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<SEC-DOCUMENT>0000928816-09-000627.txt : 20090702
<SEC-HEADER>0000928816-09-000627.hdr.sgml : 20090702
<ACCEPTANCE-DATETIME>20090702145056
ACCESSION NUMBER:		0000928816-09-000627
CONFORMED SUBMISSION TYPE:	N-CSRS
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20090430
FILED AS OF DATE:		20090702
DATE AS OF CHANGE:		20090702
EFFECTIVENESS DATE:		20090702

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:		09926755

	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_incomesecutitiestrust.htm
<DESCRIPTION>JOHN HANCOCK INCOME SECURITIES TRUST
<TEXT>
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     <TD noWrap align=center colSpan=4><FONT face=sans-serif>UNITED STATES</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=center colSpan=4><FONT face=sans-serif>SECURITIES AND EXCHANGE COMMISSION</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=center colSpan=4><FONT face=sans-serif>Washington, D.C. 20549</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=center colSpan=4>&nbsp;</TD></TR>
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     <TD noWrap align=center colSpan=4><B><FONT face=sans-serif>FORM N-CSR</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=center colSpan=4>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=center colSpan=4><B><FONT face=sans-serif>CERTIFIED SHAREHOLDER REPORT OF REGISTERED</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=center colSpan=4><B><FONT face=sans-serif>MANAGEMENT INVESTMENT COMPANIES</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=center colSpan=4>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=center colSpan=4><FONT face=sans-serif>Investment Company Act file number </FONT><U><FONT face=sans-serif>811- 4186</FONT></U>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=center colSpan=4>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=center colSpan=4><U><FONT face=sans-serif>John Hancock Income Securities Trust</FONT></U>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=center colSpan=4><FONT face=sans-serif>(Exact name of registrant as specified in charter)</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=center colSpan=4>&nbsp;</TD></TR>
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     <TD noWrap align=center colSpan=4><U><FONT face=sans-serif>601 Congress Street, Boston, Massachusetts 02210</FONT></U>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=center colSpan=4><FONT face=sans-serif>(Address of principal executive offices) (Zip code)</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD align=center colSpan=4>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD align=center colSpan=4><FONT face=sans-serif>Salvatore Schiavone</FONT></TD></TR>
<TR vAlign=bottom>
     <TD align=center colSpan=4><FONT face=sans-serif>Treasurer</FONT></TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=4>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=center colSpan=4><FONT face=sans-serif>601 Congress Street</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=4>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=center colSpan=4><U><FONT face=sans-serif>Boston, Massachusetts 02210</FONT></U>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=center colSpan=4><FONT face=sans-serif>(Name and address of agent for service)</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=4>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=4><FONT face=sans-serif>Registrant's telephone number, including area code: </FONT><U><FONT face=sans-serif>617-663-4497</FONT></U>&nbsp;</TD></TR>
<TR>
     <TD colSpan=4>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif>Date of fiscal year end:</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif>October 31</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=4>&nbsp;</TD></TR>
<TR>
     <TD colSpan=4>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left width="34%"><FONT face=sans-serif>Date of reporting period:</FONT>&nbsp;</TD>
     <TD noWrap align=right width="17%"><FONT face=sans-serif></FONT></TD>
     <TD noWrap align=left width="16%"><FONT face=Arial>April 30, 2009</FONT>&nbsp;</TD>
     <TD noWrap align=right width="32%">&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=2>ITEM 1. REPORT TO SHAREHOLDERS.</FONT></P>
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<P align=left><FONT face=serif size=7>Portfolio summary</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
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     <TD width="23%"></TD>
     <TD width="8%"></TD>
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     <TD width="23%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Portfolio diversification</FONT></B><SUP><FONT face=sans-serif size=1>1</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD style="TEXT-INDENT: 0px" noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=5>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Bonds</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>62%</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=5>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>U.S. government &amp; agencies</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>23%</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=5>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Collateralized mortgage obligations</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>12%</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=5>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Short-term investments &amp; other</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>3%</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><B><FONT face=sans-serif size=1>Sector composition</FONT></B><B><SUP><FONT face=sans-serif size=1>1,2</FONT></SUP></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=5>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>U.S. government &amp; agencies</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>23%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Telecommunication services</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6%</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>
<HR noShade SIZE=1>
</TD>
     <TD noWrap align=left></TD>
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</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Financials</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>16%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Industrials</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6%</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>
<HR noShade SIZE=1>
</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Mortgage bonds</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Consumer staples</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5%</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>
<HR noShade SIZE=1>
</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Consumer discretionary</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Materials</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4%</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>
<HR noShade SIZE=1>
</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Energy</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Health care</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>3%</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>
<HR noShade SIZE=1>
</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Utilities</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Short-term investments &amp; other</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>3%</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>
<HR noShade SIZE=1>
</TD>
     <TD></TD>
     <TD colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR>
     <TD colSpan=5>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Quality distribution</FONT></B><SUP><FONT face=sans-serif size=1>1</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>
<HR noShade SIZE=1>
</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>26%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>
<HR noShade SIZE=1>
</TD>
     <TD></TD>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>
<HR noShade SIZE=1>
</TD>
     <TD></TD>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>22%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>
<HR noShade SIZE=1>
</TD>
     <TD></TD>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>25%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>
<HR noShade SIZE=1>
</TD>
     <TD></TD>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>
<HR noShade SIZE=1>
</TD>
     <TD></TD>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>
<HR noShade SIZE=1>
</TD>
     <TD></TD>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>
<HR noShade SIZE=1>
</TD>
     <TD></TD>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Short-term investments &amp; other</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>3%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>
<HR noShade SIZE=1>
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     <TD></TD>
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<P align=left><SUP><FONT face=sans-serif size=1>1 </FONT></SUP><FONT face=sans-serif size=1>As a percentage of the Fund&#146;s total investments on April 30, 2009.</FONT></P>
<P align=left><SUP><FONT face=sans-serif size=1>2 </FONT></SUP><FONT face=sans-serif size=1>Sector investing is subject to greater risks than the market as a whole. Because the Fund may focus on particular sectors of the economy, its performance may depend on the performance of those sectors.</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD style="TEXT-INDENT: 0px" width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=2>6</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
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<P align=left><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></P>
<P align=left><FONT face=serif size=7>Fund&#146;s investments</FONT></P>
<P align=left><FONT face=sans-serif size=4>Securities owned by the Fund on 4-30-09 </FONT><FONT face=sans-serif size=2>(unaudited)</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="31%"></TD>
     <TD width="12%"></TD>
     <TD width="8%"></TD>
     <TD width="13%"></TD>
     <TD width="8%"></TD>
     <TD width="12%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Bonds 88.24%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>$106,400,626</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>(Cost $129,658,998)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Aerospace &amp; Defense 0.16%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>197,638</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Vought Aircraft Industries, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;<FONT face=sans-serif size=1>8.000%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>07-15-11</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$485</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>197,638</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Agricultural Products 0.41%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>496,634</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Bunge Ltd. Finance Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.350</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>555</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>496,634</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Air Freight &amp; Logistics 0.33%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>402,460</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Fedex Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.375</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>370</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>402,460</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Airlines 1.75%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>2,112,219</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Continental Airlines, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 1999-1 Class A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.545</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-02-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>337</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>297,866</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2000-2 Class B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.307</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-02-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>258,483</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2001-1 Class C</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.033</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-15-11</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>105</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>85,750</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Delta Airlines, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2002-1 Class G2</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.417</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>07-02-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>825</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>660,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2007-1 Class A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.821</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-10-22</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>722</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>523,095</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Northwest Airlines, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Collateralized Note Ser 2007-1</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.027</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-01-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>445</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>287,025</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Aluminum 0.72%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>871,231</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>CII Carbon, LLC,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Sub Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>11.125</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,015</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>588,700</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Rio Tinto Alcan, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.125</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-15-33</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>415</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>282,531</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
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     <TD noWrap align=left></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Apparel Retail 0.23%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>280,382</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>TJX Cos., Inc,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.950</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>270</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>280,382</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Asset Management &amp; Custody Banks 0.50%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>607,711</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Northern Trust Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>225</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>233,375</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4.625</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-01-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>370</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>374,336</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Auto Parts &amp; Equipment 0.87%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>1,043,250</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Allison Transmission, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>11.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>600,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Exide Technologies,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Sec Note Ser B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>445</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>333,750</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Tenneco, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Sub Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.625</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>365</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>109,500</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD align=right width="95%"></TD>
     <TD style="TEXT-INDENT: 0px" align=right width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>7</FONT>&nbsp;</TD></TR></TABLE><BR>
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<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
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     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Par value</FONT></B>&nbsp;</TD>
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     <TD noWrap align=left><B><FONT face=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
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     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><B><FONT face=sans-serif size=1>Brewers 0.67%</FONT></B>&nbsp;</TD>
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     <TD noWrap align=right><B><FONT face=sans-serif size=1>$806,787</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=sans-serif size=1>Miller Brewing Co.,</FONT>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;<FONT face=sans-serif size=1>5.500%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$365</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>350,337</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=sans-serif size=1>SABmiller PLC,</FONT>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>07-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>465</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>456,450</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><B><FONT face=sans-serif size=1>Broadcasting &amp; Cable TV 0.41%</FONT></B>&nbsp;</TD>
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     <TD noWrap align=right><B><FONT face=sans-serif size=1>499,326</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=sans-serif size=1>Charter Communications Holdings</FONT>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>II, LLC,</FONT>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note (H)(S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10.250</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-01-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>C</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>447</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>397,830</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=sans-serif size=1>Nexstar Broadcasting, Inc.,</FONT>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note PIK (G)(S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>254</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>71,676</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Sub Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>84</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>29,820</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><B><FONT face=sans-serif size=1>Cable &amp; Satellite 2.44%</FONT></B>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>2,943,118</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=sans-serif size=1>Canadian Satellite Radio Holdings, Inc.,</FONT>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (G)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>12.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>979</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>220,275</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=sans-serif size=1>Comcast Cable Communications</FONT>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Holdings, Inc.,</FONT>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.375</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,095</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,207,416</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=sans-serif size=1>COX Communications, Inc.,</FONT>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Bond (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.375</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-01-39</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>205</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>198,949</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=sans-serif size=1>CSC Holdings, Inc.,</FONT>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>390</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>378,300</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=sans-serif size=1>Time Warner Cable, Inc.,</FONT>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-14-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>290</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>326,009</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>07-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>605</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>612,169</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><B><FONT face=sans-serif size=1>Casinos &amp; Gaming 3.42%</FONT></B>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>4,117,150</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=sans-serif size=1>Chukchansi Economic</FONT>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Development Authority,</FONT>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>460</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>195,500</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=sans-serif size=1>Downstream Development Authority of</FONT>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>the Quapaw Tribe of Oklahoma,</FONT>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Sec Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>12.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>195,000</FONT>&nbsp;</TD></TR>
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<HR noShade SIZE=1>
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     <TD noWrap align=left><FONT face=sans-serif size=1>Fontainebleau Las Vegas Holdings, LLC,</FONT>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>11.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>995</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>34,825</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=sans-serif size=1>Greektown Holdings, LLC,</FONT>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (G)(H)(S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-01-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>D</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,015</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>60,900</FONT>&nbsp;</TD></TR>
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<HR noShade SIZE=1>
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     <TD noWrap align=left><FONT face=sans-serif size=1>Jacobs Entertainment, Inc.,</FONT>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>361,250</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Little Traverse Bay Bands of</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Odawa Indians,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10.250</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>200,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>MTR Gaming Group, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Sub Note Ser B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-01-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>290</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>136,300</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Pinnacle Entertainment, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Sub Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>830,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Seminole Hard Rock Entertainment,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Sec Note (P)(S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>3.820</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>330,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Seminole Tribe of Florida,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Bond (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.535</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-01-20</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>650</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>465,575</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Turning Stone Resort &amp;</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Casino Enterprise,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.125</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>09-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,540</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,124,200</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Waterford Gaming, LLC,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.625</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>09-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>306</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>183,600</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD style="TEXT-INDENT: 0px" width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=2>8</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
<!--$$/page=-->
<A name="page_5"></A>
<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="31%"></TD>
     <TD width="12%"></TD>
     <TD width="8%"></TD>
     <TD width="13%"></TD>
     <TD width="8%"></TD>
     <TD width="12%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Coal &amp; Consumable Fuels 0.17%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>$210,250</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Drummond Co., Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.375%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-15-16</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$290</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>210,250</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Commodity Chemicals 0.27%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>330,000</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Sterling Chemicals, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Sec Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10.250</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>400</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>330,000</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Computer Hardware 0.33%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>391,445</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>NCR Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.125</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-15-09</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>390</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>391,445</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=4>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=4><B><FONT face=sans-serif size=1>Construction &amp; Farm Machinery &amp; Heavy Trucks 0.28%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>340,000</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Manitowoc Co., Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.125</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-01-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>340,000</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Consumer Finance 2.22%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>2,670,410</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>American Express Credit Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note Ser C</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.300</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-20-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>670</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>671,209</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>American General Finance Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Note Ser J</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.900</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-15-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,470</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>592,430</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Capital One Financial Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>09-15-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>844,844</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Ford Motor Credit Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-15-16</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>140</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>106,796</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Nelnet, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Note (7.400% to 9-1-11 then variable)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.400</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>09-29-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>715</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>214,543</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>SLM Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note Ser MTN</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.450</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>395</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>240,588</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Data Processing &amp; Outsourced Services 0.36%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>437,992</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Fiserv, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.800</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-20-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>460</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>437,992</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Department Stores 0.69%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>826,144</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>J.C. Penney Co., Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Debenture</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.650</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-15-16</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>445</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>402,770</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Macy&#146;s Retail Holdings, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>07-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>450</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>423,374</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Diversified Banks 2.52%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>3,041,902</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Barclays Bank PLC,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Bond (6.860% to 6-15-32 then</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>variable) (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.860</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-15-32</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,655</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>743,012</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Chuo Mitsui Trust &amp; Banking Co. Ltd.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Jr Sub Note (5.506% to 4-15-15 then</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>variable) (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.506</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A2</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>940</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>488,800</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Mizuho Financial Group, Ltd.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sub Bond</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.375</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-29-49</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A1</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>675,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Natixis SA,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sub Bond (10.000% to 4-30-18 then</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>variable) (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-18-49</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>420</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>172,275</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Royal Bank of Scotland Group PLC,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Jr Sub Bond Ser MTN (7.640% to</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>9-29-17 then variable)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.640</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-31-49</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>400</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>116,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Sovereign Capital Trust VI,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.908</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-13-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>480</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>313,659</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Wachovia Bank NA,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sub Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.850</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-01-37</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>390</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>277,446</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sub Note Ser BKNT</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.600</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-15-38</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>325</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>255,710</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD align=right width="95%"></TD>
     <TD style="TEXT-INDENT: 0px" align=right width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>9</FONT>&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
<!--$$/page=-->
<A name="page_6"></A>
<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="31%"></TD>
     <TD width="12%"></TD>
     <TD width="8%"></TD>
     <TD width="13%"></TD>
     <TD width="8%"></TD>
     <TD width="12%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Diversified Chemicals 0.61%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>$740,700</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>EI Du Pont de Nemours &amp; Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;<FONT face=sans-serif size=1>5.875%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$695</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>740,700</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Diversified Financial Services 0.93%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>1,126,641</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>ERAC USA Finance Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.375</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-15-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>465</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>344,776</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>General Electric Capital Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-10-39</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>475</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>372,181</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>SMFG Preferred Capital,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sub Bond (6.078% to 1-25-17 then</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>variable) (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.078</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-25-49</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>590</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>409,684</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Diversified Metals &amp; Mining 0.61%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>734,912</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Rio Tinto Finance (USA) Ltd.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.950</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-01-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>710</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>734,912</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Drug Retail 1.13%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>1,364,980</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>CVS Caremark Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Jr Sub Bond (6.302% to 6-1-12</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>then variable)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.302</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-01-37</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>990</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>643,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.600</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>340</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>359,653</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>360</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>361,827</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Electric Utilities 7.52%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>9,072,593</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Beaver Valley Funding,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sec Lease Obligation Bond</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>680</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>668,284</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>BVPS II Funding Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Collateralized Lease Bond</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.890</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>680</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>677,541</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Commonwealth Edison Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sec Bond</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.800</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>705</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>670,992</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Delmarva Power &amp; Light Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>1st Mtg</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.400</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-01-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>345</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>360,342</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Duke Energy Carolinas LLC,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>1st Ref Mtg</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,080,790</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Duke Energy Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.300</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-01-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>340</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>358,545</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>FPL Energy National Wind LLC,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Sec Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.608</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-10-24</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>309</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>247,619</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Indiantown Cogeneration LP,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>1st Mtg Note Ser A&#150;9</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.260</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-15-10</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>212</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>207,376</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>ITC Holdings Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>09-30-16</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>175</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>161,631</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Midwest Generation LLC,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Note Ser B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.560</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-02-16</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>330</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>314,083</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Monongahela Power Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.950</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>635</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>671,345</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Oncor Electric Delivery Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Sec Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.375</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-01-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>820</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>834,087</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Pepco Holdings, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.450</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-15-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>565</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>564,254</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>PNPP II Funding Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Debenture</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.120</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-30-16</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>387</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>404,311</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Progress Energy, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.050</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>485</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>514,144</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Southern Power Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note Ser D</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>07-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>270</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>252,807</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD style="TEXT-INDENT: 0px" width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=2>10</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
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<A name="page_7"></A>
<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="31%"></TD>
     <TD width="12%"></TD>
     <TD width="8%"></TD>
     <TD width="13%"></TD>
     <TD width="8%"></TD>
     <TD width="12%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</FONT></B>&nbsp;</TD></TR>
<TR height=20>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Electric Utilities (continued)</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR>
     <TD colSpan=7><FONT face=sans-serif size=2>
<HR noShade SIZE=1>
</FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Texas Competitive Electric Holdings</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Co. LLC,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note Ser A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10.250%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$567,500</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Waterford 3 Funding Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sec Lease Obligation Bond</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.090</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-02-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>524</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>516,942</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
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     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Electrical Components &amp; Equipment 0.97%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>1,165,572</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Freescale Semiconductor, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>340,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>GrafTech Finance, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10.250</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-15-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Ba3</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>41</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>38,130</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Thomas &amp; Betts Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.250</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-01-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>775</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>787,442</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
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     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Electronic Manufacturing Services 0.48%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>578,428</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Tyco Electronics Group SA,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.550</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>260</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>200,106</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-01-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>415</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>378,322</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Environmental &amp; Facilities Services 0.08%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>92,400</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Blaze Recycling &amp; Metals LLC,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Sec Note (G)(S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>07-15-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>165</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>92,400</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Fertilizers &amp; Agricultural Chemicals 0.72%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>871,810</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Mosiac Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.625</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>480</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>482,400</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Potash Corp. of Saskatchewan, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.250</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>380</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>389,410</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Food Retail 0.07%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>78,133</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>SUPERVALU, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>80</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>78,133</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Gas Utilities 0.68%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>820,406</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Atmos Energy Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>395</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>418,622</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>DCP Midstream LLC,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>405</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>401,784</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Gold 0.30%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>361,991</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Barrick Gold Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.950</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-01-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>350</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>361,991</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Health Care Equipment 1.51%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>1,815,115</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Covidien International Finance SA,</FONT>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-15-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>405</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>415,109</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.450</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-15-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>930</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>965,354</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Hospira, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.050</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-30-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>485</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>434,652</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Health Care Facilities 1.38%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>1,664,025</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Community Health Systems, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Sub Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>07-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>695</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>691,525</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Sun Healthcare Group, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Sub Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.125</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>972,500</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Health Care Services 0.73%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>875,270</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Medco Health Solutions, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.250</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>850</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>875,270</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD align=right width="95%"></TD>
     <TD style="TEXT-INDENT: 0px" align=right width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>11</FONT>&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
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<A name="page_8"></A>
<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="31%"></TD>
     <TD width="12%"></TD>
     <TD width="8%"></TD>
     <TD width="13%"></TD>
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     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Home Improvement Retail 0.19%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>$234,490</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Home Depot, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.875%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-16-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$320</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>234,490</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Household Appliances 0.57%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>684,080</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Whirlpool Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>MTN</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.600</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-01-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>335</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>343,254</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>MTN</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-01-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>335</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>340,826</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Household Products 0.27%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>320,775</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Yankee Acquisition Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Sub Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>455</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>320,775</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=4>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=4><B><FONT face=sans-serif size=1>Independent Power Producers &amp; Energy Traders 1.27%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>1,532,309</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>AES Eastern Energy LP,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 1999-A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-02-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>938</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>868,028</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Constellation Energy Group, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4.550</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>415</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>337,656</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>IPALCO Enterprises, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Sec Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.625</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-14-11</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>325</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>326,625</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
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     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Industrial Conglomerates 0.66%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>791,753</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Hutchison Whampoa International Ltd.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-13-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>791,753</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Industrial Machinery 0.84%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>1,017,374</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Ingersoll-Rand Global Holding Co., Ltd.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>545</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>493,051</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>540</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>524,323</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Industrial REIT&#146;s 0.33%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>394,820</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Prologis,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Sec Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.625</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>605</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>394,820</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Integrated Oil &amp; Gas 2.84%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>3,428,419</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>ConocoPhillips,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-01-39</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>800</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>792,623</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4.400</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,022,578</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Marathon Oil Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>200</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>209,561</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Petro-Canada,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Debenture</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.250</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-15-21</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,039,363</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.050</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>400</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>364,294</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Integrated Telecommunication Services 4.72%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>5,695,830</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>AT&amp;T, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.700</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>980</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,086,824</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Bellsouth Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Debenture</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.300</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>823</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>839,507</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Cincinnati Bell, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Sub Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.375</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,025</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,012,187</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Qwest Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.375</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>330</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>328,350</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>09-01-11</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>445</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>441,663</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Telecom Italia Capital,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.721</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-04-38</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>765</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>667,957</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Verizon Communications, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Bond</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.900</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-15-38</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>405</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>399,882</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD style="TEXT-INDENT: 0px" width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=2>12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
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<A name="page_9"></A>
<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="31%"></TD>
     <TD width="12%"></TD>
     <TD width="8%"></TD>
     <TD width="13%"></TD>
     <TD width="8%"></TD>
     <TD width="12%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=4>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=4><B><FONT face=sans-serif size=1>Integrated Telecommunication Services (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=sans-serif size=1>Verizon Wireless Capital LLC,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;<FONT face=sans-serif size=1>7.375%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$355</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$394,985</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>West Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Sub Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>11.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-15-16</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>630</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>524,475</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Investment Banking &amp; Brokerage 6.30%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>7,598,539</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Bear Stearns Cos., Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.250</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,021,218</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Citigroup, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Jr Sub Bond (8.400% to 4-30-18</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>then variable) (H)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.400</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-30-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>C</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>330</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>220,727</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.125</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,790</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,504,346</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.850</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-11-34</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>300</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>225,750</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Goldman Sachs Group, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>485</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>497,670</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.125</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>760</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>720,182</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>JPMorgan Chase &amp; Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Jr Sub Note Ser 1 (7.900% to 4-30-18</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>then variable)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.900</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-31-49</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>655</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>498,291</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.300</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-23-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>765</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>752,793</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Merrill Lynch &amp; Co., Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Jr Sub Bond</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-14-38</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>495</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>338,070</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>MTN</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.150</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-25-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>919,400</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Morgan Stanley Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.375</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>900,092</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Life &amp; Health Insurance 0.18%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>219,134</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Lincoln National Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Jr Sub Bond (6.050% to 4-20-17 then</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>variable)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.050</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-20-67</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>72,500</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Symetra Financial Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Jr Sub Bond (8.300% to 10-1-17 then</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>variable) (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.300</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-15-37</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>440</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>146,634</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Managed Health Care 0.45%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>540,123</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Humana, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.150</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-15-38</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>755</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>540,123</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Marine 0.73%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>884,500</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>CMA CGM SA,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.250</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-01-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>700</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>269,500</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Navios Maritime Holdings, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>615,000</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Metal &amp; Glass Containers 0.67%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>802,812</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>BWAY Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Sub Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>315</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>295,312</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Owens-Brockway Glass Container, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.250</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>507,500</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Movies &amp; Entertainment 2.07%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>2,500,047</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Cinemark, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Disc Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>245</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>243,163</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>News America Holdings, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-20-24</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,020</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>885,547</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.600</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-11-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>990,202</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>News America, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.900</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-01-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>405</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>381,135</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD align=right width="95%"></TD>
     <TD style="TEXT-INDENT: 0px" align=right width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>13</FONT>&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
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<A name="page_10"></A>
<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="31%"></TD>
     <TD width="12%"></TD>
     <TD width="8%"></TD>
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     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Multi-Line Insurance 1.53%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>$1,849,118</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Genworth Financial, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Jr Sub Note (6.150% to 11-15-16 then</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>variable)</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;<FONT face=sans-serif size=1>6.150%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-66</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$430</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>60,051</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Horace Mann Educators Corp.,</FONT>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.850</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-15-16</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>395</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>327,254</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Liberty Mutual Group, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Bond (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-15-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>885</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>557,298</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Bond (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.800</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-37</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>705</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>289,050</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Bond (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.300</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>750</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>615,465</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Multi-Utilities 1.27%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>1,531,072</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>CalEnergy Co., Inc.,</FONT>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Bond</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.480</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>09-15-28</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>550</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>589,717</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Sempra Energy,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Bond</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.900</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>345</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>378,559</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Teco Finance Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-01-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>337</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>319,744</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.572</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>298</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>243,052</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Office Electronics 0.46%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>556,100</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Xerox Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>670</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>556,100</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Office REIT&#146;s 0.15%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>176,301</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>HRPT Properties Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.650</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>285</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>176,301</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Oil &amp; Gas Drilling 0.17%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>201,267</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Delek &amp; Avner Yam Tethys Ltd.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Sec Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.326</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-01-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>202</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>201,267</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Oil &amp; Gas Equipment &amp; Services 0.13%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>154,100</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Allis-Chalmers Energy, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>335</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>154,100</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Oil &amp; Gas Exploration &amp; Production 1.94%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>2,339,314</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Devon Energy Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.625</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,025</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,067,066</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>EnCana Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>210</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>215,530</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>McMoRan Exploration Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>11.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>340</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>251,600</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Nexen, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-10-35</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>355</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>245,618</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>XTO Energy, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.900</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-01-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>545</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>559,500</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Oil &amp; Gas Storage &amp; Transportation 6.11%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>7,368,241</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Energy Transfer Partners LP,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.700</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>330</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>366,589</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>330</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>356,193</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Enterprise Products Operating LP,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Jr Sub Note (7.034% to 1-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>then variable)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.034</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-15-68</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>590</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>371,700</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note Ser B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.600</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>650</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>603,414</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Kinder Morgan Energy Partners LP,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Bond</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-32</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>195</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>186,359</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-01-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>505</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>548,641</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.125</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>240</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>228,215</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD style="TEXT-INDENT: 0px" width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=2>14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
<!--$$/page=-->
<A name="page_11"></A>
<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="31%"></TD>
     <TD width="12%"></TD>
     <TD width="8%"></TD>
     <TD width="13%"></TD>
     <TD width="8%"></TD>
     <TD width="12%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Oil &amp; Gas Storage &amp; Transportation (continued)</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap 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=sans-serif size=1>Markwest Energy Partners LP,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note Ser B</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;<FONT face=sans-serif size=1>8.500%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>07-15-16</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$545</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$455,075</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>NGPL PipeCo LLC,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.119</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-15-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,580</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,559,405</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>ONEOK Partners LP,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.150</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>705</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>635,873</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.625</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-01-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>350</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>355,733</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Plains All American Pipeline LP,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>345</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>308,808</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Southern Union Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Jr Sub Note Ser A (7.200% to 11-1-11</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>then variable)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.200</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-01-66</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>565</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>290,975</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>TEPPCO Partners LP,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Jr Sub Note (7.00% to 6-1-17 then</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>variable)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-01-67</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>695</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>377,261</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Williams Partners LP,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.250</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-01-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>800</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>724,000</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Packaged Foods &amp; Meats 1.63%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>1,968,256</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>General Mills, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.200</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-17-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>155</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>156,181</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Kraft Foods, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-26-39</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>315</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>310,056</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.125</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>770</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>781,613</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-11-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>685</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>720,406</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Paper Packaging 0.65%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>777,662</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Graphic Packaging International, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-15-11</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>445</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>434,987</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Smurfit-Stone Container Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (H)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.375</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>07-01-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>D</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>210,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (H)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>D</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>245</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>52,675</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>U.S. Corrugated, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Sec Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-12-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>160</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>80,000</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Paper Products 0.75%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>899,326</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>International Paper Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.950</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>505</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>439,326</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Verso Paper Holdings LLC,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note Ser B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.125</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-01-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>460,000</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Pharmaceuticals 0.68%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>818,690</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Roche Holdings, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-01-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>560</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>587,056</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Wyeth,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Sub Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>220</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>231,634</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Property &amp; Casualty Insurance 0.54%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>654,133</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Progressive Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Jr Sub Debenture (6.700% to 6-1-17</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>then variable)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.700</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-15-37</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>330</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>163,434</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>QBE Insurance Group, Ltd.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-14-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>486</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>490,699</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Publishing 0.05%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>59,688</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>R.H. Donnelley Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Disc Note Ser A-1</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>C</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>200</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>11,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Disc Note Ser A-2</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-15-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>C</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>300</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>17,250</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note Ser A-4 (H)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-15-17</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>C</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>495</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>30,938</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD align=right width="95%"></TD>
     <TD style="TEXT-INDENT: 0px" align=right width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>15</FONT>&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
<!--$$/page=-->
<A name="page_12"></A>
<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="31%"></TD>
     <TD width="12%"></TD>
     <TD width="8%"></TD>
     <TD width="13%"></TD>
     <TD width="8%"></TD>
     <TD width="12%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Railroads 1.81%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>$2,184,652</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>CSX Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;<FONT face=sans-serif size=1>6.300%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000,679</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-01-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>620</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>603,075</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Union Pacific Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.450</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-31-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>580</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>580,898</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Real Estate Management &amp; Development 0.20%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>235,000</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Ventas Realty LP/Capital Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.625</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>235,000</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Retail REIT&#146;s 0.30%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>360,100</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Simon Property Group LP,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10.350</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-01-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>345</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>360,100</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Soft Drinks 0.56%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>676,573</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Dr Pepper Snapple Group, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.120</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-01-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>200</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>199,858</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>PepsiCo, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.900</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>395</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>476,715</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Specialized Consumer Services 0.28%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>331,200</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Sotheby&#146;s,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>460</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>331,200</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Specialized Finance 2.86%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>3,450,772</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>American Honda Finance Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.625</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-01-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>655</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>621,570</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Astoria Depositor Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser B (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.144</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-01-21</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>750,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Bosphorous Financial Services,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sec Floating Rate Note (P)(S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>3.034</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-15-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Baa2</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>324,012</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>CIT Group, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-13-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>120</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>67,204</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note Ser MTN</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.125</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>09-30-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>255</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>140,837</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>CME Group, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>490</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>515,515</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>ESI Tractebel Acquisition Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sec Bond Ser B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.990</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-30-11</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>688</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>671,634</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>USB Realty Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=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></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>then variable) (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.091</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-22-49</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>800</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>360,000</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Specialized REIT&#146;s 0.72%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>872,105</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Health Care REIT, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.200</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>505</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>397,349</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Healthcare Realty Trust, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.125</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-01-11</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>175</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>168,152</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Plum Creek Timberland Co., Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>365</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>306,604</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Specialty Chemicals 0.71%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>855,800</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>American Pacific Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>590</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>513,300</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Momentive Performance,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-01-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>342,500</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Specialty Stores 0.46%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>548,685</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Staples, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>548,685</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD style="TEXT-INDENT: 0px" width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=2>16</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
<!--$$/page=-->
<A name="page_13"></A>
<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="31%"></TD>
     <TD width="12%"></TD>
     <TD width="8%"></TD>
     <TD width="13%"></TD>
     <TD width="8%"></TD>
     <TD width="12%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Steel 0.42%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>$503,914</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Allegheny Technologies, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;<FONT face=sans-serif size=1>8.375%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-15-11</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$275</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>281,861</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Commercial Metals Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.350</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-15-18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>310</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>222,053</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Tires &amp; Rubber 0.37%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>448,850</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Goodyear Tire &amp; Rubber Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Sec Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.625</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-01-11</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>470</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>448,850</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Tobacco 2.35%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>2,836,363</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Alliance One International, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-15-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>245</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>218,050</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Altria Group, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.950</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-10-38</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>685</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>751,905</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-10-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>800</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>885,033</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Reynolds American, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Sec Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.250</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-01-13</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>981,375</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Trading Companies &amp; Distributors 0.46%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>548,134</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>GATX Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>550</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>548,134</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Wireless Telecommunication Services 2.12%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>2,561,180</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Digicel Group Ltd.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Note (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.875</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Caa1</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,080</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>783,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Rogers Cable, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sr Sec Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>455</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>468,805</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Sprint Capital Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.375</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>479,375</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Gtd Sr Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.900</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-01-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>830,000</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=7>&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=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Convertible bonds 0.24%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>$293,693</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>(Cost $250,000)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap 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=sans-serif size=1>Auto Parts &amp; Equipment 0.24%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>293,693</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>BorgWarner, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Bond</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;<FONT face=sans-serif size=1>3.500%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-15-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$250</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>293,693</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=7></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></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Shares</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Preferred stocks 2.98%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>$3,590,772</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>(Cost $5,106,105)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Agricultural Products 0.82%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>985,156</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=sans-serif size=1>Ocean Spray Cranberries, Inc., 6.250%, Ser A (S)</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>12,500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>985,156</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Diversified Financial Services 0.31%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>372,316</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Bank of America Corp., 8.625%</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>26,575</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>372,316</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Real Estate Investment Trusts 0.61%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>739,600</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Public Storage, Inc., 6.500%, Depositary</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Shares, Ser W</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>40,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>739,600</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD align=right width="95%"></TD>
     <TD style="TEXT-INDENT: 0px" align=right width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>17</FONT>&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
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<A name="page_14"></A>
<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="31%"></TD>
     <TD width="12%"></TD>
     <TD width="8%"></TD>
     <TD width="13%"></TD>
     <TD width="8%"></TD>
     <TD width="12%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Shares</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Real Estate Management &amp; Development 0.65%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>$777,700</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=sans-serif size=1>Apartment Investment &amp; Management Co.,</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>8.000%, Ser T</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>55,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>777,700</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Wireless Telecommunication Services 0.59%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>716,000</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Telephone &amp; Data Systems, Inc., 7.600%,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser A</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB&#150;</FONT></TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>40,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>716,000</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=7></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=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Tranche loans 0.21%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>$250,000</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=7><FONT face=sans-serif size=1>
<HR noShade SIZE=1>
</FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>(Cost $495,000)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Hotels, Resorts &amp; Cruise Lines 0.21%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>250,000</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>East Valley Tourist</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Development Authority,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Tranche (Facility LN5501750)</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;<FONT face=sans-serif size=1>7.000%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-06-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B&#150;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$500</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>250,000</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=7></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=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</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=sans-serif size=1>U.S. government &amp; agency securities 32.74%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>$39,477,303</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>(Cost $38,725,580)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>U.S. Government 1.01%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>1,218,710</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>United States Treasury,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Bond</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;<FONT face=sans-serif size=1>4.500%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-15-38</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$840</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>903,919</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Note</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2.750</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-15-19</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>325</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>314,791</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>U.S. Government Agency 31.73%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>38,258,593</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Federal Home Loan Mortgage Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>11.250</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-01-16</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>11,334</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-01-39</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4,360</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4,435,960</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Federal National Mortgage Assn.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>15 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>09-01-12</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,956</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-01-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>3,532</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>3,669,102</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-01-37</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2,104</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2,182,297</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-01-37</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4,322</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4,484,030</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-01-38</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4,529</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4,698,921</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-01-38</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6,718</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6,969,381</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-01-38</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2,939</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2,993,431</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Note (E)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-30-25</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,720</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,720,833</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>TBA (C)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-01-99</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,017,500</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Government National Mortgage Assn.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-20</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4,661</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-15-21</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4,370</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-15-25</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>12</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>13,658</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-38</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,012</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,053,297</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>30 Yr Pass Thru Ctf</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-15-39</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4,087,812</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>SBA CMBS Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sub Bond Ser 2005-1A Class D (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.219</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-35</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Baa2</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>225</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>209,250</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sub Bond Ser 2005-1A Class E (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.706</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-35</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Baa3</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>200</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>186,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sub Bond Ser 2006-1A Class H (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.389</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Ba3</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>365</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>321,200</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sub Bond Ser 2006-1A Class J (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.825</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B1</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>220</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>193,600</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD style="TEXT-INDENT: 0px" width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=2>18</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
<!--$$/page=-->
<A name="page_15"></A>
<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="31%"></TD>
     <TD width="12%"></TD>
     <TD width="8%"></TD>
     <TD width="13%"></TD>
     <TD width="8%"></TD>
     <TD width="12%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</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=sans-serif size=1>Tax-exempt long-term bonds 0.41%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>$494,584</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>(Cost $477,028)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>California 0.41%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>494,584</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>California, State of,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>GO Unltd.</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;<FONT face=sans-serif size=1>5.650%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-01-39</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$475</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>494,584</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD colSpan=7>&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=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</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=sans-serif size=1>Collateralized mortgage obligations 16.99%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>$20,486,855</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>(Cost $37,380,728)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Collateralized Mortgage Obligations 16.99%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>20,486,855</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>American Home Mortgage Assets,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2006-6 Class XP IO</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;<FONT face=sans-serif size=1>2.750%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-25-46</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$13,136</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>328,405</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2007-5 Class XP IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>3.332</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-25-47</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9,644</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>433,979</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>American Home Mortgage</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Investment Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2007-1 Class GIOP IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2.078</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-25-47</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7,988</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>359,458</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>American Tower Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2007-1A Class D (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.957</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-15-37</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>865</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>743,832</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Banc of America Commercial</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Mortgage, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-6 Class A4 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.352</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>09-10-47</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>300</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>260,141</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Banc of America Funding Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2006-B Class 6A1 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.892</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-20-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>881</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>513,731</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2006-D Class 6B2 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.889</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-20-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,823</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>106,312</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Bear Stearns Adjustable Rate</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Mortgage Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-1 Class B2 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.047</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>03-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>805</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>89,102</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Bear Stearns Alt-A Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-3 Class B2 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.249</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>552</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>91,203</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2006-4 Class 3B1 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.221</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>07-25-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2,521</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>89,978</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Bear Stearns Commercial Mortgage</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Securities, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2006-PW14 Class D (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.412</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-11-38</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>655</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>83,007</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Citigroup Mortgage Loan Trust, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-10 Class 1A5A (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.830</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>672</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>406,073</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-5 Class 2A3</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>398</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>332,206</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Citigroup/Deutsche Bank Commercial</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Mortgage Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-CD1 Class C (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.399</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>07-15-44</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>295</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>92,912</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>ContiMortgage Home Equity Loan Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 1995-2 Class A&#150;5</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.100</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-15-25</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>58</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>50,136</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Countrywide Alternative Loan Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-59 Class 2X IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>3.629</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-20-35</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9,887</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>282,700</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2006-0A12 Class X IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4.122</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>09-20-46</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>16,542</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>537,603</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2006-11CB Class 3A1</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-25-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Caa2</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2,627</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,424,740</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Crown Castle Towers LLC,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2006-1A Class G (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.795</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-15-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Ba2</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>3,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2,639,935</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sub Bond Ser 2005-1A Class D (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.612</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-15-35</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Baa2</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,340</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,252,900</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>DB Master Finance LLC,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2006-1 Class M1 (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.285</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-20-31</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>340</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>215,387</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>DSLA Mortgage Loan Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-AR5 Class X2 IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>0.151</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-19-45</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>22,892</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>400,610</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD align=right width="95%"></TD>
     <TD style="TEXT-INDENT: 0px" align=right width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>19</FONT>&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
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<A name="page_16"></A>
<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="31%"></TD>
     <TD width="12%"></TD>
     <TD width="8%"></TD>
     <TD width="13%"></TD>
     <TD width="8%"></TD>
     <TD width="12%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=4>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=4><B><FONT face=sans-serif size=1>Collateralized Mortgage Obligations (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=sans-serif size=1>First Horizon Alternative</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Mortgage Securities,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2004-AA5 Class B1 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;<FONT face=sans-serif size=1>5.212%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-25-34</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$411</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$43,673</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Global Signal Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2004-2A Class D (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.093</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-15-14</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Baa2</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>495</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>487,575</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2006-1 Class E (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.495</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>02-15-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Baa3</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>460</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>411,754</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>GSR Mortgage Loan Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2004-9 Class B1 (G)(P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4.586</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-25-34</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>812</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>243,323</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2006-4F Class 6A1</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-25-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>3,388</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2,233,803</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Harborview Mortgage Loan Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-8 Class 1X IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>3.104</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>09-19-35</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6,851</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>68,515</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2007-3 Class ES IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>0.350</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-19-47</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>21,438</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>100,489</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2007-4 Class ES IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>0.350</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>07-19-47</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>21,942</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>109,710</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2007-6 Class ES IO (G)(S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>0.342</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-19-37</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>15,596</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>73,107</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Harborview NIM Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2006-9A Class N2 (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>8.350</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-19-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>323</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Indymac Index Mortgage Loan Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2004-AR13 Class B1</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.296</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>331</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>67,181</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-AR18 Class 1X IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>3.553</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-25-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>14,188</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>212,818</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-AR18 Class 2X IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>3.256</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-25-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>14,305</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>170,224</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-AR5 Class B1 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4.573</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>439</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>37,551</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>JPMorgan Chase Commercial Mortgage</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Security, Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-LDP4 Class B (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.129</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>10-15-42</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Aa2</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2,035</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>483,702</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>JPMorgan Mortgage Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-S3 Class 2A2</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-25-21</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>B</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>687</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>611,656</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Luminent Mortgage Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2006-1 Class X IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>3.739</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-25-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>21,167</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>343,960</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Merrill Lynch Mortgage Investors Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2006-AF1 Class MF1 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.185</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-25-36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,187</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>200,325</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>MLCC Mortgage Investors, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2007-3 Class M1 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.930</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>09-25-37</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>420</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>89,473</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2007-3 Class M2 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.930</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>09-25-37</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>155</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>11,627</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2007-3 Class M3 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.930</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>09-25-37</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BBB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>105</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5,776</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Morgan Stanley Capital I,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-HQ7 Class A4 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.378</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>11-14-42</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>840</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>742,831</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2006-IQ12 Class E (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.538</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-15-43</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>A+</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>640</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>80,266</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Provident Funding Mortgage Loan Trust,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-1 Class B1 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4.425</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>411</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>69,745</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Residential Accredit Loans, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-QA12 Class NB5 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5.952</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>12-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2,989</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,433,103</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Washington Mutual, Inc.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-6 Class 1CB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6.500</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>08-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>411</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>250,151</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2005-AR4 Class B1 (P)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4.668</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-25-35</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,510</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>282,731</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2007-0A4 Class XPPP IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.039</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-25-47</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Ca</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>18,173</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>102,223</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2007-0A5 Class 1XPP IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-25-47</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Caa3</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>43,230</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>324,223</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2007-0A5 Class 2XPP IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.421</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>06-25-47</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Caa3</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>50,968</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>302,624</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2007-0A6 Class 1XPP IO</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.000</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>07-25-47</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Caa3</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>25,338</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>158,366</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD style="TEXT-INDENT: 0px" width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=2>20</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
<!--$$/page=-->
<A name="page_17"></A>
<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="31%"></TD>
     <TD width="12%"></TD>
     <TD width="8%"></TD>
     <TD width="13%"></TD>
     <TD width="8%"></TD>
     <TD width="12%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maturity</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Credit</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>Issuer, description</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>rate</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>date</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>rating (A)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(000)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Value (Z)</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Asset backed securities 0.35%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>$416,121</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=7><FONT face=sans-serif size=2>
<HR noShade SIZE=1>
</FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>(Cost $1,423,267)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Asset Backed Securities 0.35%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>416,121</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Dominos Pizza Master Issuer LLC,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Ser 2007-1 Class M1 (S)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.629%</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>04-25-37</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>BB</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$1,000</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>300,000</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>TXU Corp.,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Sec Bond</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7.460</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>01-01-15</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>CCC</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>384</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>116,121</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Short-term investments 0.50%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>$600,000</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>(Cost $600,000)</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>U.S. Government Agency 0.50%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>600,000</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=7>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Federal Home Loan Bank,</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Discount Note (G)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>Zero</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>05-01-09</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AAA</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$600</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>600,000</FONT>&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=sans-serif size=1>Total investments (Cost $214,116,706)</FONT></B><FONT face=sans-serif size=1>&#134; </FONT><B><FONT face=sans-serif size=1>142.66%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$172,009,954</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=sans-serif size=1>Liabilities in excess of other assets (42.66%)</FONT></B>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>($51,432,937)</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=sans-serif size=1>Total net assets 100.00%</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></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=sans-serif size=1>$120,577,017</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=7>
<HR noShade SIZE=1>
</TD></TR></TABLE><BR>
<P align=left><FONT face=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=sans-serif size=1>GO General Obligation Gtd Guaranteed</FONT></P>
<P align=left><FONT face=sans-serif size=1>IO Interest Only (carries notional principal amount) </FONT></P>
<P align=left><FONT face=sans-serif size=1>MTN Medium-Term Note </FONT></P>
<P align=left><FONT face=sans-serif size=1>PIK Paid In Kind </FONT></P>
<P align=left><FONT face=sans-serif size=1>REIT Real Estate Investment Trust </FONT></P>
<P align=left><FONT face=sans-serif size=1>SBA Small Business Administration </FONT></P>
<P align=left><FONT face=sans-serif size=1>TBA To Be Announced</FONT></P>
<P align=left><FONT face=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=sans-serif size=1>(C) Purchased on a forward commitment.</FONT></P>
<P align=left><FONT face=sans-serif size=1>(E) All or a portion of this security has been segregated as collateral for the security with forward commitments. </FONT></P>
<P align=left><FONT face=sans-serif size=1>(G) Security rated internally by John Hancock Advisers, LLC.</FONT></P>
<P align=left><FONT face=sans-serif size=1>(H) Non-income-producing issuer filed for protection under the Federal Bankruptcy Code or is in default of interest payment.</FONT></P>
<P align=left><FONT face=sans-serif size=1>(P) Variable rate obligation. The coupon rate shown represents the rate at period end.</FONT></P>
<P align=left><FONT face=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 $28,059,912 or 23.27% of the net assets of the Fund as of April 30, 2009.</FONT></P>
<P align=left><FONT face=sans-serif size=1>(Z) All or a portion of these securities are segregated as collateral for the Revolving Credit Agreement (see Note 9).</FONT></P>
<P align=left><FONT face=sans-serif size=1>&#134; At April 30, 2009, the aggregate cost of investment securities for federal income tax purposes was $214,647,809. Net unrealized depreciation aggregated $42,637,855, of which $5,542,963 related to appreciated investment securities and $48,180,818 related to depreciated investment securities.</FONT></P>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD align=right width="95%"></TD>
     <TD style="TEXT-INDENT: 0px" align=right width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>21</FONT>&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
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<A name="page_18"></A>
<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<P align=left><FONT face=serif size=7>Financial statements</FONT></P>
<P align=left><FONT face=sans-serif size=4>Statement of assets and liabilities </FONT><FONT face=sans-serif size=2>4-30-09 (unaudited)</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>This Statement of Assets and Liabilities is the Fund&#146;s balance sheet. It shows the value of what the Fund owns, is due and owes. You&#146;ll also find the net asset value per share.</FONT></B></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="79%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Assets</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Investments, at value (Cost $214,116,706)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$172,009,954</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Cash</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>18,543</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Receivable for investments sold</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2,188,828</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Interest receivable</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>4,353,772</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Prepaid RCA administration fees (Note 9)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>11,654</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Receivable from affiliates</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>28,156</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Total assets</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>178,610,907</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp; </TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Liabilities</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Payable for investments purchased</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2,333,631</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Payable for delayed delivery securities purchased</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,022,148</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Revolving credit agreement payable (Note 9)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>53,000,000</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Unrealized depreciation of swap contracts (Note 3)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,482,838</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Interest payable (Note 9)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10,714</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Payable to affiliates</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Accounting and legal services fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>6,912</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Transfer agent fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>11,224</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Management fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>69,585</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Other liabilities and accrued expenses</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>96,838</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Total liabilities</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>58,033,890</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Net assets</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Capital paid-in</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$181,316,657</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Accumulated net investment income</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1,813,334</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Accumulated net realized loss on investments and swap contracts</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(18,963,384)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Net unrealized depreciation on investments and swap contracts</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(43,589,590)</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Net assets</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$120,577,017</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Net asset value per shares</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Based on 11,436,233 shares of beneficial interest outstanding &#151; unlimited</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>number of shares authorized with no par value</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$10.54</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD style="TEXT-INDENT: 0px" width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=2>22</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
<!--$$/page=-->
<A name="page_19"></A>
<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<P align=left><FONT face=sans-serif size=4>Statement of operations </FONT><FONT face=sans-serif size=2>For the period ended 4-30-09 (unaudited)</FONT><SUP><FONT face=sans-serif size=2>1</FONT></SUP></P>
<P align=left><B><FONT face=sans-serif size=1>This Statement of Operations summarizes the Fund&#146;s investment income earned and expenses incurred in operating the Fund. It also shows net gains (losses) for the period stated.</FONT></B></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="72%"></TD>
     <TD width="27%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Investment income</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Interest</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$8,387,696</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Dividends</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>193,215</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Less foreign taxes withheld</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(803)</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Total investment income</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>8,580,108</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Expenses</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Investment management fees (Note 6)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>521,415</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Accounting and legal services fees (Note 6)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>16,836</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Interest expense (Note 9)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>632,284</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Transfer agent fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>65,832</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Printing fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>50,580</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Professional fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>96,328</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Custodian fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>27,943</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Registration and filing fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>27,799</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Trustees&#146; fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>23,573</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Miscellaneous</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>10,720</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Total expenses</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>1,473,310</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Net investment income</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>7,106,798</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=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=sans-serif size=1>Net realized loss on</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Investments</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(7,457,032)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Swap contracts</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(330,497)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp; </TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(7,787,529)</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=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=sans-serif size=1>Investments</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5,667,241</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Swap contracts</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(356,577)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>5,310,664</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Net realized and unrealized loss</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(2,476,865)</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Increase in net assets from operations</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$4,629,933</FONT></B>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT face=sans-serif size=1>1 </FONT></SUP><FONT face=sans-serif size=1>Semiannual period from 11-1-08 to 4-30-09.</FONT></P>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD align=right width="95%"></TD>
     <TD style="TEXT-INDENT: 0px" align=right width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>23</FONT>&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
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<A name="page_20"></A>
<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<P align=left><FONT face=sans-serif size=4>Statements of changes in net assets</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>These Statements of Changes in Net Assets show how the value of the Fund&#146;s net assets has changed during the last three periods. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of Fund share transactions.</FONT></B></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="54%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD>
     <TD width="15%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Period</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Period</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Year</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>ended</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>ended</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=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=sans-serif size=1>4-30-09</FONT></B><SUP><FONT face=sans-serif size=1>1</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>10-31-08</FONT></B><SUP><FONT face=sans-serif size=1>2</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>12-31-07</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=4>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=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>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=4><FONT face=sans-serif size=2>
<HR noShade SIZE=1>
</FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>From operations</FONT></B>&nbsp;</TD>
     <TD noWrap 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=sans-serif size=1>Net investment income</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$7,106,798</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$11,880,844</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$15,109,704</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Net realized loss</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(7,787,529)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(526,797)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(1,642,786)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Change in net unrealized appreciation</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>&nbsp;<FONT face=sans-serif size=1>(depreciation)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5,310,664</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(43,911,252)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(6,071,134)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Distributions to APS</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(1,747,235)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(4,740,155)</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=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>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<B><FONT face=sans-serif size=1>resulting from operations</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>4,629,933</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(34,304,440)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>2,655,629</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=4>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Distributions to common shareholders</FONT></B>&nbsp;</TD>
     <TD noWrap 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=sans-serif size=1>From net investment income</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(6,010,695)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(9,560,908)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(10,400,867)</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right></TD>
     <TD noWrap align=right></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>From Fund share transactions (Note 7)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>494,618</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>515,172</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>889,931</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left></TD>
     <TD noWrap align=right></TD>
     <TD noWrap align=right></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Total decrease</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(886,144)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(43,350,176)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(6,855,307)</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=4>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Net assets</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=4>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Beginning of period</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>121,463,161</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>164,813,337</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>171,668,644</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right></TD>
     <TD noWrap align=right></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>End of period</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$120,577,017</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$121,463,161</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$164,813,337</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right></TD>
     <TD noWrap align=right></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Accumulated net investment income</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$1,813,334</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$717,231</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$276,098</FONT></B>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT face=sans-serif size=1>1 </FONT></SUP><FONT face=sans-serif size=1>Semiannual period from 11-1-08 to 4-30-09. Unaudited.</FONT></P>
<P align=left><SUP><FONT face=sans-serif size=1>2 </FONT></SUP><FONT face=sans-serif size=1>For the ten month period ended October 31, 2008, the Fund changed its fiscal year end from December 31 to October 31.</FONT></P>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD style="TEXT-INDENT: 0px" width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=2>24</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
<HR align=center width="100%" noShade SIZE=2>
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<A name="page_21"></A>
<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<P align=left><FONT face=sans-serif size=4>Statement of cash flows </FONT><FONT face=sans-serif size=2>4-30-09 </FONT><FONT face=sans-serif size=2>(unaudited)</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>This statement of cash flows shows cash flow from operating and financing activities for the period stated.</FONT></B></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="78%"></TD>
     <TD width="21%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>For the</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>period ended</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>4-30-09</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Cash flows from operating activities</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=2><FONT face=sans-serif size=2>
<HR noShade SIZE=1>
</FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Net increase in net assets from operations</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$4,629,933</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Adjustments to reconcile net increase in net assets from operations to net</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>cash provided by operating activities:</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Investments purchased</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(95,620,672)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Investments sold</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>96,700,272</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Increase in short term investments</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(600,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Net amortization of premium (discount)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2,593,449</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Increase in dividends and interest receivable</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(937,920)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Increase in receivable from affiliates</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(12,302)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Increase in payable for investments purchased</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2,118,209</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Increase in receivable for investments sold</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(1,455,983)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Decrease in prepaid arrangement fees</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>62,039</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Increase in unrealized depreciation of swap contracts</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>356,577</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Decrease in payable to affiliates</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(19,800)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Decrease in interest payable</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(11,602)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Increase in accrued expenses</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9,709</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Net change in unrealized (appreciation) depreciation on investments</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(5,667,241)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Net realized (gain) loss on investments</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>7,457,032</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Net cash provided by operating activities</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$9,601,700</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Cash flows from financing activities</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Repayments of revolving credit agreement payable</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>($5,000,000)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Cash distributions to common shareholders net of reinvestments</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(5,516,077)</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Net cash used in financing activities</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>($10,516,077)</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Net decrease in cash</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(914,377)</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Cash at beginning of period</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$932,920</FONT></B>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Cash at end of period</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$18,543</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD colSpan=2></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Supplemental disclosure of cash flow information</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=sans-serif size=1>Cash paid for interest</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$599,254</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Noncash financing activities not included herein consist of</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>reinvestment of distributions</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>494,618</FONT></B>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust </FONT><FONT face=sans-serif size=2>25</FONT></P>
<HR align=center width="100%" noShade SIZE=2>
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<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
<P align=left><FONT face=sans-serif size=4>Financial highlights</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>The Financial Highlights show how the Fund&#146;s net asset value for a share has changed since the end of the previous period.</FONT></B></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD align=left width="12%"></TD>
     <TD align=right width="12%"></TD>
     <TD align=right width="12%"></TD>
     <TD align=right width="12%"></TD>
     <TD align=right width="12%"></TD>
     <TD align=right width="12%"></TD>
     <TD align=right width="12%"></TD>
     <TD align=right width="12%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>COMMON SHARES</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Period&nbsp;ended</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>4-30-09</FONT></B><SUP><FONT face=sans-serif size=1>1 </FONT></SUP></TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>10-31-08</FONT></B><SUP><FONT face=sans-serif size=1>2</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>12-31-07</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>12-31-06</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>12-31-05</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>12-31-04</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>12-31-03</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Per share operating performance</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=8>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Net asset value, beginning</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<B><FONT face=sans-serif size=1>of&nbsp;period</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$10.67</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$14.53</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$15.22</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$15.30</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$16.19</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$16.53</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$16.31</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Net investment income</FONT><SUP><FONT face=sans-serif size=1>3</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>0.62</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.05</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.34</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.26</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.20</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.22</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>0.93</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Net realized and&nbsp;unrealized</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>gain (loss) on&nbsp;investments</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.22)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(3.92)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.69)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.03)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.81)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.25)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>0.63</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Distribution to&nbsp;APS</FONT><SUP><FONT face=sans-serif size=1>4</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.15)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.42)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.38)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.25)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.12)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.02)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Total from investment</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<B><FONT face=sans-serif size=1>operations</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>0.40</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(3.02)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>0.23</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>0.85</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>0.14</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>0.85</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>1.54</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Less distributions</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<B><FONT face=sans-serif size=1>to&nbsp;common shareholders</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>From net&nbsp;investment income</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.53)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.84)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.92)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.93)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(1.03)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(1.19)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.96)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>From net&nbsp;realized gain</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.26)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Total distributions</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(0.53)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(0.84)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(0.92)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(0.93)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(1.03)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(1.19)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(1.22)</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Capital charges</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Offering costs</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>and&nbsp;underwriting discounts</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>related to&nbsp;APS</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(0.10)</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Net asset value, end</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<B><FONT face=sans-serif size=1>of&nbsp;period</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$10.54</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$10.67</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$14.53</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$15.22</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$15.30</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$16.19</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$16.53</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Per share market value,</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<B><FONT face=sans-serif size=1>end of peri</FONT></B><B><FONT face=sans-serif size=1>od</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$10.33</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$9.67</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$12.85</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$14.75</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$13.68</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$15.68</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$15.39</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Total return at net&nbsp;asset</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<B><FONT face=sans-serif size=1>value&nbsp;(%)</FONT></B><SUP><FONT face=sans-serif size=1>5</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>4.06</FONT></B><SUP><FONT face=sans-serif size=1>6</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(21.36)</FONT></B><SUP><FONT face=sans-serif size=1>6</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>1.97</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>6.24</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>1.36</FONT></B><SUP><FONT face=sans-serif size=1>7</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>5.70</FONT></B><SUP><FONT face=sans-serif size=1>7</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>9.57</FONT></B><SUP><FONT face=sans-serif size=1>7</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Total return at market</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<B><FONT face=sans-serif size=1>value&nbsp;(%)</FONT></B><SUP><FONT face=sans-serif size=1>5</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>12.54</FONT></B><SUP><FONT face=sans-serif size=1>6</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(19.41)</FONT></B><SUP><FONT face=sans-serif size=1>6</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(6.94)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>15.15</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>(6.42)</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>9.95</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>13.49</FONT></B>&nbsp;</TD></TR>
<TR>
     <TD align=left colSpan=8>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2><B><FONT face=sans-serif size=1>Ratios and&nbsp;supplemental data</FONT></B>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left colSpan=8>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Net assets applicable</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>to&nbsp;common shares, end</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
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     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>of&nbsp;period (in&nbsp;millions)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$121</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$121</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$165</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$172</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$172</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$180</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$183</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Ratios (as a percentage</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>of&nbsp;average net&nbsp;assets):</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Expenses (excluding</FONT>&nbsp;</TD>
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     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>&nbsp; interest expense)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.46</FONT><SUP><FONT face=sans-serif size=1>8</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.41</FONT><SUP><FONT face=sans-serif size=1>8</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.16</FONT><SUP><FONT face=sans-serif size=1>9</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.17</FONT><SUP><FONT face=sans-serif size=1>9</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.16</FONT><SUP><FONT face=sans-serif size=1>9</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.14</FONT><SUP><FONT face=sans-serif size=1>9</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>0.87</FONT><SUP><FONT face=sans-serif size=1>9</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Interest expense (Note 9)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.09</FONT><SUP><FONT face=sans-serif size=1>8</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>0.76</FONT><SUP><FONT face=sans-serif size=1>8</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Expenses (including interest</FONT>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD>
     <TD noWrap align=right>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>&nbsp; expense)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2.55</FONT><SUP><FONT face=sans-serif size=1>8</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>2.17</FONT><SUP><FONT face=sans-serif size=1>8</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.16</FONT><SUP><FONT face=sans-serif size=1>9</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.17</FONT><SUP><FONT face=sans-serif size=1>9</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.16</FONT><SUP><FONT face=sans-serif size=1>9</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>1.14</FONT><SUP><FONT face=sans-serif size=1>9</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>0.87</FONT><SUP><FONT face=sans-serif size=1>9</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>Net investment income</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>12.31</FONT><SUP><FONT face=sans-serif size=1>8</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>9.37</FONT><SUP><FONT face=sans-serif size=1>8</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right>&nbsp; &nbsp; &nbsp;<FONT face=sans-serif size=1>8.87</FONT><SUP><FONT face=sans-serif size=1>10</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right>&nbsp; &nbsp; &nbsp;<FONT face=sans-serif size=1>8.30</FONT><SUP><FONT face=sans-serif size=1>10</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right>&nbsp; &nbsp; &nbsp;<FONT face=sans-serif size=1>7.62</FONT><SUP><FONT face=sans-serif size=1>10</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right>&nbsp; &nbsp; &nbsp;<FONT face=sans-serif size=1>7.44</FONT><SUP><FONT face=sans-serif size=1>10</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right>&nbsp; &nbsp; &nbsp;<FONT face=sans-serif size=1>5.58</FONT><SUP><FONT face=sans-serif size=1>10</FONT></SUP>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Portfolio turnover (%)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>46</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>40</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>54</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>94</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>148</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>135</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>273</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
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     <TD noWrap align=left><FONT face=sans-serif size=2>26</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
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<P align=left><FONT face=sans-serif size=2><FONT face=sans-serif size=2>F I N A N C I A L&nbsp;&nbsp; </FONT><FONT face=sans-serif size=2>S T A T E M E N T S</FONT></FONT></P>
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     <TD noWrap align=left><B><FONT face=sans-serif size=1>Period&nbsp;ended</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>4-30-09</FONT></B><SUP><FONT face=sans-serif size=1>1 </FONT></SUP></TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>10-31-08</FONT></B><SUP><FONT face=sans-serif size=1>2</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>12-31-07</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>12-31-06</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>12-31-05</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>12-31-04</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>12-31-03</FONT></B>&nbsp;</TD></TR>
<TR>
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     <TD noWrap align=left><B><FONT face=sans-serif size=1>Senior securities</FONT></B>&nbsp;</TD>
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&nbsp;</FONT></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Total value of&nbsp;APS outstanding</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>(in&nbsp;millions)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$90</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$90</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$90</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$90</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$90</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Involuntary liquidation</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>preference per unit</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>(in&nbsp;thousands)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$25</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$25</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$25</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$25</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$25</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Average market value per unit</FONT>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>(in&nbsp;thousands)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$25</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$25</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$25</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$25</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$25</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Asset coverage per unit</FONT><SUP><FONT face=sans-serif size=1>11</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT><SUP><FONT face=sans-serif size=1>12 </FONT></SUP></TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$71,228</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$73,375</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$72,470</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$75,049</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$75,402</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Total debt outstanding end</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>of&nbsp;period (in&nbsp;millions) (Note&nbsp;9)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$53</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$58</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Asset coverage per $1,000</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>of&nbsp;APS</FONT><SUP><FONT face=sans-serif size=1>13</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$2,851</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$2,928</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$2,928</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$3,027</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$3,047</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Asset coverage per $1,000</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left>&nbsp;<FONT face=sans-serif size=1>of&nbsp;debt</FONT><SUP><FONT face=sans-serif size=1>14</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$3,275</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$3,094</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD></TR>
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     <TD></TD>
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<P align=left><SUP><FONT face=sans-serif size=1>1 </FONT></SUP><FONT face=sans-serif size=1>Semiannual period from 11-1-08 to 4-30-09. Unaudited.</FONT></P>
<P align=left><SUP><FONT face=sans-serif size=1>2 </FONT></SUP><FONT face=sans-serif size=1>For the ten month period ended October 31, 2008, the Fund changed its fiscal year end from December 31 to&nbsp;October 31.</FONT></P>
<P align=left><SUP><FONT face=sans-serif size=1>3 </FONT></SUP><FONT face=sans-serif size=1>Based on&nbsp;the average of&nbsp;the shares outstanding. </FONT></P>
<P align=left><SUP><FONT face=sans-serif size=1>4 </FONT></SUP><FONT face=sans-serif size=1>APS were issued on&nbsp;11-4-03.</FONT></P>
<P align=left><SUP><FONT face=sans-serif size=1>5 </FONT></SUP><FONT face=sans-serif size=1>Total return based on&nbsp;net asset value reflects changes in&nbsp;the Fund&#146;s net&nbsp;asset value during each period. Total return based on&nbsp;market value reflects changes in&nbsp;market value. Each figure assumes that dividend and&nbsp;capital gain distributions, if any, were reinvested. These figures will differ depending upon the level of&nbsp;any discount from or premium to&nbsp;net asset value at which the Fund&#146;s shares traded during the period.</FONT></P>
<P align=left><SUP><FONT face=sans-serif size=1>6 </FONT></SUP><FONT face=sans-serif size=1>Not annualized. </FONT></P>
<P align=left><SUP><FONT face=sans-serif size=1>7 </FONT></SUP><FONT face=sans-serif size=1>Unaudited.</FONT></P>
<P align=left><SUP><FONT face=sans-serif size=1>8 </FONT></SUP><FONT face=sans-serif size=1>Annualized.</FONT></P>
<P align=left><SUP><FONT face=sans-serif size=1>9 </FONT></SUP><FONT face=sans-serif size=1>Ratios calculated on&nbsp;the basis of&nbsp;expenses relative to&nbsp;the average net&nbsp;assets of&nbsp;common shares. Without the exclusion of&nbsp;preferred shares, the annualized ratio of&nbsp;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 12-31-07, respectively. </FONT></P>
<P align=left><SUP><FONT face=sans-serif size=1>10 </FONT></SUP><FONT face=sans-serif size=1>Ratios calculated on&nbsp;the basis of&nbsp;net investment income relative to&nbsp;the average net&nbsp;assets of&nbsp;common shares. </FONT><FONT face=sans-serif size=1>Without the exclusion of&nbsp;preferred shares, the annualized ratio of&nbsp;net investment income would have been 5.19%, 4.99%, 5.06%, 5.45%, and 5.82% for the periods ended 12-31-03, 12-31-04, 12-31-05, 12-31-06 and 12-31-07, respectively.</FONT></P>
<P align=left><SUP><FONT face=sans-serif size=1>11 </FONT></SUP><FONT face=sans-serif size=1>Calculated by subtracting the Fund&#146;s total liabilities from the Fund&#146;s total assets and&nbsp;dividing that amount by the number of&nbsp;APS outstanding, as of&nbsp;the applicable 1940 Act Evaluation Date, which may differ from the financial reporting date.</FONT></P>
<P align=left><SUP><FONT face=sans-serif size=1>12 </FONT></SUP><FONT face=sans-serif size=1>In May 2008, the Fund entered into a Revolving Credit Agreement with a third-party commercial bank in&nbsp;order to&nbsp;refinance the APS. The redemption of&nbsp;all APS was completed on&nbsp;June 12, 2008.</FONT></P>
<P align=left><SUP><FONT face=sans-serif size=1>13 </FONT></SUP><FONT face=sans-serif size=1>Asset coverage equals the total net&nbsp;assets plus APS divided by the APS of&nbsp;the Fund outstanding at period end (Note 8).</FONT></P>
<P align=left><SUP><FONT face=sans-serif size=1>14 </FONT></SUP><FONT face=sans-serif size=1>Asset coverage equals the total net&nbsp;assets plus borrowings divided by the borrowing of&nbsp;the Fund outstanding at period end (Note 8).</FONT></P>
<P align=left><FONT face=sans-serif size=1>See notes to financial statements</FONT></P>
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     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>27</FONT>&nbsp;</TD></TR></TABLE><BR>
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<P align=left><FONT face=sans-serif size=4>Notes to financial statements </FONT><FONT face=sans-serif size=2>(unaudited)</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Note 1 <BR>
Organization</FONT></B></P>
<P align=left><FONT face=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=sans-serif size=2>Note 2<BR>
</FONT></B><B><FONT face=sans-serif size=2>Significant accounting policies</FONT></B></P>
<P align=left><FONT face=serif size=2>The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>Security valuation</FONT></B></P>
<P align=left><FONT face=serif size=2>Investments are stated at value as of the close of the regular trading on the New York Stock Exchange (NYSE), normally at 4:00 </FONT><FONT face=serif size=1>P.M</FONT><FONT face=serif size=2>.</FONT><FONT face=serif size=2>, Eastern Time. Equity securities held by the Fund are valued at the last sale price or official closing price (closing bid price or last evaluated price if no sale has occurred) as of the close of business on the principal securities exchange (domestic or foreign) on which they trade. Debt obligations are valued based on the evaluated prices 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. Securities traded only in the over-the-counter market are valued at the last bid price quote
d by brokers making markets in the securities at the close of trading. Equity and debt obligations, for which there are no prices available from an independent pricing service, are valued based on broker quotes or fair valued as described below. 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 </FONT><FONT face=serif size=2>to maturity of any discount or premium, which approximates market value.</FONT></P>
<P align=left><FONT face=serif size=2>Other portfolio securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith by the Fund&#146;s Pricing Committee in accordance with procedures adopted by 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><FONT face=serif size=2>Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer&#146;s assets, general economic and market conditions, interest rates, investor perceptions and market liquidity.</FONT></P>
<P align=left><FONT face=serif size=2>The Fund adopted Statement of Financial Accounting Standards No. 157 (FAS 157), </FONT><I><FONT face=serif size=2>Fair Value Measurements</FONT></I><FONT face=serif size=2>, effective with the beginning of the Fund&#146;s fiscal year. FAS 157 established a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels listed below:</FONT></P>
<P align=left><FONT face=serif size=2>Level 1 &#151; Quoted prices in active markets for identical securities.</FONT></P>
<P align=left><FONT face=serif size=2>Level 2 &#151; Prices determined using other significant observable inputs. Observable inputs are inputs that other market participants would use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.</FONT></P>
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     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=2>28</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
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<P align=left><FONT face=serif size=2>Level 3 &#151; Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an investment, unobservable inputs may be used. Unobservable inputs reflect the Fund&#146;s own assumptions about the factors that market participants would use in pricing </FONT><FONT face=serif size=2>an investment and would be based on the best information available.</FONT></P>
<P align=left><FONT face=serif size=2>The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.</FONT></P>
<P align=left><FONT face=serif size=2>The following is a summary of the inputs used to value the Fund&#146;s net assets as of April 30, 2009:</FONT></P>
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<TR>
     <TD width="59%"></TD>
     <TD width="20%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>INVESTMENTS IN</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>OTHER FINANCIAL</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>VALUATION INPUTS</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>SECURITIES</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>INSTRUMENTS*</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Level 1 &#151; Quoted Prices</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$2,605,616</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Level 2 &#151; Other Significant Observable Inputs</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>163,965,323</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>($1,482,838)</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Level 3 &#151; Significant Unobservable Inputs</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>5,439,015</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Total</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$172,009,954</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>($1,482,838)</FONT></B>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>*Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards, options and swap contracts, which are stated at value based upon futures&#146; settlement prices, foreign currency exchange forward rates, option prices and swap prices.</FONT></P>
<P align=left><FONT face=serif size=2>The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:</FONT></P>
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     <TD width="20%"></TD>
     <TD width="20%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>INVESTMENTS IN</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>OTHER FINANCIAL</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>SECURITIES</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>INSTRUMENTS</FONT>&nbsp;</TD></TR>
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     <TD colSpan=3>
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     <TD noWrap align=left><FONT face=sans-serif size=1>Balance as of October 31, 2008</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$9,581,198</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$&#151;</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Accrued discounts/premiums</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(274,660)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Realized gain (loss)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(15,084)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Change in unrealized appreciation (depreciation)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(634,140)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Net purchases (sales)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(2,164,222)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>Transfers in and/or out of Level 3</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>(1,054,077)</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>&#151;</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=right></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Balance as of April 30, 2009</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$5,439,015</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>$&#151;</FONT></B>&nbsp;</TD></TR></TABLE><BR>
<P align=left><B><FONT face=sans-serif size=1>Security transactions and related investment income</FONT></B></P>
<P align=left><FONT face=serif size=2>Investment security 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. Interest income is accrued as earned. Dividend income and distributions to shareholders are recorded on the ex-dividend date. Discounts/premiums are accreted/amortized for financial reporting purposes. Non-cash dividends are recorded at the fair market value of the securities received. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful.</FONT></P>
<P align=left><FONT face=serif size=2>The Fund uses identified cost method for determining realized gain or loss on investments for both financial statement and federal income tax reporting purposes.</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>Overdrafts</FONT></B></P>
<P align=left><FONT face=serif size=2>Pursuant to the custodian agreement, State Street Corporation (the Custodian) may, in its discretion, advance funds to the Fund to make properly authorized payments. When such payments result in an overdraft, the Fund is obligated to repay the Custodian for any overdraft together with interest due thereon. With respect to the amount of any overdraft, the Custodian has a lien, security interest or security entitlement in Fund property to the extent such property or assets are not pledged under the Committed Facility Agreement and to the maximum extent permitted by law.</FONT></P>
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<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>29</FONT>&nbsp;</TD></TR></TABLE><BR>
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<P align=left><B><FONT face=sans-serif size=1>Expenses</FONT></B></P>
<P align=left><FONT face=serif size=2>The majority of expenses are directly identifiable to an individual fund. Fund expenses that are not readily identifiable to a specific fund are allocated in such a manner as deemed equitable, taking into consideration, among other things, the nature and type of expense and the relative size of the funds. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>Stripped securities</FONT></B></P>
<P align=left><FONT face=serif size=2>Stripped mortgage backed securities are financial instruments that derive their value from other instruments so that one class receives all of the principal from the underlying mortgage assets PO (principal only), while the other class receives the interest cash flows IO (interest only). Both the PO and IO investments represents an interest in the cash flows of an underlying stripped mortgaged backed security. If the underlying mortgage assets experience greater than anticipated prepayments of principal, a Fund may fail to fully recoup its initial investment in an interest only security. The market value of these securities can be extremely volatile in response to changes in interest rates. Credit risk reflects the risk that the Funds may not receive all or part of its principal because the issuer or credit enhancer has defaulted on its obligation.</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>When-issued/delayed delivery securities</FONT></B></P>
<P align=left><FONT face=serif size=2>The Fund may purchase or sell debt securities on a when-issued or delayed-delivery basis. These transactions involve a commitment by the Fund to purchase or sell securities for a predetermined price or yield, with payment and delivery taking place beyond the customary settlement period. When delayed-delivery purchases are outstanding, the Fund will designate liquid assets in an amount sufficient to meet the purchase price. When purchasing a security on a delayed-delivery basis, the Fund assumes the rights and risks of ownership of the security, including the risk of price and yield fluctuations, and takes such fluctuations into account when determining its NAV. The Fund may dispose of or renegotiate a delayed-delivery transaction after it is entered </FONT><FONT face=serif size=2>into, and may sell delayed-delivery securities before they are delivered, which may result in a capital gain or loss. When the Fund has sold a security on a delayed-delivery basis, the Fund does
 not participate in future gains and losses with respect to the security. The Fund may receive compensation for interest forgone in the purchase of delayed-delivery securities. The market values of the securities purchased on a forward-delivery basis are identified in the Portfolio of Investments.</FONT></P>
<P align=left><FONT face=serif size=2>In a &#147;To Be Announced&#148; (TBA) transaction, the Fund commits to purchasing or selling securities for which all specific information is not yet known at the time of the trade, particularly the face amount and maturity date of the underlying security transactions. Securities purchased on a TBA basis are not settled until they are delivered to the Fund, normally 15 to 45 days later.</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>Statement of cash flows</FONT></B></P>
<P align=left><FONT face=serif size=2>The cash amount shown in the Statement of cash flows of a Fund is the amount included in the Fund&#146;s Statement of Assets and Liabilities and represents the cash on hand at its custodian and does not include any short-term investments.</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>Federal income taxes</FONT></B></P>
<P align=left><FONT face=serif size=2>The Fund qualifies as a regulated investment company 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.</FONT></P>
<P align=left><FONT face=serif size=2>For federal income tax purposes, the Fund has $10,665,168 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, they will reduce the amount of capital gain distributions to be paid. The loss carryforwards expire as follows: October 31, 2012 &#151; $2,123,466, October 31, 2013 &#151;$2,443,482, October 31, 2014 &#151; $3,342,775, October 31, 2015 &#151; $1,351,797 and October 31, 2016 &#151; $1,403,648.</FONT></P>
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<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=2>30</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
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<P align=left><FONT face=serif size=2>As of April 30, 2009, the Fund had no uncertain tax positions that would require financial statement recognition, de-recognition, or disclosure. Each of the Fund&#146;s federal tax returns filed in the 3-year period ended October 31, 2008 remains subject to examination by the Internal Revenue Service.</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>Distribution of income and gains</FONT></B></P>
<P align=left><FONT face=serif size=2>The Fund records distributions to shareholders from net investment income and net realized gains, if any, on the ex-dividend date. The Fund declares dividends and distributes income quarterly. Capital gains distributions, if any, are distributed annually. During the year ended December 31, 2007, the tax character of distributions paid was ordinary income of $15,141,022. During the period ended October 31, 2008, the tax character of distributions paid was as follows: ordinary income $11,308,143. Distributions paid by the Fund with respect to each class of shares are calculated in the same manner, at the same time and are in the same amount, except for the effect of expenses that may be applied differently to each class.</FONT></P>
<P align=left><FONT face=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=sans-serif size=1>New accounting pronouncement</FONT></B></P>
<P align=left><FONT face=serif size=2>In March 2008, FASB No. 161 (FAS 161), </FONT><I><FONT face=serif size=2>Disclosures about Derivative Instruments and Hedging Activities</FONT></I><FONT face=serif size=2>, an amendment of FASB Statement No. 133 (FAS 133), was issued and is effective for fiscal years and interim periods beginning after November 15, 2008. FAS 161 amends and expands the disclosure requirements of FAS 133 in order to provide financial statement users an understanding of a company&#146;s use of derivative instruments, how derivative instruments are accounted for under FAS 133 and related interpretations and how these instruments affect a company&#146;s financial position, performance, and cash flows. FAS 161 requires companies to disclose </FONT><FONT face=serif size=2>information detailing the objectives and strategies for using derivative instruments, the level of derivative activity entered into by the company, and any credit risk-related contingent features of the agreements. As of April
 30, 2009, management does not believe that the adoption of FAS 161 will have a material impact on the amounts reported in the financial statements.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Note 3<BR>
</FONT></B><B><FONT face=sans-serif size=2>Financial instruments</FONT></B></P>
<P align=left><B><FONT face=sans-serif size=1>Swap contracts</FONT></B></P>
<P align=left><FONT face=serif size=2>The Fund may enter into interest rate, credit default, cross-currency, and other forms of swap transactions to manage its exposure to credit, currency and interest rate risks, or to enhance the Fund&#146;s income. Swap agreements are privately negotiated agreements between the Fund and a counterparty to exchange investment cash flows, assets, foreign currencies or market-linked returns at specified, future intervals.</FONT></P>
<P align=left><FONT face=serif size=2>Swaps are marked to market daily based upon values from third party vendors or quotations from market makers to the extent available, and the change in value, if any, is recorded as an unrealized appreciation/depreciation of swap contracts on the Statements of Assets and Liabilities. In the event that market quotations are not readily available or deemed reliable, certain swap agreements may be valued at fair value as determined in good faith by the Fund&#146;s Pricing Committee in accordance with procedures adopted by the Board of Trustees.</FONT></P>
<P align=left><FONT face=serif size=2>Entering into swap agreements involves, to varying degrees, elements of credit, market and documentation risk in excess of the amounts recognized on the Statements of Assets and Liabilities. Such risks involve the possibility that there will be no liquid market for these agreements, that the counterparty to the agreements may default on its obligation to perform or disagree as to the meaning of contractual terms in the agreements and that there may be unfavorable changes in interest rates. The Fund may also suffer losses if it is unable to terminate outstanding swap contracts or reduce its exposure through offsetting transactions.</FONT></P>
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<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>31</FONT>&nbsp;</TD></TR></TABLE><BR>
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<P align=left><FONT face=serif size=2>The Fund is a party to International Swap Dealers Association, Inc. Master Agreements (ISDA Master Agreements) with select counterparties that govern over-the-counter derivative transactions, which may include foreign exchange derivative transactions, entered into by the Fund and those counterparties. The ISDA Master Agreements typically include standard representations and warranties, events of default, termination events and other standard provisions. A Credit Support Annex that accompanies a Schedule (Schedule) to ISDA Master Agreements includes provisions outlining the general obligations of the Fund and counterparties relating to collateral. Termination events may include a decline in a Fund&#146;s net asset value below a certain point over a certain period of time that is specified in the Schedule to the ISDA Master Agreement; such an event may entitle counterparties </FONT><FONT face=serif size=2>to elect to terminate early and calculate damages based on that term
ination with respect to some or all outstanding transactions under the applicable damage calculation provisions of the ISDA Master Agreement. An election by one or more counterparties to terminate ISDA Master Agreements could have a material impact on the financial statements of the Fund.</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>Interest rate swap agreements</FONT></B></P>
<P align=left><FONT face=serif size=2>Interest rate swaps represent an agreement between two counterparties to exchange cash flows based on the difference in the two interest rates, applied to the notional principal amount for a specified period. The payment flows are usually netted against each other, with the difference being paid by one party to the other. The Fund settles accrued net receivable or payable under the swap contracts on a periodic basis.</FONT></P>
<P align=left><FONT face=serif size=2>The Fund had the following interest rate swap contract open on April 30, 2009:</FONT></P>
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<TR>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="16%"></TD>
     <TD width="16%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>NOTIONAL</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>FIXED PAYMENTS</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>VARIABLE PAYMENTS</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>TERMINATION</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>UNREALIZED</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>AMOUNT</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>MADE BY FUND</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>RECEIVED BY FUND</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>DATE</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>COUNTERPARTY</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>DEPRECIATION</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=6>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <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><FONT face=sans-serif size=1>Bank of</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>$29,000,000</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>4.6875%</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>3-month LIBOR (a)</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Sep 2010</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>America</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>($1,482,838)</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>(a) At April 30, 2009, the 3-month LIBOR rate was 1.0163%.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Note 4<BR>
</FONT></B><B><FONT face=sans-serif size=2>Risk and uncertainties </FONT></B></P>
<P align=left><B><FONT face=sans-serif size=1>Derivatives and counterparty risk</FONT></B></P>
<P align=left><FONT face=serif size=2>The use of derivative instruments may involve risks different from, or potentially greater than, the risks associated with investing directly in securities. Specifically, derivative instruments expose the Fund to the risk that the counterparty to an over-the-counter (OTC) derivatives contract will be unable or unwilling to make timely settlement payments or otherwise to honor its obligations. OTC derivatives transactions typically can only be closed out with the other party to the transaction. If the counterparty defaults, the Fund will have contractual remedies, but there is no assurance that the counterparty will meet its contractual obligations or that, in the event of default, the Fund will succeed in enforcing them.</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>Fixed income risk</FONT></B></P>
<P align=left><FONT face=serif size=2>Fixed income securities are subject to credit and interest rate risk and involve some risk of default in connection with principal and interest payments.</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>Leverage utilization risk</FONT></B></P>
<P align=left><FONT face=serif size=2>The Fund utilizes leverage to increase assets available for investment. See Note 8 for risks associated with the utilization of leverage.</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>Mortgage security risk</FONT></B></P>
<P align=left><FONT face=serif size=2>The Fund may invest a portion of its assets in issuers and/or securities of issuers that hold mortgage securities, including subprime mortgage securities. The value of these securities is sensitive to changes in economic conditions, including delinquencies and/ or defaults, and may be adversely affected by shifts in the market&#146;s perception of the issuers and changes in interest rates. Decreases in interest rates may cause prepayments</FONT></P>
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<TR>
     <TD style="TEXT-INDENT: 0px" width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=2>32</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
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<P align=left><FONT face=serif size=2>on underlying mortgages to an IO security to accelerate resulting in a lower than anticipated yield and increases the risk of loss on the IO investment.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Note 5<BR>
</FONT></B><B><FONT face=sans-serif size=2>Guarantees and indemnifications</FONT></B></P>
<P align=left><FONT face=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.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Note 6<BR>
</FONT></B><B><FONT face=sans-serif size=2>Management fee and transactions with affiliates and others</FONT></B></P>
<P align=left><FONT face=serif size=2>The Fund has an investment management contract with John Hancock Advisers, LLC (the Adviser), a wholly owned subsidiary of John Hancock Financial Services, Inc., a subsidiary of Manulife Financial Corporation (MFC). 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 revolving credit agreement (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 weekly managed assets in excess of $300,000,000. The effective management fee rate is 0.62% of the Fund&#146;s average managed assets for the period ended April 30, 2009. The Adviser has a subadvisory agreement with MFC Global Investment Management (U.S.), LLC, an indirectly owned subsidiary of MFC and an affiliate of the Adviser
. The Fund is not responsible for payment of subadvisory fees.</FONT></P>
<P align=left><FONT face=serif size=2>Pursuant to the Advisory Agreement, the Fund reimburses the Adviser for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services of the Fund, including the </FONT><FONT face=serif size=2>preparation of all tax returns, annual, semiannual and periodic reports to shareholders and the preparation of all regulatory reports. These expenses are allocated based on the relative share of net assets of each class at the time the expense was incurred.</FONT></P>
<P align=left><FONT face=serif size=2>The accounting and legal services fees incurred for the period ended April 30, 2009, were equivalent to an annual effective rate of less than 0.02% of the Fund&#146;s average daily net assets.</FONT></P>
<P align=left><FONT face=serif size=2>Mr. James R. Boyle is&nbsp;Chairman of the Adviser, as well as affiliated Trustee of the Fund, and is compensated by the Adviser and/or its affili-ates. Mr. John G. Vrysen is a Board member 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 unreali
zed gains or losses. The Deferred Compensation Plan investments had no impact on the operations of the Fund.</FONT></P>
<P align=left><FONT face=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 the NYSE&#146;s listing standards. The Fund also files with the Securities and Exchange Commission the certification of its chief executive officer and chief financial officer required by Section 302 of the Sarbanes-Oxley Act.</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD align=right width="95%"></TD>
     <TD style="TEXT-INDENT: 0px" align=right width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>33</FONT>&nbsp;</TD></TR></TABLE><BR>
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<P align=left><B><FONT face=sans-serif size=2>Note 7<BR>
</FONT></B><B><FONT face=sans-serif size=2>Fund share transactions </FONT></B></P>
<P align=left><B><FONT face=sans-serif size=1>Common shares</FONT></B></P>
<P align=left><FONT face=serif size=2>The Fund is authorized to issue an unlimited number of common shares with no par value. Transactions in common shares for the periods ended April 30, 2009 and October 31, 2008, and the year ended December 31, 2007, are as follows:</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="8%"></TD>
     <TD width="16%"></TD>
     <TD width="13%"></TD>
     <TD width="12%"></TD>
     <TD width="13%"></TD>
     <TD width="12%"></TD>
     <TD width="13%"></TD>
     <TD width="12%"></TD></TR>
<TR>
     <TD colSpan=2></TD>
     <TD></TD>
     <TD></TD>
     <TD colSpan=2></TD>
     <TD></TD>
     <TD></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Period ended </FONT></B></TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>4-30-09</FONT></B><SUP><FONT face=sans-serif size=1>1</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Period ended </FONT></B></TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>10-31-08</FONT></B><SUP><FONT face=sans-serif size=1>2</FONT></SUP>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Year ended</FONT></B></TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>12-31-07</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Shares</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Amount</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Shares </FONT></B></TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Amount</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Shares</FONT></B>&nbsp;</TD>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Amount</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD style="TEXT-INDENT: 0px" noWrap align=right><FONT face=sans-serif size=1>Distributions</FONT>&nbsp;</TD>
     <TD noWrap align=center>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left colSpan=2>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right width="8%"><FONT face=sans-serif size=1>reinvested</FONT>&nbsp;</TD>
     <TD noWrap align=center width="16%">&nbsp;</TD>
     <TD noWrap align=right width="13%"><FONT face=sans-serif size=1>49,524</FONT>&nbsp;</TD>
     <TD noWrap align=right width="12%"><FONT face=sans-serif size=1>$494,618</FONT>&nbsp;</TD>
     <TD noWrap align=right width="13%"><FONT face=sans-serif size=1>40,345 </FONT></TD>
     <TD noWrap align=right width="12%"><FONT face=sans-serif size=1>$515,172</FONT>&nbsp;</TD>
     <TD noWrap align=right width="13%"><FONT face=sans-serif size=1>64,325</FONT>&nbsp;</TD>
     <TD noWrap align=right width="12%"><FONT face=sans-serif size=1>$889,931</FONT>&nbsp;</TD></TR></TABLE><BR>
<P align=left><SUP><FONT face=sans-serif size=1>1</FONT></SUP><FONT face=sans-serif size=1>Semiannual period from 11-1-08 to 4-30-09.</FONT></P>
<P align=left><SUP><FONT face=sans-serif size=1>2</FONT></SUP><FONT face=sans-serif size=1>For the ten month period ended October 31, 2008, the Fund changed its fiscal year end from December 31 to October 31.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Note 8 Leverage</FONT></B></P>
<P align=left><FONT face=serif size=2>The Fund utilizes a Revolving Credit Agreement (RCA) to increase its assets available for investment. In prior fiscal periods, the Fund used Auctioned Preferred Shares (APS) for leverage. When the Fund leverages its assets, common shareholders pay all fees associated with and have the potential to benefit from leverage. Consequently, the Fund and the Adviser may have differing interests in determining whether to leverage the Fund&#146;s assets. Leverage creates risks which may adversely affect the return for the holders of common shares, including:</FONT></P>
<P align=left><FONT face=serif size=2>&#149; the likelihood of greater volatility of net asset </FONT><FONT face=serif size=2>value and market price of common shares</FONT></P>
<P align=left><FONT face=serif size=2>&#149; fluctuations in the interest rate paid for the </FONT><FONT face=serif size=2>use of the credit RCA</FONT></P>
<P align=left><FONT face=serif size=2>&#149; increased operating costs, which may reduce </FONT><FONT face=serif size=2>the Fund&#146;s total return to the holders of common shares</FONT></P>
<P align=left><FONT face=serif size=2>&#149; the potential for a decline in the value of an </FONT><FONT face=serif size=2>investment acquired through leverage, while the Fund&#146;s obligations under such leverage remains fixed</FONT></P>
<P align=left><FONT face=serif size=2>&#149; the fund is more likely to have to sell </FONT><FONT face=serif size=2>securities in a volatile market in order to meet asset coverage or other debt compliance requirements</FONT></P>
<P align=left><FONT face=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, conversely, return would be lower if the cost of the leverage exceeds the income or capital appreciation derived.</FONT></P>
<P align=left><FONT face=serif size=2>The Fund issued 3,560 shares of APS on November 4, 2003, in a public offering. Effective May 2, 2008, the Fund&#146;s Trustees approved a plan whereby a third party commercial bank has agreed to provide a revolving credit agreement that will enable a refinancing of the Fund&#146;s APS. The facility was used to redeem the outstanding APS and allowed the Fund to change its form of leverage from APS to debt. The redemption of all series was completed on June 12, 2008. Below is a comparison of the leverage methods utilized by the Fund:</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD style="TEXT-INDENT: 0px" width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=2>34</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
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<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD width="33%"></TD>
     <TD width="33%"></TD>
     <TD width="33%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>APS</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>RCA</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>
<HR noShade SIZE=1>
</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Required Asset Coverage</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>200%</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>300% at the time of any borrowing</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Maximum Leverage</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>$90 million</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>$77 million</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Amount</FONT></B>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Costs Associated</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Dividends paid to preferred</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Interest expense (overnight</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>with Leverage</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>shareholders (maximum rate</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Eurodollar plus 0.95%), or elect</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>equals the overnight commercial</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>to convert the interest rate to an</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>paper rate plus 1.25%)</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>alternative rate, which is the greater</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>of the prime rate in effect on such</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>day or the Federal Funds rate in effect</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>on such day plus 0.50%</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>APS auction fees</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Arrangement fee *</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Auction agent expenses</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Facility fees (0.20% and $38,500</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>per annum).</FONT>&nbsp;</TD></TR>
<TR>
     <TD colSpan=3>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Preferred share transfer</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=sans-serif size=1>agent expenses</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=1>*Administration fee is $124,768 amortized over the first year of the RCA.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Note 9<BR>
</FONT></B><B><FONT face=sans-serif size=2>Revolving credit agreement</FONT></B></P>
<P align=left><FONT face=serif size=2>Effective June 5, 2008, the Fund entered into a RCA with a third party commercial bank that allows it to borrow up to an initial limit of $77 million and to invest the borrowings in accordance with its investment practices. Borrowings under the RCA are secured by all the assets of the Fund. Interest is charged at annualized Eurodollar rate plus 0.95% and is payable monthly. In addition, the Fund may elect to convert the interest rate to an alternative rate, which is the greater of the prime rate in effect on such day or the Federal Funds rate in effect on such day plus 0.50%.</FONT></P>
<P align=left><FONT face=serif size=2>Under the terms of the RCA, the Fund also pays an administration fee of $38,500 in each year of the agreement and facility fees of 0.20% per annum on the unused portion of the facility. In addition, the Fund incurred $86,268 of legal fees associated with the execution of the RCA. The administration fees and the legal fees are amortized during the first year of the agreement. Administration and facility fees expensed for the period ended April 30, 2009 amounted to $62,040 and $23,167, respectively, and are included in interest expense in the Statement of Operations. As </FONT><FONT face=serif size=2>of April 30, 2009, the Fund had borrowings of $53,000,000 at an interest rate 1.4033% and is reflected in the revolving credit agreement on the Statement of Asset and Liabilities. For the period from November 1, 2008 to April 30, 2009, the average borrowings under the RCA and the effective average interest rate (annualized) were $53,364,641 and 2.3893%, respectively. The matur
ity date of the RCA is June 3, 2009. However, the maturity date may be extended up to 364 days by giving written notice to the lender of not more than 150 days and not less 60 days of the maturity date. Also, the RCA may be in default and result in immediate termination if certain asset coverage requirements or minimum net asset amounts are not met. Finally, the Fund may terminate the agreement with one business day&#146;s notice.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Note 10<BR>
</FONT></B><B><FONT face=sans-serif size=2>Purchase and sale of securities</FONT></B></P>
<P align=left><FONT face=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 April 30, 2009, aggregated $72,003,720 and $72,613,523, respectively. Purchases and proceeds from sales or maturities of obligations of the U.S.</FONT></P>
<TABLE cellSpacing=0 width="80%" border=0>
<TR>
     <TD align=right width="95%"></TD>
     <TD style="TEXT-INDENT: 0px" align=right width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>35</FONT>&nbsp;</TD></TR></TABLE><BR>
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<P align=left><FONT face=serif size=2>government aggregated $6,072,796 and $4,758,731, respectively, during the period ended April 30, 2009.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Note 11<BR>
Subsequent event</FONT></B></P>
<P align=left><FONT face=serif size=2>Effective June 2, 2009, the Fund entered into a new Committed Facility Agreement (the CFA) agreement with a third party commercial bank. This agreement replaces the existing RCA, which was set to terminate on June 3, 2009. The new agreement allows the Fund to borrow up to a limit of $58 million and to invest the borrowings in accordance with its investment practices. Borrowings under the CFA are secured by the assets of the Fund.</FONT></P>
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<TR>
     <TD style="TEXT-INDENT: 0px" width="4%"></TD>
     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=2>36</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
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<P align=left><B><FONT face=sans-serif size=2>Investment objective and policy</FONT></B></P>
<P align=left><FONT face=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.</FONT></P>
<P align=left><FONT face=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.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Bylaws and Declaration of Trust</FONT></B></P>
<P align=left><FONT face=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 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 </FONT><FONT face=serif size=2>proxy statement to shareholders. 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=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=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><FONT face=serif size=2>On March 31, 2008, the shareholders approved an amendment to the Fund&#146;s Declaration of Trust to permit the Fund&#146;s Board of Trustees to delegate the authority to declare dividends to a Dividend Committee consisting of officers, employees or agents of the Fund.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Financial futures contracts and options</FONT></B></P>
<P align=left><FONT face=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=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</FONT></P>
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     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>37</FONT>&nbsp;</TD></TR></TABLE><BR>
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<P align=left><FONT face=serif size=2>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=sans-serif size=2>Dividends and distributions</FONT></B></P>
<P align=left><FONT face=serif size=2>During the period ended April 30, 2009, dividends from net investment income totaling $0.5273 per share were paid to shareholders. The dates of payments and the amounts per share were as follows:</FONT></P>
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     <TD noWrap align=right><FONT face=sans-serif size=1>INCOME</FONT>&nbsp;</TD>
     <TD noWrap align=right></TD>
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     <TD noWrap align=left><FONT face=sans-serif size=1>PAYMENT DATE</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>DIVIDEND</FONT>&nbsp;</TD>
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     <TD noWrap align=left><FONT face=sans-serif size=1>December 31, 2008</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>$0.2672</FONT>&nbsp;</TD>
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     <TD noWrap align=left><FONT face=sans-serif size=1>March 31, 2009</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=1>0.2601</FONT>&nbsp;</TD>
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<P align=left><B><FONT face=sans-serif size=2>Dividend reinvestment plan</FONT></B></P>
<P align=left><FONT face=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=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=serif size=2>The Board of Trustees of the Fund has authorized the Dividend Committee to 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 </FONT><FONT face=serif size=2>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 par
ticular date shall be the mean 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=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=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 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</FONT></P>
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     <TD noWrap align=left><FONT face=sans-serif size=2>38</FONT>&nbsp;</TD>
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<P align=left><FONT face=serif size=2>shareholder will receive a cash payment for any fractional share held.</FONT></P>
<P align=left><FONT face=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 necessary to determine total tax liability for the calendar year. All correspondence or a
dditional </FONT><FONT face=serif size=2>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=sans-serif size=2>Shareholder communication and assistance</FONT></B></P>
<P align=left><FONT face=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=sans-serif size=1>Mellon Investor Services</FONT><BR>
<FONT face=sans-serif size=1>Newport Office Center VII</FONT><BR>
<FONT face=sans-serif size=1>480 Washington Boulevard</FONT><BR>
<FONT face=sans-serif size=1>Jersey City, NJ 07310</FONT><BR>
<FONT face=sans-serif size=1>Telephone: 1-800-852-0218</FONT></P>
<P align=left><FONT face=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=sans-serif size=2>Shareholder meeting </FONT></B><FONT face=sans-serif size=2>(unaudited)</FONT></P>
<P align=left><FONT face=serif size=2>On May 18, 2009, an adjourned session of the Annual Meeting of the Shareholders of John Hancock Income Securities Trust was held at 601 Congress Street, Boston, Massachusetts, for the purpose of considering and voting upon the proposals listed below.</FONT></P>
<P align=left><FONT face=serif size=2>Shareholders of the Fund approved Proposal 1 and Proposal 3 and the votes cast were as follows:</FONT></P>
<P align=left><B><FONT face=serif size=2>Proposal 1: </FONT></B><FONT face=serif size=2>To elect eleven Trustees to serve until their respective successors have been duly elected and qualified.</FONT></P>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>WITHHELD</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>FOR</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>AUTHORITY</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=serif size=2>James R. Boyle</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>7,052,704</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>352,784</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>James F. Carlin</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>7,143,183</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>262,305</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>William H. Cunningham</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>7,128,892</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>276,596</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=serif size=2>Deborah C. Jackson</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>7,126,368</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>279,120</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>Charles L. Ladner</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>7,131,790</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>273,698</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>Stanley Martin</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>7,134,723</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>270,765</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>Patti McGill Peterson</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>7,133,457</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>272,031</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>John A. Moore</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>7,135,268</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>270,220</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>Steven R. Pruchansky</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>7,143,594</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>261,894</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>Gregory A. Russo</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>7,144,372</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>261,116</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>John G. Vrysen</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>7,138,169</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>267,319</FONT>&nbsp;</TD></TR></TABLE><BR>
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     <TD style="TEXT-INDENT: 0px" align=right width="4%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>39</FONT>&nbsp;</TD></TR></TABLE><BR>
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<P align=left><B><FONT face=serif size=2>*Proposal 2: </FONT></B><FONT face=serif size=2>To amend the Fund&#146;s Declaration of Trust to divide the Board into three classes of Trustees and to provide for shareholder approval of each such class every three years.</FONT></P>
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     <TD noWrap align=left><FONT face=serif size=2>For</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=serif size=2>4,535,324</FONT>&nbsp;</TD>
     <TD noWrap align=right></TD>
     <TD noWrap align=right></TD></TR>
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     <TD noWrap align=left><FONT face=serif size=2>Against</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=serif size=2>1,666,253</FONT>&nbsp;</TD>
     <TD noWrap align=right></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>Withheld</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=serif size=2>177,377</FONT>&nbsp;</TD>
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<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>Broker Non-Votes</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=serif size=2>1,026,534</FONT>&nbsp;</TD>
     <TD noWrap align=right></TD>
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<P align=left><FONT face=serif size=1>*The proposal to amend the Declaration of Trust did not receive sufficient votes from the Fund&#146;s shareholders.</FONT></P>
<P align=left><B><FONT face=serif size=2>Proposal 3: </FONT></B><FONT face=serif size=2>To adopt a new form of investment advisory agreement.</FONT></P>
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     <TD noWrap align=left><FONT face=serif size=2>For</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=serif size=2>5,833,485</FONT>&nbsp;</TD>
     <TD noWrap align=right></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>Against</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=serif size=2>269,097</FONT>&nbsp;</TD>
     <TD noWrap align=right></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>Withheld</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=serif size=2>255,162</FONT>&nbsp;</TD>
     <TD noWrap align=right></TD>
     <TD noWrap align=right></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>Broker Non-Votes</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=serif size=2>1,047,744</FONT>&nbsp;</TD>
     <TD noWrap align=right></TD>
     <TD noWrap align=right></TD></TR></TABLE><BR>
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     <TD width="95%"></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=2>40</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
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<P align=left><B><FONT face=sans-serif size=2>Evaluation by the Board of New Form of Investment Advisory Agreement</FONT></B></P>
<P align=left><FONT face=serif size=2>At its meeting on December 8-9, 2008, the Board, including all the Independent Trustees, approved a new form of Advisory Agreement for the Fund.</FONT></P>
<P align=left><FONT face=serif size=2>The Board, including the Independent Trustees, is responsible for selecting the Fund&#146;s investment adviser, approving the Adviser&#146;s selection of fund subadvisers and approving the Fund&#146;s advisory and subadvisory agreements, their periodic continuation and any amendments.</FONT></P>
<P align=left><FONT face=serif size=2>Consistent with SEC rules, the Board regularly evaluates the Fund&#146;s advisory and subadvisory arrangements, including consideration of the factors listed below. The Board may also consider other factors (including conditions and trends prevailing generally in the economy, the securities markets and the industry) and does not treat any single factor as determinative, and each Trustee may attribute different weights to different factors. The Board is furnished with an analysis of its fiduciary obligations in connection with its evaluation and, throughout the evaluation process, the Board is assisted by counsel for the Fund and the Independent Trustees are also separately assisted by independent legal counsel. The factors considered by the Board are:</FONT></P>
<P align=left><FONT face=serif size=2>&#149; the nature, extent and quality of the </FONT><FONT face=serif size=2>services to be provided by the Adviser or subadviser, as the case may be, to the Fund;</FONT></P>
<P align=left><FONT face=serif size=2>&#149; the investment performance of the Fund;</FONT></P>
<P align=left><FONT face=serif size=2>&#149; the extent to which economies of scale would </FONT><FONT face=serif size=2>be realized as the Fund grows and whether fee levels reflect these economies of scale for the benefit of shareholders of the Fund;</FONT></P>
<P align=left><FONT face=serif size=2>&#149; the costs of the services to be provided and </FONT><FONT face=serif size=2>the profits to be realized by the Adviser (including any subadvisers affiliated with the Adviser) and its affiliates from the Adviser&#146;s relationship with the Fund; and</FONT></P>
<P align=left><FONT face=serif size=2>&#149; comparative services rendered and </FONT><FONT face=serif size=2>comparative advisory fee rates.</FONT></P>
<P align=left><FONT face=serif size=2>The Board believes that information relating to all these factors is relevant to its evaluation of the Fund&#146;s Advisory Agreement.</FONT></P>
<P align=left><FONT face=serif size=2>At its meeting on June 10, 2008, the Board approved the annual continuation of the Advisory Agreement with respect to the Fund and considered each of the factors listed above. A discussion of the basis of the Board&#146;s approval of the Advisory Agreement and its consideration of such factors at that meeting is included in the shareholder report dated October 31, 2008. A copy of the relevant report may be obtained by calling 1-800-225-5291 (TDD &#150; 1-800-554-6713) or by writing to the Fund at 601 Congress Street, Boston, Massachusetts 02210, Attn.: Salvatore Schiavone, and is also available on the Internet at www.jhfunds.com.</FONT></P>
<P align=left><FONT face=serif size=2>In evaluating the Advisory Agreement at its meeting on June 10, 2008, the Board reviewed a broad range of information requested for this purpose. This information included:</FONT></P>
<P align=left><FONT face=serif size=2>(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). </FONT><FONT face=serif size=2>The funds within each Category and Peer Group were selected by Morningstar Inc. (Morningstar), an independent provider of investment company data. Data typically covered the period since the Fund&#146;s inception through December 31, 2007;</FONT></P>
<P align=left><FONT face=serif size=2>(ii) advisory and other fees incurred by, and the expense ratios of, the Fund relative to a Category and a Peer Group;</FONT></P>
<P align=left><FONT face=serif size=2>(iii) the advisory fees of comparable portfolios of other clients of the Adviser;</FONT></P>
<P align=left><FONT face=serif size=2>(iv) the Adviser&#146;s financial results and condition, including its and certain of its affiliates&#146; profitability from services performed for the Fund;</FONT></P>
<P align=left><FONT face=serif size=2>(v) breakpoints in the Fund&#146;s and the Peer Group&#146;s fees, and information about economies of scale;</FONT></P>
<P align=left><FONT face=serif size=2>(vi) the Adviser&#146;s record of compliance with applicable laws and regulations, with the</FONT></P>
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     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>41</FONT>&nbsp;</TD></TR></TABLE><BR>
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<P align=left><FONT face=serif size=2>Fund&#146;s investment policies and restrictions, and with the applicable Code of Ethics, and the structure and responsibilities of the Adviser&#146;s compliance department;</FONT></P>
<P align=left><FONT face=serif size=2>(vii) the background and experience of senior management and investment professionals; and</FONT></P>
<P align=left><FONT face=serif size=2>(viii) the nature, cost and character of advisory and non-investment management services provided by the Adviser and its affiliates. The key factors considered by the Board and the conclusions reached are described below.</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>Nature, extent and quality of services</FONT></B></P>
<P align=left><FONT face=serif size=2>The Board considered the ability of the Adviser, based on its 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. The Board considered the Adviser&#146;s execution of its oversight responsibilities. The Board further considered the culture of compliance, resources dedicated to compliance, compliance programs and compliance records of the Adviser. In addition, the Board took into account the non-advisory services provided to the Fund by the Adviser and its affiliates.</FONT></P>
<P align=left><FONT face=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 supported renewal of the Advisory Agreement.</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>Fund performance</FONT></B></P>
<P align=left><FONT face=serif size=2>The Board considered the Fund&#146;s performance results in comparison to the performance of the Category, as well as the Fund&#146;s Peer Group and benchmark index. The Board reviewed the methodology used by Morningstar to select the funds in the Category and the Peer Group. The Board concluded that the Fund&#146;s investment process and particular investments seemed consistent with the Fund&#146;s investment objectives, strategy and style.</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>Investment advisory fee rates and expenses</FONT></B></P>
<P align=left><FONT face=serif size=2>The Board reviewed and considered the contractual investment advisory fee rate payable by the Fund to the Adviser for investment advisory services in comparison to the advisory fees for the Peer Group.</FONT></P>
<P align=left><FONT face=serif size=2>The Board received and considered expense information regarding the Fund&#146;s various components, including advisory fees, distribution and fees other than advisory and distribution 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 and net expense ratio after waivers and reimbursements.</FONT></P>
<P align=left><FONT face=serif size=2>The Adviser also discussed the Morningstar data and rankings, and other relevant information, for the Fund. Based on the above-referenced considerations and other factors, the Board concluded that the Fund&#146;s overall expenses supported the re-approval of the Advisory Agreement.</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>Profitability</FONT></B></P>
<P align=left><FONT face=serif size=2>The Board received and considered a detailed profitability analysis of the Adviser based on the Advisory Agreement, as well as on other relationships between the Fund and the Adviser and its affiliates. 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=sans-serif size=1>Economies of scale</FONT></B></P>
<P align=left><FONT face=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</FONT></P>
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<P align=left><FONT face=serif size=2>largely from the Board&#146;s understanding that most of the Adviser&#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><B><FONT face=sans-serif size=1>Information about services to other clients</FONT></B></P>
<P align=left><FONT face=serif size=2>The Board also received information about the nature, extent and quality of services and fee rates offered by the Adviser to its other clients, including other registered investment companies, institutional investors and separate accounts. The Board concluded that the Fund&#146;s advisory fees were not unreasonable, taking into account fee rates offered to others by the Adviser, after giving effect to differences in services.</FONT></P>
<P align=left><B><FONT face=sans-serif size=1>Other benefits to the Adviser</FONT></B></P>
<P align=left><FONT face=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 their 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 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=serif size=2>The Board also considered the effectiveness of the Adviser&#146;s and the 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=sans-serif size=1>Other factors and broader review</FONT></B></P>
<P align=left><FONT face=serif size=2>As discussed above, the Board reviewed detailed materials received from the Adviser 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 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><B><FONT face=sans-serif size=1>December 2008 Meeting</FONT></B></P>
<P align=left><FONT face=serif size=2>In approving the proposed new form of Advisory Agreement at the December 8&#150;9, 2008 meeting, the Board determined that it was appropriate to rely upon its recent consideration at its June 10, 2008 meeting of such factors as: fund performance; the realization of economies of scale; profitability of the Advisory Agreement to the Adviser; and comparative advisory fee rates (as well as its conclusions with respect to those factors). The Board noted that it had, at the June 10, 2008 meeting, concluded that these factors, taken as a whole, supported the continuation of the Advisory Agreement. The Board, at the December 8&#150;9, 2008 meeting, revisited particular factors to the extent relevant to the proposed new form of Agreement. In particular, the Board noted the skill and competency of the Adviser in its past management of the Fund&#146;s affairs and subadvisory relationships, the qualifications of the Adviser&#146;s personnel who perform services for the Fund, includi
ng those who served as officers of the Fund, and the high level and quality of services that the Adviser may reasonably be expected to continue to provide the Fund and concluded that the Adviser may reasonably be expected to perform its services ably under the proposed new form of Advisory Agreement. The Board also took into consideration the extensive analysis and efforts undertaken by a working group comprised by a subset of the Board&#146;s Independent Trustees, which met several times, both with management representatives and separately, to evaluate the proposal to approve a new form of Agreement, prior to the Board&#146;s December 8&#150;9, 2008 meeting. The Board considered the differences between the current Advisory Agreement and proposed new form of Agreement, and agreed that the new Advisory Agreement structure would bring all advisory fee payment mechanics for the John Hancock Fund Complex into conformity and will result in greater administrative efficiencies for the Fund.</FONT></P>
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     <TD noWrap align=right><B><FONT face=sans-serif size=1>Semiannual report | </FONT></B><FONT face=sans-serif size=1>Income Securities Trust</FONT>&nbsp;</TD>
     <TD noWrap align=right><FONT face=sans-serif size=2>43</FONT>&nbsp;</TD></TR></TABLE><BR>
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<P align=left><FONT face=serif size=7>More information</FONT></P>
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     <TD noWrap align=left><B><FONT face=sans-serif size=1>Trustees</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Investment adviser</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>Patti McGill Peterson,&nbsp;</FONT><I><FONT face=serif size=2>Chairperson</FONT></I>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>John Hancock Advisers, LLC</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>James R. Boyle&#134;</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>James F. Carlin</FONT>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Subadviser</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>William H. Cunningham*</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>MFC Global Investment Management</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>Deborah C. Jackson*</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>&nbsp; (U.S.), LLC</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT face=serif size=2>Charles L. Ladner</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>Dr. John A. Moore</FONT>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Custodian</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>Steven R. Pruchansky</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>State Street Bank and Trust Company</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>Gregory A. Russo</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>John G. Vrysen&#134;</FONT>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Transfer agent</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=sans-serif size=1>*Member of the Audit Committee</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>Mellon Investor Services</FONT>&nbsp;</TD></TR>
<TR height=20>
     <TD noWrap align=left><FONT face=sans-serif size=1>&#134;Non-Independent Trustee</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
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     <TD noWrap align=left></TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Legal counsel</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><B><FONT face=sans-serif size=1>Officers</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>K&amp;L Gates LLP</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>Keith F. Hartstein</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
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     <TD noWrap align=left><I><FONT face=serif size=2>President and Chief Executive Officer</FONT></I>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Stock symbol</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face=serif size=2>Listed New York Stock Exchange: JHS</FONT>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=serif size=2>Thomas M. Kinzler</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><I><FONT face=serif size=2>Secretary and Chief Legal Officer</FONT></I>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>For shareholder assistance</FONT></B>&nbsp;&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>refer to page 39</FONT></B>&nbsp;</TD></TR>
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     <TD noWrap align=left><FONT face=serif size=2>Francis V. Knox, Jr.</FONT>&nbsp;</TD>
     <TD noWrap align=left></TD></TR>
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     <TD noWrap align=left><I><FONT face=serif size=2>Chief Compliance Officer</FONT></I>&nbsp;</TD>
     <TD noWrap align=left></TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
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     <TD noWrap align=left><FONT face=serif size=2>Charles A. Rizzo</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><I><FONT face=serif size=2>Chief Financial Officer</FONT></I>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD></TR>
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     <TD noWrap align=left><FONT face=serif size=2>Salvatore Schiavone</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><I><FONT face=serif size=2>Treasurer</FONT></I>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left></TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><FONT face=serif size=2>John G. Vrysen</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left><I><FONT face=serif size=2>Chief Operating Officer</FONT></I>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
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<P align=left><FONT face=sans-serif size=1>The Fund&#146;s proxy voting policies and procedures, as well as the Fund&#146;s proxy voting record for the most recent twelve month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) Website at sec.gov or on our Website.</FONT></P>
<P align=left><FONT face=sans-serif size=1>The Fund&#146;s complete list of portfolio holdings, for the first and third fiscal quarters, is filed with the SEC on Form&nbsp;N-Q. The Fund&#146;s Form N-Q is available on our Website and the SEC&#146;s Website, www.sec.gov, and can be reviewed and copied (for a fee) at the SEC&#146;s Public Reference Room in Washington, DC. Call 1-800-SEC-0330 to&nbsp;receive information on the operation of the SEC&#146;s Public Reference Room.</FONT></P>
<P align=left><FONT face=sans-serif size=1>We make this information on your fund, as well as </FONT><B><FONT face=sans-serif size=1>monthly portfolio holdings</FONT></B><FONT face=sans-serif size=1>, and other fund details available on our Website www.jhfunds.com or by calling 1-800-852-0218.</FONT></P>
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     <TD noWrap align=left><FONT face=sans-serif size=1>You can also contact us:</FONT>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD></TR>
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     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>1-800-852-0218</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>Regular mail:</FONT></B>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><B><FONT face=sans-serif size=1>jhfunds.com</FONT></B>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Mellon Investor Services</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Newport Office Center VII</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>480 Washington Boulevard</FONT>&nbsp;</TD></TR>
<TR vAlign=bottom>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Jersey City, NJ 07310</FONT>&nbsp;</TD></TR>
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     <TD colSpan=3>
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     <TD noWrap align=left><FONT face=sans-serif size=2>44</FONT>&nbsp;</TD>
     <TD noWrap align=left><FONT face=sans-serif size=1>Income Securities Trust </FONT><B><FONT face=sans-serif size=1>| Semiannual report</FONT></B>&nbsp;</TD></TR></TABLE><BR>
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<BR>
<P align=left><FONT face=sans-serif size=1>1-800-852-0218</FONT><BR>
<FONT face=sans-serif size=1>1-800-231-5469 TDD</FONT><BR>
<FONT face=sans-serif size=1>1-800-843-0090 EASI-Line</FONT><BR>
<FONT face=sans-serif size=1>www.</FONT><FONT face=sans-serif size=1>jhfunds.</FONT><FONT face=sans-serif size=1>com</FONT><FONT face=sans-serif size=1></FONT></P>
<P align=left><FONT face=sans-serif size=2>PRESORTED</FONT><BR>
<FONT face=sans-serif size=2>STANDARD</FONT><BR>
<FONT face=sans-serif size=2>U.S. </FONT><FONT face=sans-serif size=2>POSTAGE</FONT><BR>
<FONT face=sans-serif size=2>PAID</FONT><BR>
<FONT face=sans-serif size=2>MIS</FONT></P>
<P align=left><FONT face=sans-serif size=1>P60SA 4/09</FONT><BR>
<FONT face=sans-serif size=1>6/09</FONT></P>
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<P align=left><FONT face=sans-serif size=2>ITEM 2. CODE OF ETHICS.</FONT></P>
<P align=left><FONT face=sans-serif size=2>Not applicable.</FONT></P>
<P align=left><FONT face=sans-serif size=2>ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.</FONT></P>
<P align=left><FONT face=sans-serif size=2>Not applicable at this time.</FONT></P>
<P align=left><FONT face=sans-serif size=2>ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.</FONT></P>
<P align=left><FONT face=sans-serif size=2>Not applicable at this time.</FONT></P>
<P align=left><FONT face=sans-serif size=2>ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.</FONT></P>
<P align=left><FONT face=sans-serif size=2>Not applicable at this time.</FONT></P>
<P align=left><FONT face=sans-serif size=2>ITEM 6. SCHEDULE OF INVESTMENTS.</FONT></P>
<P align=left><FONT face=sans-serif size=2>(a) Not applicable.</FONT><BR>
<FONT face=sans-serif size=2>(b) Not applicable.</FONT></P>
<P align=left><FONT face=sans-serif size=2>ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.</FONT></P>
<P align=left><FONT face=sans-serif size=2>Not applicable.</FONT></P>
<P align=left><FONT face=sans-serif size=2>ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.</FONT></P>
<P align=left><FONT face=sans-serif size=2>Not applicable.</FONT></P>
<P align=left><FONT face=sans-serif size=2>ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.</FONT></P>
<P align=left><FONT face=sans-serif size=2>Not applicable.</FONT></P>
<P align=left><FONT face=sans-serif size=2>ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.</FONT></P>
<P align=left><FONT face=sans-serif size=2>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 face=sans-serif size=2>ITEM 11. CONTROLS AND PROCEDURES.</FONT></P>
<P align=left><FONT face=sans-serif size=2>(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 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 face=sans-serif size=2>(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>
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<P align=left><FONT face=sans-serif size=2>ITEM 12. EXHIBITS.</FONT></P>
<P align=left><FONT face=sans-serif size=2>(a) 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 face=sans-serif size=2>(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 face=sans-serif size=2>(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 face=sans-serif size=2>(c)(2) Contact person at the registrant.</FONT></P>
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<P align=center><FONT face=sans-serif size=2>SIGNATURES</FONT></P>
<P align=left><FONT face=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=sans-serif size=2>John Hancock Income Securities Trust</FONT></P>
<P align=left><FONT face=sans-serif size=2>By: /s/ Keith F. Hartstein</FONT><BR>
<FONT face=sans-serif size=2>-------------------------------------</FONT><BR>
<FONT face=sans-serif size=2>Keith F. Hartstein</FONT><BR>
<FONT face=sans-serif size=2>President and Chief Executive Officer</FONT><BR>
<BR>
<FONT face=sans-serif size=2>Date: June 18, 2009</FONT></P>
<P align=left><FONT face=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=sans-serif size=2>By: /s/ Keith F. Hartstein</FONT><BR>
<FONT face=sans-serif size=2>-------------------------------------</FONT><BR>
<FONT face=sans-serif size=2>Keith F. Hartstein</FONT><BR>
<FONT face=sans-serif size=2>President and Chief Executive Officer</FONT><BR>
<BR>
<FONT face=sans-serif size=2>Date: June 18, 2009</FONT></P>
<P align=left><FONT face=sans-serif size=2>By: /s/ Charles A. Rizzo</FONT><BR>
<FONT face=sans-serif size=2>-------------------------------------</FONT><BR>
<FONT face=sans-serif size=2>Charles A. Rizzo</FONT><BR>
<FONT face=sans-serif size=2>Chief Financial Officer</FONT><BR>
<BR>
<FONT face=sans-serif size=2>Date: June 18, 2009</FONT></P>
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<TYPE>EX-99.CERT
<SEQUENCE>2
<FILENAME>b_incomesecuritiestrustxnn1.htm
<DESCRIPTION>CERTIFICATION
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<P align=left><B><U><FONT face=sans-serif size=2>CERTIFICATION</FONT></U></B></P>
<P align=left><FONT face=sans-serif size=2>I, Keith F. Hartstein, certify that:</FONT></P>
<P align=left><FONT face=sans-serif size=2>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 face=sans-serif size=2>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 face=sans-serif size=2>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 face=sans-serif size=2>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 face=sans-serif size=2>(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 face=sans-serif size=2>(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 face=sans-serif size=2>(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 face=sans-serif size=2>(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 face=sans-serif size=2>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 face=sans-serif size=2>(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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<P align="left"> <FONT size=2 face="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="sans-serif">By: /s/ Keith F. Hartstein</FONT><BR>
<FONT size=2 face="sans-serif">-------------------------------------</FONT><BR>
<FONT size=2 face="sans-serif">Keith F. Hartstein</FONT><BR>
<FONT size=2 face="sans-serif">President and Chief Executive Officer</FONT><BR>
<BR>
<FONT size=2 face="sans-serif">Date: June 18, 2009</FONT></P>
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<P align="left"> <B><U><FONT size=2 face="sans-serif">CERTIFICATION</FONT></U></B></P>
<P align="left"> <FONT size=2 face="sans-serif">I, Charles A. Rizzo, certify that:</FONT></P>
<P align="left"> <FONT size=2 face="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="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="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="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="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="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="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="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="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="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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<P align="left"> <FONT size=2 face="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="sans-serif">By: /s/ Charles A. Rizzo</FONT><BR>
<FONT size=2 face="sans-serif">-------------------------------------</FONT><BR>
<FONT size=2 face="sans-serif">Charles A. Rizzo</FONT><BR>
<FONT size=2 face="sans-serif">Chief Financial Officer</FONT><BR>
<BR>
<FONT size=2 face="sans-serif">Date: June 18, 2009</FONT></P>
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<TYPE>EX-99.906 CERT
<SEQUENCE>3
<FILENAME>c_incomesecuritiestrustxnnos.htm
<DESCRIPTION>CERTIFICATION 906
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<P align=center><B><FONT face=sans-serif size=2>Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of <BR>
the Sarbanes-Oxley Act of 2002</FONT></B></P>
<P align=left><FONT face=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=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=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=sans-serif size=2>/s/ Keith F. Hartstein</FONT><BR>
<FONT face=sans-serif size=2>-------------------------------------</FONT><BR>
<FONT face=sans-serif size=2>Keith F. Hartstein</FONT><BR>
<FONT face=sans-serif size=2>President and Chief Executive Officer</FONT><BR>
<BR>
<FONT face=sans-serif size=2>Dated: June 18, 2009<BR>
</FONT></P>
<P align=left><FONT face=sans-serif size=2>/s/ Charles A. Rizzo</FONT><BR>
<FONT face=sans-serif size=2>-------------------------------------</FONT><BR>
<FONT face=sans-serif size=2>Charles A. Rizzo</FONT><BR>
<FONT face=sans-serif size=2>Chief Financial Officer</FONT><BR>
<BR>
<FONT face=sans-serif size=2>Dated: June 18, 2009</FONT></P>
<P align=left><FONT face=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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<TYPE>EX-99
<SEQUENCE>4
<FILENAME>d_governancecommcharter.htm
<DESCRIPTION>GOVERNANCE COMMITTEE CHARTER
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     <TD align=center><B><FONT face=sans-serif size=2>JOHN HANCOCK FUNDS</FONT></B> </TD></TR>
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     <TD noWrap align=center><B><FONT face=sans-serif size=2>NOMINATING, GOVERNANCE AND ADMINISTRATION COMMITTEE CHARTER</FONT></B>&nbsp; </TD></TR></TABLE><BR>
<P align=left><FONT face=sans-serif size=2>A. </FONT><U><FONT face=sans-serif size=2>Composition</FONT></U><FONT face=sans-serif size=2>. The Nominating, Governance and Administration Committee (the &#147;Committee&#148;) shall be composed entirely of Trustees who are &#147;independent&#148; as defined in the rules of the New York Stock Exchange (&#147;NYSE&#148;) or any other exchange, as applicable, and are not &#147;interested persons&#148; as defined in the Investment Company Act of 1940 of any of the funds, or of any fund&#146;s investment adviser or principal underwriter (the &#147;Independent Trustees&#148;) 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 Committee.</FONT></P>
<P align=left><FONT face=sans-serif size=2>B. </FONT><U><FONT face=sans-serif size=2>Overview</FONT></U><FONT face=sans-serif size=2>. The overall charter of the Committee is to make determinations and recommendations to the Board on issues related to the composition and operation of the Board and corporate governance matters applicable to the Independent Trustees, as well as issues related to complex-wide matters and practices designed to facilitate uniformity and administration of the Board's oversight of the funds, and to discharge 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. </FONT><U><FONT face=sans-serif size=2>Specific Responsibilities</FONT></U><FONT face=sans-serif size=2>. The 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. To consider and determine nominations of individuals 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 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 determine 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. The Chairman of the Board has been granted the authority to approve special compensation to Independent Trustees in recognition of any significant amount of additional time and service to the funds required of them, subject to ratification of any such special compensation by the Committee at the next regular meeting of the Committee.</FONT></P>
<P align=left><FONT face=sans-serif size=2>4. To consider and determine 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>
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<P align=left><FONT face=sans-serif size=2>6. To evaluate, from time to time, and determine changes to the retirement policies for the Independent Trustees, as appropriate.</FONT></P>
<P align=left><FONT face=sans-serif size=2>7. To develop and recommend to the Board, if deemed desirable, guidelines for corporate governance (&#147;Corporate Governance Guidelines&#148;) 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 and practices 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: D&amp;O insurance and fidelity bond coverage and costs; association dues, including Investment Company Institute membership dues; meeting expenditures and policies relating to reimbursement of travel expenses and expenses associated with offsite meetings; expenses and policies associated with Trustee attendance at educational or informational conferences; and publication expenses.</FONT></P>
<P align=left><FONT face=sans-serif size=2>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 &#147;interested persons&#148; as defined in the Investment Company Act of 1940 of any of the funds or any fund&#146;s investment adviser or principal underwriter, or by the Committee, from time to time, other than as may be engaged directly by another Committee.</FONT></P>
<P align=left><FONT face=sans-serif size=2>10. To periodically review the Board&#146;s committee structure and the charters of the Board&#146;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 face=sans-serif size=2>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 face=sans-serif size=2>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 Committee may deem necessary or appropriate.</FONT></P>
<P align=left><FONT face=sans-serif size=2>D. </FONT><U><FONT face=sans-serif size=2>Additional Responsibilities</FONT></U><FONT face=sans-serif size=2>. 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 face=sans-serif size=2>E. </FONT><U><FONT face=sans-serif size=2>Governance</FONT></U><FONT face=sans-serif size=2>. One member of the Committee shall be appointed as chair. The chair shall be responsible for leadership of the Committee, including scheduling meetings or</FONT></P>
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<P align=left><FONT face=sans-serif size=2>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 face=sans-serif size=2>F. </FONT><U><FONT face=sans-serif size=2>Miscellaneous</FONT></U><FONT face=sans-serif size=2>. 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&#146; 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 face=sans-serif size=2>G. </FONT><U><FONT face=sans-serif size=2>Evaluation</FONT></U><FONT face=sans-serif size=2>. At least annually, the Committee shall evaluate its own performance, including whether the Committee is meeting frequently enough to discharge its responsibilities appropriately.</FONT></P>
<P align=left><FONT face=sans-serif size=2>H. </FONT><U><FONT face=sans-serif size=2>Review</FONT></U><FONT face=sans-serif size=2>. 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><FONT face=sans-serif size=2>Last revised: December 9, 2008</FONT></P>
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<P align=left><FONT face=sans-serif size=2>ANNEX A</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>General Criteria</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>1. Nominees should have a reputation for integrity, honesty and adherence to high ethical standards.</FONT></P>
<P align=left><FONT face=sans-serif size=2>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>
<P align=left><FONT face=sans-serif size=2>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 face=sans-serif size=2>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 face=sans-serif size=2>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 face=sans-serif size=2>Application of Criteria to Existing Trustees</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>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 Nominating, Governance and Administration Committee (the &#147;Committee&#148;) shall consider the existing Trustee&#146;s performance on the Board and any committee.</FONT></P>
<P align=left><B><FONT face=sans-serif size=2>Review of Shareholder Nominations</FONT></B></P>
<P align=left><FONT face=sans-serif size=2>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 Committee. In evaluating a nominee recommended by a shareholder, the 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&#146;s candidate among the slate of its designated nominees, the candidate&#146;s name will be placed on the funds&#146; 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&#146;s candidate will be</FONT></P>
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<P align=left><FONT face=sans-serif size=2>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&#146; proxy statement.</FONT></P>
<P align=left><FONT face=sans-serif size=2>As long as an existing Independent Trustee continues, in the opinion of the 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 Committee will consider nominees recommended by shareholders to serve as trustees, the Committee may only act upon such recommendations if there is a vacancy on the Board, or the 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 Committee will, in addition to any shareholder recommendations, consider candidates identified by other means, including candidates proposed by members of the Committee. The 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-----
