roman,Arial,Helvetica,sans-serif> </FONT><BR>
<FONT face=Times-Roman,Arial,Helvetica,sans-serif>(Exact name of registrant as specified in charter)</FONT><BR>
<BR>
<U><FONT face=Times-Roman,Arial,Helvetica,sans-serif>601 Congress Street, Boston, Massachusetts 02210</FONT></U><FONT face=Times-Roman,Arial,Helvetica,sans-serif> </FONT><BR>
<FONT face=Times-Roman,Arial,Helvetica,sans-serif>(Address of principal executive offices) (Zip code)</FONT><BR>
<BR>
<FONT face=Times-Roman,Arial,Helvetica,sans-serif>Alfred P. Ouellette </FONT><BR>
<FONT face=Times-Roman,Arial,Helvetica,sans-serif>Senior Counsel and Assistant Secretary </FONT><BR>
<BR>
<FONT face=Times-Roman,Arial,Helvetica,sans-serif>601 Congress Street</FONT><BR>
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<U><FONT face=Times-Roman,Arial,Helvetica,sans-serif>Boston, Massachusetts 02210</FONT></U><FONT face=Times-Roman,Arial,Helvetica,sans-serif> </FONT><BR>
<FONT face=Times-Roman,Arial,Helvetica,sans-serif>(Name and address of agent for service)</FONT></P>
<P align=left><FONT face=Times-Roman,Arial,Helvetica,sans-serif>Registrant's telephone number, including area code: </FONT><U><FONT face=Times-Roman,Arial,Helvetica,sans-serif>617-663-4324</FONT></U><FONT face=Times-Roman,Arial,Helvetica,sans-serif> </FONT></P>
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     <TD noWrap align=left><FONT face=Times-Roman,Arial,Helvetica,sans-serif>Date of fiscal year end:</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Times-Roman,Arial,Helvetica,sans-serif>December 31</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left><FONT face=Times-Roman,Arial,Helvetica,sans-serif>Date of reporting period:</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Times-Roman,Arial,Helvetica,sans-serif>June 30, 2007</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2><BR>
ITEM 1. REPORT TO SHAREHOLDERS. </FONT></P>
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     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>TABLE OF CONTENTS</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Your fund at a glance&nbsp;</FONT></TD></TR>
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     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>page 1</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Managers&#146; report&nbsp;</FONT></TD></TR>
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     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>page 2</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Fund&#146;s investments&nbsp;</FONT></TD></TR>
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     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>page 6</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Financial statements&nbsp;</FONT></TD></TR>
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     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>page 20</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Notes to financial&nbsp;</FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1><B>s</B>tatements&nbsp;</FONT></TD></TR>
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     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>page 25</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>For more information&nbsp;</FONT></TD></TR>
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     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>page 40</FONT></B>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=4>CEO corner</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>To Our Shareholders,</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The stock market gained ground in the first half of 2007, returning 6.96% through June 30, as measured by the Standard &amp; Poor&#146;s 500 Index. It was bolstered by stronger-than-expected corporate earnings growth, healthy global economic growth, increased merger and acquisitions activity and mostly steady interest rates. These positives served to overcome concerns about inflation, a slumping housing market, the subprime mortgage debacle and mixed signals on the future direction of interest rates.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>In fact, at the end of May, the stock market passed a significant milestone, when the broad Standard &amp; Poor&#146;s 500 Index climbed beyond the record it had set seven years ago. From its peak in March 2000, the stock market spiraled downward three consecutive years, bottoming in 2002. The upturn began in 2003, and the market has advanced each year since, finally setting a new high on May 30, 2007.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>This nearly complete market cycle highlights the importance of an investment principle you have heard us speak of often: diversification. That is because it is a key to protecting, and growing, your assets. By allocating your investments among different asset classes, investment styles and portfolio managers, you are likely to be well represented through all phases of a complete market cycle, with the winners helping to cushion the fall of the losers.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The challenge for investors with a diversified portfolio is to properly evaluate your investments to tell the difference between an underperforming manager and an out-of-favor style, while also understanding the role each investment plays in your portfolio. That&#146;s where your financial professional can provide true value. He or she can help you make those assessments and also counsel patience, because a properly diversified portfolio by its very nature will typically have something lagging or out of favor &#151; a concept that can be difficult to live with, but necessary to embrace. If everything in your portfolio is &#147;working,&#148; then you are not truly diversified, but rather are leveraged to the current market and the flavor of the day. If so, you are bound to be out of step in the near future. </FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>With the recent volatility in the securities markets, it has prompted investors to question how long this type of market cycle will last. History tells us it will end and that when it does, today&#146;s leaders may well turn into laggards and vice versa. Indeed, the current subprime mortgage market woes, the subsequent credit crunch and their impact on the financial markets and the global credit markets, are just the latest examples of why investors should be well-diversified. For with patience and a diversified portfolio, it could be easier to weather the market&#146;s twists and turns and reach your long-term goals.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Sincerely,</FONT></P>
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<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Keith F. Hartstein,</FONT> <BR>
<FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>President and Chief Executive Officer</FONT></P>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>This commentary reflects the CEO&#146;s views as of August 27, 2007. They are subject to change at any time.</FONT></P>
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<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=4>Your fund at a glance</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>The Fund seeks a high level of current income consistent with prudent investment risk by investing at least 80% of its assets in a diversified portfolio of income securities.</FONT></B></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Over the last six months</FONT></B></P>
<P align=left><B><FONT face="ZapfDingbats,Zapf Dingbats" size=2><FONT face=Arial>&#9658; </FONT></FONT></B><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=2>Bonds gained modestly in the first half of 2007 despite higher interest rates and subprime mortgage market woes.</FONT></P>
<P align=left><B><FONT face="ZapfDingbats,Zapf Dingbats" size=2><FONT face=Arial>&#9658; </FONT></FONT></B><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=2>High-yield corporate bonds were the best performers, while investment-grade corporate securities lagged.</FONT></P>
<P align=left><B><FONT face="ZapfDingbats,Zapf Dingbats" size=2><FONT face=Arial>&#9658; </FONT></FONT></B><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=2>Overweights in high-yield corporate bonds and mortgage-backed securities helped the Fund outperform its benchmark index.</FONT></P>
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<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Top 10 issuers</FONT></B></P>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Federal National Mortgage Assn.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>36.1%</FONT>&nbsp;</TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Washington Mutual, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1.6%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Federal Home Loan Mortgage Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.4%</FONT>&nbsp;</TD>
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     <TD vAlign=center noWrap align=left rowSpan=3><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Residential Asset Mortgage</FONT>&nbsp; &nbsp;<BR>
<FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Products, Inc.</FONT>&nbsp; </TD>
     <TD vAlign=center noWrap align=right background="" rowSpan=3>&nbsp;<FONT face="Frutiger 45 Light" size=1>1.3%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Countrywide Home Loans, Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2.3%</FONT>&nbsp;</TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bear Stearns Cos., Inc.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2.2%</FONT>&nbsp;</TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bank of America Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1.2%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Goldman Sachs Group</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2.1%</FONT>&nbsp;</TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>JPMorgan Chase &amp; Co.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1.1%</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Crown Castle Int&#146;l Corp.</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1.7%</FONT>&nbsp;</TD>
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<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>As a percentage of the Fund&#146;s net assets plus the value of preferred shares on June 30, 2007.</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>1</FONT></P>
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<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=7>Managers&#146; report</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=5>John Hancock</FONT><BR>
<BR>
<FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=6>Income Securities Trust</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>In an environment of rising interest rates, U.S. bonds produced modestly positive returns in the first half of 2007. </FONT></B><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=2>The Lehman Brothers Aggregate Bond Index, a broad measure of bond market performance, returned 0.98% for the six-month period.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Bonds gained ground in the first quarter of the year as the U.S. economy continued to weaken, producing an annualized growth rate of just 0.7% . A continued slump in the housing market led to worsening delinquencies and foreclosures among subprime borrowers, and the resulting &#147;flight to quality&#148; helped boost the bond market.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>In the second quarter, however, economic data came in stronger than expected, most notably in the labor market. In addition, inflation remained persistently above trend, in part because of a renewed rise in energy prices. As a result, expectations of an interest rate cut by the Federal Reserve before year-end faded. This combination of factors led to rising interest rates in the last two months of the period, erasing most of the bond market&#146;s earlier gains.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The yield curve grew steeper during the six-month period. At the start of the year, the yield curve was &#147;inverted&#148; &#151; short-term bond yields were slightly higher than the yields of longer-term bonds. However, longer-term bond yields rose higher than short-term yields during the period, and the yield curve returned to a more &#147;normal&#148; shape.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>SCORECARD</FONT></B></P>
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     <TD noWrap align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=1>INVESTMENT</FONT>&nbsp; </TD>
     <TD noWrap align=center><FONT face=Arial>&nbsp; </FONT></TD>
     <TD noWrap align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=1>PERIOD&#146;S PERFORMANCE . . &nbsp;AND WHAT&#146;S BEHIND THE NUMBERS</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Cinemark</FONT></B>&nbsp; </TD>
     <TD noWrap align=center><FONT face=Arial><FONT face=Arial size=1>&#9650;</FONT> </FONT></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Theater company benefited from improving business conditions and</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=center><FONT face=Arial>&nbsp; </FONT></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>debt reduction efforts</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Navios Maritime</FONT></B>&nbsp; </TD>
     <TD noWrap align=center><FONT face=Arial><FONT face=Arial size=1>&#9650;</FONT></FONT></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Increase in global trade boosted this shipping company</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Holdings</FONT></B>&nbsp; </TD>
     <TD noWrap align=center><FONT face=Arial>&nbsp; </FONT></TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
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     <TD noWrap align=center background=""></TD>
     <TD noWrap align=left background="">&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Liberty Mutual</FONT></B>&nbsp; </TD>
     <TD noWrap align=center><FONT face=Arial><FONT face=Arial size=1>&#9660;</FONT> </FONT></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Subprime lending woes weighed on property and casualty insurer</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>2</FONT></P>
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<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Portfolio Managers, MFC Global Investment Management (U.S.), LLC</FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Barry H. Evans, CFA, Jeffrey N. Given, CFA, and Howard C. Greene, CFA</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Every sector of the bond market gained ground during the period. High-yield corporate bonds remained the top performers, though rising interest rates and a significant increase in new issues led to a sharp pullback in the high yield market late in the period. Among investment-grade sectors, mortgage-backed securities posted the best returns, while corporate </FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>bonds lagged.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>&#147;In an environment of rising </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>interest rates, U.S. bonds </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>produced modestly positive </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>returns in the first half of 2007.&#148;</FONT></B></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Fund performance</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>For the six months ended June 30, 2007, John Hancock Income Securities Trust produced a total return of 1.14% at net asset value (NAV) and &#150;1.45% at market </FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>value. The Fund&#146;s NAV return and its market performance differ because the market share price is subject to the dynamics of secondary market trading, which could cause it to trade at a discount or premium to the Fund&#146;s NAV share price at any time. The Fund&#146;s yield at closing market price on June 30, 2007 was 6.53% . By comparison, the average closed-end intermediate-term bond fund returned 1.92%, according to Morningstar, Inc., and the Lehman Brothers Government/Credit Bond Index returned 0.97% .</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Overweight positions in high-yield corporate bonds and mortgage-backed securities helped the portfolio outperform its benchmark index, but our Morningstar peer group has an even higher average weighting in high-yield bonds, and that factor contributed to our underperformance of the peer group average.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>High yield added value</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The portfolio&#146;s outperformance of its benchmark index was driven in part by our position in high-yield corporate bonds, which outperformed during the six-month period. Although we reduced our overall exposure </FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>3</FONT></P>
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<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>to corporate bonds during the period, we mainly sold investment-grade corporate securities and maintained our weighting in lower-quality corporate bonds.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>We cut back on our investment-grade holdings because of concerns about &#147;event risk&#148; &#151; leveraged buyouts, special dividends and other actions that favor stockholders over bondholders. In contrast, event risk has little impact on the lower-quality segment of the market, where companies are typically too debt-heavy to take on additional borrowing. Another factor in favor of high yield bonds was the positive fundamental backdrop &#151; solid balance sheets, healthy corporate earnings growth and very few defaults.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Many of the top-performing bonds in the portfolio were high yield securities. The best contributor was Cinemark, Inc., which owns a chain of movie theaters. The CCC-rated bonds rallied as business conditions improved, the summer movie season appeared promising and the company successfully reduced its debt load. Another strong performer was shipping company Navios Maritime Holdings, Inc., which benefited from the strength of global trade. Toward the end of the period, we sold some high yield bonds that had enjoyed a strong run-up, including car rental company Avis, clothing maker </FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Hanes Brands and food services provider Aramark.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The weakest performers among corporate securities tended to be longer-term bonds that suffer greater price declines when interest rates rise. An example was a bond issued by Liberty Mutual Group, a property and casualty insurer, that matures in 2036. The combination of a long maturity and general weakness among finance-related companies because of the subprime lending problems weighed on this bond.</FONT></P>
<TABLE style="WIDTH: 186px; HEIGHT: 312px" cellSpacing=1 cellPadding=0 width=186 border=0>
<TR>
     <TD width="78%"></TD>
     <TD width="21%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=1>SECTOR DISTRIBUTION</FONT><SUP><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=1>1</FONT></SUP>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="">&nbsp;</TD>
     <TD noWrap align=left background=""></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Government &#151;</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>U.S. agency</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>42%</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mortgage bonds</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>18%</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Financials</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>13%</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Consumer discretionary</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6%</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Utilities</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5%</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Materials</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4%</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Telecommunication</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>services</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3%</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Industrials</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3%</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Energy</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2%</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Health care</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1%</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Government &#151; U.S.</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1%</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Consumer staples</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1%</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Upgrading mortgage holdings</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>We modestly increased our position in mortgage-backed securities, the largest sector weighting in the portfolio, which provided a boost to performance during the period. Within the mortgage segment, we improved the credit quality of our holdings by increasing our exposure to mortgage-backed securities issued by government agencies. We also added </FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>4</FONT></P>
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<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>a small position in interest-only bonds, which represent ownership in the interest payments of a pool of mortgages. These securities typically increase in value when the housing market weakens and mortgage prepayment activity declines, as it has in recent months.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>&#147;Overweight positions in high-</FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>yield corporate bonds and </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>mortgage-backed securities </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>helped the portfolio outperform </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>its benchmark index&#133;&#148;</FONT></B></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Benefiting from the steeper yield curve</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The steeper yield curve during the period also boosted Fund performance modestly. We positioned the portfolio to benefit from this steeper environment by reducing exposure to short- and long-term securities and shifting these assets into the intermediate sector of the market, with maturities ranging from seven to 10 years. We expect the yield curve to grow steeper going forward and plan to maintain this positioning.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Outlook</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Recent signs of resilience in the U.S. economy are likely to keep the Fed on hold through the end of the year. Nonetheless, we expect the housing market to weaken further, which should keep economic </FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>growth at a below-trend rate in the second half of 2007. We intend to remain overweight in mortgage-backed securities, though we are positioned defensively within the mortgage sector, and we believe corporate bonds can continue to outperform in a relatively stable credit environment.</FONT></P>
<IMG src="incsectrustx7x1.jpg" border=0>
<BR>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1></FONT><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>This commentary reflects the views of the portfolio managers through the end of the Fund&#146;s period discussed in this report. The managers&#146; statements reflect their own opinions. As such, they are in no way guarantees of future events, and are not intended to be used as investment advice or a recommendation regarding any specific security. They are also subject to change at any time as market and other conditions warrant.</FONT></P>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1></FONT><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>See the prospectus for the risks of investing in high yield bonds.</FONT></P>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1></FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1</FONT></SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1> As a percentage of the Fund&#146;s net assets plus the value of preferred shares on June 30, 2007.</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>5</FONT></P>
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<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=7>Fund&#146;s investments</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=4>Securities owned by the Fund on 6-30-07 </FONT><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>(unaudited)</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>This schedule is divided into five main categories: bonds, preferred stocks, tranche loans, </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>U.S. government and agencies securities, and short-term investments. Bonds, preferred </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>stocks, tranche loans, and U.S. government and agencies securities are further broken </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>down by industry group. Short-term investments, which represent the Fund&#146;s cash </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>position, are listed last.</FONT></B></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="16%" background=""></TD>
     <TD width="16%"></TD>
     <TD width="8%"></TD>
     <TD width="9%"></TD>
     <TD width="16%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Interest</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Maturity</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Credit</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Par value</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer, description</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rate</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background="">&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>date</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rating (A)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>(000)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Bonds 80.84%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$136,441,134</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(Cost $137,441,206)</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background="">&nbsp;</TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Advertising 0.28%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>473,750</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>R.H. Donnelley Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Disc Note Ser A-1</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.875%</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-15-13</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$200</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>189,500</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Disc Note Ser A-2</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.875</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-15-13</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>300</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>284,250</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Aerospace &amp; Defense 0.14%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>242,400</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>TransDigm, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Sub Note (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.750</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>07-15-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>240</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>242,400</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Agricultural Products 0.30%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>506,850</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Chaoda Modern Agriculture</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(Holdings) Ltd.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Note (Cayman Islands) (F)(L)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.750</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-08-10</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>545</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>506,850</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Airlines 1.03%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,736,583</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Continental Airlines, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Pass Thru Ctf Ser 1999-1A</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.545</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-02-19</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>362</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>368,718</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Pass Thru Ctf Ser 2000-2 Class B (L)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.307</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10-02-19</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>398</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>408,471</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Pass Thru Ctf Ser 2001-1 Class C</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.033</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-15-11</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>130</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>129,238</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Delta Airlines, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Pass Thru Ctf Ser 02-1</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.417</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>07-02-12</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>825</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>830,156</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Apparel Retail 0.13%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>223,300</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Hanesbrands, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Floating Rate Note Ser B (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.784</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-15-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>220</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>223,300</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Automotive Retail 0.12%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>202,000</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Avis Budget Car Rental LLC,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.625</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-15-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>200</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>202,000</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Broadcasting &amp; Cable TV 0.48%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>805,694</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Nexstar Finance, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Sub Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-15-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CCC+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>340</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>336,600</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Rogers Cable, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Sec Note (Canada) (F)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.750</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>03-15-15</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>455</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>469,094</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>6</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<!--$$/page=-->
<A name="page_9"></A>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></FONT></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="16%" background=""></TD>
     <TD width="16%"></TD>
     <TD width="8%">&nbsp;</TD>
     <TD width="9%">&nbsp;</TD>
     <TD width="16%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Interest</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Maturity</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Credit</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Par value</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer, description</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rate</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>date</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rating (A)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>(000)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Casinos &amp; Gaming 4.65%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$7,846,241</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Chukchansi Economic Development</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Authority, Sr Note (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.000%</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-15-13</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$460</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>469,200</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Fontainbleau Las Vegas Holdings Ltd.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Note (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10.250</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-15-15</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CCC+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>290</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>285,650</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Jacobs Entertainment, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.750</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-15-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>500</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>519,375</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Little Traverse Bay Bands of</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Odawa Indians,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10.250</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-15-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>500</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>515,000</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mashantucket West Pequot,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bond (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.912</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>09-01-21</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>285</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>265,375</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>MTR Gaming Group, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Sub Note Ser B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-01-12</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>290</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>305,225</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Pinnacle Entertainment, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Sub Note (L)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-15-15</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>965,000</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Pokagon Gaming Authority,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10.375</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-15-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>215</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>237,038</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Seminole Hard Rock Entertainment,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Sec Note (P)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.848</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>03-15-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>500</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>503,750</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Seminole Tribe of Florida,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bond (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.535</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10-01-20</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>650</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>620,327</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Seneca Gaming Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.250</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-01-12</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>875</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>887,031</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Shingle Springs Tribal Gaming Authority,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.375</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-15-15</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>200</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>201,750</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Turning Stone Casino Resort Enterprise,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.125</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>09-15-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,540</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,566,950</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Waterford Gaming LLC,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.625</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>09-15-12</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>484</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>504,570</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Commodity Chemicals 0.44%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>743,225</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Lyondell Chemical Co.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Sub Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10.875</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-01-09</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>500</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>500,000</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sterling Chemicals, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Sec Note (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10.250</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-01-15</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>235</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>243,225</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=4><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Construction &amp; Farm Machinery &amp; Heavy Trucks 0.30%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>501,250</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Manitowoc Co., Inc. (The),</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.125</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-01-13</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>500</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>501,250</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Consumer Finance 2.67%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>4,513,026</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Ford Motor Credit Co.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.375</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10-28-09</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,625</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,613,066</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.875</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-10-11</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>295</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>309,642</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-15-16</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>140</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>134,099</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>General Motors Acceptance Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.750</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-01-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>550</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>526,711</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-15-11</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>465</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>442,076</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>7</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

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<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></FONT></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="16%" background=""></TD>
     <TD width="16%"></TD>
     <TD width="9%">&nbsp;</TD>
     <TD width="8%"></TD>
     <TD width="16%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Interest</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Maturity</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Credit</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Par value</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer, description</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rate</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>date</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rating (A)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>(000)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Consumer Finance (continued)</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>HSBC Finance Capital Trust IX,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Note (5.911% to 11-30-15</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>then variable)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.911%</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-30-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$800</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$774,566</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Nelnet, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.400</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>09-29-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>715</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>712,866</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Department Stores 0.28%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>481,952</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Penney, J.C. Co., Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Deb</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.650</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-15-16</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>445</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>481,952</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Diversified Banks 3.92%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>6,610,572</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Banco Mercantil del Norte SA,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sub Note (Mexico) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.862</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10-13-21</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Baa2</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>685</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>684,299</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bancolombia SA,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sub Bond (Colombia) (F)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.875</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-25-17</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Baa3</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>340</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>329,375</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bank of New York,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Cap Security (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.780</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-01-26</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>650</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>675,285</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Barclays Bank Plc,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Perpetual Bond (6.860% to 6-15-32</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>then variable) (United Kingdom) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.860</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>09-29-49</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,655</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,692,171</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Chuo Mitsui Trust &amp; Banking</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Co., Ltd.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Perpetual Sub Note (5.506% to</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4-15-15 then variable) (Japan) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.506</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-15-49</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Baa1</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>940</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>887,262</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Lloyds TSB Group Plc,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bond (United Kingdom) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.267</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-14-49</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>730</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>692,538</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Royal Bank of Scotland Group Plc,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Perpetual Bond (7.648% to 9-30-31</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>then variable) (United Kingdom) (F)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.648</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-29-49</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>650</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>724,684</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Societe Generale,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sub Note (France) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.922</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-05-49</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>460</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>445,386</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Standard Chartered Plc,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bond (Great Britain) (F)(P)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.014</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-30-49</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>500</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>479,572</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Diversified Chemicals 1.40%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>2,361,975</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mosiac Co. (The),</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.625</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-01-16</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>290</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>296,525</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>NOVA Chemicals Corp.</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Med Term Note (Canada) (F)(L)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.400</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-01-09</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,045</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,065,450</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=4><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Diversified Commercial &amp; Professional Services 0.46%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>771,516</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Hutchison Whampoa</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>International Ltd.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Note (Cayman Islands) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-13-13</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>750</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>771,516</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Diversified Financial Services 1.44%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>2,428,690</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Comerica Capital Trust II,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Bond</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.576</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-20-37</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>350</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>327,526</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Cosan Finance Ltd.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Bond (Brazil) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-01-17</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>300</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>290,640</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>8</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

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<A name="page_11"></A>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></FONT></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="16%" background=""></TD>
     <TD width="16%"></TD>
     <TD width="9%">&nbsp;</TD>
     <TD width="8%"></TD>
     <TD width="16%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Interest</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Maturity</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Credit</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Par value</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer, description</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rate</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>date</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rating (A)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>(000)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Diversified Financial Services (continued)</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Huntington Capital III,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sub Bond (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.650%</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-15-37</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$590</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$564,298</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>QBE Capital Funding II LP,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sub Bond (Jersey</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Islands) (P)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.797</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-29-49</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>695</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>678,640</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>SMFG Preferred Capital Ltd.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Perpetual Bond (6.078% to 1-25-17</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>then variable) (Cayman Islands) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.078</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-25-49</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>590</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>567,586</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Diversified Metals &amp; Mining 0.38%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>647,500</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Freeport-McMoRan Copper &amp;</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gold, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.375</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-01-17</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>130</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>138,775</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Vedanta Resources Plc,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (United Kingdom) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.625</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-22-10</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>510</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>508,725</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Electric Utilities 5.38%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>9,080,625</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Abu Dhabi National Energy Co.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bond (United Arab Emirates) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10-27-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>935</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>907,171</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AES Eastern Energy LP,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Pass Thru Ctf Ser 1999-A</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-02-17</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,034</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,152,483</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Beaver Valley Funding Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sec Lease Obligation Bond</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-01-17</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>506</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>563,922</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BVPS II Funding Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Collateralized Lease Bond</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.890</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-01-17</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>700</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>778,222</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>FPL Energy National Wind,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Sec Note (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.608</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>03-10-24</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>358</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>346,868</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>HQI Transelect Chile SA,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (Chile) (F)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.875</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-15-11</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,230</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,297,002</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Indiantown Cogeneration LP,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1st Mtg Note Ser A-9</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.260</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-15-10</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>338</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>357,922</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>IPALCO Enterprises, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Sec Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.625</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-14-11</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>325</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>347,750</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Monterrey Power SA de CV,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Sec Bond (Mexico) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.625</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-15-09</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>514</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>556,754</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Pepco Holdings, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.450</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-15-12</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>565</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>579,746</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>PNPP II Funding Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Deb</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.120</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-30-16</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>458</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>509,062</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>TXU Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sec Bond</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.460</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-01-15</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>545</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>548,802</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Waterford 3 Funding Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sec Lease Obligation Bond</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.090</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-02-17</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,111</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,134,921</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Electrical Components &amp; Equipment 0.57%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>955,000</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Freescale Semiconductor, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (L)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.875</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-15-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>955,000</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Electronic Equipment Manufacturers 0.47%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>791,189</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Thomas &amp; Betts Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.250</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-01-13</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>775</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>791,189</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>9</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<!--$$/page=-->
<A name="page_12"></A>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></FONT></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="16%" background=""></TD>
     <TD width="16%"></TD>
     <TD width="9%">&nbsp;</TD>
     <TD width="8%">&nbsp;</TD>
     <TD width="16%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Interest</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Maturity</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Credit</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Par value</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer, description</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rate</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>date</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rating (A)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>(000)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Gas Utilities 0.60%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$1,013,906</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>KN Capital Trust I,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Cap Security Ser B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.560%</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-15-27</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$445</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>448,160</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Southern Union Co.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Jr Sub Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.200</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-01-66</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>565</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>565,746</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Health Care Equipment 0.13%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>221,564</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Hospira, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.050</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>03-30-17</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>225</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>221,564</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Health Care Facilities 0.62%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,040,000</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sun Healthcare Group, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Sub Note (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.125</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-15-15</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CCC+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,040,000</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Health Care Services 0.57%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>966,800</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Alliance Imaging, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Sub Note (L)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.250</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-15-12</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>440</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>426,800</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>HEALTHSOUTH Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Floating Rate Note (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11.354</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-15-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CCC+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>500</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>540,000</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Industrial Machinery 0.27%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>460,082</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Trinity Industries, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Pass Thru Ctf (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.755</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-15-09</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Baa2</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>457</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>460,082</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Insurance 0.33%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>550,000</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Merna Reinsurance Ltd.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sub Note Ser B (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.110</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>07-07-10</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A2</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>550</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>550,000</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Integrated Oil &amp; Gas 1.14%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,926,110</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Pemex Project Funding Master Trust,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.125</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10-13-10</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>615</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>676,500</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Petro-Canada,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Deb (Canada) (F)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.250</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10-15-21</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,249,610</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Integrated Telecommunication Services 2.06%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>3,473,488</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Axtel SAB de CV,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (Mexico) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.625</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-01-17</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>520</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>514,800</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bellsouth Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Deb</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.300</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-15-15</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>957</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>968,752</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Qwest Capital Funding, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-03-09</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,000,000</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sprint Capital Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.900</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-01-19</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>989,936</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Investment Banking &amp; Brokerage 0.46%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>783,135</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mizuho Financial Group Cayman Ltd.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sub Bond (Cayman Islands) (F)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.375</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-29-49</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A2</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>750</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>783,135</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
IT Consulting &amp; Other Services 0.24%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>398,406</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>NCR Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.125</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-15-09</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>390</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>398,406</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Life &amp; Health Insurance 0.43%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>719,092</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Lincoln National Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Jr Sub Bond</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.050</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-20-67</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>250</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>238,696</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Provident Financing Trust I,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Cap Security (L)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.405</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>03-15-38</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>485</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>480,396</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>10</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<!--$$/page=-->
<A name="page_13"></A>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></FONT></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="35%"></TD>
     <TD width="11%"></TD>
     <TD width="11%" background=""></TD>
     <TD width="11%"></TD>
     <TD width="8%">&nbsp;</TD>
     <TD width="8%"></TD>
     <TD width="11%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Interest</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Maturity</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Credit</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Par value</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer, description</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rate</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>date</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rating (A)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>(000)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Marine 1.09%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$1,838,400</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CMA CGM SA,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (France) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.250%</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-01-13</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$700</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>714,000</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Minerva Overseas Ltd.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Note (Cayman Islands) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-01-17</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>680</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>700,400</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Navios Maritime Holdings, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (Marshall Islands) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-15-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>400</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>424,000</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Metal &amp; Glass Containers 0.65%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,091,200</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Blaze Recycling &amp; Metals LLC,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Sec Note (M)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10.875</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>07-15-12</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>60</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>61,200</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Owens-Brockway Glass Container, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.250</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-15-13</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>500</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>517,500</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Vitro SA de CV,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (Mexico) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.125</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-01-17</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>500</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>512,500</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Movies &amp; Entertainment 0.13%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>222,950</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Cinemark, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Disc Note (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.750</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>03-15-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CCC+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>245</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>222,950</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Multi-Line Insurance 1.86%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>3,148,325</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Allstate Corp. (The),</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Jr Sub Deb (6.125% to 5-15-17</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>then variable)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.125</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-15-37</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>350</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>337,196</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Genworth Financial, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Jr Sub Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.150</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-15-66</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>430</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>407,559</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Horace Mann Educators Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.850</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-15-16</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>395</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>399,351</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Liberty Mutual Group,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bond (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-15-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>885</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>897,540</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Jr Sub Bond (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.800</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>03-15-37</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>705</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>663,779</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sul America Participacoes SA,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bond (Brazil) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.625</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-15-12</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>430</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>442,900</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Multi-Media 0.66%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,119,383</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>News America Holdings,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Deb</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.750</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-20-24</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,020</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,119,383</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Multi-Utilities 1.44%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>2,424,916</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CalEnergy Co., Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Bond</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.480</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>09-15-28</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>550</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>679,188</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Dynegy-Roseton Danskamme,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Pass Thru Ctf Ser B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.670</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-08-16</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>500</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>517,500</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Salton Sea Funding Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sec Note Ser C</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.840</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-30-10</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,204</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,228,228</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Office Services &amp; Supplies 0.41%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>687,271</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Xerox Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.750</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-01-17</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>670</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>687,271</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Oil &amp; Gas Drilling 0.17%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>282,495</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Delek &amp; Avner-Yam Tethys Ltd.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Sec Note (Israel) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.326</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-01-13</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>291</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>282,495</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>11</FONT></P>
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<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
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     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Interest</FONT></B>&nbsp; </TD>
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     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Maturity</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Credit</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Par value</FONT></B>&nbsp; </TD>
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     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer, description</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rate</FONT></B>&nbsp; </TD>
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     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>date</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rating (A)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>(000)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
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     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Oil &amp; Gas Equipment &amp; Services 0.20%</FONT></B>&nbsp; </TD>
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     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$334,581</FONT></B>&nbsp; </TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Allis-Chalmers Energy Inc.,</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.500%</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>03-01-17</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$335</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>334,581</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Oil &amp; Gas Refining &amp; Marketing 0.18%</FONT></B>&nbsp; </TD>
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     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>303,458</FONT></B>&nbsp; </TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Premcor Refining Group, Inc.,</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.500</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-01-13</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>285</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>303,458</FONT>&nbsp; </TD></TR>
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Oil &amp; Gas Storage &amp; Transportation 1.76%</FONT></B>&nbsp; </TD>
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     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>2,965,737</FONT></B>&nbsp; </TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Energy Transfer Partners LP,</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.950</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-01-15</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>960</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>944,725</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Markwest Energy Partners LP/Markwest</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Energy Finance Corp.,</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.500</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>07-15-16</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>545</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>554,538</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>TEPPCO Partners LP,</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Jr Sub Note (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.000</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-01-67</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>695</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>662,474</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Williams Partners LP,</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.250</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-01-17</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>800</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>804,000</FONT>&nbsp; </TD></TR>
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Paper Packaging 0.87%</FONT></B>&nbsp; </TD>
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     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,471,025</FONT></B>&nbsp; </TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>MDP Acquisitions Plc,</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (Ireland) (F)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.625</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10-01-12</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>70</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>73,325</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Smurfit-Stone Container Enterprises, Inc.,</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.375</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>07-01-12</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CCC+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,001,250</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.000</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>03-15-17</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CCC+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>245</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>237,650</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>US Corrugated, Inc.</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Sec Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10.000</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-01-13</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CCC+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>160</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>158,800</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Paper Products 1.09%</FONT></B>&nbsp; </TD>
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     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,840,906</FONT></B>&nbsp; </TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Graphic Packaging International Corp.,</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.500</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-15-11</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>445</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>455,013</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Plum Creek Timber Co., Inc.,</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.875</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-15-15</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>365</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>353,393</FONT>&nbsp; </TD></TR>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Verso Paper Holdings LLC,</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Sec Note (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.125</FONT>&nbsp; </TD>
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     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-01-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,032,500</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Property &amp; Casualty Insurance 0.76%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,286,295</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Chubb Corp. (The),</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sub Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.375</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>03-29-67</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>500</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>488,950</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Ohio Casualty Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.300</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-15-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>750</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>797,345</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Publishing 0.10%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>171,700</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Idearc, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-15-16</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>170</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>171,700</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Real Estate Management &amp; Development 1.61%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>2,722,024</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Healthcare Realty Trust, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.125</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-01-11</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>175</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>188,284</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Health Care REIT, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.200</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-01-16</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>505</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>500,309</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Post Apartment Homes,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.125</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10-12-11</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>870</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>844,518</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>12</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

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<A name="page_15"></A>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></FONT></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="16%" background=""></TD>
     <TD width="16%"></TD>
     <TD width="9%">&nbsp;</TD>
     <TD width="8%">&nbsp;</TD>
     <TD width="16%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Interest</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Maturity</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Credit</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Par value</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer, description</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rate</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>date</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rating (A)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>(000)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=4><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Real Estate Management &amp; Development (continued)</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Shimao Property Holding Ltd.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Note (Cayman Islands) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.000%</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-01-16</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$940</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$942,350</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Ventas Realty LP/Capital Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.625</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10-15-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>250</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>246,563</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Regional Banks 1.60%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>2,705,352</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>NB Capital Trust IV,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Cap Security</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.250</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-15-27</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,170</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,217,153</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sovereign Capital Trust VI,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.908</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-13-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>480</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>512,919</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Suntrust Capital VIII,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Bond (6.100% to 12-15-36</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>then variable)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.100</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-01-66</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,065</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>975,280</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Soft Drinks 0.61%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,027,615</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Panamerican Beverages, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (Panama) (F)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.250</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>07-01-09</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,027,615</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Specialized Finance 2.49%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>4,197,680</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Astoria Depositor Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Pass Thru Ctf Ser B (G)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.144</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-01-21</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,080,000</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bosphorous Financial Services,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sec Floating Rate Note (P)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.160</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-15-12</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Baa2</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>500</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>505,049</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Drummond Co., Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (L)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.375</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-15-16</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>500</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>475,000</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>ESI Tractebel Acquisition Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sec Bond Ser B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.990</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-30-11</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>919</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>932,861</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Graftech Finance, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10.250</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-15-12</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>401</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>420,048</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>USB Realty Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Perpetual Bond (6.091% to 1-15-12</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>then variable) (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.091</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-15-49</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>800</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>784,722</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Specialty Chemicals 0.27%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>455,569</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>American Pacific Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-01-15</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>445</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>455,569</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Steel 0.77%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,301,150</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Metallurg Holdings, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Sec Note (G)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10-01-10</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>615</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>639,600</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>WCI Steel Acquisition, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Sec Note (G)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-01-16</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>655</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>661,550</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Thrifts &amp; Mortgage Finance 27.79%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>46,904,344</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>American Home Mortgage Assets,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Interest Only Ser 2006-6</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class XP IO (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2.457</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-25-46</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>14,717</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>763,460</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>American Tower Trust,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2007-1A</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class D (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.957</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-15-37</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>865</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>843,307</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Banc of America Commercial</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mortgage, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2005-6</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class A4 (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.353</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>09-10-47</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>300</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>289,335</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>13</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

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<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></FONT></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="16%" background=""></TD>
     <TD width="16%"></TD>
     <TD width="9%">&nbsp;</TD>
     <TD width="8%"></TD>
     <TD width="16%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Interest</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Maturity</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Credit</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Par value</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer, description</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rate</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>date</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rating (A)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>(000)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Thrifts &amp; Mortgage Finance (continued)</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Banc of America Funding Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2006-B</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class 6A1 (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.881%</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>03-20-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$1,089</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$1,088,474</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2006-D</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class 6B2 (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.953</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-20-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,827</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,774,792</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bear Stearns Adjustable Rate</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mortgage Trust,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2005-1</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class B2 (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4.866</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>03-25-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AA+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>849</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>833,867</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bear Stearns Alt-A Trust,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2005-3</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class B2 (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.300</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-25-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AA+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>597</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>592,558</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2006-1</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class 23A1 (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.621</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-25-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>983</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>975,713</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2006-4</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class 3B1</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.342</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>07-25-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,527</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,532,941</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bear Stearns Commercial Mortgage</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Securities, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2006-PW14</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class D (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.412</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-01-38</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>655</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>616,128</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Citigroup Mortgage Loan Trust, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2005-10</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class 1A5A (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.852</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-25-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>836</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>834,413</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2005-5</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class 2A3</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-25-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>573</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>551,078</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Citigroup/Deutsche Bank</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Commercial Mortgage Group,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2005-CD1</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class C (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.400</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>07-15-44</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>295</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>281,912</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>ContiMortgage Home Equity</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Loan Trust,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 1995-2</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class A-5</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.100</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-15-25</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>90</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>89,799</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Countrywide Alternative Loan Trust,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Interest Only Ser 2005-59</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class 2X IO (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1.988</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-20-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8,765</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>316,346</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Interest Only Ser 2006-0A10</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class XPP IO (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1.943</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-25-46</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4,446</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>191,727</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Interest Only Ser 2006-0A12</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class X IO (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2.614</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>09-20-46</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>20,622</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>992,417</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2006-0A8</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class X IO (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1.953</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>07-25-46</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11,151</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>496,572</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2006-0A8</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class X IO</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-25-47</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7,780</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>359,825</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2006-11CB</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class 3A1</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-25-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Aaa</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3,496</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3,501,340</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Crown Castle Towers LLC,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2006-1A</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class G</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.795</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-15-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Ba2</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,956,037</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>DB Master Finance LLC,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sub Bond Ser 2006-1 Class M1 (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.285</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-20-31</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>340</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>343,392</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>14</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<!--$$/page=-->
<A name="page_17"></A>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></FONT></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="16%" background=""></TD>
     <TD width="16%"></TD>
     <TD width="9%"></TD>
     <TD width="8%"></TD>
     <TD width="16%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Interest</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Maturity</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Credit</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Par value</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer, description</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rate</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>date</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rating (A)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>(000)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Thrifts &amp; Mortgage Finance (continued)</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Domino&#146;s Pizza Master Issuer LLC,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2007-1</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class M1 (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.629%</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-25-37</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$1,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$980,834</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>First Horizon Alternative</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mortgage Securities,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2004-AA5</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class B1 (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.217</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-25-34</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>477</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>467,941</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2006-AA2</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class B1 (G)(P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.195</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-25-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,548</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,552,390</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Global Signal Trust,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sub Bond Ser 2004-2A Class D (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.093</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-15-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Baa2</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>495</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>483,027</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sub Bond Ser 2006-1 Class E (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.495</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-15-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Baa3</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>460</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>459,621</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>GSR Mortgage Loan Trust,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2004-9</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class B1 (G)(P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.074</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-25-34</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,175</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,158,523</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2006-4F</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class 6A1</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-25-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4,167</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4,192,057</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Indymac Index Mortgage Loan Trust,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2004-AR13</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class B1</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.296</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-25-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>418</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>417,073</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2005-AR18</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class 1X IO</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1.934</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10-25-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>19,806</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>569,422</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2005-AR5</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class B1 (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.374</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-25-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>522</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>520,336</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2006-AR19</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class 1B1 (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.419</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-25-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>453</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>458,280</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>JP Morgan Chase Commercial</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mortgage Security Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2005-LDP4</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.129</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10-15-42</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Aa2</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,035</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,923,640</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>JP Morgan Mortgage Trust,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2005-S3</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class 2A2</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-25-21</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>940</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>920,340</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Merrill Lynch Mortgage</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Investors Trust,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2006-AF1</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class MF1</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.102</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-25-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,230</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,202,571</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Morgan Stanley Capital I,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2005-HQ7</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class A4 (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.373</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-14-42</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>840</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>810,004</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2006-IQ12</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class E</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.538</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-15-43</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>640</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>610,345</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Provident Funding Mortgage</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Loan Trust,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2005-1</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class B1 (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4.352</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-25-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>419</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>411,944</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Residential Accredit Loans, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2005-QA12</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class NB5 (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.973</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-25-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3,435</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3,432,393</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>SBA CMBS Trust,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sub Bond Ser 2005-1A Class D (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.219</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-15-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Baa2</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>225</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>225,534</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sub Bond Ser 2005-1A Class E (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.706</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-15-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Baa3</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>200</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>201,375</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>15</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<!--$$/page=-->
<A name="page_18"></A><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>
<P align=left></FONT><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="17%" background=""></TD>
     <TD width="16%"></TD>
     <TD width="10%">&nbsp;</TD>
     <TD width="8%"></TD>
     <TD width="16%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Interest</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Maturity</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Credit</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Par value</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer, description</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rate</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>date</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rating (A)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>(000)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Thrifts &amp; Mortgage Finance (continued)</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>SBA CMBS Trust,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sub Bond Ser 2006-1A Class H (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.389%</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-15-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Ba3</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$365</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$360,917</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sub Bond Ser 2006-1A Class J (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.825</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-15-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B1</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>220</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>217,565</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Washington Mutual Alternative</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Loan Trust,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2005-6</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class 1CB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-25-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>528</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>528,567</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Washington Mutual, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2005-AR4</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class B1 (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4.672</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-25-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,512</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,467,613</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2007-0A4</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class XPPP IO</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>0.813</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-25-47</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Aaa</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>20,670</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>423,735</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2007-0A5</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class 1XPP IO</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>0.626</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-25-47</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Aaa</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>48,960</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>734,393</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2007-0A6</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class 1XPP IO</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>0.485</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>07-25-47</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Aaa</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>28,190</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>377,746</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mtg Pass Thru Ctf Ser 2007-1</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Class B1</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.205</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-25-37</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>578</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>570,725</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Tobacco 0.76%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,283,395</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Alliance One International, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Note (S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-15-12</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>240</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>245,400</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Reynolds American, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Sec Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.250</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-01-13</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,037,995</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Wireless Telecommunication Services 1.88%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>3,179,442</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Citizens Communications Co.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.250</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-15-13</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>460</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>441,025</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Crown Castle Towers LLC,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sub Bond Ser 2005-1A Class D</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.612</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-15-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Baa2</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,340</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,321,911</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Digicel Group Ltd.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note (Bermuda) (F)(L)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.875</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-15-15</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Caa2</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>520</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>509,600</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mobile Telesystems Finance SA,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Gtd Sr Note (Luxembourg) (F)(S)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.750</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-30-08</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>400</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>407,120</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Nextel Communications, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sr Note Ser D</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.375</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-01-15</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>500</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>499,786</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Credit</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer, description</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rating (A) </FONT></B></TD>
     <TD noWrap align=right background=""><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Shares</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Preferred stocks 5.36%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$9,042,394</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(Cost $9,018,146)</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Agricultural Products 0.62%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,039,844</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Ocean Spray Cranberries, Inc.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.25%, Ser A (S)</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12,500</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,039,844</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Broadcasting &amp; Cable TV 0.59%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,004,400</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CBS Corp., 7.250%</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>40,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,004,400</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Diversified Banks 0.83%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,397,550</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bank One Capital Trust VI, 7.20%</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A&#150;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>55,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,397,550</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Diversified Metals &amp; Mining 0.76%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,285,000</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Freeport-McMoRan Copper &amp; Gold, Inc., 6.75%, Conv</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,285,000</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>16</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

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<A name="page_19"></A>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></FONT></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="16%" background=""></TD>
     <TD width="16%"></TD>
     <TD width="9%">&nbsp;</TD>
     <TD width="8%">&nbsp;</TD>
     <TD width="16%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Credit</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer, description</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rating (A)&nbsp;</FONT></B> </TD>
     <TD noWrap align=right background=""><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Shares</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Integrated Telecommunication Services 0.58%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$980,000</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Telephone &amp; Data Systems, Inc., 7.60%, Ser A</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>40,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>980,000</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Multi-Utilities 0.60%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,012,400</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Dominion CNG Capital Trust I, 7.80%</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>40,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,012,400</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Real Estate Management &amp; Development 1.38%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>2,323,200</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=4><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Apartment Investment &amp; Management Co., 8.00%, Ser T</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>55,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,377,200</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Public Storage, Inc., 6.50%, Depositary Shares, Ser W</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>BBB+</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>40,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>946,000</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Credit</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Par value</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer, description, maturity date</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rating (A)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>(000)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Tranche loans 0.12%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$199,746</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(Cost $199,497)</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Education Services 0.12%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>199,746</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Riverdeep Interactive Learning Ltd.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Tranche B, 11-28-13</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$199</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>199,746</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Interest</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Maturity</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Credit</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Par value</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer, description</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rate</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>date</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rating (A)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>(000)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=4><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>U.S. government and agencies securities 65.73%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$110,937,011</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(Cost $112,631,823)</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Government U.S. 0.96%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,612,131</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>United States Treasury,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Note (L)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4.750%</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-15-14</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$150</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>148,125</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Note (L)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-15-17</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,045</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,001,894</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Note (L)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4.250</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-15-13</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>480</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>462,112</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Government U.S. Agency 64.77%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>109,324,880</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Federal Home Loan Mortgage Corp.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>20 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11.250</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-01-16</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>16</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>16,676</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Adj Rate Pass Thru Ctf (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.157</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-01-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,091</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,020,442</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-01-34</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,109</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,089,647</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-01-33</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,648</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,597,192</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CMO REMIC 2978-CL</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-15-31</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,695</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,653,481</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CMO REMIC 3174-CB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-15-31</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>300</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>297,696</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CMO REMIC 3228-PJ</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>03-15-29</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>415</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>410,414</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CMO REMIC 3245-MC</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10-15-30</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,425</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,410,363</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CMO REMIC 3280-MB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-15-30</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,720</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,695,544</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CMO REMIC 3294-NB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-15-29</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>340</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>335,079</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CMO REMIC 3294-ND</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-15-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3,000</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,881,432</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CMO REMIC 3320-PB</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-15-31</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,030</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,018,295</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Federal National Mortgage Assn.,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>15 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>09-01-10</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>18</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>17,932</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>15 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>09-01-12</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,907</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>15 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-01-17</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>36</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>37,120</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>15 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-01-21</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>807</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>810,325</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Adj Rate Pass Thru Ctf (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.527</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-01-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8,636</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8,548,171</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Adj Rate Pass Thru Ctf (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.758</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-01-37</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7,434</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7,452,943</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Adj Rate Pass Thru Ctf (P)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.315</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-01-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3,546</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3,485,260</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf (N)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>07-01-34</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3,020</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3,048,311</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>07-01-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>403</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>407,408</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-01-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>426</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>429,699</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>17</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

<!--$$/page=-->
<A name="page_20"></A>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></FONT></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="26%"></TD>
     <TD width="22%"></TD>
     <TD width="11%" background=""></TD>
     <TD width="12%"></TD>
     <TD width="8%">&nbsp;</TD>
     <TD width="8%"></TD>
     <TD width="12%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Interest</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Maturity</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Credit</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Par value</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer, description</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rate</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>date</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rating (A)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>(000)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><STRONG>Government U.S. Agency (continued)</STRONG><FONT size=3>&nbsp;</FONT></FONT>&nbsp; </TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Federal National Mortgage Assn.,</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf (N)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.000%</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>07-15-34</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$3,170</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$3,135,327</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-01-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3,318</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3,282,390</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-01-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,147</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,127,642</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-01-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,792</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,773,974</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>08-01-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3,631</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3,594,312</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf (N)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>09-01-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>16,559</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>16,391,222</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-01-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,333</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,309,779</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-01-37</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>673</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>666,000</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-01-37</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4,235</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4,190,100</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>04-01-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,983</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,919,666</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-01-35</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,808</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,747,985</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-01-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,336</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,258,948</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-01-36</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4,454</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4,306,424</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>03-01-37</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8,860</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8,545,186</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-01-37</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4,594</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4,430,918</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf (M)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>06-01-37</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5,289</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5,101,620</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CMO REMIC 2006-67-PD</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12-25-34</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,230</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,187,608</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Note</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>05-30-25</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,720</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,666,178</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Government National Mortgage Assn.,</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10.000</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11-15-20</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4,837</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>01-15-21</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4,624</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9.500</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>02-15-25</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AAA</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>13</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>13,803</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Interest</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Maturity </FONT></B></TD>
     <TD noWrap align=right background=""><FONT face="Frutiger 65" size=1><STRONG>Par value </STRONG><FONT face="Arial Narrow" size=3>&nbsp;</FONT></FONT></TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer, description</FONT></B>&nbsp; </TD>
     <TD noWrap align=center background=""></TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>rate</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>date</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>(000)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Short-term investments 7.88%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$13,304,490</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(Cost $13,303,863)</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><STRONG><BR>
Government U.S. Agency 2.78%</STRONG><FONT size=3>&nbsp;</FONT></FONT>&nbsp; </TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>4,700,000</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Federal Home Loan Bank,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Disc Note</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4.94% (Y)</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>07-02-07</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$4,700</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4,700,000</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1><BR>
Joint Repurchase Agreement 0.03%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>54,000</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Joint Repurchase Agreement with Cantor</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Fitzgerald LP dated 6-29-07 at 4.40% to</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>be repurchased at $54,020 on 7-2-07,</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>collateralized by $42,353 of U.S. Treasury</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Inflation Indexed Note, 3.875%, due 1-15-09</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(Valued at $55,080 including interest)</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>54</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>54,000</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>18</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

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<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></FONT></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="68%"></TD>
     <TD width="15%"></TD>
     <TD width="16%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Issuer</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Shares</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Value</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="" colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Cash Equivalents 5.07%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$8,550,490</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>John Hancock Cash Investment Trust (T)(W)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8,550,490</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8,550,490</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Total investments (Cost $272,594,535) 159.93%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$269,924,775</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Other assets and liabilities, net (7.18%)</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>($12,114,903)</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Fund preferred shares, at liquidation value (52.75%)</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>($89,031,784)</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Total net assets applicable to common shareholders 100.00%</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$168,778,088</FONT></B>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>The percentage shown for each investment category is the total value of that category as a percentage of the net assets applicable to common shareholders.</FONT></P>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>IO Interest only (carries notional principal) </FONT></P>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>REIT Real Estate Investment Trust</FONT></P>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(A) Credit ratings are unaudited and are rated by Moody&#146;s Investors Service where Standard &amp; Poor&#146;s ratings are not available unless indicated otherwise.</FONT></P> <P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(F) Parenthetical disclosure of a foreign country in the security description represents country of a foreign issuer; however, the security is U.S. dollar-denominated.</FONT></P>
<P align=left><B><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1></FONT></B><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(G) Security rated internally by John Hancock Advisers, LLC.</FONT></P>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(L) All or a portion of this security is on loan as of June 30, 2007.</FONT></P>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(M) This security having an aggregate value of $61,200, or 0.04% of the net assets applicable to common shareholders, has been purchased as a forward commitment &#151; that is, the Fund has agreed on trade date to take delivery of and to make payment for this security on a delayed basis subsequent to the date of this schedule. The purchase price and interest rate of this security are fixed at trade date, although the Fund does not earn any interest on these until settlement date. The Fund has segregated assets with a current value at least equal to the amount of the forward commitment. Accordingly, the market value of $81,989 of Federal National Mortgage Assn., 5.500%, 6-1-37 has been segregated to cover the forward commitment.</FONT></P>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(N) These securities having an aggregate value of $6,183,638 or 3.66% of the net assets applicable to common shareholders, has been purchased on a when-issued basis. The purchase price and the interest rate of such securities are fixed at trade date, although the Fund does not earn any interest on such securities until settlement date. The Fund has instructed its custodian bank to segregate assets with a current value at least equal to the amount of its when-issued commitments. Accordingly, the market value of $6,340,053 of Federal National Mortgage Assn., 6.000%, 9-1-36 has been segregated to cover the when-issued commitments.</FONT></P>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(P) Represents rate in effect on June 30, 2007.</FONT></P>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(S) These securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers, in transactions exempt from registration. Rule 144A securities amounted to $37,509,045 or 22.22% of the net assets applicable to common shareholders as of June 30, 2007.</FONT></P>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(T) Represents investment of securities lending collateral. </FONT></P>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(W) Issuer is an affiliate of John Hancock Advisers, LLC.</FONT></P>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(Y) Represents current yield on June 30, 2007.</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>19</FONT></P>
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<A name="page_22"></A>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=7>Financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=4>Statement of assets and liabilities</FONT><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2> 6-30-07 (unaudited)</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>This Statement of Assets and Liabilities is the Fund&#146;s balance sheet. It shows the value </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>of what the Fund owns, is due and owes. You&#146;ll also find the net asset value for each </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>common share.</FONT></B></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="87%"></TD>
     <TD width="12%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Assets</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="" colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Investments in unaffiliated issuers, at value (cost $264,044,045)</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>including $8,607,915 of securities loaned (Note 1)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$261,374,285</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Investments in affiliated issuers, at value (cost $8,550,490)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8,550,490</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Total investments at value (cost $272,594,535)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>269,924,775</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Cash</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,411,506</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Cash segregated at broker for future contracts (Note 1)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>130,900</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Receivable for investments sold</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8,127</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Receivable for shares sold</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>221,939</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Dividends and interest receivable</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,538,386</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Other assets</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>19,533</FONT>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=right background=""></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Total assets</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>274,255,166</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=2>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Liabilities</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="" colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Payable for investments purchased</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7,363,044</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Payable upon return of securities loaned (Note 1)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8,550,490</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Dividends payable</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11,512</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Payable for futures variation margin</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>93,500</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Payable to affiliates</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Management fees</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>343,786</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Other</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7,345</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Other payables and accrued expenses</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>75,617</FONT>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="">&nbsp;</TD>
     <TD noWrap align=right background=""></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Total liabilities</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>16,445,294</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Auction Preferred Shares (APS) Series A, including accrued dividends,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>unlimited number of shares of beneficial interest authorized with no par</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>value, 1,780 shares issued, liquidation preference of $25,000 per share</FONT>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>44,515,892</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>APS Series B, including accrued dividends, unlimited number of shares of</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>beneficial interest authorized with no par value, 1,780 shares issued,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>liquidation preference of $25,000 per share</FONT>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>44,515,892</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Net assets</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="" colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Common shares capital paid-in</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>179,297,727</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Accumulated net realized loss on investments and financial futures contracts</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(8,184,545)</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Net unrealized depreciation of investments and financial futures contracts</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(2,292,687)</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Distributions in excess of net investment income</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(42,407)</FONT>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=right background=""></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Net assets applicable to common shares</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$168,778,088</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Net asset value per common share</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="" colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Based on 11,312,428 shares of beneficial interest outstanding &#151; unlimited</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>number of shares authorized with no par value</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$14.92</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>20</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

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<A name="page_23"></A>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></FONT><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=4><BR>
Statement of operations</FONT><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2> For the period ended 6-30-07 (unaudited)</FONT><SUP><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>1</FONT></SUP></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>This Statement of Operations summarizes the Fund&#146;s investment income earned </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>and expenses incurred in operating the Fund. It also shows net gains (losses) and </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>distributions paid to APS shareholders for the period stated.</FONT></B></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="87%"></TD>
     <TD width="12%">&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Investment income</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Interest</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$8,017,791</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Dividends</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>289,313</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Securities lending</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>19,069</FONT>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=right background=""></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Total investment income</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>8,326,173</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Expenses</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="" colSpan=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>
<HR noShade SIZE=1>
</FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Investment management fees (Note 2)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>688,932</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Accounting and legal services fees (Note 2)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>17,505</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Compliance fees</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1,363</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>APS auction fees</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>117,324</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Transfer agent fees</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>44,504</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Custodian fees</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>40,926</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Printing fees</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>32,142</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Professional fees</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>16,893</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Registration and filing fees</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11,906</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Trustees&#146; fees</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5,168</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Interest</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,058</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Securities lending fees</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>465</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Miscellaneous</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9,642</FONT>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="">&nbsp;</TD>
     <TD noWrap align=right background=""></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Total expenses</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>988,828</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=right background=""></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Net investment income</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>7,337,345</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=2></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Realized and unrealized gain (loss)</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Net realized gain (loss) on</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Investments</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(90,564)</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Financial futures contracts</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>167,136</FONT>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="">&nbsp;</TD>
     <TD noWrap align=left background=""></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Change in net unrealized appreciation (depreciation) of</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Investments</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(3,506,738)</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Financial futures contracts</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>131,919</FONT>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="">&nbsp;</TD>
     <TD noWrap align=right background=""></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Net realized and unrealized loss</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>(3,298,247)</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Distributions to APS Series A</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(1,129,614)</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Distributions to APS Series B</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(1,128,436)</FONT>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="">&nbsp;</TD>
     <TD noWrap align=right background=""></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Increase in net assets from operations</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$1,781,048</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=2>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1 </FONT></SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Semiannual period from 1-1-07 to 6-30-07.</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>21</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

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<A name="page_24"></A>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=4>Statement of changes in net assets</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>These Statements of Changes in Net Assets show how the value of the Fund&#146;s net assets </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>has changed during the last two periods. The difference reflects earnings less expenses, </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>any investment gains and losses, distributions, if any, paid to shareholders and the net of </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Fund share transactions.</FONT></B></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="75%"></TD>
     <TD width="12%"></TD>
     <TD width="12%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Year</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Period</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>ended</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>ended</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>12-31-06</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>6-30-07</FONT></B><B><SUP><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>1</FONT></SUP></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Increase (decrease) in net assets</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>From operations</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Net investment income</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$14,120,827</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$7,337,345</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Net realized gain (loss)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(2,401,780)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>76,572</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Change in net unrealized appreciation (depreciation)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2,048,384</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(3,374,819)</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Distributions to APS</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(4,255,519)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(2,258,050)</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Increase in net assets resulting from operations</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>9,511,912</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1,781,048</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="">&nbsp;</TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left background=""></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Distributions to common shareholders</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>From net investment income</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(10,412,003)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(5,108,480)</FONT>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="">&nbsp;</TD>
     <TD noWrap align=right background=""></TD>
     <TD noWrap align=right background=""></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>From Fund share transactions</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>932,358</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>436,876</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="">&nbsp;</TD>
     <TD noWrap align=right background=""></TD>
     <TD noWrap align=right background=""></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Total increase (decrease)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>32,267</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>(2,890,556)</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD colSpan=3></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Net assets</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="" colSpan=3><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>
<HR noShade SIZE=1>
</FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Beginning of period</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>171,636,377</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>171,668,644</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>End of period</FONT></B><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2</FONT></SUP>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$171,668,644</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$168,778,088</FONT></B>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1></FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1</FONT></SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1> Semiannual period from 1-1-07 to 6-30-07. Unaudited.</FONT><BR>
<FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1></FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2</FONT></SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1> Includes distributions in excess of net investment income of $13,222 and $42,407, respectively.</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>22</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

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<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></FONT><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=4><BR>
Financial highlights</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>The Financial Highlights show how the Fund&#146;s net asset value for a share has changed </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>since the end of the previous period.</FONT></B></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="14%"></TD>
     <TD width="14%"></TD>
     <TD width="14%"></TD>
     <TD width="14%"></TD>
     <TD width="14%"></TD>
     <TD width="14%"></TD>
     <TD width="14%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>COMMON SHARES</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Period ended</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>12-31-02</FONT></B><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1</FONT></SUP>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>12-31-03</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>12-31-04</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>12-31-05</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>12-31-06</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>6-30-07</FONT></B><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2</FONT></SUP>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Per share operating performance</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="" colSpan=7><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>
<HR noShade SIZE=1>
</FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Net asset value,</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>beginning of period</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$16.06</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$16.31</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$16.53</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$16.19</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$15.30</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$15.22</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Net investment income</FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3</FONT></SUP>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>0.89</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>0.93</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1.22</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1.20</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1.26</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>0.65</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Net realized and unrealized</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>gain (loss) on investments</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>0.28</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>0.63</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(0.25)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(0.81)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(0.03)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(0.30)</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Distributions to APS Series A and B </FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4</FONT></SUP>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(0.02)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(0.12)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(0.25)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(0.38)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(0.20)</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Total from investment operations</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1.17</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1.54</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>0.85</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>0.14</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>0.85</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>0.15</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Less distributions to</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>common shareholders</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>From net investment income</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(0.92)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(0.96)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(1.19)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(1.03)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(0.93)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(0.45)</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>From net realized gain</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(0.26)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>(0.92)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>(1.22)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>(1.19)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>(1.03)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>(0.93)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>(0.45)</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Capital charges</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Offering costs and underwriting</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>discount related to APS</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(0.10)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Net asset value, end of period</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$16.31</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$16.53</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$16.19</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$15.30</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$15.22</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>14.92</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Per share market value,</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>end of period</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$14.66</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$15.39</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$15.68</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$13.68</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$14.75</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$14.09</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Total return at net asset value</FONT></B><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5 </FONT></SUP><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>(%)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>8.00</FONT></B><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6</FONT></SUP>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>9.57</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>5.70</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1.36</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>6.24</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>1.14</FONT></B><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7</FONT></SUP>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Total return at market value</FONT></B><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5 </FONT></SUP><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>(%)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>6.42</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>13.49</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>9.95</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>(6.42)</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>15.15</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>(1.45)</FONT></B><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7</FONT></SUP>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Ratios and supplemental data</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="" colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Net assets applicable to common shares,</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>end of period (in millions)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$179</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$183</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$180</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$172</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$172</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$169</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Ratio of expenses to average</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>net assets (%)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>0.84</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>0.87</FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8</FONT></SUP>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1.14</FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8</FONT></SUP>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1.16</FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8</FONT></SUP>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1.17</FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8</FONT></SUP>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1.16</FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8,9</FONT></SUP>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Ratio of net investment income</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>to average net assets (%)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.56</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5.58</FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10</FONT></SUP>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.44</FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10</FONT></SUP>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7.62</FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10</FONT></SUP>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.30</FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10</FONT></SUP>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8.58</FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9,10</FONT></SUP>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Portfolio turnover (%)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>371</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>273</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>135</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>148</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>94</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>34</FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7,11</FONT></SUP>&nbsp; </TD></TR>
<TR>
     <TD colSpan=7></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Senior securities</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background="" colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Total APS Series A outstanding</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(in millions)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$45</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$45</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$45</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$45</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$45</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Total APS Series B outstanding</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(in millions)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$45</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$45</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$45</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$45</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$45</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Involuntary liquidation preference</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>APS Series A per unit (in thousands)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$25</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$25</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$25</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$25</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$25</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Involuntary liquidation preference</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>APS Series B per unit (in thousands)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$25</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$25</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$25</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$25</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$25</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Average market value per unit</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>(in thousands)</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$25</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$25</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$25</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$25</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$25</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Asset coverage per unit </FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12</FONT></SUP>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$75,402</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$75,049</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$72,470</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$73,375</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$72,719</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>23</FONT></P>
<HR align=center width="100%" noShade SIZE=2>

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<A name="page_26"></A>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; S T A T E M E N T S<BR>
</FONT></FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Notes to Financial Highlights</FONT></B></P>
<P align=left><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1</FONT></SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1> Audited by previous auditor.</FONT></P>
<P align=left><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>2</FONT></SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1> Semiannual period from 1-1-07 to 6-30-07. Unaudited. <BR>
<BR>
<BR>
</FONT><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>3</FONT></SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1> Based on the average of the shares outstanding.</FONT></P>
<P align=left><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>4</FONT></SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1> APS Series A and B were issued on 11-4-03.</FONT></P>
<P align=left><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>5</FONT></SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1> Total return based on net asset value reflects changes in the Fund&#146;s net asset value during each period. Total return based on market value reflects changes in market value. Each figure assumes that dividend and capital gain distributions, if any, were reinvested. These figures will differ depending upon the level of any discount from or premium to net asset value at which the Fund&#146;s shares traded during the period.</FONT></P>
<P align=left><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>6</FONT></SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1> Unaudited.</FONT></P>
<P align=left><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>7</FONT></SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1> Not annualized.</FONT></P>
<P align=left><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>8</FONT></SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1> Ratios calculated on the basis of expenses relative to the average net assets of common shares. Without the exclusion of preferred shares, the ratios of expenses would have been 0.81%, 0.76%, 0.77%, 0.77% and 0.76% for the periods ended 12-31-03, 12-31-04, 12-31-05, 12-31-06 and 6-30-07, respectively.</FONT></P>
<P align=left><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>9</FONT></SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1> Annualized.</FONT></P>
<P align=left><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>10</FONT></SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1> Ratios calculated on the basis of net investment income relative to the average net assets of common shares. Without the exclusion of preferred shares, the ratios of net investment income would have been 5.19%, 4.99%, 5.06%, 5.45% and 5.65% for the periods ended 12-31-03, 12-31-04, 12-31-05, 12-31-06 and 6-30-07, respectively.</FONT></P>
<P align=left><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11</FONT></SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1> The portfolio turnover rate including the effect of forward commitment trades is 50% for the six months ended June 30, 2007. Prior years exclude the effect of forward commitment trades.</FONT></P>
<P align=left><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>12</FONT></SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1> Calculated by subtracting the Fund&#146;s total liabilities from the Fund&#146;s total assets and dividing that amount by the number of APS outstanding, as of the applicable 1940 Act Evaluation Date, which may differ from the financial reporting date.</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>24</FONT></P>
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<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=4>Notes to financial statements </FONT><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>(unaudited)</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Note 1 </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Accounting policies</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>John Hancock Income Securities Trust (the Fund) is a closed-end diversified investment management company registered under the Investment Company Act of 1940, as amended (the 1940 Act).</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Significant accounting policies of the Fund <BR>
are as follows:</FONT></B></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Security valuation</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The net asset value of the common shares of the Fund is determined daily as of the close of the New York Stock Exchange (NYSE), normally at 4:00 </FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=1>p</FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>.</FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=1>m</FONT><FONT face="Berkeley-Book,Times New &#13;&#10;Roman,Times,serif" size=2>.,</FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2> Eastern Time. Short-term debt investments that have a remaining maturity of 60 days or less are valued at amortized cost, and thereafter assume a constant amortization to maturity of any discount or premium, which approximates market value. Investments in John Hancock Cash Investment Trust (JHCIT), an affiliate of John Hancock Advisers, LLC (the Adviser), a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary of
 Manulife Financial Corporation (MFC), are valued at their net asset value each business day. All other securities held by the Fund are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) as of the close of business on the principal securities exchange (domestic or foreign) on which they trade or, lacking any sales, at the closing bid price. Securities traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. Securities for which there are no such quotations, principally debt securities, are valued based on the valuation provided by an independent pricing service, which utilizes both dealer-supplied and electronic data processing techniques, which take into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data.</FONT>
</P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Other assets and securities for which no such quotations are readily available are valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees. Generally, trading in non-U.S. securities is substantially completed each day at various times prior to the close of trading on the NYSE. The values of such securities used in computing the net asset value of the Fund&#146;s shares are generally determined as of such times. Occasionally, significant events that affect the values of such securities may occur between the times at which such values are generally determined and the close of the NYSE. Upon such an occurrence, these securities will be valued at fair value as determined in good faith under consistently applied procedures established by and under the general supervision of the Board of Trustees.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Joint repurchase agreement</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Pursuant to an exemptive order issued by the Securities and Exchange Commission (SEC), the Fund, along with other registered investment companies having a management contract with the Adviser, may participate in a joint repurchase agreement transaction. Aggregate cash balances are invested in one or more large repurchase agreements, whose underlying securities are obligations of the U.S. government and/or its agencies. The Fund&#146;s custodian bank receives delivery of the underlying securities for the joint account on the Fund&#146;s behalf. The Adviser is responsible for ensuring that the agreement is fully collateralized at all times.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Investment transactions</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Investment transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Net realized gains and losses on sales of investments are determined on the identified cost basis. Some securities may be purchased on a &#147;when-issued&#148; or &#147;forward commitment&#148; basis, which means that the securities will be </FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>25</FONT></P>
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<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>delivered to the Fund at a future date, usually beyond customary settlement date.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Discount and premium on securities</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Fund utilizes the level yield method to accrete discount from par value on securities from either the date of issue or the date of purchase over the life of the security.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Expenses</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The majority of expenses are directly identifiable to an individual fund. Expenses that are not readily identifiable to a specific fund will be allocated in such a manner as deemed equitable, taking into consideration, among other things, the nature and type of expense and the relative sizes of the funds.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Securities lending</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Fund may lend securities in amounts up to 33</FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=1><SUP> 1 </SUP>/<SUB> 3 </SUB></FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>% of the Fund&#146;s total assets. Such loans are callable at any time and are at all times fully secured by cash, cash equivalents or securities issued or guaranteed by the U.S. government or its agencies or instrumentalities and marked-to-market on a daily basis. The Fund may bear the risk of delay in recovery of, or even of rights in, the securities loaned should the borrower of the securities fail financially. </FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Fund receives compensation for lending their securities either in the form of fees and/or by retaining a portion of interest on the investment of any cash received as collateral. The Fund invests the cash collateral received in connection with securities lending transactions in JHCIT, a Delaware common law trust and an affili-ated fund. JHCIT is exempt from registration under Section 3(c)(7) of the 1940 Act (pursuant to exemptive order issued by the SEC) and is managed by the Adviser, for which the Adviser receives an investment advisory fee of 0.04% of the average daily net assets of the JHCIT.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>All collateral received will be in an amount equal to at least 100% of the market value of the loaned securities and is intended to be maintained at that level during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund the next business&nbsp;</FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>day. During the loan period, the Fund continues to retain rights of ownership, including dividends and interest of the loaned securities. As of June 30, 2007, the Fund loaned securities having a market value of $8,607,915 collateralized by cash invested in securities in the amount of $8,550,490.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Financial futures contracts</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Fund may buy and sell financial futures contracts. Buying futures tends to increase the Fund&#146;s exposure to the underlying instrument. Selling futures tends to decrease the Fund&#146;s exposure to the underlying instrument or hedge other Fund&#146;s instruments. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral for the account of the broker (the Funds&#146; agent in acquiring futures position). Each day, the futures contract is valued at the official settlement price of the board of trade or U.S. commodities exchange on which it trades. Subsequent payments to and from the broker, known as &#147;variation margin,&#148; are made on a daily basis as the market price of the financial futures contract fluctuates. Daily variation margin adjustments arising from this &#147;mark to market&#148; are recorded by the Fund as unrealized gain
s or losses.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>When the contracts are closed, the Fund recognizes a gain or loss. Risks of entering into financial futures contracts include the possibility that there may be an illiquid market and/or that a change in the value of the contracts may not correlate with changes in the value of the underlying securities. In addition, the Fund could be prevented from opening or realizing the benefits of closing out financial futures positions because of position limits or limits on daily price fluctuation imposed by an exchange.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>For federal income tax purposes, the amount, character and timing of the Fund&#146;s gains and/or losses can be affected as a result of financial futures contracts. On June 30, 2007, the Fund had deposited $130,900 in a segregated account for the broker to cover margin requirements on open financial futures contracts.</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>26</FONT></P>
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<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>The Fund had the following financial futures contracts open on June 30, 2007:</FONT></B></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="20%"></TD>
     <TD width="20%"></TD>
     <TD width="20%"></TD>
     <TD width="20%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>NUMBER OF</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>OPEN CONTRACTS</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>CONTRACTS</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>POSITION</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>EXPIRATION</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>APPRECIATION</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=5>
<HR noShade SIZE=1>
</TD></TR>
<TR>
     <TD colSpan=5>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>U.S. 10-year Treasury Note</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>187</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Short</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sep 2007</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$377,073</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Federal income taxes</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Fund qualifies as a &#147;regulated investment company&#148; by complying with the applicable provisions of the Internal Revenue Code and will not be subject to federal income tax on taxable income that is distributed to shareholders. Therefore, no federal income tax provision is required. For federal income tax purposes, the Fund has $7,909,723 of a capital loss carryforward available, to the extent provided by regulations, to offset future net realized capital gains. To the extent that such carryforward is used by the Fund, no capital gain distributions will be made. The loss carryforward expires as follows: December 31, 2012 &#151; $2,123,466, December 31, 2013 &#151; $2,443,482 and December 31, 2014 &#151; $3,342,775.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>New accounting pronouncements</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>In June 2006, Financial Accounting Standards Board (FASB) Interpretation No. 48, </FONT><I><FONT face="Berkeley-BookItalic,Times New Roman,Times,serif" size=2>Accounting for Uncertainty in Income Taxes</FONT></I><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2> (the Interpretation), was issued and is effective for fiscal years beginning after December 15, 2006, and is to be applied to all open tax years as of the effective date. This Interpretation prescribes a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return, and requires certain expanded disclosures. Management has evaluated the application of this Interpretation to the Fund and does not believe there is a material impact resulting from the adoption of this Interpretation on the Fund&#146;s financial statements.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>In September 2006, FASB Standard No. 157,&nbsp;</FONT><I><FONT face="Berkeley-BookItalic,Times New Roman,Times,serif" size=2>Fair Value Measurements</FONT></I><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2> (FAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. FAS 157 defines fair value, establishing a framework for measuring fair value and expands disclosure about fair value measurements. Management is currently evaluating the application of FAS 157 to the </FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Fund and its impact, if any, resulting from the adoption of FAS 157 on the Fund&#146;s financial statements.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Dividends, interest and distributions</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Dividend income on investment securities is recorded on the ex-dividend date or, in the case of some foreign securities, on the date thereafter when the Fund identifies the dividend. Interest income on investment securities is recorded on the accrual basis. The Fund may place a security on non-accrual status and reduce related investment income by ceasing current accruals or writing off interest receivable when the collection of income has become doubtful. Foreign income may be subject to foreign withholding taxes, which are accrued as applicable.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. During the year ended December 31, 2006, the tax character of distributions paid was as follows: ordinary income $14,667,522.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Such distributions, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. Distributions in excess of tax basis earnings and profits, if any, are reported in the Fund&#146;s financial statements as a return of capital.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Use of estimates</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The preparation of these financial statements, in accordance with accounting principles generally accepted in the United States of America, incorporates estimates made by management in determining the reported amount of assets, liabilities, revenues and expenses of the Fund. Actual results could differ from these estimates.</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>27</FONT></P>
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<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Note 2 </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Management fee and transactions with </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>affiliates and others</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Fund has an investment management contract with the Adviser. Under the investment management contract, the Fund pays a quarterly management fee to the Adviser, equivalent on an annual basis, to the sum of (a) 0.650% of the first $150,000,000 of the Fund&#146;s average weekly net asset value and the value attributable to the Auction Preferred Shares (collectively, managed assets), (b) 0.375% of the next $50,000,000, (c) 0.350% of the next $100,000,000 and (d) 0.300% of the Fund&#146;s average daily managed assets in excess of $300,000,000.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Fund has an agreement with the Adviser and affiliates to perform necessary tax, accounting and legal services for the Fund. The compensation for the period amounted to $17,505. The Fund also reimbursed John Hancock Life Insurance Company (JHLICO), a subsidiary of MFC, for certain compliance costs, included in the Fund&#146;s Statement of Operations.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Mr. James R. Boyle is Chairman of the Adviser, as well as affiliated Trustee of the Fund, and is compensated by the Adviser and/or its affiliates. The compensation of unaffiliated Trustees is borne by the Fund. The unaffiliated Trustees may elect to defer, for tax purposes, their receipt of this compensation under the John Hancock Group of Funds Deferred Compensation Plan. The Fund makes investments into other John Hancock funds, as applicable, to cover its liability for the deferred compensation. Investments to cover the Fund&#146;s deferred compensation liability are recorded on the Fund&#146;s books as an other asset. The deferred compensation liability and the related other asset are always equal and are marked to market on a periodic basis to reflect any income earned by the investments, as well as any unrealized gains or losses. The Deferred Compensation Plan investments had no impact on the operations of the Fund.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Fund is listed for trading on the NYSE and has filed with the NYSE its chief executive officer certification regarding compliance with&nbsp;</FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>the NYSE&#146;s listing standards. The Fund also files with the SEC the certification of its chief executive officer and chief financial officer required by Section 302 of the Sarbanes-Oxley Act.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Note 3 </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Guarantees and indemnifications</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Under the Fund&#146;s organizational documents, its Officers and Trustees are indemnified against certain liability arising out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts with service providers that contain general indemnification clauses. The Fund&#146;s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred. However, based on experience, the Fund believes the risk of loss to be remote.</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>28</FONT></P>
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<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Note 4 </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Fund share transactions</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>This listing illustrates the reclassification of the Fund&#146;s capital accounts, dividend reinvestments and the number of common shares outstanding during the year ended December 31, 2006, and the period ended June 30, 2007, along with the corresponding dollar value.</FONT></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="29%"></TD>
     <TD width="18%"></TD>
     <TD width="19%"></TD>
     <TD width="16%"></TD>
     <TD width="16%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right colSpan=2><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Year ended 12-31-06</FONT></B>&nbsp; </TD>
     <TD noWrap align=right colSpan=2><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Period ended 6-30-07</FONT></B><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1</FONT></SUP>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Shares</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Amount</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Shares</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Amount</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Beginning of period</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11,215,223</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$177,367,356</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>11,282,039</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$178,860,851</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Distributions reinvested</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>66,816</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>932,358</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>30,389</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>436,876</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Reclassification of capital</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>accounts</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>561,137</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#151;</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>End of period</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>11,282,039</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$178,860,851</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>11,312,428</FONT></B>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>$179,297,727</FONT></B>&nbsp; </TD></TR></TABLE><BR>
<P align=left><SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1</FONT></SUP><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Semiannual period from 1-1-07 to 6-30-07. Unaudited.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Auction preferred shares</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Fund issued a total of 3,560 Auction Preferred Shares: 1,780 shares of Series A Auction Preferred Shares and 1,780 shares of Series B Auction Preferred Shares (collectively, the Preferred Shares or APS) on November 4, 2003, in a public offering. The total offering costs of $188,388 and the total underwriting discount of $890,000 has been charged to capital paid-in of common shares during the years ended December 31, 2003 and December 31, 2004.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Dividends on the APS, which accrue daily, are cumulative at a rate that was established at the offering of the APS and has been reset every seven days thereafter by an auction. Dividend rates on APS Series A ranged from 5.00% to 5.30% and Series B from 4.94% to 5.31% during the period ended June 30, 2007. Accrued dividends on APS are included in the value of APS on the Fund&#146;s Statement of Assets and Liabilities.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The APS are redeemable at the option of the Fund, at a redemption price equal to $25,000 per share, plus accumulated and unpaid dividends on any dividend payment date. The APS are also subject to mandatory redemption at a redemption price equal to $25,000 per share, plus accumulated and unpaid dividends, if the Fund is in default on its asset coverage requirements with respect to the APS as defined in the Fund&#146;s bylaws. Under the 1940 Act, the Fund is required to maintain asset coverage of at least 200% with respect to the Preferred </FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Shares as of the last business day of each month in which any shares are outstanding. If the dividends on the APS shall remain unpaid in an amount equal to two full years&#146; dividends, the holders of the APS, as a class, have the right to elect a majority of the Board of Trustees. In general, the holders of the APS and the common
 shareholders have equal voting rights of one vote per share, except that the holders of the APS, as a class, vote to elect two members of the Board of Trustees, and separate class votes are required on certain matters that affect the respective interests of the APS and common shareholders.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Leverage</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Fund issued preferred shares to increase its assets available for investment. The Fund generally will not issue preferred shares unless the Adviser expects that the Fund will achieve a greater return on the proceeds resulting from the use of leverage than the additional costs the Fund incurs as a result of leverage. When the Fund leverages its assets, the fees paid to the Adviser for investment advisory and administrative services will be higher than if the Fund did not borrow because the Adviser&#146;s fees are calculated based on the Fund&#146;s total assets, including the proceeds of the issuance of preferred shares. Consequently, the Fund and the Adviser may have differing interests in determining whether to leverage the Fund&#146;s assets. The Board of Trustees will monitor this potential conflict. The Fund&#146;s use of leverage is premised upon the expectation that the </FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>29</FONT></P>
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<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Fund&#146;s dividends on its outstanding preferred shares will be lower than the return the Fund achieves on its investments with the proceeds of the issuance of preferred shares.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Leverage creates risks which may adversely affect the return for the holders of common shares, including:</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>&#149; the likelihood of greater volatility of net asset value and market price of common shares</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>&#149; fluctuations in the dividend rates on any preferred shares</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>&#149; increased operating costs, which may reduce the Fund&#146;s total return to the holders of common shares</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>&#149; the potential for a decline in the value of an investment acquired through leverage, while the Fund&#146;s obligations under such leverage remains fixed</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>To the extent the income or capital appreciation derived from securities purchased with funds received from leverage exceeds the cost of leverage; the Fund&#146;s return will be greater than if leverage had not been used.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Note 5 <BR>
</FONT></B><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Investment transactions</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Purchases and proceeds from sales or maturities of securities, other than short-term securities and obligations of the U.S. government, during the period ended June 30, 2007, aggregated $83,987,688 and $78,016,609, respectively. Purchases and proceeds from sales or maturities of obligations of the U.S. government aggregated $8,584,459 and $12,026,065, respectively, during the period ended June 30, 2007.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The cost of investments owned on June 30, 2007, including short-term investments, for federal income tax purposes was $273,126,155. Gross unrealized appreciation and depreciation of investments aggregated $1,721,884 and $4,923,264, respectively, resulting in net unrealized depreciation of $3,201,380. </FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>30</FONT></P>
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<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Investment objective and policy </FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Fund is a closed-end diversified management investment company, common shares of which were initially offered to the public on February 14, 1973, and are publicly traded on the NYSE. The Fund&#146;s investment objective is to generate a high level of current income consistent with prudent investment risk. The Fund invests in a diversified portfolio of freely marketable debt securities and may invest an amount not exceeding 20% of its assets in income-producing preferred and common stock. Under normal circumstances, the Fund will invest at least 80% of net assets in income securities. Income securities will consist of the following: (i) marketable corporate debt securities, (ii) governmental obligations and (iii) cash and commercial paper. &#147;Net assets&#148; is defined as net assets plus borrowings for investment purposes. The Fund will notify shareholders at least 60 days prior to any change in this 80% investment policy.</FO
NT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>It is contemplated that at least 75% of the value of the Fund&#146;s total assets will be represented by debt securities, which have at the time of purchase a rating within the four highest grades as determined by Moody&#146;s Investors Service, Inc. or Standard &amp; Poor&#146;s Corporation. The Fund intends to engage in short-term trading and may invest in repurchase agreements. The Fund may issue a single class of senior securities not to exceed 33</FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=1><SUP> 1 </SUP>/<SUB> 3 </SUB></FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>% of its net assets at market value and may borrow from banks as a temporary measure for emergency purposes in amounts not to exceed 5% of the total assets at cost. The Fund may lend portfolio securities not to exceed 33</FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=1><SUP> 1 </SUP>/<SUB> 3 </SUB></FONT>
<FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>% of total assets. </FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Bylaws</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>In November 2002, the Board of Trustees adopted several amendments to the Fund&#146;s bylaws, including provisions relating to the calling of a special meeting and requiring advance notice of shareholder proposals or nominees for Trustee. The advance notice provisions in the bylaws require shareholders to notify the Fund in writing of any proposal which they intend to present at an annual </FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>meeting of shareholders, including any nominations for Trustee, between 90 and 120 days prior to the first anniversary of the mailing date of the notice from the prior year&#146;s annual meeting of shareholders. The notification must be in the form prescribed by the bylaws. The advance notice provisions provide the Fund and its Trustees with the opportunity to thoughtfully consider and address the matters proposed before the Fund prepares and mails its proxy statement to shareholde
rs. Other amendments set forth the procedures that must be followed in order for a shareholder to call a special meeting of shareholders. Please contact the Secretary of the Fund for additional information about the advance notice requirements or the other amendments to the bylaws.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>On August 21, 2003, shareholders approved the amendment of the Fund&#146;s bylaws effective August 26, 2003, to provide for the issuance of preferred shares. Effective March 9, 2004, the Trustees approved additional changes to conform with the Fund&#146;s maximum dividend rate on the preferred shares with the rate used by other John Hancock funds.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>On September 14, 2004, the Trustees approved an amendment to the Fund&#146;s bylaws increasing the maximum applicable dividend rate ceiling on the preferred shares to conform with the modern calculation methodology used by the industry and other John Hancock funds.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Financial futures contracts and options</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Fund may buy and sell financial futures contracts and options on futures contracts to hedge against the effects of fluctuations in interest rates and other market conditions. The Fund&#146;s ability to hedge successfully will depend on the Adviser&#146;s ability to predict accurately the future direction of interest rate changes and other market factors. There is no assurance that a liquid market for futures and options will always exist. In addition, the Fund could be prevented from opening, or realizing the benefits of closing out a futures or options position because of position limits or limits on daily price fluctuations imposed by an exchange.</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>31</FONT></P>
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<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Fund will not engage in transactions in futures contracts and options on futures for speculation, but only for hedging or other permissible risk management purposes. All of the Fund&#146;s futures contracts and options on futures will be traded on a U.S. commodity exchange or board of trade. The Fund will not engage in a transaction in futures or options on futures if, immediately thereafter, the sum of initial margin deposits on existing positions and premiums paid for options on futures would exceed 5% of the Fund&#146;s total assets.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Dividends and distributions</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>During the period ended June 30, 2007, dividends from net investment income totaling $0.4525 per share were paid to shareholders. The dates of payments and the amounts per share are as follows:</FONT></P>
<TABLE style="WIDTH: 501px; HEIGHT: 137px" cellSpacing=1 cellPadding=0 width=501 border=0>
<TR>
     <TD width="58%"></TD>
     <TD width="41%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>INCOME</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>PAYMENT DATE</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>DIVIDEND</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>March 30, 2007</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>$0.2225</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>June 29, 2007</FONT>&nbsp; </TD>
     <TD noWrap align=right><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>0.2300</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Dividend reinvestment plan</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Fund offers its common shareholders a Dividend Reinvestment Plan (the Plan), which offers the opportunity to earn compounded yields. Any holder of common shares of record of the Fund may elect to participate in the Plan and receive the Fund&#146;s common shares in lieu of all or a portion of the cash dividends. The Plan is available to all common shareholders without charge. Mellon Investor Services (the Plan Agent) will act as agent for participating shareholders.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Shareholders may join the Plan by notifying the Plan Agent by telephone, in writing or by visiting the Plan Agent&#146;s Web site at www.melloninvestor.com showing an election to reinvest all or a portion of dividend payments. If received in proper form by the Plan Agent prior to the record date for a dividend, the election will be effective with respect to all dividends paid after such record date. Shareholders whose shares are held in the name of a broker or nominee should contact the broker or nominee to determine whether and how they may participate in the Plan.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Board of Trustees of the Fund will declare dividends from net investment income payable in cash or, in the case of shareholders participating in the Plan, partially or entirely in the Fund&#146;s common shares. The number of shares to be issued for the benefit of each shareholder will be determined by dividing the amount of the cash dividend, otherwise payable to such shareholder on shares included under the Plan, by the per share net asset value of the common shares on the date for payment of the dividend, unless the net asset value per share on the payment date is less than 95% of the market price per share on that date, in which event the number of shares to be issued to a shareholder will be determined by dividing the amount of the cash dividend payable to such shareholder, by 95% of the market price per share of the common shares on the payment date. The market price of the common shares on a particular date shall be the mea
n between the highest and lowest sales price on the NYSE on that date. Net asset value will be determined in accordance with the established procedures of the Fund. However, if as of such payment date the market price of the common shares is lower than such net asset value per share, the number of shares to be issued will be determined on the basis of such market price. Fractional shares, carried out to four decimal places, will be credited to the shareholder&#146;s account. Such fractional shares will be entitled to future dividends. </FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The shares issued to participating shareholders, including fractional shares, will be held by the Plan Agent in the name of the participant. A confirmation will be sent to each shareholder promptly, normally within five to seven days, after the payment date of the dividend. The confirmation will show the total number of shares held by such shareholder before and after the dividend, the amount of the most recent cash dividend that the shareholder has elected to reinvest and the number of shares acquired with such dividend.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Participation in the Plan may be terminated at any time by contacting the Plan Agent by telephone, in writing or by visiting the Plan Agent&#146;s Web site, and such termination will </FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>32</FONT></P>
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<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>be effective immediately. However, notice of termination must be received prior to the record date of any distribution to be effective for that distribution. Upon termination, certificates will be issued representing the number of full shares of common shares held by the Plan Agent. A shareholder will receive a cash payment for any fractional share held. </FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The reinvestment of dividends will not relieve participants of any federal, state or local income tax, which may be due with respect to such dividend. Dividends reinvested in common shares will be treated on your federal income tax return as though you had received a dividend in cash in an amount equal to the fair market value of the shares received, as determined by the prices for common shares of the Fund on the NYSE as of the dividend payment date. Distributions from the Fund&#146;s long-term capital gains will be processed as noted above for those electing to reinvest in common shares and will be taxable to you as long-term capital gains. The confirmation referred to above will contain all the information you will require for determining the cost basis of shares acquired and should be retained for that purpose. At year end, each account will be supplied with detailed information </FONT><FONT face="Berkeley-Book,Times New Roman,Ti
mes,serif" size=2>necessary to determine total tax liability for the calendar year.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>All correspondence or additional information concerning the Plan should be directed to the Plan Agent, Mellon Bank, N.A., c/o Mellon Investor Services, P.O. Box 3338, South Hackensack, New Jersey 07606-1938 (Telephone: 1-800-852-0218).</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Shareholder communication and assistance</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>If you have any questions concerning the Fund, we will be pleased to assist you. If you hold shares in your own name and not with a brokerage firm, please address all notices, correspondence, questions or other communications regarding the Fund to the transfer agent at: </FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=1>Mellon Investor Services </FONT><BR>
<FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=1>Newport Office Center VII </FONT><BR>
<FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=1>480 Washington Boulevard </FONT><BR>
<FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=1>Jersey City, NJ 07310 </FONT><BR>
<FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=1>Telephone: 1-800-852-0218</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>If your shares are held with a brokerage firm, you should contact that firm, bank or other nominee for assistance.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Shareholder meeting</FONT></B><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2> (unaudited)</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>On March 27, 2007, the Annual Meeting of the Fund was held to elect eight Trustees.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Proxies covering 10,017,147 shares of beneficial interest were voted at the meeting. The common shareholders elected the following Trustees to serve until their respective successors are duly elected and qualified, with the votes tabulated as follows: </FONT></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="36%"></TD>
     <TD width="35%"></TD>
     <TD width="27%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>WITHHELD</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>FOR</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>AUTHORITY</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>James R. Boyle</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>9,871,674</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>145,473</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>James F. Carlin</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>9,877,727</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>139,420</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>William H. Cunningham</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>9,870,137</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>147,010</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Ronald R. Dion</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>9,874,528</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>142,619</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Charles L. Ladner</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>9,880,350</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>136,797</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Steven R. Pruchansky</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>9,877,998</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>139,149</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The preferred shareholders elected Patti McGill Peterson and John A. Moore as Trustees of the Fund until their successors are duly elected and qualified, with the votes tabulated as follows: 2,923 FOR and 5 WITHHELD.</FONT></P>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>33</FONT></P>
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<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Board Consideration of and </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Continuation of Investment Advisory </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Agreement and Subadvisory </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Agreement: John Hancock Income </FONT></B><BR>
<B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=2>Securities Trust</FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Investment Company Act of 1940 (the 1940 Act) requires the Board of Trustees (the Board) of John Hancock Income Securities Trust (the Fund), including a majority of the Trustees who have no direct or indirect interest in the investment advisory agreement and are not &#147;interested persons&#148; of the Fund, as defined in the 1940 Act (the Independent Trustees), annually to meet in person to review and consider the continuation of: (i) the investment advisory agreement (the Advisory Agreement) with John Hancock Advisers, LLC (the Adviser) and (ii) the investment subadvisory agreement (the Subadvisory Agreement) with MFC Global Investment Management (U.S.), LLC (the Subadviser).&nbsp; </FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Advisory Agreement and the Subadvisory Agreement are collectively referred to as the Advisory Agreements.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>At meetings held on May 7 and June 4&#150;5, 2007, the Board considered the factors and reached the conclusions described below relating to the selection of the Adviser and Subadviser and the continuation of the Advisory Agreements. During such meetings, the Board&#146;s Contracts/ Operations Committee and the Independent Trustees also met in executive sessions with their independent legal counsel.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>In evaluating the Advisory Agreements, the Board, including the Contracts/Operations Committee and the Independent Trustees, reviewed a broad range of information requested for this purpose by the Independent Trustees, including: (i) the investment performance of the Fund relative to a category of relevant funds (the Category) and a peer group of comparable funds (the Peer Group) each selected by Morningstar, Inc. (Morningstar), an independent provider of investment company data, for a range of periods ended December 31, 2006, (ii) advisory and other fees incurred by, and the expense ratios of, the Fund relative to a Category and a Peer Group, (iii) the advisory fees of comparable portfolios of other clients of the Adviser and the Subadviser, (iv) the Adviser&#146;s </FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>financial results and condition, including its and certain of its affiliates&#146; profitability from
 services performed for the Fund, (v) breakpoints in the Fund&#146;s and the Peer Group&#146;s fees, and information about economies of scale, (vi) the Adviser&#146;s and Subadviser&#146;s record of compliance with applicable laws and regulations, with the Fund&#146;s investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Adviser&#146;s and Subadviser&#146;s compliance department, (vii) the background and experience of senior management and investment professionals, and (viii) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates and by the Subadviser.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Independent Trustees considered the legal advice of independent legal counsel and relied on their own business judgment in determining the factors to be considered in evaluating the materials that were presented to them and the weight to be given to each such factor. The Board&#146;s review and conclusions were based on a comprehensive consideration of all information presented to the Board and not the result of any single controlling factor. They principally considered performance and other information from Morningstar as of December 31, 2006. The Board also considered updated performance information provided to it by the Adviser or Subadviser at the May and June 2007 meetings. Performance and other information may be quite different as of the date of this shareholders report. The key factors considered by the Board and the conclusions reached are described below.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Nature, extent and quality of services </FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Board considered the ability of the Adviser and the Subadviser, based on their resources, reputation and other attributes, to attract and retain qualified investment professionals, including research, advisory and supervisory personnel. The Board considered the investment philosophy, research and investment decision-making processes of the Adviser and Subadviser. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs and compliance records of the Adviser and Subadviser. In addition, the Board took into account the </FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>34</FONT></P>
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<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>administrative and other non-advisory services provided to the Fund by the Adviser and its affiliates. </FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Based on the above factors, together with those referenced below, the Board concluded that, within the context of its full deliberations, the nature, extent and quality of the investment advisory services provided to the Fund by the Adviser and Subadviser supported renewal of the Advisory Agreements.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Fund performance </FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Board considered the performance results for the Fund over various time periods ended December 31, 2006. The Board also considered these results in comparison to the performance of the Category, as well as the Fund&#146;s Peer Group and benchmark index. Morningstar determined the Category and Peer Group for the Fund. The Board reviewed with a representative of Morningstar the methodology used by Morningstar to select the funds in the Category and the Peer Group. The Board noted the imperfect comparability of the Peer Group.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Board noted that the Fund&#146;s performance was lower than the performance of the Category and Peer Group medians, but was higher than the performance of its benchmark index, the Lehman Brothers Government/ Credit Bond Index, over the 3-, 5- and 10- year periods. The Board noted that the Fund&#146;s more recent performance during the 1-year period was lower than, but generally competitive with, the performance of the Category median, and higher than the performance of the Peer Group median and benchmark index. The Adviser noted that the Fund&#146;s Peer Group contained primarily unleveraged closed-end funds, which had a high level of high-yield exposure. The Adviser explained that these factors impacted the Fund&#146;s comparative performance results.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Investment advisory fee and subadvisory fee rates and expenses</FONT></B><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2> <BR>
<BR>
The Board reviewed and considered the contractual investment advisory fee rate payable by the Fund to the Adviser for investment advisory services (the Advisory Agreement Rate). The Board received and considered information </FONT><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>comparing the Advisory Agreement Rate with the advisory fees for the Category and Peer Group. The Board noted that the Advisory Agreement Rate was higher than the median rate of the Peer Group and Category.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Board received and considered expense information regarding the Fund&#146;s various components, including advisory fees, and other non-advisory fees, including transfer agent fees, custodian fees and other miscellaneous fees (e.g., fees for accounting and legal services). The Board considered comparisons of these expenses to the Peer Group median. The Board also received and considered expense information regarding the Fund&#146;s total operating expense ratio (Expense Ratio). The Board noted that, unlike the Fund, several funds in the Peer Group employed fee waivers or reimbursements. The Board received and considered information comparing the Expense Ratio of the Fund to that of the Category and Peer Group medians before the application of fee waivers and reimbursements (Gross Expense Ratio) and after the application of such waivers and reimbursement (Net Expense Ratio). The Board noted that the Fund&#146;s Expense Ratio was hi
gher than the Gross and Net Expense Ratio of the Peer Group median. The Board also noted the differences in the funds included in the Peer Group, including differences in the employment of fee waivers and reimbursements and differences in the amount of assets under management. The Board noted that the Fund&#146;s Expense Ratio was lower than the Gross Expense Ratio and equal to the Net Expense Ratio of the Category median. </FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Adviser also discussed the Morningstar data and rankings, and other relevant information, for the Fund. The Adviser noted that most of the funds in the Peer Group were unleveraged, which contributed to the results. Based on the above-referenced considerations and other factors, the Board concluded that the Fund&#146;s overall expense results and performance supported the re-approval of the Advisory Agreements.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Board also received information about the investment subadvisory fee rate (the Subadvisory Agreement Rate) payable by the Adviser to the Subadviser for investment subadvisory services. The Board concluded </FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>35</FONT></P>
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<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>that the Subadvisory Agreement Rate was fair and equitable, based on its consideration of the</FONT><B><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2> </FONT></B><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>factors described here.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Profitability </FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Board received and considered a detailed profitability analysis of the Adviser based on the Advisory Agreements, as well as on other relationships between the Fund and the Adviser and its affiliates, including the Subadviser. The Board also considered a comparison of the Adviser&#146;s profitability to that of other similar investment advisers whose profitability information is publicly available. The Board concluded that, in light of the costs of providing investment management and other services to the Fund, the profits and other ancillary benefits reported by the Adviser were not unreasonable.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Economies of scale </FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Board received and considered general information regarding economies of scale with respect to the management of the Fund, including the Fund&#146;s ability to appropriately benefit from economies of scale under the Fund&#146;s fee structure. The Board recognized the inherent limitations of any analysis of economies of scale, stemming largely from the Board&#146;s understanding that most of the Adviser&#146;s and Subadviser&#146;s costs are not specific to individual Funds, but rather are incurred across a variety of products and services.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Board noted that the Advisory Agreements offered breakpoints. However, the Board considered the limited relevance of economies of scale in the context of a closed-end fund that, unlike an open-end fund, does not continuously offer its shares. The Board noted that the Fund, as a closed-end investment company, was not expected to increase materially in size and that its assets would grow (if at all) through the investment performance of the Fund. Therefore, the Board did not consider potential economies of scale as a principal factor in assessing the fees payable under the Advisory Agreements, but concluded that the fees were fair and equitable based on relevant factors.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Other benefits to the Adviser </FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Board received information regarding potential &#147;fall-out&#148; or ancillary benefits received by the Adviser and its affiliates as a result of the Adviser&#146;s relationship with the Fund. Such benefits could include, among others, benefits directly attributable to the relationship of the Adviser with the Fund and benefits potentially derived from an increase in the business of the Adviser as a result of its relationship with the Fund (such as the ability to market to shareholders other financial products offered by the Adviser and its affiliates).</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Board also considered the effectiveness of the Adviser&#146;s, Subadviser&#146;s and Fund&#146;s policies and procedures for complying with the requirements of the federal securities laws, including those relating to best execution of portfolio transactions and brokerage allocation.</FONT></P>
<P align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Other factors and broader review </FONT></B></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>As discussed above, the Board reviewed detailed materials received from the Adviser and Subadviser as part of the annual re-approval process. The Board also regularly reviews and assesses the quality of the services that the Fund receives throughout the year. In this regard, the Board reviews reports of the Adviser and Subadviser at least quarterly, which include, among other things, fund performance reports and compliance reports. In addition, the Board meets with portfolio managers and senior investment officers at various times throughout the year.</FONT></P>
<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>After considering the above-described factors and based on its deliberations and its evaluation of the information described above, the Board concluded that approval of the continuation of the Advisory Agreements for the Fund was in the best interest of the Fund and its shareholders. Accordingly, the Board unanimously approved the continuation of the Advisory Agreements.</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>36</FONT></P>
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<P align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=7>For more information</FONT></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="34%"></TD>
     <TD width="35%"></TD>
     <TD width="30%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=3><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>The Fund&#146;s proxy voting policies, procedures and records are available without charge,</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>upon request:</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>By phone</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>On the Fund&#146;s Web site</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>On the SEC&#146;s Web site</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>1-800-225-5291</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>www.jhfunds.com/proxy</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>www.sec.gov</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR>
     <TD colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Trustees</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Gordon M. Shone</FONT>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Transfer agent for</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Ronald R. Dion, </FONT><I><FONT face="Berkeley-BookItalic,Times New Roman,Times,serif" size=2>Chairman</FONT></I>&nbsp; </TD>
     <TD noWrap align=left><I><FONT face="Berkeley-BookItalic,Times New Roman,Times,serif" size=2>Treasurer</FONT></I>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>preferred shareholders</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background=""><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>James R. Boyle&#134;</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left background=""></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>James F. Carlin</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>John G. Vrysen</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Deutsche Bank Trust</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>William H. Cunningham</FONT>&nbsp; </TD>
     <TD noWrap align=left><I><FONT face="Berkeley-BookItalic,Times New Roman,Times,serif" size=2>Chief Operating Officer</FONT></I>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Company Americas</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Charles L. Ladner*</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>280 Park Avenue</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Dr. John A. Moore*</FONT>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Investment adviser</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>New York, NY 10017</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Patti McGill Peterson*</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>John Hancock Advisers, LLC</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Steven R. Pruchansky</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>601 Congress Street</FONT>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Legal counsel</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Boston, MA 02210-2805</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Kirkpatrick &amp; Lockhart</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>*Members of the Audit Committee</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Preston Gates Ellis LLP</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>&#134;Non-Independent Trustee</FONT>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Subadviser</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>One Lincoln Street</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>MFC Global Investment</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Boston, MA 02111-2950</FONT>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background=""><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Officers</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Management (U.S.), LLC</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Keith F. Hartstein</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>101 Huntington Avenue</FONT>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Stock symbol</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><I><FONT face="Berkeley-BookItalic,Times New Roman,Times,serif" size=2>President and</FONT></I>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Boston, MA 02199</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Listed New York Stock</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><I><FONT face="Berkeley-BookItalic,Times New Roman,Times,serif" size=2>Chief Executive Officer</FONT></I>&nbsp; </TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Exchange:</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Custodian</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>JHS</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Thomas M. Kinzler</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>The Bank of New York</FONT>&nbsp; </TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><I><FONT face="Berkeley-BookItalic,Times New Roman,Times,serif" size=2>Secretary and Chief Legal Officer</FONT></I>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>One Wall Street</FONT>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>For shareholder assistance</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>New York, NY 10286</FONT>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>refer to page 33</FONT></B>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background=""><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Francis V. Knox, Jr.</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left background=""></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><I><FONT face="Berkeley-BookItalic,Times New Roman,Times,serif" size=2>Chief Compliance Officer</FONT></I>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>Transfer agent for</FONT></B>&nbsp; </TD>
     <TD noWrap align=left></TD></TR>
<TR>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left background=""><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=1>common shareholders</FONT></B>&nbsp; </TD>
     <TD noWrap align=left background=""></TD></TR>
<TR>
     <TD noWrap align=left background=""><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Charles A. Rizzo</FONT>&nbsp; </TD>
     <TD noWrap align=left background=""></TD>
     <TD noWrap align=left background=""></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><I><FONT face="Berkeley-BookItalic,Times New Roman,Times,serif" size=2>Chief Financial Officer</FONT></I>&nbsp; </TD>
     <TD noWrap align=left><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Mellon Investor Services</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=Berkeley-Book size=2>Newport Office Center VII</FONT>&nbsp;&nbsp;</TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=Berkeley-Book size=2>480 Washington Boulevard</FONT>&nbsp;&nbsp;</TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD align=center></TD>
     <TD align=left background=""><FONT face="Berkeley-Book,Times New Roman,Times,serif" size=2>Jersey City, NJ 07310</FONT>&nbsp; </TD>
     <TD align=center background="">&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=center></TD>
     <TD align=left background=""></TD>
     <TD align=center background="">&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp; </TD></TR></TABLE><BR>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="15%"></TD>
     <TD width="55%"></TD>
     <TD width="29%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=Frutiger-Black,Arial,Helvetica,sans-serif size=2>How to contact us</FONT></B>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR>
     <TD colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Internet</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>www.jhfunds.com</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR>
     <TD colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Mail</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mellon Investor Services</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Newport Office Center VII</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>480 Washington Boulevard</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Jersey City, NJ 07310</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR>
     <TD colSpan=3>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-Bold,Arial,Helvetica,sans-serif size=1>Phone</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Customer service representatives</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1-800-852-0218</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Portfolio commentary</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1-800-344-7054</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>EASI-Line</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1-800-843-0090</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>TDD line</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>1-800-231-5469</FONT>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>A listing of month-end portfolio holdings is available on our Web site, www.jhfunds.com. A more detailed portfolio holdings summary is available on a quarterly basis 60 days after the fiscal quarter on our Web site or upon request by calling 1-800-225-5291, or on the SEC&#146;s Web site, www.sec.gov.</FONT></P>
<P align=left><FONT face=Frutiger-Roman,Arial,Helvetica,sans-serif size=2>40</FONT></P>
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<P align=left><B><FONT face=Frutiger-BoldCn,Arial,Helvetica,sans-serif size=2>J O H N&nbsp;&nbsp; H A N C O C K&nbsp;&nbsp;&nbsp;F A M I L Y&nbsp;&nbsp; O F&nbsp;&nbsp; F U N D S</FONT></B></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>
<TR>
     <TD width="44%"></TD>
     <TD width="55%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=Frutiger-BlackCn,Arial,Helvetica,sans-serif size=1>EQUITY</FONT></B>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-BlackCn,Arial,Helvetica,sans-serif size=1>INTERNATIONAL/GLOBAL</FONT></B></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Balanced Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Global Opportunities Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Classic Value Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Global Shareholder Yield Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Classic Value Fund II</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Greater China Opportunities Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Classic Value Mega Cap Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>International Allocation Portfolio</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Core Equity Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>International Classic Value Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Growth Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>International Core Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Growth Opportunities Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>International Growth Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Growth Trends Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Intrinsic Value Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-BlackCn,Arial,Helvetica,sans-serif size=1>INCOME</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Large Cap Equity Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bond Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Large Cap Select Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Government Income Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Mid Cap Equity Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>High Yield Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Multi Cap Growth Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Investment Grade Bond Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Small Cap Equity Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Strategic Income Fund</FONT>&nbsp; </TD></TR>
<TR>
     <TD noWrap align=left background=""><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Small Cap Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left background="">&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Small Cap Intrinsic Value Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-BlackCn,Arial,Helvetica,sans-serif size=1>TAX-FREE INCOME</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Sovereign Investors Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>California Tax-Free Income Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>U.S. Core Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>High Yield Municipal Bond Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>U.S. Global Leaders Growth Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Massachusetts Tax-Free Income Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Value Opportunities Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>New York Tax-Free Income Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Tax-Free Bond Fund</FONT>&nbsp; </TD></TR>
<TR>
     <TD colSpan=2><B><FONT face=Frutiger-BlackCn,Arial,Helvetica,sans-serif size=1>ASSET ALLOCATION</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Allocation Core Portfolio</FONT>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-BlackCn,Arial,Helvetica,sans-serif size=1>MONEY MARKET</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Allocation Growth + Value Portfolio</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Money Market Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Lifecycle 2010 Portfolio</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>U.S. Government Cash Reserve</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Lifecycle 2015 Portfolio</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Lifecycle 2020 Portfolio</FONT>&nbsp; </TD>
     <TD noWrap align=left><B><FONT face=Frutiger-BlackCn,Arial,Helvetica,sans-serif size=1>CLOSED-END</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Lifecycle 2025 Portfolio</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Bank and Thrift Opportunity Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Lifecycle 2030 Portfolio</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Financial Trends Fund, Inc.</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Lifecycle 2035 Portfolio</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Income Securities Trust</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Lifecycle 2040 Portfolio</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Investors Trust</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Lifecycle 2045 Portfolio</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Patriot Premium Dividend Fund II</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Lifecycle Retirement Portfolio</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Patriot Select Dividend Trust</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Lifestyle Aggressive Portfolio</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Preferred Income Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Lifestyle Balanced Portfolio</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Preferred Income II Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Lifestyle Conservative Portfolio</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Preferred Income III Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Lifestyle Growth Portfolio</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Tax-Advantaged Dividend Income Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Lifestyle Moderate Portfolio</FONT>&nbsp; </TD>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Tax-Advantaged Global Shareholder Yield Fund</FONT>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR>
     <TD colSpan=2><B><FONT face=Frutiger-BlackCn,Arial,Helvetica,sans-serif size=1>SECTOR</FONT></B>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Financial Industries Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Health Sciences Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Real Estate Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Regional Bank Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Technology Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=Frutiger-Light,Arial,Helvetica,sans-serif size=1>Technology Leaders Fund</FONT>&nbsp; </TD>
     <TD noWrap align=left>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=Frutiger-Cn,Arial,Helvetica,sans-serif size=2>The Fund&#146;s investment objectives, risks, charges and expenses are included in the prospectus and should be considered carefully before investing. For a prospectus, contact your financial professional, call John Hancock Funds at 1-800-225-5291 or visit the Fund&#146;s Web site at www.jhfunds.com. Please read the prospectus carefully before investing or sending money.</FONT></P>
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<BR>
<P align="left">
<FONT size=1 face="Frutiger-Light,Arial,Helvetica,sans-serif">1-800-852-0218</FONT><BR>
<FONT size=1 face="Frutiger-Light,Arial,Helvetica,sans-serif">1-800-231-5469 TDD</FONT><BR>
<FONT size=1 face="Frutiger-Light,Arial,Helvetica,sans-serif">1-800-843-0090 EASI-Line</FONT><BR>
<FONT size=1 face="Frutiger-Light,Arial,Helvetica,sans-serif">www.</FONT><FONT size=1 face="Frutiger-Light,Arial,Helvetica,sans-serif">jhfunds. </FONT><FONT size=1 face="Frutiger-Light,Arial,Helvetica,sans-serif">com</FONT></P>
<P align="left">
<FONT size=2 face="Frutiger-Light,Arial,Helvetica,sans-serif">PRESORTED</FONT><BR>
<FONT size=2 face="Frutiger-Light,Arial,Helvetica,sans-serif">STANDARD</FONT><BR>
<FONT size=2 face="Frutiger-Light,Arial,Helvetica,sans-serif">U.S. </FONT><FONT size=2 face="Frutiger-Light,Arial,Helvetica,sans-serif">POSTAGE</FONT><BR>
<FONT size=2 face="Frutiger-Light,Arial,Helvetica,sans-serif">PAID</FONT><BR>
<FONT size=2 face="Frutiger-Light,Arial,Helvetica,sans-serif">MIS</FONT></P>
<P align="left">
<FONT size=1 face="Frutiger-Light,Arial,Helvetica,sans-serif">P60SA 6/07</FONT><BR>
<FONT size=1 face="Frutiger-Light,Arial,Helvetica,sans-serif">8/07</FONT></P>

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<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">ITEM 2. CODE OF ETHICS.</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">As of the end of the period, June 30, 2007, the registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Chief Executive Officer, Chief Financial Officer
and Treasurer (respectively, the principal executive officer, the principal financial officer and the principal accounting officer, the &#147;Senior Financial Officers&#148;). A copy of the code of ethics is filed as an exhibit to this Form
N-CSR.</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. </FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Not applicable at this time.</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Not applicable at this time.</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Not applicable at this time. </FONT><BR>
<BR>
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">ITEM 6. SCHEDULE OF INVESTMENTS.</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Not applicable.</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES. </FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Not applicable.</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. </FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Not applicable.</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. </FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Not applicable.</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. </FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">The registrant has adopted procedures by which shareholders may recommend nominees to the registrant's Board of Trustees. A copy of the procedures is filed as an exhibit to this Form N-CSR. See
attached &#147;John Hancock Funds &#150; Governance Committee Charter&#148;. </FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">ITEM 11. CONTROLS AND PROCEDURES.</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's principal executive
officer and principal financial officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed </FONT></P>

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<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. </FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal
half-year in the case of an annual report) that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting. </FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">ITEM 12. EXHIBITS.</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(a)(1) Code of Ethics for Senior Financial Officers is attached. </FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(a)(2) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a)
under the Investment Company Act of 1940, are attached. </FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(b) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, and Rule 30a-2(b) under the Investment Company Act of 1940, are attached. The certifications furnished pursuant to this paragraph are not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of
1934, or otherwise subject to the liability of that section. Such certifications are not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the
Registrant specifically incorporates them by reference. </FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(c)(1) Submission of Matters to a Vote of Security Holders is attached. See attached and &#147;John Hancock Funds &#150; Governance Committee Charter&#148;. </FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(c)(2) Contact person at the registrant.</FONT></P>

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<P align=center><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>SIGNATURES</FONT></P>
<P align=left><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>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. </FONT></P>
<P align=left><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>John Hancock Income Securities Trust</FONT></P>
<P align=left><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>By: /s/ Keith F. Hartstein </FONT><BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>------------------------------------- </FONT><BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Keith F. Hartstein </FONT><BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>President and Chief Executive Officer</FONT><BR>
<BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Date: August 27, 2007 </FONT></P>
<P align=left><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. </FONT></P>
<P align=left><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>By: /s/ Keith F. Hartstein </FONT><BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>------------------------------------- </FONT><BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Keith F. Hartstein </FONT><BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>President and Chief Executive Officer</FONT><BR>
<BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Date: August 27, 2007 </FONT></P>
<P align=left><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>By: /s/ Charles A. Rizzo </FONT><BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>-------------------------------------</FONT><BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Charles A. Rizzo </FONT><BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Chief Financial Officer </FONT><BR>
<BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Date: August 27, 2007 </FONT></P>
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<TYPE>EX-99.CERT
<SEQUENCE>2
<FILENAME>b_istxnn.htm
<DESCRIPTION>CERTIFICATION
<TEXT>

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<P align="left">
<B><U><FONT size=2 face="Arial-BoldMT,Arial,Helvetica,sans-serif">CERTIFICATION</FONT></U></B><BR>
<BR>
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">I, Keith F. Hartstein, certify that:</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">1. I have reviewed this report on Form N-CSR of the John Hancock Income Securities Trust (the &#147;registrant&#148;);</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company
Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; </FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second
fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the
equivalent functions):</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize, and report financial information; and</FONT></P>

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<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">By: /s/ Keith F. Hartstein </FONT><BR>
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">------------------------------------- </FONT><BR>
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Keith F. Hartstein </FONT><BR>
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">President and Chief Executive Officer</FONT><BR>
<BR>
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Date: August 27, 2007 </FONT></P>

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<P align="left">
<B><U><FONT size=2 face="Arial-BoldMT,Arial,Helvetica,sans-serif">CERTIFICATION</FONT></U></B><BR>
<BR>
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">I, Charles A. Rizzo, certify that:</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">1. I have reviewed this report on Form N-CSR of the John Hancock Income Securities Trust (the &#147;registrant&#148;);</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report;</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company
Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the
registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; </FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and
procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second
fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the
equivalent functions):</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize, and report financial information; and</FONT></P>

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<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.</FONT></P>
<P align="left">
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">By: /s/ Charles A. Rizzo </FONT><BR>
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">-------------------------------------</FONT><BR>
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Charles A. Rizzo </FONT><BR>
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Chief Financial Officer </FONT><BR>
<BR>
<FONT size=2 face="ArialMT,Arial,Helvetica,sans-serif">Date: August 27, 2007 </FONT></P>

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<TYPE>EX-99.906 CERT
<SEQUENCE>3
<FILENAME>c_istxnnos.htm
<DESCRIPTION>CERTIFICATION 906
<TEXT>

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<P align=center><B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of </FONT></B><BR>
<B><FONT face=Arial-BoldMT,Arial,Helvetica,sans-serif size=2>the Sarbanes-Oxley Act of 2002 </FONT></B></P>
<P align=left><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>In connection with the attached Report of John Hancock Income Securities Trust (the &#147;registrant&#148;) on Form N-CSR to be filed with the Securities and Exchange Commission (the "Report"), each of the undersigned officers of the registrant does hereby certify that, to the best of such officer's knowledge:</FONT></P>
<P align=left><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</FONT></P>
<P align=left><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant as of, and for, the periods presented in the Report.</FONT></P>
<P align=left><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>/s/ Keith F. Hartstein </FONT><BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>------------------------------------- </FONT><BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Keith F. Hartstein </FONT><BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>President and Chief Executive Officer </FONT><BR>
<BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Dated: August 27, 2007 </FONT><BR>
<BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>/s/ Charles A. Rizzo </FONT><BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>------------------------------------- </FONT><BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Charles A. Rizzo </FONT><BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Chief Financial Officer </FONT><BR>
<BR>
<FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>Dated: August 27, 2007 </FONT></P>
<P align=left><FONT face=ArialMT,Arial,Helvetica,sans-serif size=2>A signed original of this written statement, required by Section 906, has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.</FONT></P>
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<DOCUMENT>
<TYPE>EX-99.CODE ETH
<SEQUENCE>4
<FILENAME>d_codeofeth.htm
<DESCRIPTION>CODE OF ETHICS
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<P align=left><B><FONT face=sans-serif size=2>JOHN HANCOCK FUNDS</FONT></B></P>
<P align=left><B><FONT face=sans-serif size=2>CODE OF ETHICS</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>This is the code of ethics
of:</FONT></P>
<P align=left>
<TABLE>

  <TR>
    <TD noWrap><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149; </FONT>John Hancock Advisers, LLC</FONT><BR><BR><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
      </FONT>MFC Global Investment Management (U.S.), LLC (formerly known as Sovereign Asset Management LLC)</FONT><BR><BR><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149; </FONT>each open-end and
      closed-end fund advised by John Hancock Advisers, LLC</FONT><BR><BR><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149; </FONT>John
      Hancock Funds, LLC </FONT><BR></TD></TR></TABLE></P>
<P align=left><FONT face=sans-serif size=2>(together, called "John Hancock
Funds" or "JHF")</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>1. General
Principles</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>Each person within the John Hancock
Funds organization is responsible for maintaining the very highest ethical
standards when conducting our business.</FONT></P>
<P align=left><FONT face=sans-serif size=2>This means that:</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>You have a fiduciary duty at all times to place the interests of our
clients and fund investors first.</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>All of your personal securities transactions must be conducted consistent
with the provisions of this code of ethics that apply to you and in such a
manner as to avoid any actual or potential conflict of interest or other abuse
of your position of trust and responsibility.</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>You should not take inappropriate advantage of your position or engage in
any fraudulent or manipulative practice (such as front-running or manipulative
market timing) with respect to our clients' accounts or fund
investors.</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>You must treat as confidential any information concerning the identity of
security holdings and financial circumstances of clients or fund
investors.</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>You must comply with all applicable federal securities laws.</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>You must promptly report any violation of this code of ethics that comes
to your attention to the Chief Compliance Officer of your company -see Appendix
F.</FONT></P>
<P align=left><FONT face=sans-serif size=2>The General Principles discussed
above govern all conduct, whether or not</FONT></P>
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<P align=left><FONT face=sans-serif size=2>The General Principles discussed
above govern all conduct, whether or not the conduct is also covered by more
specific standards and procedures in this code of ethics. As described below
under the heading "Interpretation and Enforcement", failure to comply with the
code of ethics may result in disciplinary action, including termination of
employment.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>2. To Whom Does This Code
Apply?</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>This code of ethics applies to you if
you are a director, officer or employee of John Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC, John Hancock Funds, LLC or a John Hancock open-end or
closed-end fund registered under the Investment Company Act of 1940 (the "'40
Act") and advised by John Hancock Advisers, LLC ("John Hancock funds"). It also
applies to you if you are trustee of the John Hancock Financial Trends Fund,
Inc. or an employee of Manulife Financial Corporation or its subsidiaries who
participates in making recommendations for, or receives information about,
portfolio trades or holdings of the John Hancock funds or accounts. However,
notwithstanding anything herein to the contrary, it does not apply to any
trustees/directors of any open-end or closed-end funds advised by John Hancock
Advisers, LLC who are not "interested persons" of such funds as defined in
Section 2(a)(19) of the '40 Act, so long as they are subject to a separate Code
of Ethics (each, an "Excluded Independent Director"). Also, in some cases only a
limited number of provisions will apply to you, based on your access category.
For example, only a limited number of provisions apply to directors of the John
Hancock open-end funds and closed-end funds who are not Excluded Independent
Directors-- see Appendix C for more information.</FONT></P>
<P align=left><FONT face=sans-serif size=2>Please note that if a policy
described below applies to you, it also applies to all accounts over which you
have a beneficial interest. </FONT><FONT face=sans-serif size=2>Normally, you
will be deemed to have a beneficial interest in your personal accounts, those of
a spouse, "significant other," minor children or family members sharing a
household, as well as all accounts over which you have discretion or give advice
or information. "Significant others" are defined for these purposes as two
people who (1) share the same primary residence; (2) share living expenses; and
(3) are in a committed relationship and intend to remain in the relationship
indefinitely.</FONT></P>
<P align=left><FONT face=sans-serif size=2>There are three main categories for
persons covered by this code of ethics, taking into account their positions,
duties and access to information regarding fund portfolio trades. You have been
notified about which of these categories applies to you, based on the JHF
Investment Compliance Department's understanding of your current role. If you
have a level of investment access beyond your assigned category, or if you are
promoted or change duties and as a result should more appropriately be included
in a different category, it is your responsibility to notify the Chief
Compliance Officer of your company.</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<!--$$/page=--><A name=page_3></A>
<P align=left><FONT face=sans-serif size=2>The basic definitions of the three
main categories, with examples, are provided below. The more detailed
definitions of each category are attached as Appendix A.</FONT></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="28%" colSpan=3><B><FONT face=sans-serif size=2>&#147;Investment Access&#148;
      person</FONT></B>&nbsp; </TD>
    <TD width="4%">&nbsp; </TD>
    <TD noWrap align=left width="35%" colSpan=3><B><FONT face=sans-serif size=2>&#147;Regular Access&#148;
      person</FONT></B>&nbsp; </TD>
    <TD width="3%">&nbsp; </TD>
    <TD noWrap align=left width="29%" colSpan=3><B><FONT face=sans-serif size=2>&#147;Non-Access&#148;
      person</FONT></B>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="25%">&nbsp; </TD>
    <TD width="4%">&nbsp; </TD>
    <TD noWrap align=left width="35%" colSpan=3><FONT face=sans-serif size=2>A person who regularly has access</FONT>&nbsp; </TD>
    <TD width="3%">&nbsp; </TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD noWrap align=left width="24%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="25%">&nbsp; </TD>
    <TD width="4%">&nbsp; </TD>
    <TD noWrap align=left width="35%" colSpan=3><FONT face=sans-serif size=2>to (1) fund portfolio trades or (2)</FONT>&nbsp; </TD>
    <TD width="3%">&nbsp; </TD>
    <TD noWrap align=left width="29%" colSpan=3><FONT face=sans-serif size=2>A person who does not regularly</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="28%" colSpan=3><FONT face=sans-serif size=2>A person who regularly participates</FONT>&nbsp; </TD>
    <TD width="4%">&nbsp; </TD>
    <TD noWrap align=left width="35%" colSpan=3><FONT face=sans-serif size=2>non-public information regarding</FONT>&nbsp; </TD>
    <TD width="3%">&nbsp; </TD>
    <TD noWrap align=left width="29%" colSpan=3><FONT face=sans-serif size=2>participate in a fund&#146;s investment</FONT>&nbsp;
  </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="28%" colSpan=3><FONT face=sans-serif size=2>in a fund&#146;s investment process or</FONT>&nbsp; </TD>
    <TD width="4%">&nbsp; </TD>
    <TD align=left width="35%" colSpan=3><FONT face=Arial size=2>holdings or
      securities</FONT>&nbsp;&nbsp;&nbsp; </TD>
    <TD width="3%">&nbsp; </TD>
    <TD noWrap align=left width="29%" colSpan=3><FONT face=sans-serif size=2>process or obtain information</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="28%" colSpan=3><FONT face=sans-serif size=2>makes securities recommendations</FONT>&nbsp; </TD>
    <TD width="4%">&nbsp; </TD>
    <TD noWrap align=left width="35%" colSpan=3><FONT face=sans-serif size=2>recommendations to clients.</FONT>&nbsp; </TD>
    <TD width="3%">&nbsp; </TD>
    <TD noWrap align=left width="29%" colSpan=3><FONT face=sans-serif size=2>regarding fund portfolio trades</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD align=left width="28%" colSpan=3><FONT face=sans-serif size=2>to clients.</FONT>&nbsp; </TD>
    <TD width="4%">&nbsp; </TD>
    <TD align=left width="35%" colSpan=3></TD>
    <TD width="3%">&nbsp; </TD>
    <TD align=left width="29%" colSpan=3></TD></TR>
  <TR>
    <TD width="1%">&nbsp; </TD>
    <TD width="2%"></TD>
    <TD width="25%" background="">&nbsp;</TD>
    <TD width="4%"></TD>
    <TD width="3%" background="">&nbsp;</TD>
    <TD width="2%"></TD>
    <TD width="30%" background=""><EM><U><FONT face=Arial size=2>examples:</FONT></U></EM>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD width="3%"></TD>
    <TD width="4%" background="">&nbsp;</TD>
    <TD width="1%"></TD>
    <TD width="24%" background=""><EM><U><FONT face=Arial size=2>examples:</FONT></U></EM>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD></TR>
  <TR>
    <TD noWrap align=left width="1%" background=""></TD>
    <TD width="2%" background=""></TD>
    <TD noWrap align=left width="25%" background=""><EM><U><FONT face=Arial size=2>examples:</FONT></U></EM>&nbsp; </TD>
    <TD width="4%" background=""></TD>
    <TD noWrap align=right width="3%" background=""></TD>
    <TD width="2%" background=""></TD>
    <TD noWrap align=left width="30%" background=""></TD>
    <TD width="3%" background=""></TD>
    <TD noWrap align=right width="4%" background=""></TD>
    <TD width="1%" background=""></TD>
    <TD noWrap align=left width="24%" background=""></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="25%">&nbsp; </TD>
    <TD width="4%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif>&#149;</FONT></TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="30%"><I><FONT face=sans-serif size=2>personnel in
      Investment</FONT></I>&nbsp; </TD>
    <TD width="3%">&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif>&#149;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD noWrap align=left width="24%"><I><FONT face=sans-serif size=2>wholesalers</FONT></I>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp; &#149;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="25%"><EM><FONT face=Arial size=2>portfolio
      managers</FONT></EM>&nbsp; </TD>
    <TD width="4%">&nbsp; </TD>
    <TD noWrap align=right width="3%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="30%"><I><FONT face=sans-serif size=2>Operations or
      Compliance</FONT></I>&nbsp; </TD>
    <TD width="3%">&nbsp; </TD>
    <TD noWrap align=right width="4%"></TD>
    <TD width="1%">&nbsp;</TD>
    <TD noWrap align=left width="24%"></TD></TR>
  <TR>
    <TD noWrap align=right width="1%" background=""></TD>
    <TD width="2%" background=""></TD>
    <TD noWrap align=left width="25%" background=""></TD>
    <TD width="4%" background=""></TD>
    <TD noWrap align=right width="3%" background=""></TD>
    <TD width="2%" background=""></TD>
    <TD noWrap align=left width="30%" background=""></TD>
    <TD width="3%" background=""></TD>
    <TD noWrap align=right width="4%" background="">&#149;</TD>
    <TD width="1%" background=""></TD>
    <TD noWrap align=left width="24%" background=""><EM><FONT face=Arial size=2>inside wholesalers who</FONT></EM>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"><FONT face=serif>&#149;</FONT></TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="25%"><EM><FONT face=Arial size=2>analysts</FONT></EM>&nbsp; </TD>
    <TD width="4%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif>&#149;</FONT></TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="30%"><I><FONT face=sans-serif size=2>most FFM
      personnel</FONT></I>&nbsp; </TD>
    <TD width="3%">&nbsp; </TD>
    <TD noWrap align=right width="4%"></TD>
    <TD width="1%">&nbsp;</TD>
    <TD noWrap align=left width="24%"><I><FONT face=sans-serif size=2>don&#146;t attend
      investment</FONT></I>&nbsp; </TD></TR>
  <TR>
    <TD noWrap align=right width="1%" background=""></TD>
    <TD width="2%" background=""></TD>
    <TD noWrap align=left width="25%" background=""></TD>
    <TD width="4%" background=""></TD>
    <TD noWrap align=right width="3%" background=""></TD>
    <TD width="2%" background=""></TD>
    <TD noWrap align=left width="30%" background=""></TD>
    <TD width="3%" background=""></TD>
    <TD noWrap align=right width="4%" background=""></TD>
    <TD width="1%" background=""></TD>
    <TD noWrap align=left width="24%" background=""><EM><FONT face=Arial size=2>&#147;morning meetings&#148;</FONT></EM>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"><FONT face=serif>&#149;</FONT></TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="25%"><EM><FONT face=Arial size=2>traders</FONT></EM>&nbsp; </TD>
    <TD width="4%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif>&#149;</FONT></TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="30%"><I><FONT face=sans-serif size=2>Technology personnel
      with</FONT></I>&nbsp; </TD>
    <TD width="3%">&nbsp; </TD>
    <TD noWrap align=right width="4%">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD noWrap align=left width="24%"></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="25%">&nbsp; </TD>
    <TD width="4%">&nbsp; </TD>
    <TD noWrap align=right width="3%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="30%"><I><FONT face=sans-serif size=2>access to
      investment</FONT></I>&nbsp; </TD>
    <TD width="3%">&nbsp; </TD>
    <TD noWrap align=right width="4%"><FONT face=serif>&#149;</FONT></TD>
    <TD width="1%">&nbsp;</TD>
    <TD noWrap align=left width="24%"><I><FONT face=sans-serif size=2>certain
      administrative</FONT></I>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=right width="1%"></TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="25%"></TD>
    <TD width="4%">&nbsp; </TD>
    <TD noWrap align=right width="3%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="30%"><I><FONT face=sans-serif size=2>systems</FONT></I>&nbsp;
    </TD>
    <TD width="3%">&nbsp; </TD>
    <TD noWrap align=right width="4%">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD noWrap align=left width="24%"><I><FONT face=sans-serif size=2>personnel</FONT></I>&nbsp; </TD></TR>
  <TR>
    <TD noWrap align=left width="1%" background=""></TD>
    <TD width="2%" background=""></TD>
    <TD noWrap align=left width="25%" background=""></TD>
    <TD width="4%" background=""></TD>
    <TD noWrap align=right width="3%" background=""></TD>
    <TD width="2%" background=""></TD>
    <TD noWrap align=left width="30%" background="">&nbsp;&nbsp; </TD>
    <TD width="3%" background=""></TD>
    <TD noWrap align=right width="4%" background=""></TD>
    <TD width="1%" background=""></TD>
    <TD noWrap align=left width="24%" background=""></TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="25%">&nbsp; </TD>
    <TD width="4%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif>&#149;</FONT></TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="30%"><I><FONT face=sans-serif size=2>attorneys and some
      legal</FONT></I>&nbsp; </TD>
    <TD width="3%">&nbsp; </TD>
    <TD noWrap align=right width="4%">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD noWrap align=left width="24%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="25%">&nbsp; </TD>
    <TD width="4%">&nbsp; </TD>
    <TD noWrap align=right width="3%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="30%"><I><FONT face=sans-serif size=2>administration
      personnel</FONT></I>&nbsp; </TD>
    <TD width="3%">&nbsp; </TD>
    <TD noWrap align=right width="4%">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD noWrap align=left width="24%">&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=11>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="25%">&nbsp; </TD>
    <TD width="4%">&nbsp; </TD>
    <TD noWrap align=right width="3%"><FONT face=serif>&#149;</FONT></TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="30%"><I><FONT face=sans-serif size=2>investment
      admin.</FONT></I>&nbsp; </TD>
    <TD width="3%">&nbsp; </TD>
    <TD noWrap align=right width="4%">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD noWrap align=left width="24%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="1%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="25%">&nbsp; </TD>
    <TD width="4%">&nbsp; </TD>
    <TD noWrap align=right width="3%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD noWrap align=left width="30%"><I><FONT face=sans-serif size=2>personnel</FONT></I>&nbsp; </TD>
    <TD width="3%">&nbsp; </TD>
    <TD noWrap align=right width="4%">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD noWrap align=left width="24%">&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=11>
      <HR noShade SIZE=1>
    </TD></TR></TABLE><BR>
<P align=left><B><FONT face=sans-serif size=2>3. Which Accounts and Securities
are Subject to the Code's Personal Trading Restrictions?</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>If this code of ethics describes
"Personal Trading Requirements" (i.e. John Hancock Mutual Fund reporting
requirement and holding period, the preclearance requirement, the ban on
short-term profits, the ban on IPOs, the disclosure of private placement
conflicts and the reporting requirements) that apply to your access category as
described above, then the requirements apply to trades for any account in which
you have a beneficial interest. Normally, this includes your personal accounts,
those of a spouse, "significant other," minor children or family members sharing
your household, as well as all accounts over which you have discretion or give
advice or information. This includes all brokerage accounts that contain
securities (including brokerage accounts that only contain securities exempt
from reporting). Accounts over which you have no direct or indirect influence or
control are exempt. To prevent potential violations of this code of ethics, you
are strongly encouraged to request clarification for any accounts that are in
question.</FONT></P>
<P align=left><FONT face=sans-serif size=2>These personal trading requirements
do not apply to the following securities:</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;</FONT> Direct obligations of the U.S. government (e.g., treasury
securities);</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;</FONT> Bankers' acceptances, bank certificates of deposit, commercial
paper, and high quality short-term debt obligations, including repurchase
agreements;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;</FONT> Shares of open-end mutual funds registered under the '40 Act
that are not advised or sub-advised by John Hancock Advisers, John Hancock
Investment Management Services or another Manulife entity;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;</FONT> Shares issued by money market funds; and</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<!--$$/page=--><A name=page_4></A>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Securities in accounts over which you have no direct or indirect
influence or control.</FONT></P>
<P align=left><FONT face=sans-serif size=2>Except as noted above, the Personal
Trading Requirements apply to all securities, including:</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Stocks;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Bonds;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Government securities that are not direct obligations of the U.S.
government, such as Fannie Mae or municipal securities;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Closed-end funds;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Options on securities, on indexes, and on currencies;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Limited partnerships;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Domestic unit investment trusts;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Exchange traded funds;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Non-US unit investment trusts and Non-US mutual funds;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Private investment funds and hedge funds; and</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Futures, investment contracts or any other instrument that is considered
a "security" under the Investment Advisers Act.</FONT></P>
<P align=left><FONT face=sans-serif size=2>Different requirements apply to
shares of open-end mutual funds that are advised or sub-advised by John Hancock
Advisers, LLC or another Manulife entity--see the section below titled "John
Hancock Mutual Funds Reporting Requirement and Holding Period".</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>4. Overview of
Policies</FONT></B></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="42%">&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="18%"><FONT face=sans-serif size=2>Investment Access</FONT>&nbsp;
    </TD>
    <TD width="5%">&nbsp; </TD>
    <TD noWrap align=left width="6%"><FONT face=sans-serif size=2>Regular Access </FONT></TD>
    <TD width="9%"></TD>
    <TD noWrap align=left width="18%" background=""><FONT face=Arial size=2>Non-Access Person</FONT>&nbsp;&nbsp;&nbsp;</TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="42%">&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="18%"><FONT face=sans-serif size=2>Person</FONT>&nbsp; </TD>
    <TD width="5%">&nbsp; </TD>
    <TD noWrap align=left width="6%"><FONT face=sans-serif size=2>Person</FONT>&nbsp; </TD>
    <TD width="9%">&nbsp; </TD>
    <TD noWrap align=left width="18%">&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="42%"><FONT face=sans-serif size=2>General principles</FONT>&nbsp;
    </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="18%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="5%">&nbsp; </TD>
    <TD noWrap align=left width="6%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="9%">&nbsp; </TD>
    <TD noWrap align=left width="18%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="42%"><FONT face=sans-serif size=2>Policies outside the
      code</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="18%">&nbsp; </TD>
    <TD width="5%">&nbsp; </TD>
    <TD noWrap align=left width="6%">&nbsp; </TD>
    <TD width="9%">&nbsp; </TD>
    <TD noWrap align=left width="18%">&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="42%"><FONT face=sans-serif size=2>Conflict of interest
      policy</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="18%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="5%">&nbsp; </TD>
    <TD noWrap align=left width="6%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="9%">&nbsp; </TD>
    <TD noWrap align=left width="18%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="42%"><FONT face=sans-serif size=2>Inside information
      policy</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="18%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="5%">&nbsp; </TD>
    <TD noWrap align=left width="6%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="9%">&nbsp; </TD>
    <TD noWrap align=left width="18%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="42%"><FONT face=sans-serif size=2>Policy regarding dissemination
      of mutual fund</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="18%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="5%">&nbsp; </TD>
    <TD noWrap align=left width="6%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="9%">&nbsp; </TD>
    <TD noWrap align=left width="18%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="42%"><FONT face=sans-serif size=2>portfolio
      information</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="18%">&nbsp; </TD>
    <TD width="5%">&nbsp; </TD>
    <TD noWrap align=left width="6%">&nbsp; </TD>
    <TD width="9%">&nbsp; </TD>
    <TD noWrap align=left width="18%">&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
<!--$$/page=--><A name=page_5></A>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>Policies in the
      code</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%">&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>Restriction on
      gifts</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>John Hancock mutual funds
      reporting</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>requirement and holding
      period</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%">&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>Pre-clearance
      requirement</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%"><FONT face=sans-serif size=2>Limited</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>Heightened preclearance of
      securities</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%"><FONT face=sans-serif size=2>no</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>transactions for &#147;Significant
      Personal</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%">&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>Positions&#148;</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%">&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>Ban on short-term
      profits</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%"><FONT face=sans-serif size=2>no</FONT>&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%"><FONT face=sans-serif size=2>no</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>Ban on IPOs</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%"><FONT face=sans-serif size=2>no</FONT>&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%"><FONT face=sans-serif size=2>no</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>Disclosure of private placement
      conflicts</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%"><FONT face=sans-serif size=2>no</FONT>&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%"><FONT face=sans-serif size=2>no</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>Seven day blackout
      period</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%"><FONT face=sans-serif size=2>no</FONT>&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%"><FONT face=sans-serif size=2>no</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>Reports and other disclosures
      outside the code</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%">&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>Broker letter/duplicate
      confirms</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>Reports and other disclosures in
      the code</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%">&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%">&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%">&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>Annual recertification
      form</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>Initial/annual holdings
      reports</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%"><FONT face=sans-serif size=2>no</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="50%"><FONT face=sans-serif size=2>Quarterly transaction
      reports</FONT>&nbsp; </TD>
    <TD width="1%">&nbsp; </TD>
    <TD noWrap align=left width="3%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="22%">&nbsp; </TD>
    <TD noWrap align=left width="4%"><FONT face=sans-serif size=2>yes</FONT>&nbsp; </TD>
    <TD width="12%">&nbsp; </TD>
    <TD noWrap align=left width="7%"><FONT face=sans-serif size=2>no</FONT>&nbsp; </TD></TR>
  <TR>
    <TD align=left width="99%" background="" colSpan=7>
      <HR noShade SIZE=1>
    </TD></TR></TABLE><BR>
<P align=left><B><FONT face=sans-serif size=2>5. Policies Outside of the Code of
Ethics</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>John Hancock Funds have certain
policies that are not part of the code of ethics, but are equally important. The
two most important of these policies are (1) the Company Conflict and Business
Practice Policy; and (2) the Inside Information Policy.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>&gt;&gt; Company Conflict &amp;
Business Practice Policy</FONT></B></P>
<P align=left>
<TABLE>

  <TR>
    <TD noWrap><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR><FONT face=sans-serif size=2>Applies to: Investment Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Regular Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Non-Access
      Persons</FONT><BR><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR></TD></TR></TABLE><FONT face=sans-serif size=2>A conflict of interest occurs when your private interests
interfere or could potentially interfere with your responsibilities at work. You
must not place yourself or the company in a position of actual or potential
conflict.</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<!--$$/page=--><A name=page_6></A>
<P align=left><FONT face=sans-serif size=2>This Policy covers a number of
important issues for officers and employees of John Hancock Funds. For example,
you cannot serve as a director of any company without first obtaining the
required written executive approval.</FONT></P>
<P align=left><FONT face=sans-serif size=2>This Policy includes significant
requirements to be followed if your personal securities holdings overlap with
John Hancock funds investment activity. For example, if you or a member of your
family own:</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>a 5% or greater interest in a company, John Hancock Funds and its
affiliates may not make any investment in that company;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>a 1% or greater interest in a company, you cannot participate in any
decision by John Hancock Funds and its affiliates to buy or sell that company's
securities;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>ANY interest in a company, you cannot recommend or participate in a
decision by John Hancock Funds and its affiliates to buy or sell that company's
securities unless your personal interest is fully disclosed at all stages of the
investment decision.</FONT></P>
<P align=left><FONT face=sans-serif size=2>(This is just a summary of these
requirements--please read Section IV of the Company Conflict and Business
Practices Policy for more detailed information.)</FONT></P>
<P align=left><FONT face=sans-serif size=2>Other important issues in this Policy
include:</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>personal investments or business relationships</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>misuse of inside information </FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>receiving or giving of gifts, entertainment or favors </FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>misuse or misrepresentation of your corporate position </FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>disclosure of confidential or proprietary information </FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>antitrust activities</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>political campaign contributions and expenditures on public
officials</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>&gt;&gt; Inside Information Policy
and Procedures</FONT></B></P>
<P align=left>
<TABLE>

  <TR>
    <TD noWrap><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR><FONT face=sans-serif size=2>Applies to: Investment Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Regular Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Non-Access
      Persons</FONT><BR><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR></TD></TR></TABLE></P>
<HR align=center width="100%" noShade SIZE=2>
<!--$$/page=--><A name=page_7></A><FONT face=sans-serif size=2>
<P align=left><FONT face=sans-serif size=2>The antifraud provisions of the
federal securities laws generally prohibit persons with material non-public
information from trading on or </FONT>communicating the information to others.
Sanctions for violations can include civil injunctions, permanent bars from the
securities industry, civil penalties up to three times the profits made or
losses avoided, criminal fines and jail sentences. While Investment Access
persons are most likely to come in contact with material non-public information,
the rules (and sanctions) in this area apply to all John Hancock Funds personnel
and extend to activities both related and unrelated to your job
duties.</FONT></P>
<P align=left><FONT face=sans-serif size=2>The Inside Information Policy and
Procedures covers a number of important issues, such as:</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>The misuse of material non-public information</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>The information barrier procedure</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>The "restricted list" and the "watch list"</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>broker letters and duplicate confirmation statements (see section 7 of
this code of ethics)</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>&gt;&gt; Policy Regarding
Dissemination of Mutual Fund Portfolio Information</FONT></B></P>
<P align=left>
<TABLE>

  <TR>
    <TD noWrap><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR><FONT face=sans-serif size=2>Applies to: Investment Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Regular Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Non-Access
      Persons</FONT><BR><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR></TD></TR></TABLE></P>
<P align=left><FONT face=sans-serif size=2>Information about securities held in
a mutual fund cannot be disclosed except in accordance with this Policy, which
generally requires time delays of approximately one month and public posting of
the information to ensure that it uniformly enters the public domain.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>6. Policies in the Code of
Ethics</FONT></B></P>
<P align=left><B><FONT face=sans-serif size=2>&gt;&gt; Restriction on
Gifts</FONT></B></P>
<P align=left>
<TABLE>

  <TR>
    <TD noWrap><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR><FONT face=sans-serif size=2>Applies to: Investment Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Regular Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Non-Access
      Persons</FONT><BR><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR></TD></TR></TABLE></P>
<P align=left><FONT face=sans-serif size=2>You and your family cannot accept
preferential treatment or favors (for example, gifts) from securities brokers or
dealers or other organizations with which John Hancock Funds might transact
business, except in accordance with the Company Conflict and Business Practice
Policy. For the protection of both you and John Hancock Funds, the appearance of
a possible conflict of interest must be avoided. You should exercise caution in
any</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
<!--$$/page=--><A name=page_8></A>
<P align=left><FONT face=sans-serif size=2>instance in which business travel and
lodging are paid for by someone other than John Hancock Funds. The purpose of
this policy is to minimize the basis for any charge that you used your John
Hancock Funds position to obtain for yourself opportunities which otherwise
would not be offered to you. Please see the Company Conflict and Business
Practice Policy's "Compensation and Gifts" section for additional details
regarding restrictions on gifts and exceptions for "nominal value"
gifts.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>&gt;&gt; John Hancock Mutual Funds
Reporting Requirement and Holding Period</FONT></B></P>
<P align=left>
<TABLE>

  <TR>
    <TD noWrap><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR><FONT face=sans-serif size=2>Applies to: Investment Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Regular Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Non-Access
      Persons</FONT><BR><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR></TD></TR></TABLE></P>
<P align=left><FONT face=sans-serif size=2>You must follow the reporting
requirement and the holding period requirement specified below if you purchase
either:</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>a "John Hancock Mutual Fund" (i.e. a '40 Act mutual fund that is advised
by </FONT><FONT face=sans-serif size=2>John Hancock Advisers, LLC, John Hancock
Investment Management Services LLC or by another Manulife entity); or</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>a "John Hancock Variable Product" (i.e. contracts funded by insurance
company separate accounts that use one or more portfolios of John Hancock
Trust). </FONT><FONT face=sans-serif size=2>The John Hancock Mutual Funds
reporting requirement and the holding period requirement are excluded for the
money market funds and any dividend reinvestment, payroll deduction, systematic
investment/withdrawal and/or other program trades.</FONT></P>
<P align=left><FONT face=sans-serif size=2>Reporting Requirement: You must
report your holdings and your trades in a John Hancock Mutual Fund or a John
Hancock Variable Product. This is not a preclearance requirement--you can report
your holdings after you trade by submitting duplicate confirmation statements to
the JHF Investment Compliance Department. If you are an Investment Access Person
or a Regular Access Person, you must also make sure that your holdings in a John
Hancock fund or a John Hancock variable product are included in your Initial
Holdings Report (upon hire) and Annual Holdings Report (each year
end).</FONT></P>
<P align=left><FONT face=sans-serif size=2>If you purchase a John Hancock
Variable Product, you must notify the JHF Investment Compliance Department. The
JHF Investment Compliance Department will then obtain directly from the contract
administrators the personal trade and holdings information regarding the
portfolios underlying the Manulife or John Hancock variable insurance
contracts.</FONT></P>
<P align=left><FONT face=sans-serif size=2>The JHF Investment Compliance
Department will obtain personal securities trades and holdings information in
the 401(k) plan for John Hancock funds directly from the plan
administrators.</FONT></P>
<HR align=center width="100%" noShade SIZE=2>


<!--$$/page=-->
<A name="page_9"></A>

<P align="left">
<FONT size=2 face="sans-serif">Holding Requirement: You cannot profit from the purchase and sale of a John Hancock Mutual Fund within 30 calendar days. The purpose of this policy is to address the risk, real or perceived, of manipulative market
timing or other abusive practices involving short-term personal trading in the John Hancock Mutual Funds. Any profits realized on short-term trades must be surrendered by check payable to John Hancock Advisers, LLC and will be contributed by John
Hancock Advisers, LLC to a charity, upon determination by the Compliance and Business Practices Committee. If you donate or gift a security, it is considered a sale. You may request an exemption from this policy for involuntary sales due to
unforeseen corporate activity (such as a merger), or for sales due to hardship reasons (such as unexpected medical expenses) by sending an e-mail to the Chief Compliance Officer of your company.</FONT></P>
<P align="left">
<B><FONT size=2 face="sans-serif">&gt;&gt; Preclearance of Securities Transactions</FONT></B></P>
<P align="left">
<TABLE><TR><TD nowrap>
<FONT size=2 face="sans-serif">--------------------------------------------------------------------------------</FONT><BR>
<FONT size=2 face="sans-serif">Applies to: Investment Access Persons</FONT><BR>
<FONT size=2 face="sans-serif">Regular Access Persons</FONT><BR>
<BR>
<FONT size=2 face="sans-serif">Also, for a limited category of trades:</FONT><BR>
<FONT size=2 face="sans-serif">------------------------------------</FONT><BR>
<FONT size=2 face="sans-serif">Non-Access Persons</FONT><BR>
<FONT size=2 face="sans-serif">--------------------------------------------------------------------------------</FONT><BR>
</TD></TR></TABLE>
</P>
<P align="left">
<FONT size=2 face="sans-serif">Limited Category of Trades for Non-Access Persons: If you are a Non-Access person, you must preclear transactions in securities of any closed-end funds advised by John Hancock Advisers, LLC. A Non-Access person is not
required to preclear other trades. However, please keep in mind that a Non-Access person is required to report securities transactions after every trade (even those that are not required to be precleared) by requiring your broker to submit duplicate
confirmation statements, as described in section 7 of this code of ethics.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">Investment Access persons and Regular Access persons: If you are an Investment Access person or Regular Access person, you must "preclear" (i.e.: receive advance approval of) any personal securities transactions in the
categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions". Due to this preclearance requirement, participation in investment clubs is prohibited.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">Preclearance of private placements requires some special considerations--the decision will take into account whether, for example: (1) the investment opportunity should be reserved for John Hancock Funds clients; and
(2) it is being offered to you because of your position with John Hancock Funds.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">How to preclear: You preclear a trade by following the steps outlined in the preclearance procedures, which are attached as Appendix B. Please note that:</FONT></P>

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<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>You may not trade until clearance is received.</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Clearance approval is valid only for the date granted (i.e. the
preclearance date and the trade date should be the same).</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>A separate procedure should be followed for requesting preclearance of a
private placement or a derivative, as detailed in Appendix B. The JHF Investment
Compliance Department must maintain a five-year record of all clearances of
private placement purchases by Investment Access persons, and the reasons
supporting the clearances.</FONT></P>
<P align=left><FONT face=sans-serif size=2>The preclearance policy is designed
to proactively identify potential "problem trades" that raise front-running,
manipulative market timing or other conflict of interest concerns (example: when
an Investment Access person trades a security on the same day as a John Hancock
fund).</FONT></P>
<P align=left><FONT face=sans-serif size=2>Certain transactions in securities
that would normally require pre-clearance are exempt from the pre-clearance
requirement in the following situations; (1) shares are being purchased as part
of an automatic investment plan; (2) shares are being purchased as part of a
dividend reinvestment plan; or (3) transactions are being made in an account
over which you have designated a third party as having discretion to trade (you
must have approval from the Chief Compliance Officer to establish a
discretionary account).</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>&gt;&gt; Heightened Preclearance
of Securities Transactions for "Significant Personal Positions"</FONT></B></P>
<P align=left>
<TABLE>

  <TR>
    <TD noWrap><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR><FONT face=sans-serif size=2>Applies to: Investment Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Regular Access
      Persons</FONT><BR><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR></TD></TR></TABLE></P>
<P align=left><FONT face=sans-serif size=2>If you are an Investment Access
person or Regular Access person with a personal securities position that is
worth $100,000 or more, this is deemed to be a "Significant Personal Position".
This applies to any personal securities positions in the categories described
above in the section "Which Accounts and Securities are Subject to the Code's
Personal Trading Restrictions". Before you make personal trades to establish,
increase or decrease a Significant Personal Position, you must notify either the
Chief Fixed Income Officer or the Chief Equity Officer that (1) you intend to
trade in a Significant Personal Position and (2) confirm that you are not aware
of any clients for whom related trades should be completed first. You must
receive their pre-approval to proceed--their approval will be based on their
conclusion that your personal trade in a Significant Personal Position will not
"front-run" any action that John Hancock Funds should take for a client. This
Heightened Preclearance requirement is in addition to, not in place of, the
regular preclearance requirement described above--you must also receive the
regular preclearance before you trade.</FONT></P>
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<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=2 face="sans-serif">&gt;&gt; Ban on Short-Term Profits</FONT></B><BR>
</TD></TR></TABLE>
</P>
<P align="left">
<FONT size=2 face="sans-serif">--------------------------------------------------------------------------------<BR>Applies to: Investment Access Persons <BR>--------------------------------------------------------------------------------</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">If you are an Investment Access person, you cannot profit from the purchase and sale (or sale and purchase) of the same (or equivalent) securities within 60 calendar days. This applies to any personal securities trades
in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions".</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">You may invest in derivatives or sell short provided the transaction period exceeds the 60-day holding period (30 days for '40 Act mutual funds advised by John Hancock Advisers, LLC, John Hancock Investment Management
Services LLC or another Manulife entity). If you donate or gift a security, it is considered a sale.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">The purpose of this policy is to address the risk, real or perceived, of front-running, manipulative market timing or other abusive practices involving short-term personal trading. Any profits realized on short-term
trades must be surrendered by check payable to John Hancock Advisers, LLC and will be contributed by John Hancock Advisers, LLC to a charity, upon determination by the Compliance and Business Practices Committee.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">You may request an exemption from this policy for involuntary sales due to unforeseen corporate activity (such as a merger), or for sales due to hardship reasons (such as unexpected medical expenses) from the JHF
Investment Compliance Department.</FONT></P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=2 face="sans-serif">&gt;&gt; Ban on IPOs</FONT></B><BR>
</TD></TR></TABLE>
</P>
<P align="left">
<FONT size=2 face="sans-serif">--------------------------------------------------------------------------------<BR>Applies to: Investment Access Persons <BR>--------------------------------------------------------------------------------</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">If you are an Investment Access person, you may not acquire securities in an initial public offering (IPO). You may not purchase any newly-issued securities until the next business (trading) day after the offering
date. This applies to any personal securities trades in the categories described above in the section "Which Accounts and Securities are Subject to the Code's Personal Trading Restrictions".</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">There are two main reasons for this prohibition: (1) these purchases may suggest that persons have taken inappropriate advantage of their positions for personal profit; and (2) these purchases may create at least the
appearance that an investment opportunity that should have been available to the John Hancock funds was diverted to the personal benefit of an individual employee.</FONT></P>

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<P align=left><FONT face=sans-serif size=2>You may request an exemption for
certain investments that do not create a potential conflict of interest, such
as: (1) securities of a mutual bank or mutual insurance company received as
compensation in a demutualization and other similar non-voluntary stock
acquisitions; (2) fixed rights offerings; or (3) a family member's participation
as a form of employment compensation in their employer's IPO.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>&gt;&gt; Disclosure of Private
Placement Conflicts</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>--------------------------------------------------------------------------------<BR>Applies
to: Investment Access Persons
<BR>--------------------------------------------------------------------------------</FONT></P>
<P align=left><FONT face=sans-serif size=2>If you are an Investment Access
person and you own securities purchased in a private placement, you must
disclose that holding when you participate in a decision to purchase or sell
that same issuer's securities for a John Hancock fund. This applies to any
private placement holdings in the categories described above in the section
"Which Accounts and Securities are Subject to the Code's Personal Trading
Restrictions". Private placements are securities exempt from SEC registration
under section 4(2), section 4(6) or rules 504 -506 of the Securities Act of
1933.</FONT></P>
<P align=left><FONT face=sans-serif size=2>The investment decision must be
subject to an independent review by investment personnel with no personal
interest in the issuer.</FONT></P>
<P align=left><FONT face=sans-serif size=2>The purpose of this policy is to
provide appropriate scrutiny in situations in which there is a potential
conflict of interest.</FONT></P>
<P align=left>
<TABLE>

  <TR>
    <TD noWrap><B><FONT face=sans-serif size=2>&gt;&gt; Seven Day Blackout
      Period</FONT></B><BR></TD></TR></TABLE></P>
<P align=left><FONT face=sans-serif size=2>--------------------------------------------------------------------------------<BR>Applies
to: Investment Access Persons
<BR>--------------------------------------------------------------------------------</FONT></P>
<P align=left><FONT face=sans-serif size=2>If you are a portfolio manager (or
were identified to the JHF Investment Compliance Department as part of a
portfolio management team) you are prohibited from buying or selling a security
within seven calendar days before and after that security is traded for a fund
that you manage unless no conflict of interest exists in relation to that
security (as determined by the Compliance and Ethics Committee).</FONT></P>
<P align=left><FONT face=sans-serif size=2>In addition, all investment access
persons are prohibited from knowingly buying or selling a security within seven
calendar days before and after that security is traded for a John Hancock fund
unless no conflict of interest exists in relation to that security. This applies
to any personal securities trades in the categories described above in the
section "Which Accounts and Securities are Subject to the Code's Personal
Trading Restrictions". If a John Hancock fund trades in a security within seven
calendar days before or after you trade in that security, you may be required to
demonstrate that you did not know that the trade was being <FONT face=sans-serif size=2>considered for that John Hancock fund.</FONT></P></FONT>
<HR align=center width="100%" noShade SIZE=2>
<!--$$/page=--><A name=page_13></A>
<P align=left><FONT face=sans-serif size=2>You will be required to sell any
security purchased in violation of this policy unless it is determined that no
conflict of interest exists in relation to that security (as determined by the
Compliance and Ethics Committee). Any profits realized on trades determined by
the Compliance and Ethics Committee to be in violation of this policy must be
surrendered by check payable to John Hancock Advisers, LLC and will be
contributed by John Hancock Advisers, LLC to a charity.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>7. Reports and Other Disclosures
Outside the Code of Ethics </FONT></B></P>
<P align=left><B><FONT face=sans-serif size=2>&gt;&gt; Broker Letter/Duplicate
Confirm Statements</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>--------------------------------------------------------------------------------<BR>Applies
to: Investment Access Persons<BR>Regular Access Persons <BR>Non-Access Persons
<BR>--------------------------------------------------------------------------------</FONT></P>
<P align=left><FONT face=sans-serif size=2>As required by the Inside Information
Policy, you must inform your stockbroker that you are employed by an investment
adviser or broker. Your broker is subject to certain rules designed to prevent
favoritism toward your accounts. You may not accept negotiated commission rates
that you believe may be more favorable than the broker grants to accounts with
similar characteristics.</FONT></P>
<P align=left><FONT face=sans-serif size=2>When a brokerage account is opened
for which you have a beneficial interest, before any trades are made, you
must:</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Notify the broker-dealer with which you are opening an account that you
are a registered associate of John Hancock Funds;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Ask the firm in writing to have duplicate written confirmations of any
trade, as well as statements or other information concerning the account, sent
to the John Hancock Funds Investment Compliance Department (contact: Fred
Spring), 8th Floor, 101 Huntington Avenue, Boston, MA 02199; and</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Notify the JHF Investment Compliance Department, in writing, that you
have an account before you place any trades.</FONT></P>
<P align=left><FONT face=sans-serif size=2>This applies to any personal
securities trades in the categories described above in the section "Which
Accounts and Securities are Subject to the Code's Personal Trading Restrictions"
as well as trades in John Hancock Mutual Funds and John Hancock Variable
Products. The JHF Investment Compliance Department may rely on information
submitted by your broker as part of your reporting requirements under this code
of ethics.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>8. Reports and Other Disclosures
In the Code of Ethics</FONT></B></P>
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<P align=left><B><FONT face=sans-serif size=2>&gt;&gt; Initial Holdings Report
and Annual Holdings Report</FONT></B></P>
<P align=left>
<TABLE>

  <TR>
    <TD noWrap><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR><FONT face=sans-serif size=2>Applies to: Investment Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Regular Access
      Persons</FONT><BR><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR></TD></TR></TABLE></P>
<P align=left><FONT face=sans-serif size=2>You must file an initial holdings
report within 10 calendar days after becoming an Investment Access person or a
Regular Access person. The information must be current as of a date no more than
45 days prior to your becoming an Investment Access person or a Regular Access
person.</FONT></P>
<P align=left><FONT face=sans-serif size=2>You must also file an annual holdings
report (as of December 31st) within 45 calendar days after the calendar year
end. This applies to any personal securities holdings in the categories
described above in the section "Which Accounts and Securities are Subject to the
Code's Personal Trading Restrictions" as well as holdings in John Hancock Mutual
Funds and John Hancock Variable Products.</FONT></P>
<P align=left><FONT face=sans-serif size=2>Your reports must include:</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>the title and type of security, and as applicable the exchange ticker
symbol or CUSIP number, number of shares, and principal amount of each
reportable security;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>the name of any broker, dealer or bank with which you maintain an
account; and</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>the date that you submit the report.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>&gt;&gt; Quarterly Transaction
Certification</FONT></B></P>
<P align=left>
<TABLE>

  <TR>
    <TD noWrap><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR><FONT face=sans-serif size=2>Applies to: Investment Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Regular Access
      Persons</FONT><BR><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR></TD></TR></TABLE></P>
<P align=left><FONT face=sans-serif size=2>On a quarterly basis, Investment
Access Persons and Regular Access persons are required to certify transactions
in their brokerage accounts and the John Hancock Funds 401(k) Plan. Within 30
calendar days after the end of each calendar quarter you will be asked to log
into the John Hancock Personal Trading and Reporting System to verify that the
system has captured accurately all transactions for the preceding calendar
quarter for accounts and trades which are required to be reported pursuant to
the above noted section entitled "Which Accounts and Securities are Subject to
the Code's Personal Trading Restrictions". Even if you have no transactions to
report you will be asked to complete the certification.</FONT></P>
<P align=left><FONT face=sans-serif size=2>For each transaction you must report
the following information:</FONT></P>
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<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>the date of the transaction, the title, and as applicable the exchange
</FONT>ticker symbol or CUSIP number, interest rate and maturity date, number of
shares, and principal amount of each reportable security involved;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;</FONT> the nature of the transaction (i.e. purchase, sale or any other
type of acquisition or disposition);</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;</FONT> the price at which the transaction was effected;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;</FONT> the name of the broker, dealer or bank with or through which the
transaction was effected; and</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>&gt;&gt; Quarterly Brokerage
Account Certification</FONT></B></P>
<P align=left>
<TABLE>

  <TR>
    <TD noWrap><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR><FONT face=sans-serif size=2>Applies to: Investment Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Regular Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Non-Access
      Persons</FONT><BR><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR></TD></TR></TABLE></P>
<P align=left><FONT face=sans-serif size=2>Each quarter, all Investment Access
Persons, Regular Access Persons and Non-Access Persons will be required to
provide a complete list of all brokerage accounts as described above in the
section entitled "Which Accounts and Securities are Subject to the Code's
Personal Trading Restrictions". This includes all brokerage accounts, including
brokerage accounts that only contain securities exempt from
reporting.</FONT></P>
<P align=left><FONT face=sans-serif size=2>You will be asked to log into the
John Hancock Personal Trading and Reporting System and verify that all brokerage
accounts are listed and the following information is accurate:</FONT></P>
<P align=left>
<TABLE>

  <TR>
    <TD noWrap><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;</FONT> Account number;</FONT><BR><BR><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;</FONT> Account
      registration;</FONT><BR><BR><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;</FONT> Brokerage
  firm</FONT><BR></TD></TR></TABLE></P>
<P align=left><B><FONT face=sans-serif size=2>&gt;&gt; Annual
Certification</FONT></B></P>
<P align=left>
<TABLE>

  <TR>
    <TD noWrap><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR><FONT face=sans-serif size=2>Applies to: Investment Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Regular Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Non-Access
      Persons</FONT><BR><FONT face=sans-serif size=2>Limited Access
      Persons</FONT><BR><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT><BR></TD></TR></TABLE></P>
<P align=left><FONT face=sans-serif size=2>At least annually (or additionally
when the code of ethics has been significantly changed), you must provide a
certification at a date designated by the Investment Compliance Department
that:</FONT></P>
<P align=left><FONT face=sans-serif size=2>(1) you have read and understood this
code of ethics;</FONT></P>
<HR align=center width="100%" noShade SIZE=2>


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<A name="page_16"></A>

<P align="left">
<FONT size=2 face="sans-serif">(2) you recognize that you are subject to its policies; and</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">(3) you have complied with its requirements.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">You are required to make this certification to demonstrate that you understand the importance of these policies and your responsibilities under the code of ethics.</FONT></P>
<P align="left">
<B><FONT size=2 face="sans-serif">9. Limited Access Persons</FONT></B></P>
<P align="left">
<FONT size=2 face="sans-serif">There is an additional category of persons called "Limited Access" persons. This category consists only of directors of John Hancock Advisers, LLC, trustees of the John Hancock Financial Trends Fund, Inc. or an
"interested person" of the John Hancock funds who:</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">(a) are not also officers of John Hancock Advisers, LLC; and</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">(b) do not ordinarily obtain information about fund portfolio trades</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">An "interested person" of the John Hancock funds has the meaning given to the term in Section 2(a)(19) of the '40 Act.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">A more detailed definition of Limited Access persons, and a list of the policies that apply to them, is attached as Appendix C.</FONT></P>
<P align="left">
<B><FONT size=2 face="sans-serif">10. Subadvisers</FONT></B></P>
<P align="left">
<FONT size=2 face="sans-serif">A subadviser to a John Hancock fund has a number of code of ethics responsibilities, as described in Appendix D.</FONT></P>
<P align="left">
<B><FONT size=2 face="sans-serif">11. Reporting Violations</FONT></B></P>
<P align="left">
<FONT size=2 face="sans-serif">If you know of any violation of our code of ethics, you have a responsibility to promptly report it to the Chief Compliance Officer of your company. You should also report any deviations from the controls and
procedures that safeguard John Hancock Funds and the assets of our clients. You can request confidential treatment of your reporting action.</FONT></P>
<P align="left">
<B><FONT size=2 face="sans-serif">12. Interpretation and Enforcement</FONT></B></P>
<P align="left">
<FONT size=2 face="sans-serif">This code of ethics cannot anticipate every situation in which personal interests may be in conflict with the interests of our clients and fund investors. You should be responsive to the spirit and intent of this code
of ethics as well as its specific provisions.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">When any doubt exists regarding any code of ethics provision or whether a conflict of interest with clients or fund investors might exist, you should</FONT></P>

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<!--$$/page=--><A name=page_17></A>
<P align=left><FONT face=sans-serif size=2>discuss the situation in advance with
the Chief Compliance Officer of your company. The code of ethics is designed to
detect and prevent fraud against clients and fund investors, and to avoid the
appearance of impropriety. If you feel inequitably burdened by any policy, you
should feel free to contact your Chief Compliance Officer or the Compliance and
Business Practices Committee. Exceptions may be granted where warranted by
applicable facts and circumstances. For example, exemption from some Personal
Trading Requirements may be granted for transactions effected pursuant to an
automatic investment plan.</FONT></P>
<P align=left><FONT face=sans-serif size=2>To provide assurance that policies
are effective, the JHF Investment Compliance Department will monitor and check
personal securities transaction reports and certifications against fund
portfolio transactions. Additional administration and recordkeeping procedures
are described in Appendix E.</FONT></P>
<P align=left><FONT face=sans-serif size=2>The Chief Compliance Officer of your
company has general administrative responsibility for this code of ethics as it
applies to the access persons of your company; an appropriate Compliance
Department will administer procedures to review personal trading reports. The
Compliance and Business Practices Committee of John Hancock Funds approves
amendments to the code of ethics and dispenses employee/officer sanctions for
violations of the code of ethics. The Boards of Trustees/Directors of the
open-end mutual funds and closed-end funds also approve amendments to the code
of ethics and dispenses sanctions for access persons of the Funds who are not
employees/officers. Accordingly, the Investment Compliance Department will refer
violations to the Compliance and Business Practices Committee and/or the Boards
of Trustees/Directors of the John Hancock '40 Act funds, respectively, for
review and appropriate action. The following factors will be considered when
determining a fine or other disciplinary action:</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>the person's position and function (senior personnel may be held to a
higher standard);</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>the amount of the trade;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>whether the funds or accounts hold the security and were trading the same
day;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>whether the violation was by a family member.</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>whether the person has had a prior violation and which policy was
involved.</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>whether the employee self-reported the violation.</FONT></P>
<P align=left><FONT face=sans-serif size=2>You can request reconsideration of
any disciplinary action by submitting a written request.</FONT></P>
<P align=left><FONT face=sans-serif size=2>No less frequently than annually, a
written report of all material violations and sanctions, significant conflicts
of interest and other related issues will be submitted to the boards of
directors of the John</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
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<P align=left><FONT face=sans-serif size=2>Hancock funds for their review.
Sanctions for violations could include (but are not limited to) fines,
limitation of personal trading activity, suspension or termination of the
violator's position with John Hancock Funds and/or a report to the appropriate
regulatory authority.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>13. Education of
Employees</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>The JHF Investment Compliance
Department will provide a paper copy or electronic version of the Code of Ethics
(and any amendments) to each person subject to this Code of Ethics. The JHF
Investment Compliance Department will also administer training of employees on
the principles and procedures of the code of ethics.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Appendix A: Categories of
Personnel</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>You have been notified about which of
these categories applies to you, based on the JHF Investment Compliance
Department's understanding of your current role. If you have a level of
investment access beyond that category, or if you are promoted or change duties
and as a result should more appropriately be included in a different category,
it is your responsibility to immediately notify the Chief Compliance Officer of
your company.</FONT></P>
<P align=left><FONT face=sans-serif size=2>1) Investment Access person: You are
an Investment Access person if you are an employee of John Hancock Advisers,
LLC, MFC Global Investment Management (U.S.), LLC, a John Hancock fund, or Manulife Financial
Corporation or its subsidiaries who, in connection with your regular functions
or duties, makes or participates in making recommendations regarding the
purchase or sale of securities by a John Hancock fund.</FONT></P>
<P align=left><FONT face=sans-serif size=2>(examples: portfolio managers,
analysts, traders)</FONT></P>
<P align=left><FONT face=sans-serif size=2>2) Regular Access person: You are a
Regular Access person if you do not fit the definition of Investment Access
Person, but you do fit one of the following two sub-categories:</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>You are an officer (vice president and higher) or director of John
Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC or a John Hancock fund,
unless you qualify as a Limited Access person--please see Appendix C for this
definition.)</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>You are an employee of John Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC, a John Hancock fund or Manulife Financial Corporation or its
subsidiaries , or a director, officer (vice president and higher) or employee of
John Hancock Funds, LLC who has access to nonpublic information regarding any
clients' purchase or sale of securities, or nonpublic information regarding the
portfolio holdings of any reportable fund or who is involved in making
securities recommendations to clients, or who has access to such recommendations
that are nonpublic.</FONT></P>
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<P align=left><FONT face=sans-serif size=2>(examples: Investment Operations
personnel, Investment Compliance </FONT><FONT face=sans-serif size=2>Department
personnel, most Fund Financial Management personnel, investment administrative
personnel, Technology Resources personnel with access to investment systems,
attorneys and some legal administration personnel)</FONT></P>
<P align=left><FONT face=sans-serif size=2>3) Non-Access person: You are a
non-access person if you are an employee of John Hancock Advisers, LLC,
MFC Global Investment Management (U.S.), LLC, John Hancock Funds, LLC or a John Hancock fund
who does not fit the definitions of any of the other three categories
(Investment Access Person, Regular Access Person or Limited Access Person). To
be a non-access person, you must not have access to information regarding the
purchase or sale of securities by a John Hancock fund or nonpublic information
regarding the portfolio holdings in connection with your regular functions or
duties.</FONT></P>
<P align=left><FONT face=sans-serif size=2>(examples: wholesalers, inside
wholesalers, certain administrative staff)</FONT></P>
<P align=left><FONT face=sans-serif size=2>4) Limited Access Person: Please see
Appendix C for this definition.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Appendix B: Preclearance
Procedures</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>You should read the Code of Ethics to
determine whether you must obtain a preclearance before you enter into a
securities transaction. If you are required to obtain a preclearance, you should
follow the procedures detailed below.</FONT></P>
<P align=left><FONT face=sans-serif size=2>1. Pre-clearance for Public
Securities including Derivatives, Futures, Options and Selling Short:</FONT></P>
<P align=left><FONT face=sans-serif size=2>A request to pre-clear should be
entered into the John Hancock Personal Trading &amp; Reporting
System.</FONT></P>
<P align=left><FONT face=sans-serif size=2>The John Hancock Personal Trading
&amp; Reporting System is located under your Start Menu on your Desktop. It can
be accessed by going to Programs/Personal Trading &amp; Reporting/ Personal
Trading &amp; Reporting and by entering your Web Security Services user id and
password.</FONT></P>
<P align=left><FONT face=sans-serif size=2>If the John Hancock Personal Trading
&amp; Reporting System is not on your Desktop, please contact the HELP Desk at
(617) 572-6950 for assistance.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>The Trade Request
Screen:</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>At times you may receive a message
like "System is currently unavailable". The system is scheduled to be offline
from 8:00 PM until 7:00 AM each night.</FONT></P>
<P align=left><FONT face=sans-serif size=2>[GRAPHIC: Trade Request
Screen]</FONT></P>
<P align=left><FONT face=sans-serif size=2>Ticker/Security Cusip: Fill in either
the ticker, cusip or security name with the proper information of the security
you want to buy or sell. Then</FONT></P>
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<P align="left">
<FONT size=2 face="sans-serif">click the [Lookup] button. Select one of the hyperlinks for the desired security, and the system will populate the proper fields Ticker, Security Cusip, Security Name and Security Type automatically on the Trade
Request Screen.</FONT></P>
<P align="left">
<B><FONT size=2 face="sans-serif">If You Don't Know the Ticker, Cusip, or Security Name:</FONT></B></P>
<P align="left">
<FONT size=2 face="sans-serif">If you do not know the full ticker, you may type in the first few letters followed by an asterisk * and click the [Lookup] button. For example, let's say you want to buy some shares of Intel, but all you can remember
of the ticker is that it begins with int, so you enter int* for Ticker. If any tickers beginning with int are found, they are displayed on a new screen. Select the hyperlink of the one you want, and the system will populate Security Cusip, Security
Name and Security Type automatically on the Trade Request Screen. If you do not know the full cusip, you may type in the first few numbers followed by an asterisk * and click the [Lookup] button. For example, let's say you want to buy some shares of
Microsoft, but all you can remember of the cusip is that it begins with 594918, so you enter 594918* for Ticker. If any cusips beginning with 594918 are found, they are displayed on a new screen. Select the hyperlink of the one you want, and the
system will fill in Ticker, Security Name and Security Type automatically on the Trade Request Screen. If you do not know the Ticker but have an idea of what the Security Name is, you may type in an asterisk, a few letters of the name and an
asterisk * and click the [Lookup] button. For example, let's say you want to buy some shares of American Brands, so you enter *amer* for Security Name. Any securities whose names have amer in them are displayed on a new screen, where you are asked
to select the hyperlink of the one you want, and the system will fill in Ticker, Cusip and Security Type automatically on the Trade Request Screen.</FONT></P>
<P align="left">
<B><FONT size=2 face="sans-serif">Other Items on the Trade Request Screen:</FONT></B></P>
<P align="left">
<FONT size=2 face="sans-serif">Brokerage Account: Click on the dropdown arrow to the right of the Brokerage Account field to choose the account to be used for the trade.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">Transaction Type: Choose one of the values displayed when you click the dropdown arrow to the right of this field.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">Trade Date: You may only submit trade requests for the current date.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">Note: One or more of these fields may not appear on the Request Entry screen if the information is not required. Required fields are determined by the Investment Compliance Department.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">Click the [Submit Request] button to send the trade request to your Investment Compliance department.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">Once you click the [Submit Request] button, you will be asked to confirm the values you have entered. Review the information and click the [Confirm] button if all the information is correct. After which, you will
receive</FONT></P>

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<P align="left">
<FONT size=2 face="sans-serif">immediate feedback in your web browser. (Note: We suggest that you print out this confirmation and keep it as a record of the trade you have made). After this, you can either submit another trade request or
logout.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">Attention Investment Access Persons: If the system identifies a potential violation of the Ban on Short Term Profits Rule, your request will be sent to the Investment Compliance Department for review and you will
receive feedback via the e-mail system.</FONT></P>
<P align="left">
<B><FONT size=2 face="sans-serif">Starting Over:</FONT></B></P>
<P align="left">
<FONT size=2 face="sans-serif">To clear everything on the screen and start over, click the [Clear Screen] button.</FONT></P>
<P align="left">
<B><FONT size=2 face="sans-serif">Exiting Without Submitting the Trade Request:</FONT></B></P>
<P align="left">
<FONT size=2 face="sans-serif">If you decide not to submit the trade request before clicking the [Submit Request] button, simply exit from the browser by clicking the [X] button on the upper right or by pressing [Alt+F4], or by clicking the Logout
hyperlink on the lower left side of the screen.</FONT></P>
<P align="left">
<B><FONT size=2 face="sans-serif">Ticker/Security Name Lookup Screen:</FONT></B></P>
<P align="left">
<FONT size=2 face="sans-serif">You arrive at this screen from the Trade Request Screen, where you've clicked the [Lookup] button (see above, "If You Don't Know the Ticker, Cusip, or Security Name"). If you see the security you want to trade, you
simply select its corresponding hyperlink, and you will automatically return to the Trade Request Screen, where you finish making your trade request. If the security you want to trade is not shown, that means that it is not recognized by the system
under the criteria you used to look it up. Keep searching under other names (click the [Return to Request] button) until you are sure that the security is not in the system. If you determine that the desired security is not in the system, please
contact a member of the Investment Compliance department to add the security for you. Contacts are listed below:</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">Fred Spring (617) 375-4987</FONT></P>
<P align="left">
<B><FONT size=2 face="sans-serif">Adding Brokerage Accounts:</FONT></B></P>
<P align="left">
<FONT size=2 face="sans-serif">To access this functionality, click on the Add Brokerage Account hyperlink on the left frame of your browser screen. You will be prompted to enter the Brokerage Account Number, Brokerage Account Name, Date Opened, and
Broker. When you click the [Create New Brokerage Account] button, you will receive a message that informs you whether the account was successfully created.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">[GRAPHIC: Add Brokerage Account screen]</FONT></P>

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<P align="left">
<B><FONT size=2 face="sans-serif">3. Pre-clearance for Private Placements and Initial Public Offerings:</FONT></B></P>
<P align="left">
<FONT size=2 face="sans-serif">You may request a preclearance of private placement securities or an Initial Public Offering by contacting Fred Spring via email (please "cc." Frank Knox on all such requests). Please keep in mind that the code of
ethics prohibits Investment Access persons from purchasing securities in an initial public offering.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">The request must include:</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">|_| the associate's name;</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">|_| the associate's John Hancock Funds' company;</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">|_| the complete name of the security;</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">|_| the seller (i.e the selling party if identified and/or the broker-dealer or placement agent) and whether or not the associate does business with those individuals or entities on a regular basis;</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">|_| the basis upon which the associate is being offered this investment opportunity;</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">|_| any potential conflict, present or future, with fund trading activity and whether the security might be offered as inducement to later recommend publicly traded securities for any fund or to trade through a
particular broker-dealer or placement agent; and</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">|_| the date of the request.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">Clearance of private placements or initial public offerings may be denied for any appropriate reason, such as if the transaction could create the appearance of impropriety. Clearance of initial public offerings will
also be denied if the transaction is prohibited for a person due to his or her access category under the code of ethics.</FONT></P>
<P align="left">
<B><FONT size=2 face="sans-serif">Appendix C: Limited Access Persons</FONT></B></P>
<P align="left">
<FONT size=2 face="sans-serif">There are three types of Limited Access Persons--(1) Certain directors of the Adviser and (2) the trustees of the John Hancock Financial Trends Fund, Inc. and (3) the directors of the John Hancock open-end funds and
closed-end funds who are not Excluded Independent Directors</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">(1) Certain Directors of the Adviser:</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">You are a Limited Access person if you are a director of John Hancock Advisers, LLC or MFC Global Investment Management (U.S.), LLC and you meet the three following criteria:</FONT></P>

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<P align=left><FONT face=sans-serif size=2>(a) you are not also an officer of
John Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC or a John Hancock
fund;</FONT></P>
<P align=left><FONT face=sans-serif size=2>(b) you do not have access to
nonpublic information regarding any clients' purchase or sale of securities, or
nonpublic information regarding the portfolio holdings of any John Hancock fund
or account; and</FONT></P>
<P align=left><FONT face=sans-serif size=2>(c) you are not involved in making
securities recommendations to clients and do not have access to such
recommendations that are nonpublic.</FONT></P>
<P align=left><FONT face=sans-serif size=2>(examples: directors of John Hancock
Advisers, LLC or MFC Global Investment Management (U.S.), LLC who are not involved in the
daily operations of the adviser)</FONT></P>
<P align=left><FONT face=sans-serif size=2>If you are a Limited Access Person
who fits this definition, the following policies apply to your category. These
policies are described in detail in the code of ethics.</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>General principles</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Inside information policy and procedures</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Broker letter/Duplicate Confirms*</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Initial/annual holdings reports*</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Quarterly transaction reports*</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Annual recertification</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Preclearance requirement LIMITED: You only need to preclear any direct or
indirect acquisition of beneficial ownership in any security in an initial
public offering (an IPO) or in a limited offering (i.e. a private placement). To
request preclearance of these securities, contact </FONT></P>
<P align=left><FONT face=sans-serif size=2>Fredrick Spring at
fspring@jhancock.com and/or Frank Knox at Frank_Knox@manulifeusa.com.</FONT></P>
<P align=left><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT></P>
<P align=left><FONT face=sans-serif size=2>*A Limited Access Person may complete
this requirement under the code of<BR> ethics of another Manulife/John Hancock
adviser or fund by the applicable<BR> regulatory deadlines and arrange for
copies of the required information to<BR> be sent to the John Hancock Funds
Compliance Department.</FONT></P>
<P align=left><FONT face=sans-serif size=2>--------------------------------------------------------------------------------</FONT></P>
<P align=left><FONT face=sans-serif size=2>(2) The Independent Directors of the
Funds: If you are a trustee of the John Hancock Financial Trends Fund, Inc. or a
director to a John Hancock fund and an "interested person" of the fund within
the meaning of the Investment Company Act of 1940, the following policies apply
to your category. These policies are described in detail in the code of
ethics.</FONT></P>
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<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>General principles</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Annual recertification</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>Quarterly transaction report, but only if you knew (or should have known)
that during the 15 calendar days before or after you trade a security,
either:</FONT></P>
<P align=left><FONT face=sans-serif size=2>(i) a John Hancock fund purchased or
sold the same security, or</FONT></P>
<P align=left><FONT face=sans-serif size=2>(ii) a John Hancock fund or John
Hancock Advisers, LLC considered purchasing or selling the same
security.</FONT></P>
<P align=left><FONT face=sans-serif size=2>This policy applies to holdings in
your personal accounts, those of a spouse, "significant other" or family members
sharing your household, as well as all accounts over which you have discretion
or give advice or information. If this situation occurs, it is your
responsibility to contact the Chief Compliance Officer of your company and he
will assist you with the requirements of the quarterly transaction
report.</FONT></P>
<P align=left><FONT face=sans-serif size=2>This means that the independent
directors of the funds will not usually be required to file a quarterly
transaction report--they are only required to file in the situation described
above and only if they are not Excluded Independent Directors.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Appendix D:
Subadvisers</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>Each subadviser to a John Hancock
fund is subject to its own code of ethics, which must meet the requirements of
Rule 17j-1 and Rule 204A-1.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Approval of Code of
Ethics</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>Each subadviser to a John Hancock
fund must provide a copy of its code of ethics to the trustees of the relevant
John Hancock funds for approval initially and within 60 calendar days of any
material amendment. The trustees will give their approval if they determine that
the code:</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>contains provisions reasonably necessary to prevent the subadviser's
Access Persons (as defined in Rule 17j-1) from engaging in any conduct
prohibited by Rule 17j-1;</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>requires the subadviser's Access Persons to make reports to at least the
extent required in Rule 17j-1(d);</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>requires the subadviser to institute appropriate procedures for review of
these reports by management or compliance personnel (as contemplated by Rule
17j-1(d)(3));</FONT></P>
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<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>provides for notification of the subadviser's Access Persons in
accordance with Rule 17j-1(d)(4); and</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>requires the subadviser's Access Persons who are Investment Personnel to
obtain the pre-clearances required by Rule 17j-1(e);</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Reports and
Certifications</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>Each subadviser must provide an
annual report and certification to John Hancock Advisers, LLC and the fund's
trustees in accordance with Rule 17j-1(c)(2)(ii). The subadviser must also
provide other reports or information that John Hancock Advisers, LLC may
reasonably request.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Recordkeeping
Requirements</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>The subadviser must maintain all
records for its Access Persons as required by Rule 17j-1(f).</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Appendix E: Administration and
Recordkeeping</FONT></B></P>
<P align=left><B><FONT face=sans-serif size=2>Adoption and
Approval</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>The trustees of a John Hancock fund
must approve the code of ethics of an adviser, subadviser or affiliated
principal underwriter before initially retaining its services.</FONT></P>
<P align=left><FONT face=sans-serif size=2>Any material change to a code of
ethics of a John Hancock fund, John Hancock Funds, LLC, John Hancock Advisers,
LLC or a subadviser to a fund must be approved by the trustees of the John
Hancock funds, including a majority of trustees who are not interested persons,
no later than six months after adoption of the material change.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Administration</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>No less frequently than annually,
John Hancock Funds, LLC, John Hancock Advisers, LLC, each subadviser and each
John Hancock fund will furnish to the trustees of each John Hancock fund a
written report that:</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>describes issues that arose during the previous year under the code of
ethics or the related procedures, including, but not limited to, information
about material code or procedure violations, and</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>certifies that each entity has adopted procedures reasonably necessary to
prevent its access persons from violating its code of ethics.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Recordkeeping</FONT></B></P>
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<P align=left><FONT face=sans-serif size=2>The Investment Compliance Department
will maintain:</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>a copy of the current code of ethics for John Hancock Funds, LLC, John
Hancock Advisers, LLC, MFC Global Investment Management (U.S.), LLC, and each John Hancock
fund, and a copy of each code of ethics in effect at any time within the past
five years.</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>a record of any violation of the code of ethics, and of any action taken
as a result of the violation, for six years.</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>a copy of each report made by an Access person under the code of ethics,
for six years (the first two years in a readily accessible place).</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>a record of all persons, currently or within the past five years, who are
or were required to make reports under the code of ethics. This record will also
indicate who was responsible for reviewing these reports.</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>a copy of each code of ethics report to the trustees, for six years (the
first two years in a readily accessible place).</FONT></P>
<P align=left><FONT face=sans-serif size=2><FONT face="Times New Roman" size=3>&#149;
</FONT>a record of any decision, and the reasons supporting the decision, to
approve the acquisition by an Investment Access person of initial public
offering securities or private placement securities, for six years.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Appendix F: Chief Compliance
Officers</FONT></B></P>
<TABLE cellSpacing=1 cellPadding=0 width="80%" border=0>

  <TR vAlign=bottom>
    <TD noWrap align=left width="58%"><B><FONT face=sans-serif size=2>Entity</FONT></B>&nbsp; </TD>
    <TD width="6%">&nbsp; </TD>
    <TD noWrap align=left width="35%"><B><FONT face=sans-serif size=2>Chief Compliance Officer</FONT></B>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="58%"><FONT face=sans-serif size=2>John Hancock Advisers,
      LLC</FONT>&nbsp; </TD>
    <TD width="6%">&nbsp; </TD>
    <TD noWrap align=left width="35%"><FONT face=sans-serif size=2>Frank Knox</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="58%"><FONT face=sans-serif size=2>MFC Global Investment Management (U.S.), LLC</FONT>&nbsp; </TD>
    <TD width="6%">&nbsp; </TD>
    <TD noWrap align=left width="35%"><FONT face=sans-serif size=2>Frank Knox</FONT>&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="58%"><FONT face=sans-serif size=2>Each open-end and closed-end
      fund advised</FONT>&nbsp; </TD>
    <TD width="6%">&nbsp; </TD>
    <TD noWrap align=left width="35%"><FONT face=sans-serif size=2>Frank Knox</FONT>&nbsp; </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="58%"><FONT face=sans-serif size=2>by John Hancock Advisers,
      LLC</FONT>&nbsp; </TD>
    <TD width="6%">&nbsp; </TD>
    <TD noWrap align=left width="35%">&nbsp; </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>
      <HR noShade SIZE=1>
    </TD></TR>
  <TR vAlign=bottom>
    <TD noWrap align=left width="58%"><FONT face=sans-serif size=2>John Hancock Funds,
      LLC</FONT>&nbsp; </TD>
    <TD width="6%">&nbsp; </TD>
    <TD noWrap align=left width="35%"><FONT face=sans-serif size=2>Michael Mahoney</FONT>&nbsp;
  </TD></TR>
  <TR>
    <TD width="99%" colSpan=3>
      <HR noShade SIZE=1>
    </TD></TR></TABLE><BR>
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<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>5
<FILENAME>e_govcom.htm
<DESCRIPTION>GOVERNANCE COMMITTEE CHARTER
<TEXT>

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<P align=left>
<TABLE>

  <TR>
    <TD noWrap><B><FONT face=sans-serif size=2>JOHN HANCOCK
      FUNDS</FONT></B><BR></TD></TR></TABLE></P>
<P align=left><B><FONT face=sans-serif size=2>GOVERNANCE COMMITTEE
CHARTER</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>A. Composition. The Governance
Committee shall be composed entirely of Trustees who are "independent" as
defined in the rules of the New York Stock Exchange ("NYSE") and the NASDAQ
Stock Market, Inc. ("NASDAQ") or any other exchange, as applicable, and are not
"interested persons" as defined in the Investment Company Act of 1940 of any of
the funds, or of any fund's investment adviser or principal underwriter (the
"Independent Trustees") who are designated for membership from time to time by
the Board of Trustees. The Chairman of the Board shall be a member of the
Governance Committee.</FONT></P>
<P align=left><FONT face=sans-serif size=2>B. Overview. The overall charter of
the Governance Committee is to make recommendations to the Board on issues
related to corporate governance applicable to the Independent Trustees and to
the composition and operation of the Board, and to assume duties,
responsibilities and functions to recommend nominees to the Board, together with
such additional duties, responsibilities and functions as are delegated to it
from time to time.</FONT></P>
<P align=left><FONT face=sans-serif size=2>C. Specific Responsibilities. The
Governance Committee shall have the following duties and powers, to be exercised
at such times and in such manner as the Committee shall deem necessary or
appropriate:</FONT></P>
<P align=left><FONT face=sans-serif size=2>1. Except where the funds are legally
required to nominate individuals recommended by others, to recommend to the
Board of Trustees individuals for nomination to serve as Trustees.</FONT></P>
<P align=left><FONT face=sans-serif size=2>2. To consider, as it deems necessary
or appropriate, the criteria for persons to fill existing or newly created
Trustee vacancies. The Governance Committee shall use the criteria and
principles set forth in Annex A to guide its Trustee selection
process.</FONT></P>
<P align=left><FONT face=sans-serif size=2>3. To consider and recommend the
amount of compensation to be paid by the funds to the Independent Trustees,
including incremental amounts, if any, payable to Committee Chairmen, and to
address compensation-related matters.</FONT></P>
<P align=left><FONT face=sans-serif size=2>4. To consider and recommend the
duties and compensation of the Chairman of the Board.</FONT></P>
<P align=left><FONT face=sans-serif size=2>5. To consider and recommend changes
to the Board regarding the size, structure, and composition of the
Board.</FONT></P>
<P align=left><FONT face=sans-serif size=2>6. To evaluate, from time to time,
the retirement policies for the Independent Trustees.</FONT></P>
<P align=left><FONT face=sans-serif size=2>7. To develop and recommend to the
Board guidelines for corporate governance ("Corporate Governance Guidelines")
for the funds that take into account the rules of the NYSE and any applicable
law or regulation, and to periodically review and assess the Corporate
Governance Guidelines and recommend any proposed changes to the Board for
approval.</FONT></P>
<P align=left><FONT face=sans-serif size=2>8. To monitor all expenditures of the
Board or the Committees or the Independent Trustees not otherwise incurred
and/or monitored by a particular Committee, including, but not limited to:
legal, consulting, and D&amp;O insurance costs; association dues, including
Investment Company Institute membership dues; meeting expenditures and policies
relating to</FONT></P>
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<P align="left">
<FONT size=2 face="sans-serif">reimbursement of travel expenses and expenses associated with offsite meetings; expenses associated with Trustee attendance at educational or informational conferences; and publication expenses.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">9. To consider, evaluate and make recommendations and necessary findings regarding independent legal counsel and any other advisers, experts or consultants, that may be engaged by the Board of Trustees, by the Trustees
who are not "interested persons" as defined in the Investment Company Act of 1940 of any of the funds or any fund's investment adviser or principal underwriter, or by the Governance Committee, from time to time, other than as may be engaged directly
by another Committee.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">10. To periodically review the Board's committee structure and the charters of the Board's committees, and recommend to the Board of Trustees changes to the committee structure and charters as it deems
appropriate.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">11. To coordinate and administer an annual self-evaluation of the Board, which will include, at a minimum, a review of its effectiveness in overseeing the number of funds in the fund complex and the effectiveness of
its committee structure.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">12. To report its activities to Board of Trustees and to make such recommendations with respect to the matters described above and other matters as the Governance Committee may deem necessary or appropriate.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">D. Additional Responsibilities. The Committee will also perform other tasks assigned to it from time to time by the Chairman of the Board or by the Board of Trustees, and will report findings and recommendations to the
Board of Trustees, as appropriate.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">E. Governance. One member of the Committee shall be appointed as chair. The chair shall be responsible for leadership of the Committee, including scheduling meetings or reviewing and approving the schedule for them,
preparing agendas or reviewing and approving them before meetings, and making reports to the Board of Trustees, as appropriate.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">F. Miscellaneous. The Committee shall meet as often as it deems appropriate, with or without management, as circumstances require. The Committee shall have the resources and authority appropriate to discharge its
responsibilities, including the authority to retain special counsel and other advisers, experts or consultants, at the funds' expense, as it determines necessary to carry out its duties. The Committee shall have direct access to such officers of and
service providers to the funds as it deems desirable.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">G. Review. The Committee shall review this Charter periodically and recommend such changes to the Board of Trustees as it deems desirable.</FONT></P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=2 face="sans-serif">ANNEX A</FONT></B><BR>
<BR>
<B><FONT size=2 face="sans-serif">General Criteria</FONT></B><BR>
</TD></TR></TABLE>
</P>
<P align="left">
<FONT size=2 face="sans-serif">1. Nominees should have a reputation for integrity, honesty and adherence to high ethical standards.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">2. Nominees should have demonstrated business acumen, experience and ability to exercise sound judgments in matters that relate to the current and long-term objectives of the funds and should be willing and able to
contribute positively to the decision-making process of the funds.</FONT></P>

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<FONT size=2 face="sans-serif">3. Nominees should have a commitment to understand the funds, and the responsibilities of a trustee/director of an investment company and to regularly attend and participate in meetings of the Board and its
committees.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">4. Nominees should have the ability to understand the sometimes conflicting interests of the various constituencies of the funds, including shareholders and the management company, and to act in the interests of all
shareholders.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">5. Nominees should not have, nor appear to have, a conflict of interest that would impair their ability to represent the interests of all the shareholders and to fulfill the responsibilities of a
director/trustee.</FONT></P>
<P align="left">
<B><FONT size=2 face="sans-serif">Application of Criteria to Existing Trustees</FONT></B></P>
<P align="left">
<FONT size=2 face="sans-serif">The renomination of existing Trustees should not be viewed as automatic, but should be based on continuing qualification under the criteria set forth above. In addition, the Governance Committee shall consider the
existing Trustee's performance on the Board and any committee.</FONT></P>
<P align="left">
<TABLE><TR><TD nowrap>
<B><FONT size=2 face="sans-serif">Review of Shareholder Nominations</FONT></B><BR>
</TD></TR></TABLE>
</P>
<P align="left">
<FONT size=2 face="sans-serif">Any shareholder nomination must be submitted in compliance with all of the pertinent provisions of Rule 14a-8 under the Securities Exchange Act of 1934 in order to be considered by the Governance Committee. In
evaluating a nominee recommended by a shareholder, the Governance Committee, in addition to the criteria discussed above, may consider the objectives of the shareholder in submitting that nomination and whether such objectives are consistent with
the interests of all shareholders. If the Board determines to include a shareholder's candidate among the slate of its designated nominees, the candidate's name will be placed on the funds' proxy card. If the Board determines not to include such
candidate among its designated nominees, and the shareholder has satisfied the requirements of Rule 14a-8, the shareholder's candidate will be treated as a nominee of the shareholder who originally nominated the candidate. In that case, the
candidate will not be named on the proxy card distributed with the funds' proxy statement.</FONT></P>
<P align="left">
<FONT size=2 face="sans-serif">As long as an existing Independent Trustee continues, in the opinion of the Governance Committee, to satisfy the criteria listed above, the Committee generally would favor the re-nomination of an existing Trustee
rather than a new candidate. Consequently, while the Governance Committee will consider nominees recommended by shareholders to serve as trustees, the Governance Committee may only act upon such recommendations if there is a vacancy on the Board, or
the Governance Committee determines that the selection of a new or additional Trustee is in the best interests of the fund. In the event that a vacancy arises or a change in Board membership is determined to be advisable, the Governance Committee
will, in addition to any shareholder recommendations, consider candidates identified by other means, including candidates proposed by members of the Governance Committee. The Governance Committee may retain a consultant to assist the Committee in a
search for a qualified candidate.</FONT></P>

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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
